BP investors can sue over post-Macondo share slump

OREANDA-NEWS. September 14, 2015.  BP investors can proceed with a class-action lawsuit for over \\$2.5bn in losses they claim to have suffered when the major's share price fell following the 2010 US Gulf of Mexico (GoM) oil spill.

The investors allege that BP initially lied about the true size of the oil spill, which falsely inflated the value of the shares they purchased after the spill. The share price fell further when the full scope of the spill became clearer. A federal appeals court yesterday upheld a lower court judge's decision to grant class certification to the group of investors.

In the filing, the 5th Circuit Court of Appeals pointed to the Coast Guard's statement that it believed the spill rate was "five-fold higher than first anticipated."

The appeals court, however, upheld an earlier decision barring investors who purchased shares before the spill from seeking damages. The investors had said they were misled by the company's false promise it had made safety improvements following the 2005 Texas City refinery explosion.

In July, BP agreed to pay \\$18.7bn over the next 15-18 years to settle federal and state claims related to the spill. The blowout aboard the drilling rig Deepwater Horizon killed 11 workers and led to the largest offshore oil spill in US history. The well spewed oil for 87 days before it was sealed. A judge found BP was grossly negligent in its actions leading up to the spill.

Most of the money will go to the five Gulf coast states to pay for environmental and economic damage from the estimated 3.18mn bl of oil that spilled.