With options dwindling, BP seized a chance to settle oil spill case
By Jessica Resnick-Ault, Dmitry Zhdannikov and Terry Wade
NEW YORK/LONDON/HOUSTON (Reuters) - In early May, with its legal options dwindling and investors impatient, BP Plc saw a chance to negotiate what became a $18.7 billion settlement that ended five years of litigation over the worst offshore oil spill in U.S. history.
An unexpected opportunity to secure a global deal that would wipe the slate clean of hundreds of claims and untold billions of dollar in penalties opened up when Chief Executive Bob Dudley met with Patrick Juneau, the lifelong Louisiana litigator who BP had panned for handing out "absurd" sums of money as part of a class settlement in 2012.
The British giant was ready to bury the hatchet after years of acrimony over payouts, which had ballooned to more than $10 billion. It had bigger problems: unresolved claims by the federal government, five Gulf of Mexico states and hundreds of local municipalities stemming from Macondo well blowout.
Toward the end of an over hour-long conversation about the claims, Juneau, a mediator by trade, steered it toward the bigger cases BP still faced from the 2010 disaster that killed 11 men and gushed oil into the Gulf of Mexico for 87 days.
"I suggested to Mr. Dudley that it seemed to me that I, along with Judge Shushan and Louie Freeh, thought that those matters can be and should be addressed," he told Reuters.
Sally Shushan, the eastern Louisiana district court magistrate, and former Federal Bureau of Investigation director Freeh, who had been enlisted to investigate Juneau's oil spill claims program, were already deeply steeped in the issue.
Within weeks, District Court Judge Carl Barbier, who had overseen years of acrimonious lawsuits, had designated this trio to shepherd the sides to what would be the largest corporate settlement in U.S. history, according to people involved.
Within a day, BP signaled its interest in further talks, Juneau said. Its executive board put chief financial officer Brian Gilvary, a mathematics PhD and career BP man, in charge of the effort, hoping it would turn out better than in 2012, when an initial round of settlement talks collapsed. Continued...