London-based BP on Thursday agreed to pay $175 million to shareholders, including public pension funds in Ohio and New York, in a Deepwater Horizon settlement.
Those pension funds had sued the company, accusing it of providing misleading information about the April 2010 oil spill in the Gulf of Mexico to prop up its stock price.
The lawsuits by U.S. investors were filed by Ohio Attorney General Mike DeWine on behalf of four Ohio state pension funds, New York State Comptroller Thomas DiNapoli and others.
The plaintiffs said they lost as much as 40 percent of their investments due to a decline in BP stock prices in the wake of the spill. They had been seeking as much as $2.5 billion.
Ohio’s four pension funds — the Ohio Public Employees Retirement System, the State Teachers Retirement System of Ohio, the School Employees Retirement System of Ohio and the Ohio Police and Fire Pension Fund — lost about $100 million, DeWine said in filing the suits.
The proposed settlement averts a trial that was scheduled for July in a federal court in Houston.
BP announced the settlement, to be paid in 2016-2017 if approved by U.S. District Court, in a 66-word statement.
How much plaintiffs might get will be determined by the court after a claim period is conducted, said DeWine spokesman Dan Tierney.
The plaintiffs had alleged in the suit that BP had misrepresented the estimated size and severity of the spill and the company’s ability to respond to it, especially in the first two weeks.
More than 4 million barrels of oil flooded into the Gulf of Mexico in the 87 days after the Deepwater Horizon drilling rig blew up. BP officials repeatedly estimated that 1,000 to 5,000 barrels per day were coming from the well, while internal calculations said the daily volume was more than 10 times greater.
In 2012, BP agreed to pay $525 million to settle claims by the U.S. Securities and Exchange Commission that the company had underestimated the size of the spill in an effort to keep stock prices from falling.
The company also agreed that year to pay $4 billion to resolve criminal charges on pollution violations, misleading Congress and manslaughter for the deaths of 11 workers killed in the explosion. Seventeen other workers were injured.
Last year, BP agreed to pay $20.8 billion over the next 17 years to cover additional pollution violations, financial losses and natural resources damages suffered by state, local and national governments.
The company has earmarked $56.4 billion to settle all Deepwater Horizon claims, BP said in an April regulatory filing.
Other securities-related litigation is pending, the company said.
Bob Downing can be reached at 330-996-3745 or bdowning@thebeaconjournal.com.