Bankruptcy no protection for BP, still must pay damage claims and cleanup costs


BP Bankruptcy Would Be No Protection From Gulf Spill Costs, Bloomberg, June 15, 2010:

BP Plc, whose potential liability for the Gulf of Mexico oil spill has lawmakers and analysts raising the specter of bankruptcy, would be unlikely to avoid paying claims by seeking court protection, restructuring experts...  it wouldn't allow BP to avoid paying for most of the cleanup and damages, said New York bankruptcy lawyer Martin Bienenstock of Dewey & LeBoeuf LLP.

It's highly unlikely the claims would be so large that BP would pay any valid claims less than in full,"  said Bienenstock, who advised General Motors Co. and Chrysler Financial Corp. in their bankruptcies. "The environmental claims and other claims would all ride through bankruptcy and be paid in the normal course." ...

BP wouldn't succeed in assigning liability to a subsidiary that is subsequently placed into bankruptcy because creditors may seek to reverse the move, said John Penn, an attorney at Haynes & Boone LLP in Fort Worth, Texas, and a former president of the American Bankruptcy Institute.

http://preview.bloomberg.com/news/2010-06-15/bp-bankruptcy-would-offer-no-protection-from-gulf-damages-cleanup-costs.html

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