Lawyers representing two pension funds are petitioning a US court to stop BP paying its outgoing chief executive, Lord Browne, a multimillion-pound retirement, pension and compensation package.
The funds want the payments to be held in a special account while they pursue claims launched last year against Lord Browne and the other members of the BP board relating to environmental and safety issues which they claim damaged shareholders' interests. Those issues include an oil spill in Alaska and a fatal refinery fire in Texas over which BP was heavily criticised in a recent report by former US secretary of state, James Baker.
William Lerach, a leading US class action lawyer, said his firm, which represents the London Pension Fund Authority and the pension fund of the US union, Unite Here, said they were making the application because: "We just don't want him leaving the scene with a wheelbarrow overflowing with money."
The application, which was expected to have been filed overnight, estimates Lord Browne's compensation package at more than $140m (£71m). Mr Lerach's firm has acknowledged that the figure is based on a combination of subjective estimates as well as publicly available data and said it has asked for immediate access to information which would allow it to determine a precise amount.
BP said it did not comment on litigation.
The decision to file the application in a court in Anchorage, Alaska, could reignite the debate among UK businesses about the jurisdiction of US courts over non-US companies and nationals.
Asked why his firm had not chosen to take action against Lord Browne in the UK, Mr Lerach said: "We felt the US was a more favourable forum to proceed. The court may well apply British law; that's an argument we will have later on. There is no question that the US courts have jurisdiction to consider this kind of lawsuit."
He said Alaska had been chosen rather than Texas because there were "a lot of people with first-hand knowledge" and Lord Browne had begun his career with BP in Alaska. A spokesman for the LPFA, which represents a number of local authorities, said the fund had a stake of about £2.5m in BP. The action was "part of a package about good governance. It isn't one single thing towards BP as such, it is a general point of principle".
Lord Browne said last month he would step down as BP chief executive at the end of July, 17 months earlier than planned. He is being replaced by Tony Hayward, the head of exploration and production.
The funds want the payments to be held in a special account while they pursue claims launched last year against Lord Browne and the other members of the BP board relating to environmental and safety issues which they claim damaged shareholders' interests. Those issues include an oil spill in Alaska and a fatal refinery fire in Texas over which BP was heavily criticised in a recent report by former US secretary of state, James Baker.
William Lerach, a leading US class action lawyer, said his firm, which represents the London Pension Fund Authority and the pension fund of the US union, Unite Here, said they were making the application because: "We just don't want him leaving the scene with a wheelbarrow overflowing with money."
The application, which was expected to have been filed overnight, estimates Lord Browne's compensation package at more than $140m (£71m). Mr Lerach's firm has acknowledged that the figure is based on a combination of subjective estimates as well as publicly available data and said it has asked for immediate access to information which would allow it to determine a precise amount.
BP said it did not comment on litigation.
The decision to file the application in a court in Anchorage, Alaska, could reignite the debate among UK businesses about the jurisdiction of US courts over non-US companies and nationals.
Asked why his firm had not chosen to take action against Lord Browne in the UK, Mr Lerach said: "We felt the US was a more favourable forum to proceed. The court may well apply British law; that's an argument we will have later on. There is no question that the US courts have jurisdiction to consider this kind of lawsuit."
He said Alaska had been chosen rather than Texas because there were "a lot of people with first-hand knowledge" and Lord Browne had begun his career with BP in Alaska. A spokesman for the LPFA, which represents a number of local authorities, said the fund had a stake of about £2.5m in BP. The action was "part of a package about good governance. It isn't one single thing towards BP as such, it is a general point of principle".
Lord Browne said last month he would step down as BP chief executive at the end of July, 17 months earlier than planned. He is being replaced by Tony Hayward, the head of exploration and production.
Source: The Guardian
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