The Southeastern Pennsylvania Transportation Authority this week sued BP Plc, the giant oil company, and its Gulf of Mexico drilling partners Halliburton Energy Services Inc., Transocean Ltd., and Cameron International Corp., and their affiliates, in Delaware Chancery Court, in an attempt to recover Septa's investment losses since BP's Deepwater Horizon rig blew up in the Gulf of Mexico on April 20.
"We took a big loss with BP," general counsel Nicholas Staffieri told me. He figures Septa's $700 million workers' pension fund lost "over $7.8 million" as BP shares fell from around $60 a share to around $42 following the blow-out, which has fouled the Gulf and 100 miles of Louisiana coastline and shrimp habitat so far.
The "double derivative lawsuit" alleges BP, Halliburton and Transocean "were all negligent" in building and running the Deepwater Horizon rig. "We have a fiduciary duty to protect the taxpayers," alongside workers and pensioners, Staffieri told me. Pennsylvania taxpayers help Septa workers fund their $700 million pension plan. The Wilmington law firm Tikellis Chimicles & Tikellis is representing Septa.
My colleague Paul Nussbaum wrote in January about a previous Delaware lawsuit by Septa against Goldman Sachs. Staffieri told me Septa has also sued at least seven other companies, including banking giant Wells Fargo & Co., Level III Communications, and bookseller Barnes & Noble, since the stock market collapsed in 2008. Some of the suits are in state courts, some in federal.
Septa has split the cases between the Tikellis firm and the Philadelphia firm Barroway Topaz Kessler Meltzer & Check LLP, Staffieri said. Why them? "These are very specialized cases, and these are two major firms in the area" that do shareholder suits, Staffieri said. "We give them access, at times, through my office," to the list of investments Septa holds. "And they come back with proposals" about whom to sue.
Septa has yet to make any money from these shareholder suits. But, Staffieri says, it hasn't cost any out-of-pocket expense, either, because the firms are working on commission. Eventually, "most of these cases are settled." So what's the law firms' cut? Depends on the settlement, the Septa counsel said: "We haven't negotiated any of these yet."