BP Alaska Derivative Claim

Originally published in BLG’s Directors’ and Officers’ Liability Review, Winter 2006

The derivative action filed in October in the Alaska State Court against directors and officers of BP Plc ("BP") and its US subsidiaries (the "BP Action") may develop into an important precedent. Although only in its infancy, the case raises significant issues for UK companies doing business in the US, notably in connection with the reforms in the new Companies Act.

The claimants in the BP Action include the City of London Pension Fund, as well as other claimants purporting to sue derivatively on behalf of BP and certain of its US subsidiaries. The allegations focus on the corrosion problems in the pipelines at Prudhoe Bay, the Texas refinery explosion, and the investigations into alleged price fixing in the propane market. It is contended that the conduct of the executives damaged