Transocean pays stockholders $1 billion; controversy follows

[trof]

"Controversy follows"?
No shit!

ZUG, Switzerland -- After the chief executive of Transocean Ltd., owner of the Deepwater Horizon rig, held a closed-door meeting with shareholders Friday, the company issued a terse statement after the Zurich stock market closed saying it would distribute some $1 billion in dividend to shareholders.

News of the dividends, which amount to about $3.11 per share, came just days after company chief executive Steven Newman appeared before Congress to explain his company's involvement in the massive Gulf of Mexico oil spill.

Although its stock has lost value, the dollar-amount of the dividend caught the eye of people angry over the disaster.

"What spill? Rig owner approves $1 billion dividend to stockholders," read a headline today on the website The Raw Story.

"To put the distribution in perspective," the Web site states, "the amount of profit that Transocean plans to pay out in the next year is half of what Exxon ultimately paid for the Exxon Valdez disaster off the Alaska Coast."
http://blog.al.com/live/2010/05/oil_spill_rig_owner_transocean.html

Putting money where it can't be reached by lawsuits?
And just how many shares of the stock that just paid $3.11 per share do you think the CEO and directors own?
:grr:

[Mojeoux]

1. Growl Howl GRRRRRRR

This shit is thick!
They broke the ocean, they have to buy it now!

[Vinnie From Indy]

2. You are exactly correct!

This is about as clear a case as take the money and run while the running is still good as I have ever seen. Surely someone somewhere will file a lawsuit to get an injunction to halt any payouts in the face of this gargantuan disaster.

[Scuba]

11. +1+1

[Incitatus]

3. of course

[RandomThoughts]

4. That is fine, it justifies larger action.

Just a piece of things.

Eagle Claw, Eagle Claw!!!
http://www.youtube.com/watch?v=YWaosOaURfU

Eye of the Tiger.
http://www.youtube.com/watch?v=btPJPFnesV4

To Life!!!!!!!!

Wake Up !!!!!!!!!



LOL, some people think gold is money, that is funny.

[TexasObserver]

5. This will probably lead to a fraudulent conveyance case.

If a person or entity moves assets or money to hide them from one who has a legitimate claim for damages against the company, that person can sue the miscreant for fraudulent conveyance, and sue those who received such sums.

This would be a highly unusual case, however. Typically, it's related party transactions, where assets are sold to related parties or insiders at a discount, and typically, it arises when the offending company files a chapter 11 reorg in bankruptcy court. Creditors begin to examine transactions that occurred leading up to the bankruptcy.

This is a clever attempt to make Transocean stock more attractive and to move cash from the company to stockholders, which would help Transocean and those who hold Transocean stock or options. In other words, it will help insiders a great deal, as well as large stockholders.

I predict the officers and directors will all be sued for this action, individually, as well as in their corporate capacities. It's impossible for them to do this action without contemplating the impact it may have on future claims against the company. They have a huge conflict of interest. The company should be protecting its cash, not giving it away to stockholders before the liability cases start coming in. This action is malfeasance in office, and gives rise to a cause of action against the officers and directors by stockholders who own shares that do not pay dividends (assuming there are some).

I can't imagine their lenders are happy with this action, either.

[Ruby the Liberal]

8. Not to mention their insurance company...

[ProgressiveProfessor]

13. Interesting concept, how is it going to be litigaged against a company based in Switzerland?

You are citing US law which is most likely not applicable in this case. Note that the move there is about 2 years old.

[TexasObserver]

16. They can be sued in the US, in state court or federal court.

They have assets in the US. They are amenable to US jurisdiction. That's not even an issue.

Transocean is already being sued in the US over this, and stated in Switzerland that it would file a petition in federal court in Houston to try to cap its overall liability. It's clear that Transocean knows it is amenable to federal court, and will, in fact, use federal court to try to invoke a cap for its exposure.

http://www.google.com/hostednews/ap/article/ALeqM5j6ZHFewGSO2bKWbUi8oFghM2zCkQD9FMHL8O0

"Lawsuits have piled up against Transocean and BP, which leased the rig and is trying to shut off a well that's spewing 210,000 gallons of crude into the Gulf of Mexico each day. Transocean said Thursday it will petition a federal court in Houston to cap its overall liability from the incident at less than $27 million."

[trof]

15. Yeah, and in the courts for...how many years?

:-(

[TexasObserver]

17. Depends on the forum, depends on the parties, depends on the lawyers.

Probably somewhere between three and eight years.

[Swamp Rat]

6. GOOD! They are digging their own graves.

Now go drink a quart of oil and die!

[Ruby the Liberal]

7. These guys just may be even more tone deaf than Wall Street

Announcing this while the crisis is ongoing isn't the smartest thing to do, IMO.

Greedy bastards. Next week they will file for bankruptcy and close shop, just to crawl out from under their rock in a year to form a shiny new company.

[Kablooie]

9. Whoo boy. The slime keeps coming out from both ends.

[TBF]

10. Can they touch them with lawsuits though

if they live overseas (the shareholders I mean...)??

[Cali_Democrat]

12. Transocean is based in Switzerland?

Isn't Switzerland a landlocked country?

Could it be that they just want to get around paying their fair share in taxes? :shrug:

[ProgressiveProfessor]

14. And different corporate laws

This could well be a sort of apriori liquidation. It will make litigation much less attractive or at least less practical.

[TexasObserver]

18. Which is completely irrelevant to the US claims against them.

You really need to stop thinking that fact matters in the pursuit of litigation against them.

Where did you get the idea that a company existing under foreign laws is not amenable to US courts for torts that impact US citizens? Please dissuade yourself of that notion. It's wrong.

Tranocean sues people in US courts, is sued in federal courts, has assets and installations in the US, and does not share your misapprehension regarding their being under US jurisdiction for these claims.

Here's a link to their Houston Operation, which is substantial.
http://www.deepwater.com/fw/main/Houston-Office-71.html

We in litigation call this "doing business in the United States." It's one basis for jurisdiction over foreign companies. Committing a tort against US citizens is another basis for such jurisdiction. So is breaching a contract with an American company.

And there there's the NYSE and the jurisdiction of the SEC over the officers and directors for their actions to try to manipulate stock values while raiding the company treasury.

The States Attorneys Generals, the US Attorney General, the SEC, and private citizens can all pursue Transocean in US courts. When US courts want you, there's no place to hide.

[trof]

19. I like your way of thinking, counselor.

And I do believe you have some experience in this area.
Thanks for your input.