so when will BP declare bankruptcy thus leaving us holding the bag?

I'm thinking sometime around the point when the oil reaches the Potomac.

Anyone else care to wager a guess?

steal all the money.

They think boycotting them would prove something and would show them! To quote what some have said "If they do go out of business, that's how it goes."

All these folks filing suits don't realize, they won't get much when its all over and done anyway. That federal law which places a cap on damages limits the size of that pie. The best folks can hope for is that BP remain viable so that those put out of work by the oil will be able to get work cleaning up the oil.

Ever heard of insurance? That well and any destruction it causes has to be insured.Otherwise they could not even begin to drill. BP will not be on the hook for this. Probably Lloyds.

Have I heard of insurance? Sure have, I'm a Katrina survivor and I KNOW how insurance companies work.

What insurance BP has is limited, it won't come close to covering this mess.

They have no external insurance.

Then again with $63 billion in current assets, $250 billion in total assets, and pofits of about $1.5 billion per MONTH they really don't need insurance.

Reuters reported that BP self-insures through its own insurance company, Jupiter, which does not lay off risks onto reinsurers or syndicates at Lloyds of London, according to a spokesman for the company.

BP may still end up paying costs out of its own pocket, but it is possible that the company could also seek to reclaim damages from Cameron International Corp., the supplier of the well-head equipment being blamed for the accident or other companies involved in the maintenance of the drilling machinery, according to Reuters.

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BP is going to absorb a lot of costs no doubt about that it simply isn't enough for them to go bankrupt. Wonder if Jupiter Insurance (wholly owned subsidiary of BP) could file insurance and BP say "look we are insured talk to Jupiter".

Nah big companies would never do stuff like that. :)

It's the old "box,within a box,within a box,etc"

to $10 bill. If that Happens I see BP filing. Their best quarter profits have been $5 bill. up to this point.

But here is how I think it will play out...

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x8264000

I'm on the MS Gulf Coast and I fear you are right. :(

is enough to benkrupt an extremely profitable company?

off of them, selling them off in bankruptcy.

even this liability.

The company has $63 billion in "current assets". Current assets are defined as cash, account receivable (money people owe them), short term investments, money market accounts, payroll, etc. Stuff the company could liquidate "quickly" (in matter of months) to pay a debt.

The company has total assets are $250 billion.
Their profit (not revenue or sales but pure profit) is roughly $1.5 billion.
The company clears about $2.5 billion a month in free cashflow (money that could be redirected towards paying any future debt).

The first thing to consider is that you can't just "get bankruptcy" you need to file and the court needs to accept it. If BP was looking at losses of $10 billion a BK court would laugh them out of the courtroom. Maybe if they were looking at $150 billion or $200 billion in losses but not $10 billion.

To put it in perspective it assuming you make $30K a year and have net worth of $200K (of which $40K is cash in the bank) and you decided to file bankruptcy over $2K in bills. The judge would laugh you out of the courtroom and order to you SIMPLY PAY YOUR BILLS. :rofl: (the judge laughing at you).

Second EVEN IF THEY COULD file bankruptcy the loss to shareholders would be a magnitude worse than $10B loss.

Your "fears" are both unfounded and silly.

which will never happen, I fear.

The rig owner, by statute, is only liable up to the cost of the rig - $350 million dollars.

You can already see the CEO of BP planting the seeds "This was not our accident" etc etc.

Ironically, I think they're too big to fail. If they were to fail, the cascade effect through the economy would be devestating, especially with the economy being so vulnerable right now.

I'm really getting tired of multinational corps holding us financially hostage.

The limited liability law makes their max payout in damages (class action lawsuits) a "massive" $75 million.

Now they have the mitigation/cleanup costs and they will be huge but not huge enough to sink a company the size of BP.

Say the cleanup is $5 billion (2x Exxon) put that into perspective that BP made $16 billion PROFIT (not revenue but pure profit) last year. Current assets are $63 billion and $4 billion of that is pure cash.

Needs fact checking but... It has been the case that UK companies spin off US operations and take advantage of favorable US bankruptcy laws. However, these are usually companies that can afford not operate in the US... and they still need to do this through the court which could be tricky if you are a tremendously asset and cash rich company that just happens to be saddled with cleaning up our coast.

British bankruptcy laws are more stringent then US laws (even after 2004 reforms), once you declare yourself insolvent, I'm pretty sure that is it... shareholders may even be liable for past gains (crazy stuff :crazy:).

Their total liability under law will be about what they booked as profit last quarter.

If they were liable for ALL damages then maybe they'd end up fleeing into bankruptcy.

But they are not.

http://www.guardian.co.uk/environment/2010/may/04/bp-shareholders-challenge

Activist shareholders and pension funds will grill BP this week over its safety record and US contractors as the financial fallout from the Gulf of Mexico disaster continues to spread. The coalition of investors, who have successfully forced companies such as Shell to be more transparent over the environmental impact of their controversial oil sands operations, is planning to launch a similar campaign against deepwater drilling, the Guardian has learned.

Today BP's shares fell by a further 3%. Since the Deepwater Horizon rig exploded and sank nearly a fortnight ago almost $30bn (£19.7bn) has been wiped off its market value on worries about the cost of the clean-up operation, any fines and damage to BP's long-term reputation.

Lauren Compere, the managing director of Boston Common Asset Management, has organised a conference call with the company this Friday with up to 40 other institutional investors holding an estimated $1bn of BP shares. "We will raise questions over the amount of due diligence and oversight BP carries out on its partners and contractors before it enters into contracts with them," she said. "There have been a number of incidents with BP in the US over the last five years. It makes you wonder how well they are overseeing their operations there, although we have seen kernels of improvement in BP's safety approach since Tony Hayward took over."

Louise Rouse from FairPensions, the lobbygroup which organised the investor campaign against oil sands, said that the fall in BP's share price demonstrated that fund managers had a financial responsibility to scrutinise more closely key decisions by management, such as exploiting oil sands or deepwater drilling in environmentally sensitive areas.