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Obama Plans First Oval Office Speech to Put Pressure On BP

Publication Date: 
June 13, 2010
Source: 
The New York Times
Author: 
Jackie Calmes

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. Jackie Calmes of The New York Times reports:

Searching for a way to satisfy both the United States government and its own shareholders, the board of BP was examining three options for what to do with its next dividend, a person with direct knowledge of the board’s discussions said Monday.

The company’s $10.5 billion annual dividend has become a point of contention as President Obama has said BP should not be paying stockholders when fishermen, oil workers and small business owners are saying they cannot get the company to pay their loss claims from the oil spill in the Gulf of Mexico.

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“I’m not aware of any legal precedent that would give the government any authority that would preclude British Petroleum from paying dividends,” said Joseph A. Grundfest, a professor at Stanford Law School and former member of the Securities and Exchange Commission.

BP’s status as a foreign corporation further complicates matters, he said. “There’s no suggestion that British Petroleum lacks the money necessary to pay all claims or damages that might result from this calamitous spill,” Mr. Grundfest said.