BP Dividend Reduction Or Suspension Looking More Likely
Professor Joseph Grundfest is quoted on the possibility of BP suspending its quarterly dividend to set up a compensation fund for victims of the Gulf Coast oil spill. Julie Schmit of USA Today reports:
BP's shares sank 10% Monday to $30.67 on concerns that it'll suspend its $2.6 billion quarterly dividend and set up an account to pay for damages stemming from the Gulf of Mexico oil spill.
Wall Street analysts say a dividend suspension or reduction is looking more likely as the Obama administration steps up pressure on BP (BP) as the spill's economic and public relations fallout mounts.
BP had no comment. Legal experts say a fund could help BP in one way. "If an independent third party administers the account, then BP avoids many questions about its own motives in compensating victims," says law professor Joseph Grundfest at Stanford University.