Market Cap Tanked
Investors led by the pension funds of U.S. Virgin Islands retirees and over 100 hedge funds have filed a class action securities fraud suit seeking billions of dollars of lost share value. Anadarko has over 100 hedge fund shareholders.
According to the shareholders, Anadarko Petroleum Corporation (NYSE:APC) which held a 25 percent stake in BP plc (NYSE:BP) (LON:BP), saw its shares fall from $73.94 on April 20, 2010 to $34.83 on June 9, 2010, resulting in a loss of $19.3 billion in market capitalization.
Allegations fromAnadarko Petroleum Shareholders
Anadarko Petroleum shareholders have accused the company of mismanaging its 25 percent stake in the Macondo well besides understating its ability to manage risk and handle liabilities.
The investors claimed Anadarko Petroleum Corporation (NYSE:APC) wasn’t a passive partner in the Macondo well. They claimed the company expressly approved and funded a series of extremely risky decisions made in connection with drilling the well. The investors claimed those decisions contributed directly to the disaster. The investors also contended that once the spill occurred, the company attempted to prop up its shares by continuing to downplay its role in the project.
Judge Dismissed Most Allegations
U.S. District Judge Keith P. Ellison dismissed most of the investors’ allegations. However, he found they had sufficient reason to sue Anadarko for attempting to downplay its involvement in BP plc (NYSE:BP) (LON:BP)’s Macondo well.
The judge, while dismissing 28 allegedly misleading statements attributable to Anadarko Petroleum Corporation (NYSE:APC), did find however that the investors had sufficient reason to sue the company for a single ‘isolated’ statement. This statement was made by Anadarko senior vice president Robert Daniels during the May 2010 earnings conference call. During the conference call, which occurred two weeks after the blowout, the senior official said Anadarko had not been involved in the design of or procedures at the well.