Schumer, Wyden Ask BP to Halt Payments to Shareholders

[babylonsister]

Schumer, Wyden Ask BP to Halt Payments to Shareholders
By Annie Lowrey 6/2/10 5:06 PM


This afternoon, Sens. Charles Schumer (D-N.Y.) and Ron Wyden (D-Ore.) called on BP, the British oil company responsible for the catastrophic Deepwater Horizon spill in the Gulf of Mexico, to halt its dividend payments to shareholders until the well is capped and damages determined.

London papers reported today that BP hoped to assure its shareholders that they would continue to get dividend payouts, as the stock declined 15 percent yesterday when the company’s “top kill” effort to seal the leak failed over the weekend. The company’s liability could be as high as $37 billion, Credit Suisse said, and Schumer and Wyden want BP to know what it owes to American citizens and taxpayers before remitting funds to shareholders.

The threat to BP from high liabilities and a falling shareprice might be existential. Reuters blogger Felix Salmon notes, “The most likely fate for BP at this point isn’t death but rather takeover. There’s been a lot of speculation along those lines, and with BP’s leadership looking even weaker than its stock price, the rest of Big Oil is surely salivating at the prospect of picking BP up without much difficulty. What’s more, BP could easily be broken up, like ABN Amro, and divvied up according to its various geographical units.”

BP has spent around $1 billion on cleanup and economic hardship payments to Gulf residents and workers thus far. But today, analysts said that the leak might last until Christmas — six months from now. And in the best-case scenario, BP hopes to plug the leak no sooner than August.

Here is Wyden and Schumer’s letter to Tony Hayward, BP’s chief executive officer:

more...

http://washingtonindependent.com/86222/schumer-wyden-ask-bp-to-halt-dividend-payment

[Scuba]

1. Why am I skeptical...

...that BP will have any money left when it comes time to compensate their victims?