BP ERISA Class-Action Lawsuit Seeks Compensation for Pension Losses

Chicago, ILEven though BP Oil appears to have sufficiently capped the gushing oil well in the Gulf of Mexico, the larger crisis is far from over. Individuals who work for the oil company and partake in BP employee benefits but share no direct responsibility for the decisions that led to the oil spill face a financial crisis that will extend far beyond the immediate environmental dangers.

To that end, a participant in BP's US 401(k) plan is suing BP PLC and State Street Bank & Trust. Charis Moule filed the lawsuit in US District Court in Chicago on June 28 and is seeking class action status.

According to the 7/12/10 issue of Pensions & Investments, also named in the suit as defendants are BP Corp. North America Inc., BP America Inc., BP Corp. North America Inc. Savings Plan Investment Oversight Committee, BP CEO Anthony Hayward, BP America Chairman and President Lamar McKay (also a member of the plan investment oversight committee), and BP America director of trust investments Gregory Williamson.

Four other members of the BP Savings Plan Investment Oversight Committee were named in the lawsuit, including State Street Bank & Trust, a trustee of the employee savings plan. The SSgA investment management arm of the bank also served as the investment manager of the BP stock fund.

The lawsuit contends that as of December 31, 2009 the plan held $2.45 billion of BP American depository shares, amounting to 29 percent of the total $8.27 billion in plan assets, according to BP's 11-K report filed on June 16. The BP ADS lost more than 50 percent of their value, falling from $59.88 a share on April 19, the day before the devastating explosion on the Deepwater Horizon.

The defendants in the lawsuit are accused of breaching their fiduciary duties under ERISA with regard to the loss of hundreds of millions of dollars contained in the company stock option in BP's US 401(k) plan.

The suit seeks recovery of participant losses and losses sustained by investing in BP ADS instead of other prudent funds within the plan. State Street Bank & Trust was a fiduciary of the BP employee plan with independent discretion and authority to liquidate the BP stock fund. According to the suit, it failed to do so.