BP Stands For Bankruptcy Protection?

IBD's Capital Hill ^ | 6/9/2010 | Ed Carson

[freebird5850]

See my tagline.

[Uncle Chip]

The shrimp boaters in the Gulf may own an oil company before long.

[PGR88]

Who thinks that doing business in the USA is less risky than in, say, India or China?

[KarlInOhio]

BP has plunged 15% — more than 50% below pre-spill levels. In an article today, Fortune quoted Matt Simmons, oil and gas industry insider: They have about a month before they declare Chapter 11. They’re going to run out of cash from lawsuits, cleanup and other expenses.

Huh? Other than at the initial public offering or stock buybacks, the price of the stock has very little effect on its cost and profits from operations (the reverse isn't true, making profits boosts the stock price). They really haven't spent a lot for the clean up compared to their after-tax profit (over $16 billion in 2009). Are they going to have a rough time and maybe a couple of years where everything that would have been profit goes to the cleanup? Yes, but that isn't bankrupt unless they are abusing the bankruptcy laws to hid from legitimate liabilities.

[Red Badger]

BARRACK PETROLEUM..................

[Buckeye McFrog]

hmmm...if a Big Eeevil Oil Company is unable to stem the tide that is fouling the Gulf, then I’m sure a Big Eeevil BANKRUPT Oil Company will be up to the task! /sarc

[Red Badger]

Along with the Clam Farmers.............

[WayneS]

...that isn't bankrupt unless they are abusing the bankruptcy laws to hide from legitimate liabilities.

Hmmmmmmmmmm.

[napscoordinator]

What crap. They should sell some buildings all over the world first before being able to file bankruptcy.

[grumpygresh]

The end game will be interesting here. As BP’s liabilities grow and grow, the company edges closer towards bankruptcy and possibly insolvency. If the government somehow decides to take over BP (as some idiot liberals suggest), it will not have any value only a liability that will need to be borne by the taxpayers. Government lawsuits will only further deplete BP of even more value.
BP will probably fail and the government will be picking up the clean-up bill. Those harmed by the oil spill may not have any recourse unless we see another bail-out which would be very un-popular by the Left and the Right.

[RonDog]

BP = Barack’s Problem

[US_MilitaryRules]

No wonder the stock is tanking. Damn.

[RonDog]

Great minds think alike!

[Blood of Tyrants]

Obastard will take it away from BP and give it to them.

[Blood of Tyrants]

I agree. This one well alone will produce $50 million a DAY in income from crude oil for years to come.

[WhistlingPastTheGraveyard]

Wow... it’s a good thing Tony Hayward remembered to sell one third of his stake in the company three weeks before the SHTF. What amazing luck!

[rigelkentaurus]

not buying this line of thought. BP is a global company with billions in free cash flow coming in regularly. The event in the gulf has no impact on their cash flow from their global business - it continues on unimpacted generating profit. The potential liabilities are not even known, let alone invoiced and due in 30 days, so I don’t see how they could be insolvent in the near term. These kinds of costs will take many years to resolve, go through countless courts and appeals. BP is not going anywhere, even though RATs are hoping to take out another sort of capitalist company.

[Larousse2]

The Cover-up: BP's Crude Politics and the Looming Environmental Mega-Disaster

[KarlInOhio]

Another thing that could happen is that the UK government could act to protect BP, including allowing it to split into another company (let's call it English Petroleum) and just leave BP as a husk of a company stuck with a bunch of liabilities and no revenue. A US company couldn't do that to avoid US liabilities, but BP is a UK company. With the chilly treatment Obama has given Britain, they might not want to see their biggest company gutted just to provide financial cover to Obama.