BP Bankruptcy in U.K. Is Obama’s Worst Nightmare: Caroline Baum

[1776Forever]

Source: Bloomberg

June 25 (Bloomberg) -- It would be a “horror,” a “disaster,” according to lawyer Kenneth Feinberg, who was appointed by President Barack Obama to administer BP Plc’s $20 billion compensation fund for victims of the Gulf oil spill. “That is not an option.”

Feinberg was talking about a bankruptcy filing by BP in a Fox News interview.

“Bankruptcy absolutely is an option, and the U.S. needs to recognize that,” said Peter Kaufman, president and head of restructuring and distressed M&A at the Gordian Group, an investment bank in New York.

(more at link)

Read more: http://www.businessweek.com/news/2010-06-24/bp-bankruptcy-in-u-k-is-obama-s-worst-nightmare-caroline-baum.html

---

Joe Papantonio just mentioned BP is talking to Bankruptcy lawyers on Ed Schultz Radio Show - More on Ed Schultz MSNBC Show tonight!

[xchrom]

1. recommend

[DJ13]

2. We had better stop being so mean then

How dare the government hold a major corporation accountable for ruining an entire region of our country!


:eyes:

[Nihil]

36. Yeah ...

> How dare the government hold a major corporation accountable for
> ruining an entire region of our country!

The last thing the administration would want to do is set a precedent
for that ...

[louis-t]

3. If BP files bankruptcy, fox will report

"$20 bil Obama 'stole' from them caused it." So predictable.

[dipsydoodle]

11. Well if you follow

the financial media of all different types I think you may find that the escrow a/c has already started to cause liquidity problems , by viture of timing of payments ,which may not be easy for BP to resolve. It's well and good them selling some of their investments and assets but both assume there are buyers out there and there may not be. Conventionally they would simply issue bonds to raise funds but they been downgraded severely to which many here said whoopee.

I don't support BP in any way shape or form but if you were to search me on DU I've always maintained that its their contimued operations which are necessary to provide profits / funds to resolve this mess. Others here don't agree with that. Its easy to find who's who - just search BP in GD and LBN back to April.

[SalmonFritters]

24. It's the equivalent of debtor's prison

if you put them out of business, you'll never get paid. Gotta take emotion out of the equation. Very difficult for some as it requires interrogation of the facts vs feel-good venting.

[Gordan Shumway]

27. The facts are 20 billion

puts BP nowhere near bankrupt. Why would they ever agree to it if it would?

[villager]

4. Just as long as the little people don't delusionally think bankruptcy protection is for *them!*

n/t

[Hassin Bin Sober]

5. Somebody explain to me how a corporation that nets, what?, 15 billion can file BK?

[1776Forever]

7. Here you go - It happens! Link and article on Halliburton's bankruptcy plan in 2002.......

This is an article from 2002 but it shows how bankruptcy courts are used to settle class action suites!

.....

Article: Halliburton Follows Denver Producer's Method of Dealing with Asbestos Claims
By Eric Berger, Houston Chronicle Knight Ridder/Tribune Business News

http://www.highbeam.com/doc/1G1-95588091.html

Dec. 19--Halliburton's plan to use the bankruptcy courts to help settle billions of dollars in asbestos claims is an accepted practice used by solvent companies settling such huge class actions.

In this case, Halliburton is trying to refine the process to allow its Kellogg Brown & Root subsidiary to get through the process within 90 days of when it files next spring.

Halliburton will be following in the footsteps of Johns Manville, a Denver-based producer of building materials that, in the face of a staggering number of asbestos claims, filed for bankruptcy in 1982.

[Hassin Bin Sober]

10. I wonder how safe that 20 billion really is.

[GOTV]

13. It's not at all safe. It's simply a promise to pay in the future. Very easy to break.

and that's why I'm not impressed by it.

[closeupready]

14. Right! Things like bonuses and jubilees are for corporations only.

:sarcasm:

[postulater]

6. If they're too big to fail, let the British government bail them out. nt

[dipsydoodle]

8. They don't hold BP stock

so no due cause.

[mbperrin]

23. What would due cause be?

When the US bailed out AIG, Chrysler, GM, and every large bank in existence, did they hold stock in those companies? Is that what you mean?

[dipsydoodle]

26. It doesn't follow

that the UK government has such vested interest in BP. Wasn't part of the motive for the USA bailing out the auto co's to protect jobs ? The motives of the USA for bailing out the banks and AIG defeat me.

[mbperrin]

30. Nobody in the UK works for BP?

That would be amazing.

[CountAllVotes]

9. BP bankruptcy =

too fucking bad BP! :nopity: :nopity: :nopity: :grr: :mad: :argh:

You reap what you sow.

:kick:

[n2doc]

12. If they go bankrupt can we take back all their leases?

How about their assets in the States?

[dipsydoodle]

16. Are far as I'm aware

the leases are based on payment of agreed royalties. Their assets are mainly of value in context with the purpose they fulfill in that they help generate profits - remove the purpose and their value reduces.

[dipsydoodle]

15. I don't believe this para to be true

"What if BP chose to file for bankruptcy in the U.K., something that’s well within its rights? No doubt London courts would deliver an outcome more favorable to BP. And they’re apt to be less generous when it comes to paying damages to folks three times removed from directly affected claimants."

One of the big four international auditing firms would be appoined receiver and as such there would be no cause for favoratism.

