BP Corp. North America Inc.'s savings and retirement plans won dismissal of a counterclaim by Northern Trust Investments and parent Northern Trust over BP's securities-lending losses in index funds.
Judge William J. Hibbler of U.S. District Court in Chicago dismissed the counterclaim filed July 7 that accused BP's two investment committees overseeing the savings and retirement plans of possibly violating ERISA.
Northern Trust and NTI did not “present a compelling argument” in their counterclaim to the lawsuit BP filed Oct. 21, 2008, against the two, alleging they caused the securities-lending losses, Mr. Hibbler wrote in his Feb. 10 decision.
BP's suit against Northern Trust and NTI is still pending before Mr. Hibbler.
Northern Trust and NTI argued in their counterclaim that even if the BP investment committees prove their original allegations, “the committees failed to obtain and understand sufficient information (on securities lending) before making investments with them,” and did not conduct proper due diligence before investing and failing to oversee Northern Trust and NTI appropriately, according to the ruling.
Also, the judge in his ruling wrote that if the countersuit was successful in pursuing its claims, “the judgment would reduce the amount of the plans' recovery. Clearly, ERISA prohibits such a remedy.”
"We are evaluating the opinion," said Douglas A. Holt, senior vice president-corporate communications, Northern Trust.
Gregory T. Williamson, director of trust investments, the Americas, at BP America Inc., Warrenville, Ill., declined to comment on the case. BP's U.S. defined contribution plans have $8 billion in assets.