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Judge Approves BP Criminal Settlement Over Gulf Spill

Several dozen people gave emotional testimony and submitted letters to Judge Sarah S. Vance, of Federal District Court in New Orleans, requesting that she reject the plea agreement reached last November. Some wanted additional financial compensation, while others requested stronger punishment for BP supervisors or a more powerful apology.

“If I had my wish,” wrote Ashley Manuel, daughter of Keith Blair Manuel, one of the 11 rig workers who died, “it would be that the three representatives from BP who sat in my grandparents’ living room and lied to my face about the accident would sit in jail and feel the same pain and loss I feel.”

At the hearing on Tuesday, Luke Keller, a vice president of BP America, apologized to the families. “BP understands and acknowledges its role in that tragedy, and we apologize — BP apologizes — to all those injured and especially to the families of the lost loved ones,” Mr. Keller said. “BP is also sorry for the harm to the environment that resulted from the spill, and we apologize to the individuals and communities who were injured.”

Had the judge not accepted the plea agreement, the company would have faced a long and expensive trial, potentially resulting in tougher penalties.

The company’s stock price, which fell roughly by half after the accident, has recovered more than 40 percent of its loss over the last three years. The company has sold off billions of dollars of assets to pay for damages from the accident and is now a smaller company, but still one focused on drilling in the Gulf of Mexico. The company’s shares rose on the news of the judge’s decision, with its American shares ending the day at $45.21, up almost 2 percent.

The company said it had already paid out more than $24 billion on various settlements and cleanup efforts.

The two top BP officers aboard the Deepwater Horizon drilling rig, Robert Kaluza and Donald Vidrine, were charged with manslaughter in connection with each of the men who died, and David Rainey, a former vice president, was charged with obstruction of Congress and making false statements for understating the rate at which oil was spilling from the well.

A low-level engineer, Kurt Mix, was previously charged with obstruction of justice for deleting text messages about company estimates of the spill flow rate.

Those individual cases are still pending.

Although BP has resolved the criminal charges against the company, it still faces sizable pollution fines before it can put the accident behind it. A settlement with the Justice Department has so far been elusive, and a trial to resolve the remaining civil litigation is scheduled for Feb. 25 in New Orleans.

Under the Clean Water Act, the company faces potential civil fines of $5 billion to $21 billion, based on a government estimate that 4.9 million barrels of oil were released from the Macondo well. The higher fines could be applied if the company were found to be grossly negligent in the spill.

Attorney General Eric H. Holder Jr. has publicly said that the Justice Department is committed to proving the company was grossly negligent. The company does not accept that assessment, contending that the accident was in part the fault of two of its contractors: Transocean, the rig owner and operator, and Halliburton, which handled the cement job on the well.

Transocean agreed this month to settle civil and criminal claims with the federal government and pay $1.4 billion in penalties. Halliburton has not reached any civil or criminal settlements related to the accident.

BP has also argued that the government spill estimate is too high, and company lawyers this month said in a filing to United States District Judge Carl J. Barbier that an estimated 810,000 barrels of escaped oil that it collected should not be counted toward any Clean Water Act fines. A ruling in the company’s favor could reduce fines by $891 million to $3.5 billion.

The company announced some changes to its management team on Tuesday, including the promotion of John Mingé, who has led operations in Alaska, to chairman and president of BP America. He will succeed Lamar McKay, who will now head BP’s upstream business.

Bob Fryar, the executive vice president for production, will become the new executive vice president for safety and operational risk. Officials at BP said the moves did not represent a fundamental change in direction.

Article source: http://www.nytimes.com/2013/01/30/business/judge-approves-bp-criminal-settlement.html?partner=rss&emc=rss

Wealth Matters: Safeguarding Assets Against the Hazards of a Lawsuit

The short answer is that someone’s money can never be completely protected from creditors, but there are steps that can be taken to discourage people from pursuing you.

“There is no such thing as asset protection,” said Jason Cain, head of the family wealth planning group in the central region for Credit Suisse Private Bank. “What there is is good business and estate planning that as a byproduct insulates your assets from future, potential creditors.”

Or as Amy Jetel, a partner in the law firm of Beckett, Thackett Jetel in Austin, Tex., said, such protection is like setting up a series of hurdles. “They can be knocked over, but every time you knock one over, it costs the creditor $500,000,” she said. “So they might say, ‘I’m going to settle.’ They want the easy stuff.”

While this may sound like the realm of just the truly wealthy, asset protection is something that people with a nice home and a couple of cars should consider, particularly if they can imagine being sued. Certain professionals who are well off but far from rich, like lawyers, architects and doctors, are at a higher risk of being sued. And naturally, children who inherit money from parents or grandparents can become targets for lawsuits and higher divorce payouts, advisers said.

So how should people think about what they might need?

R. Hugh Magill, chief fiduciary officer at Northern Trust, said that putting a proper plan in place took time but needed to start with an assessment of what people had and how likely it was that someone would sue them for it.

“So much of the literature about asset protection starts with the assumption that you need an asset protection trust,” Mr. Magill said. “I don’t want to start with the solution. I want to start with the risk.”

Insurance is the first level of protection. After the necessary home and auto policies, the most crucial thing is to have an umbrella policy that limits liability. Think of it as protection against the unexpected, like someone falling down your stairs or being hit by the car driven by your child.

“We view lawsuits as probably the most dangerous thing that our clients face,” Jeremiah Hourihan, executive vice president at Chartis Private Client Group, said. “The No. 1 risk is a car accident where you or a family member causes harm to someone else. Those are the most frequent incidents we see.”

He said the company’s most common liability policy was for $10 million. Depending on how many homes and cars people have, he said, it generally costs about $2,000 to $3,000 a year for $10 million in umbrella coverage. He said yachts, boats or Jet Skis increased the cost.

These policies can also be written to include separate coverage for legal fees from a lawsuit as well as to protect people who serve on nonprofit boards and fear the group’s coverage is inadequate if they are sued, Mr. Hourihan said.

Another easy step is to see what is automatically protected by the states where you live. Florida and Texas, for example, have homestead laws that allow primary residences to be excluded from lawsuits. Illinois and Pennsylvania have laws that protect the equity in a home when it is owned jointly if one spouse is sued.

Retirement assets, like 401(k) plans, and some types of insurance also have some protection from creditors.

Money put in trusts for heirs is another way to shield assets. If they are worded to give plenty of discretion to a trustee in making distributions, trusts can also serve double duty and protect children from lawsuits or divorce settlements, Mr. Magill said, and be more discreet and effective than prenuptial agreements.

People who work in certain professions, like lawyers, architects and engineers, also face liability by the nature of their work. They could be named as a party in a lawsuit, even if they did nothing wrong.

“Let’s say the architect designs the building and the engineers do the drawings and there was a problem with the load-bearing structure,” Mr. Magill said. “So it’s whoever gets sued, they’re going to name the architect.”

This article has been revised to reflect the following correction:

Correction: November 2, 2012

An earlier version of this story misidentified the law firm where Amy Jetel is a partner. It is Beckett, Thackett Jetel in Austin, Tex., not Schurig, Jetel, Becket Thackett.

Article source: http://www.nytimes.com/2012/11/03/your-money/safeguarding-assets-against-the-hazards-of-a-lawsuit.html?partner=rss&emc=rss

Judge Approves BP Criminal Settlement Over Gulf Spill

Wealth Matters: Safeguarding Assets Against the Hazards of a Lawsuit

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