BP shareholder suits in court Nov. 4 on motions to dismiss

Steve Korris Oct. 4, 2011, 3:57am


HOUSTON – U.S. District Judge Keith Ellison will hear motions to dismiss three groups of Deepwater Horizon suits from BP shareholders at hearings on Nov. 4.

All three suits seek to recover damages from BP directors on behalf of the company.

In the morning, Ellison will hear a motion to dismiss claims from all who bought BP's American depositary shares in 13 months prior to the explosion.

Their class action complaint asserted claims under the Securities Exchange Act.

They alleged that BP misled investors about safety risks.

In May, BP answered that the Act doesn't allow claims of internal corporate mismanagement.

"Vague and optimistic statements concerning topics such as safety and deepwater drilling lack a standard against which a reasonable investor would expect them to be pegged, and thus are immaterial to an investment decision," Thomas Taylor of Houston wrote for BP.

He wrote, "Plaintiffs readily acknowledge that the risks and dangers inherent in offshore drilling and oil extraction have been well known for decades."

He wrote that Ellison can't exercise jurisdiction over BP directors who are foreign citizens.

Ellison has already adopted that position in regard to shareholder suits under common law.

He dismissed them in September, so plaintiffs could file them with the English High Court.

Ellison plans another hearing after noon on Nov. 4, on a motion to dismiss a bigger class action.

In that case, public pension funds of Ohio and New York represent all buyers of American depositary shares between Jan. 16, 2007, and May 28, 2010.

Taylor countered their complaint with the same arguments he offered in the smaller class action.

Ellison will also hear a motion to dismiss competing suits from the same groups, seeking recovery on behalf of those who bought ordinary BP shares.

According to Taylor, the U.S. Supreme Court bars all Exchange Act claims based on purchases of BP shares that trade only in London and Frankfurt.

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