Baker Panel Report

January 16th, 2007

On June 3, 2016, BP PLC agreed to pay $175 million to settle claims by U.S. investors that its managers lied about the size of the 2010 Gulf of Mexico oil spill pending in the Southern District of Texas.

The investors’ class action lawsuit (case No. 10-md-2185), led by public employee pension funds from New York and Ohio, concerned statements made shortly after the Deepwater Horizon drilling rig exploded in April 2010.

This settlement is the third settlement in connection with the oil spill but the first settlement relating to investor claims, following a 2012 settlement for $4 billion to resolve criminal charges tied to pollution violations, misleading Congress and manslaughter for the deaths of 11 oil rig workers killed in the initial explosion. In October 2015, BP agreed to pay more than $20 billion in fines, the largest corporate settlement of its kind in U.S. history.

The $175 million settlement doesn’t cover other securities-related claims, and there are still various private actions pending.

Participate Here

STICHTING INVESTOR CLAIMS AGAINST BP (the "Foundation") is an “open foundation” under Article 3:305a of the Dutch Civil Code (“DCC”) representing the interests of all of its members collectively.

To download the Deed of Incorporation click here.

The Foundation's Purpose

The purpose of the Foundation is to protect the interests and rights of all investors in BP plc, the largest British company by market capitalization and one of the world’s leading oil exploration and producing companies, particularly regarding the compensation of investor losses sustained as a result of BP's false or misleading shareholder representations and information leading up to and concerning the Deepwater Horizon oil drilling rig explosion and consequential oil spill in the Gulf of Mexico ("Deepwater Horizon Disaster") and the financial consequences for the company and its shareholders. BP's stock price dropped by almost 50% in the first two months following the Deepwater Horizon Disaster, wiping out over £47 billion in shareholder value.

The Foundation seeks a determination and discovery of the truth of what happened at and surrounding BP that led to the Deepwater Horizon Disaster and, in this context, will assist any public investigative bodies pursuing the same goal, such as the U.S. Securities and Exchange Commission, the U.S. Department of Justice, the U.K.’s Financial Service Authority, the Netherlands Authority for the Financial Markets, and/or other regulatory or environmental agencies around the world.

The Foundation also seeks an investigation into the management and shareholder communication practices at BP, especially with regard to its security precautions, safety programs, emergency response procedures and programs for off-shore, deep water oil drilling, including the implementation of any necessary corporate governance and management changes, and any possible sanctions against BP.

The Foundation also seeks to assist BP shareholders with an investigation into avenues, jurisdictions and remedies for relief in the form of compensation to such BP investors in and outside of the Netherlands for any losses they have experienced resulting from financial consequences of the Deepwater Horizon Disaster. The Foundation specifically seeks to assist those BP shareholder who have invested in BP common stock outside the U.S. (“Non-U.S. Investors) between January 16, 2007, the date of BP’s acknowledgement of the Baker Report and vow to follow it, and July 15, 2010, the date the Gulf oil leak was stopped (the “Relevant Period”) and who are not separately represented in the U.S. class action under case no. 10-md-02185 (“ADS Investors”).

BP's False and Misleading Statements

On April 20, 2010, the so-called “Deepwater Horizon” drilling rig exploded, causing enormous amounts of oil to spill into the Gulf of Mexico, leading to an environmental catastrophe of still-evolving and unknown dimensions. The leak at deep sea level was sealed on July 15, 2010, but not before millions of barrels of oil had already poured into the Gulf of Mexico. BP blamed various subcontractors for their failures but eventually admitted its own shortcomings in preparing for, preventing and reacting to such an environmentally catastrophic event, as also shown by various investigations and reports.

BP failed to properly inform and notify the investing public about market-relevant information yet known mostly by insiders of BP, such as information about security measures, security protocols, emergency programs and planning, knowledge about potentially unsafe operations at BP and BP’s oil drilling and exploration sites, or knowledge and willful selection of low-budget solutions for high risk aspects of the deep sea oil drilling operations. At the same time, BP made various statements regarding safety (“Safety, both personal and process, remains our highest priority.”) and procedures for oil rig operations (“All of our production facilities have contingency plans that identify the procedures, response equipment, and key personnel needed for responding to incidents.”) and assured the public that it could operate safely in deep water, that a major oil spill was next to impossible and that even in the unlikely event of a major oil spill, BP would have adequate procedures in place to handle even the most substantial spills. Later, however, BP CEO Mr. Hayward admitted in an interview that the U.K.-based oil giant did not have the adequate technology available to stop a leak such as the leak caused by the Deepwater Horizon explosion, and said that, in hindsight, it was “probably true” that BP should have done more to prepare for an emergency of this kind.

Furthermore, BP initially estimated that the well involved in the Deepwater Horizon matter would discharge 1,000 barrels of crude oil into the Gulf of Mexico each day, but later on raised the estimate to 5,000 barrels a day. However, it is now clear that BP tried to downplay the severity of the oil spill, and that up to 60,000 barrels of crude oil were discharged every day, which had much more severe environmental, business interruption and health consequences and a much more severe financial impact on BP and, therefore, its shareholders.

Important Developments in the BP Matter

In June 2010, BP set up a $20 billion claims fund to satisfy claims including natural resource damages and state and local response costs. In December 2012, the United States District Court Eastern District of Louisiana approved a settlement, which resolves the substantial majority of outstanding private economic loss, property damage and medical claims against BP. BP has estimated the total costs associated with this settlement at $7.8 billion, which will be paid out of the $20 billion claims fund. This settlement does not cover any of the federal government claims or individual State lawsuits brought against BP.

