Is BP going to declare bankruptcy? - Democratic Underground

undeterred

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Wed Jun-09-10 08:41 PM
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Is BP going to declare bankruptcy?

BP hit by doubts over ability to pay for costs of oil spill

SAN FRANCISCO (MarketWatch) -- BP PLC shares slumped Wednesday, leaving its market value halved in fewer than seven weeks, while the oil giant's bonds were crushed as questions mounted over whether it can afford to clean up the worst environmental disaster in U.S. history.

Oil-industry insider Matt Simmons, head of the Texas-based, energy-focused investment bank Simmons & Co., told Fortune magazine Wednesday that BP will run out of cash from lawsuits, cleanup costs and other expenses.

"They have about a month before they declare Chapter 11" bankruptcy, Simmons said.

"One really smart thing that Obama did was about three weeks ago, he forced BP CEO Tony Hayward to put in writing that BP would pay for every dollar of the cleanup," he added. "But there isn't enough money in the world to clean up the Gulf of Mexico. Once BP realizes the extent of this, my guess is that they'll panic and go into Chapter 11."

BP's U.S.-traded shares slumped 16% to close at $29.20 on heavy volume. It's the lowest level for the stock since 1996. The shares traded above $60 before April 22, the day the Deepwater Horizon drilling platform sank off the coast of Louisiana.

http://www.marketwatch.com/story/bps-market-value-halves-as-spill-costs-loom-large-2010-06-09?dist=afterbell

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Sebastian Doyle

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Wed Jun-09-10 08:42 PM
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1. Seize their assests NOW

If there's any legal red tape involved in doing so, just call them "terrorists".

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Walk away

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Wed Jun-09-10 09:31 PM
Response to Reply #1

6. What are their assets? Their stock?

Should we plan a big garage sale for their equipment?

Keep dancing on BP's grave and we won't get a penny.

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Abq_Sarah

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Wed Jun-09-10 10:39 PM
Response to Reply #6

12. The more their stock price is driven down

The less chance they'll be able to foot the bill.

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glinda

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Wed Jun-09-10 08:44 PM
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2. They will get nothing for clean up if they go bankrupt.

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IndianaJoe

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Wed Jun-09-10 08:50 PM
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3. And the written "promise" to clean up the Gulf becomes

and unsecured claim in a Chapter 11 bankruptcy? Or is it a priority claim? Interesting legal issue.

I know claims for environmental damages can't be "abandoned". Also, bankruptcy courts, being courts of equity, let judges sometimes prioritize some claims over others for equitable reasons. I'd like to see every unsecured dime BP has applied to making right the damage their carelessness has caused.

They have lots of assets. Is the Gulf of Mexico a creditor? This is going to be one interesting Chapter 11!

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elfin

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Wed Jun-09-10 09:01 PM
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4. "Bankruptcy" is a sham --

They have earned BILLIONS - 7 Billion alone in their last quarter.

The best short term strategy I heard today on satellite radio - either MSNBC or POTUS - was to have 10 Billion in an account to be managed by a :"master" to handle the justifiable claims.

I would up that to at LEAST 20 B, with that being the minimum.

Then BP would have to go after TransOcean or Halliburton to recoup, after having the $ deposited to US. No repeat of Exxon skating from Valdiz after 20 or more years..

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theoldman

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Wed Jun-09-10 09:10 PM
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5. Wake up and open your eyes everyone.

BP will not go bankrupt because their lawyers will see to it that very little money will be paid for the cleanup. The name of the company is British Petroleum not US Petroleum. The US tax payer will end up funding most of the cleanup. Have you guys forgotten that little spill in Alaska? Life is not how we would like it to be. We are the poor and they are the rich.

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HCE SuiGeneris

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Wed Jun-09-10 09:34 PM
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7. Wonder who the big players are that bet against them in options

and hedge funds... my guess is you would find some pretty big names a layer or two down.

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TexasObserver

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Wed Jun-09-10 09:37 PM
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8. I don't know if it will happen that soon, but yes, BP is probably headed to chapter 11.

That will allow them to put on hold most of the litigation that has been spawned by this disaster.

It's also why I've consistently warned people to unload their BP stock since this event started.

Get as far from this disaster as you can, economically.

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no_hypocrisy

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Wed Jun-09-10 09:40 PM
Response to Original message

9. Not until its shareholders get their promised dividends . . . . . .

Edited on Wed Jun-09-10 09:41 PM by no_hypocrisy

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salguine

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Wed Jun-09-10 09:44 PM
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10. Are you kidding!? They'll find a way to get a 100 billion dollar bailout out of this.

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FarCenter

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Wed Jun-09-10 10:27 PM
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11. Yes, they will split up into "bad-BP" and "good-BP". Bad BP will go bankrupt in London courts.

Good luck with that.

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Abq_Sarah

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Wed Jun-09-10 10:41 PM
Response to Reply #11

13. Old oil company

Vs new oil company. The only thing missing is a government bailout.

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