BP Shareholders Sue Company

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BP Shareholders Sue Company

ANCHORAGE, Alaska -- A lawsuit filed on the behalf of BP shareholders claims that BP PLC executives and its board of directors have been negligent in the operations of Prudhoe Bay's oil fields, resulting in pipeline leaks that have tarnished the company's image and opened it up to millions of dollars in penalties and fines, The Associated Press reported.

The 100-plus page lawsuit was filed this week in an Anchorage Superior Court by the Unite Here National Retirement Fund, which holds 6,000 of BP's negotiable certificates, and Jeffrey Pickett of Anchorage. It stated that BP executives and the board broke their fiduciary duties when running U.S. operations in Alaska. This resulted in the damage of BP's reputation, increased operating costs and subjecting the company to numerous fines that resulted in lost revenues and profits, the AP reported.

"We want to send a message loud and clear to the British Petroleum board that they have to vastly improve their oversight of their North American operations," San Diego lawyer, William Lerach, told the AP. "This company has a terrible record. It is completely inconsistent with how these folks have said they are running this company."

The lawsuit also stated that BP had presented itself as "an exceptionally-progressive, highly-ethical and environmentally-sensitive corporation, which stressed safety in its operations." The lawsuit continued: "The true facts were quite different than these corporate fiduciaries presented to BP's owners -- its shareholders."

The suit focuses on the company's recent mishaps, including the corroded pipes at Prudhoe Bay and the resulting oil leak; a refinery explosion in Texas where 15 people were killed; and investigations into illegal price fixing within the propane market, the AP reported. The plaintiffs are seeking unspecified damages that could run into the hundreds of millions, according to Lerach.

Some of the Prudhoe Bay pipelines, including the one that leaked in August, had not been cleaned for 14 years and the sludge was a foot thick, the lawsuit states. "BP executives and directors neglected key pipelines at the core of the vast Prudhoe Bay field, allowing bacterial-ridden sludge to build up inside the lines and corrosion to go unchecked." It continued that BP was "keenly aware of the corrosion problem," but skimped on maintenance and inspections to increase profits, reported the AP.

At the same time, BP officers and "inside directors" were awarded with bonuses amounting to more than 100 percent of their salaries, the AP said.

BP spokesman Daren Beaudo told the AP that as a matter of policy, the company does not comment on pending litigation.