Settlement ends 1st trial in Texas BP blast
HOUSTON - BP PLC has agreed to settle claims by four victims of an explosion in 2005 at its Texas refinery, ending the first trial over the disaster. The terms weren't disclosed.
BP said yesterday it has settled more than 1,600 claims over the explosion at its Texas City, Texas, refinery that killed 15 people and injured hundreds. The London-based company set aside $1.6 billion for that purpose.
Yesterday's agreements end a "distraction" for BP management, said analyst James Halloran, who holds 3.85 million BP shares among the $35 billion he helps manage at National City Private Client Group in Cleveland. The litigation hasn't affected the stock, he said.
"The street looks at this as history," Halloran said in an interview. "The trial has been one of several indicators there was something not quite right with the way the company has been run."
BP shares have increased 0.9 percent since the day before the March 23, 2005, explosion, compared with a 27 percent increase by the Dow Jones Europe Stoxx Oil & Gas Index.
The company's American depositary receipts, each representing six ordinary shares, rose $1.63, or 2.4 percent, to $69.95 yesterday in New York Stock Exchange composite trading. BP is second in size among European oil companies to Royal Dutch Shell PLC.
The company increased its offer to reach the settlement, workers' lawyer Brent Coon said.
"Over the course of the negotiations, they came up and we came down until we finally reached a number that everyone can live with," he said in an interview. "We're happy to be able to get closure without having to let a jury decide."
Trials set for October, November, and January in groups of eight cases may also be averted, Coon said.
Company spokesman Neil Chapman said BP "worked very hard to settle cases right from the very beginning so people don't have to go to court."
Judge Susan Criss last week ordered all the remaining cases into mediation. She said yesterday at least 1,200 are pending out of 4,000 filed. Jury trials over explosion suits might lead to awards of hundreds of millions of dollars against BP, as the company faces almost unlimited liability.
Criss ruled future jurors can award punitive damages above normal state limits if they find BP destroyed evidence, as the workers claim and as she ruled in an earlier hearing. She said she will tell juries to assume missing documents are unfavorable to the company.
At the trial, jurors heard the Texas City plant manager and two senior refining executives testify that a series of equipment and policy failures caused the explosion.
The blast led to a record $21 million fine by the US Occupational Safety and Health Administration. The US Chemical Safety Board found separately that the company endangered workers by cutting costs. The explosion contributed to the early retirement of company chief executive John Browne.