And this bit cracks me up :

No wonder Congress wants to shut down that option. House Judiciary Chairman John Conyers, Democrat of Michigan, introduced a bill that would, among other things, prevent BP from seeking bankruptcy protection in the U.K.

and exactly how does he intend to do that ? You cannot use either your constitution or your laws in the UK where they do not apply.

Back to gardening.

[pattmarty]

17. I believe it's rather easy then, NATIONALIZE American BP assets.........

.........Which I believe would be the "old" Standard Oil & Exxon and that's the end of that. The US government will own a oil company that will continue to pay out damages as long as it fucking takes. End of story.

[dipsydoodle]

18. Good idea

I take it you're busy writing your missive on the subject to Obama at this very moment.

btw - might an idea for you to also suggest an alternative way getting oil and gas to you from Alaska avoiding Canada which of course isn't USA.

[pattmarty]

19. I don't know if you're being sarcastic or not, but my point is that..........

........if the US nationalized all the oil companies doing business in the US we could use ALL that money not to bring down the debt or to give healthcare to everybody, but to use the profits to invest in new, alternative ways to "fuel" our industries (whatever are left) and our vehicles. It ain't gonna happen, I fucking know that, but we all better start coming up with better ideas than our politicians (either party, they are both ass holes for the most part). This country is at a fucking crossroads now, we either reign in capitalism and tax it for the general welfare or we are truly FUCKED.

[dipsydoodle]

20. I undertstand what you mean

but you may fall into the trap of believing that ALL that money would be used to bring down the debt or to give healthcare to everybody. I just don't believe that would happen as a result. I also believe that soon as the Regugs were back in power they would privatise it all again anyway.

:hi: and sorry about the previous sarcasm.

[pattmarty]

22. I totally agree. I was stating what I would LIKE TO HAPPEN, not that..........

...........it ever will. I strongly believe that this country is too "far gone" now to have any kind of liberal or even moderate reforms. The best we will get now (at least for a short while) is the shitty healthcare "reform" that was passed and a really shitty financial "reform". Granted for all that say that Obama is the fucking greatest thing since sliced bread, and all his "reforms" are really change we can believe in, it is WAY TOO LITTLE AND WAY TO FUCKING LATE. We are so fucked.

[SalmonFritters]

25. Exxon is the "old" Standard Oil. BP is the old ... British Petroleum

I doubt the UK would be too stoked on the US stealing a company they have a major stake in also.

[dipsydoodle]

29. The UK has no "stake" in BP

other than by private institutional share ownership. USA has and UK have almost equal holding at c. 40 each. Overall the largest shareholder worlwide is JP Morgan Chase with c. 28% of entire stock.

As such there is really nothing to "steal" from the UK.

[depakid]

33. Apparently one out of every £6 paid in dividends paid to British citizens comes from BP

I found that number to be astonishing.

[TexasObserver]

21. BP's assets in the US are subject to US jurisdiction.

BP's plants, their holdings, their assets in the USA - all subject to US jurisdiction.

They're going to spend what they have fixing the gulf, or they're going to be liquidated and see their assets sold off to other companies.

[dipsydoodle]

28. Fair comment

and I think that may be what will happen. BP will cease to function completely within the USA's borders including Alaska and excluding Canada.

[vaberella]

31. It's everyone's worst nightmare. n/t

[Elmore Furth]

32. Reuters: "British PM Fears BP's Destruction, Stock Plunges"

BP only has $12 billion in accessible assets. Theoretically, BP could dodge billions in payouts to Gulf area businesses, residents, along with state and federal agencies, if the company sought Chapter 11 bankruptcy. BP currently has a net worth of about $81 billion but most of those assets are locked up in illiquid assets. Analysts at Credit Suisse have estimated the total clean-up cost at $23 million – but that doesn’t factor in billions in claims resulting from lost tourism in Alabama, Florida, Louisiana, Mississippi and Texas.

Well, I guess the plan B is to stick all of us with the bill.

TORONTO/HOUSTON (Reuters) - Fearing the "destruction" of BP Plc, British Prime Minister David Cameron said on Friday some certainty is needed over its costs from the Gulf of Mexico oil spill even as the company's stock plunged to a 14-year low.

Total share losses for the embattled British energy giant since the worst oil spill in U.S. history began on April 20 stand at around $100 billion, more than halving its market value prior to the disaster. BP stock on Friday fell more than 6 percent in London and New York.

BP plans to nearly double next week its capacity for siphoning oil gushing from its ruptured deep-sea well, but a looming storm is raising fears the effort could be disrupted for days or weeks. BP and the U.S. government nervously watched as an approaching low-pressure system over the western Caribbean Sea gathered strength.

Cameron is due to meet on Saturday with U.S. President Barack Obama on the sidelines of the G8/G20 summits in Canada. He has pledged to discuss BP with Obama, who has been highly critical of the company. British business and shareholder groups have clamored for Cameron to defend the company.



British PM Fears BP's "Destruction", Stock Plunges

[agentS]

34. How in the world will the British save BP?

They ain't got the money for a BP bailout and BP has completely and utterly fucked itself 10 times over with all the fines, damages, and fees from the cleanup. Then there's the operating costs just of the cleanup alone- those skimmers and crews don't come cheap.

The level of damage here is so great that not only will BP not survive, neither will anybody who buys BP assets. Such is the nature of the 'beast'.

[dipsydoodle]

35. Its arbitary

Why would the UK want to bail out BP anyway ? It's the Pentagon which gets over 60% of its oil supply from BP. Sale of their assets is an unassociated issue.