Furthermore, in November 2012, BP pled guilty to criminal charges brought against it by the United States Department of Justice (“DoJ”), and has agreed to pay $4.5 billion in fines and other penalties. To resolve all criminal claims brought by the US government against it, BP was sentenced to pay $4 billion in total to the DoJ, the National Fish & Wildlife Foundation and the National Academy of Sciences. To resolve all securities claims brought by the US government against BP for alleged misstatements regarding the actual flow rate of the oil well, BP reached a settlement with the United States Securities and Exchange Commission (“SEC”) of $525 million.

The Foundation’s Plan of Action

The Foundation, as an Article 3:305a DCC foundation, is prepared to file a collective complaint in the Netherlands as a representative action under Dutch law in the interests of its members, participants and general investors alike, seeking a determination of liability against BP and its management. The Foundation will also analyze, research, prepare and finance possible actions in the United States, the United Kingdom or any other suitable jurisdiction and prepare appropriate financial and funding models for the proper pursuit of liability or damage actions against BP. Currently, the Foundation is supported by U.S. and European law firms experienced in the pursuit of Foundation and investor loss recovery actions. In doing so, the Foundation is particularly concerned with the protection of the interest of the Non-U.S. Investors, who are not included and protected by the currently pending consolidated U.S. class action against BP and who might not have a basis to assert federal securities claims in the U.S. because of jurisdictional issues (NAB decision and forum non conveniens).

The Foundation is planning to provide regular updates of its efforts to its members and additional information on this website or via other means of communication, as any important and relevant information becomes available.

BP Investors Who Are Encouraged To Support the Foundation

Institutional investors who purchased BP common stock (ISIN: GB0007980591) on any European or other non-U.S. exchange (“Non-U.S. Investors”) during the Relevant Period (January 16, 2007 to July 15, 2010) are encouraged to join the Foundation as a Participant as soon as possible and, thereby, support the Foundation’s initiatives and purpose. Non-U.S. Investors also include U.S. investors who purchased BP common stock outside the U.S. stock exchanges.

Participation in the Foundation is confidential and carries no financial risk or obligation to pay with it. Submitting a Participation Agreement also does not make any investor a party to any litigation, and is merely intended to provide the Foundation the required representative capacity under Dutch Law to act as representative body and also enter into and execute any class-wide settlement agreements on behalf of the protected Non-U.S. Investor class.

Currently, the Foundation counts over 200 institutional participants with aggregate claims of over GBP 700 million, but represents all foreign purchasers of the 3.79 billion BP ordinary shares held on April 20, 2010 (the date of the Deepwater Horizon explosion), who suffered collective losses of over GBP 47 billion.

Recent Developments

While the pending U.S. shareholders class action only covers ADS Investors, recent developments in the Texas court concerning individual actions (i.e. not class action) may have opened the door for U.S. as well as non-U.S. investors with purchases of BP common stock on Non-U.S. exchanges.

In December 2013, the Texas District Court denied class certification of the class action and determining that the plaintiffs failed to meet their burden of showing that damages can be measured on a class-wide basis consistent with their theories of liability, but allowed plaintiffs to refile an amended certification motion to address the court’s reservations on damages. Plaintiffs filed amended motion on January 6, 2014, folloewd by a motion to dismiss on February 19, 2014. On May 20, 2014, the Judge partially certified the post-spill "spill severity" subclass of investors, but denied the class certification of the pre-spill "process safety" subclass. The certified class definition covers the "Post-Explosion" or "Spill Severity" Subclass consisting of investors, but denied the class certification of the pre-spill "process safety" subclass. The certified class defintion covers the "Post-Explosion" or "Spill Severity" Subclass consisting of persons or entities who purchased or otherwise acquired BP ADSs between either April 26, 2010 or April 29, 2013 and May 28, 2010 and were injured thereby.

Several groups of institutional investors of 50 or less filed private actions in 2013 in Texas (50 or less in order to avoid treatment as federal class action as dictated by the Securities Litigation Uniform Standards Act (SLUSA)). The investors claimed damages under Texas state law, including the Texas Securities Act and Texas common law, for investments in BP common stock and ADSs. In one of these actions the Texas Federal District Court (a) dismissed the state law claims (Texas Securities Act and common law fraud), but (b) held that the English common law claims (for deceit) are viable, and that (c) the forum non conveniens doctrine favors U.S. jurisdiction and that the court may hear and decide English law claims in Texas. While technically this decision only applies to U.S. investors who purchased BP shares outside the U.S., i.e. the BP common stock in England, it could  also apply to Non-U.S. investors, who purchased BP common stock abroad.

Additional groups of institutional investors filed their claims in the U.S. Texas Federal Court before the expiration of the statute of limitations in the U.S. that most likely expired on April 20, 2014 (4-years from the day of the Deepwater Horizon oil spill). In comparison, the statute of limitations for the English law claims (6 years in England) will expire on April 20, 2016. The Dutch statute of limitations will not expire before April 20, 2015, however, the Dutch Supreme Court explicitly considered that a foundation should be able to interrupt the prescription period on behalf of all whose interests are being represented by the foundation. Hence, the Foundation has the possibility to restart the statute of limitation before its expiration.