What happens if/when BP declares bankruptcy??

..

now that the Chinese are looking at buying it.

Other than that you'd be completely fucked.

In the case of US government fines for bad actions, they are in the front of the line after the IRS.

and you need more than that.

The Government has a wonderful ability of tracking down and freezing assets of people in other countries. Wonder if they have the same ability here.

with Russia and China.

Honestly, I laugh when they are mentioned. China is one step away from a revolution in most of its territory everyday and Russia...well they have their own issues.

Most of their military is defensive against their own people, not offensive against a 3rd party.

that most of their fixed assets, regardless of where they are physically , are rather large lumps of metal which in BP's day to day business may help generate large profits but out of thsat context become almost valueless.

Seeing they are the 4th largest corporation in the world, have tons of paper floating around, and probably have more than a few exotic financial instruments written based on said paper.

:-)

Therefore it is speculative nonsense because my guess is they would at the least take down the British banking system with them and I doubt politicians on either side of the pond would like that very much. Not very much at all.

China and Russia please. Manhattan and London.

http://en.wikipedia.org/wiki/Defense_Production_Act


...BP U.S. Assets... Cash.. in-ground reserves, etc.

Mr. Obama will never do that.. but it would be nice to make sure that all the people who lost their homes and businesses in Gulf disaster would be compensated.

There are two possible reasons for bankruptcy:

a) because BP has to seek bankruptcy protection.
Any claims and/or fines won't be due on day 1. BP will likely pay them over course of a decade meaning the affect on cashflow will be minimal. BP generated $25 billion in pre-tax profit last year and will do so again as long as average price of oil remains above $65 this year (almost guaranteed).

Even if the total cost (fines, mitigation, long term cleanup, damages, etc) is huge say $100 billion BP is only liable for 60% of that. BP is a partial owner of the well so that is $60B. Say BP pays it over a decade that is $6B annually which is less than they pay out in dividends.

b) BP files bankruptcy because it is profitable to do so.
I doubt BP will do this. Not because they are ethical, or nice but because US oil fields are off the charts profitable for companies. US govt gets about 12% of gross profits from US oil fields. The global average is 80%. Nigeria for example takes 94%. Thus US oil fields are worth a lot more to oil companies than any other country. If BP were to pull some legal tricks to get into bankruptcy they likely would lose US leases and potential for future leases and that in the long run (next century) could be worth trillions.

Now the more likely thing is BP tries to play court games (aka Exxon) and delay & reduce claims. Try to drive hard bargains and force people (who likely are suffering financially and may have no other choice) to accept reduced out of court settlements. Like someone who suffers million dollars in damages to his/her business. BP ties it up in court so they won't see a nickle for a decade. Then tells them they will settle for $280,000 right now. The guy has business debt, payroll, taxes. He needs the cashflow now. $280,000 is a ripoff but he likely won't survive a decade to collect the million. So he signs.

Crappy but that is exactly what Exxon did. Everyone knows the court settlement of punitive damages got reduced from $5B to $500M however what they forget is Exxon settle 90%+ of claims out of court and most of them were pennies on the dollar.

Their banking system is in the shitter already. Would pretty much push them down the hole. British banking system goes down, ours follows.

Cue Paulson and the suicide bomber vest to visit congress again, Geithner doesn't look as scary or can't be taken as serious.

GM filed bankruptcy and emerged with minimal disruption on the other hand you have Lehman Brothers.

All depends on how the bankruptcy is structured. It is unlikely that situation would get so chaotic that BP would have a disorderly bankruptcy which brings down the UK.

Still I think it is a moot point because BP won't file bankruptcy because it is both not necessary and would exclude them from the ultra profitable US oil fields (we are suckers).

BP is the 4th largest corprorate entity in the world. Take what happened when tiny little Greece started having financial problems and extrapolate.

BP also has significant cash reserves. As Statistical points out, they'll fight every payment in the courts. After a few years, they are banking on the will not being there to keep the pressure up.

Based on Exxon and other corporate malfeasance cases, that bet is probably a good one.

Not only is more oil leaking than we have been told by the corporations and their corporate media, there may be up to three oil leaks in the gulf in addition to the three at the Deepwater Horizon site. Furthermore, this means more than just fouled beaches and dead marine life. Oil can clog the intakes of water from the Gulf that is used to cool coal and nuclear power plants, resulting in power outages. It can also clog the intakes of desalinization plants that use reverse osmosis to produce drinking for cities on the GUlf coast. For more information, check out: http://www.examiner.com/x-38220-Orlando-Independent-Examiner~y2010m6d9-Satellite-imagery-shows-up-to-three-oil-leaks-in-Gulf-FL-power-and-water-supplies-may-be-at-risk

And the drones will get the shaft. That's the way it always works out.