BP PLC is facing an ERISA lawsuit alleging breach of fiduciary duty over the losses of millions of dollars in its U.S. defined contribution plans’ company stock option as a result of the Gulf of Mexico oil rig explosion and leak.
The suit was filed Thursday by Ralph Whitley, a former BP employee and a participant in the BP Employee Savings Plan, a 401(k) plan, in U.S. District Court in New York. The suit calls the continued offering of the company stock option imprudent.
Named in the lawsuit are the Savings Plan Investment Oversight Committee of BP Corp. North America Inc., Warrenville, Ill.; Richard J. Dorazil, BP vice president-HR total reward Western Hemisphere; Anthony Hayward, BP CEO and director; Carl-Henric Svanberg, BP chairman; and other BP directors and executives.
The suit seeks class-action status for participants in the BP Employee Savings Plan, as wells as the BP Capital Accumulation Plan, BP Partnership Savings Plan and BP Direct Save Plan, all defined contribution plans.
The defendants under the Employee Retirement Income Security Act “breached their fiduciary duties to the (plans) and participants by failing to prudently and loyally manage the (plans’) investments in BP (American depositary shares),” the suit said.
It claims defendants continued to offer and hold the shares as a retirement saving option “when it was imprudent to do so,” failed to give full and accurate information to participants about the prudence of investing in the shares, kept the option when it was no longer prudent.
The suit seeks restitution. The suit doesn’t quantify the amount of company stock held by the plans or the amount of the total losses.
According to BP’s 11-K, filed with the SEC on June 16, the plans as of Dec. 31 had a combined 29%, or $2.4 billion, in BP ADS out of total assets of $8.2 billion.
U.S. District Court Judge Naomi Reice Buchwald is presiding over the case.
Robert Wine, BP spokesman, said, “We can’t comment on ongoing legal cases.”
Stephen J. Fearon Jr., an attorney with the law firm of Squitieri & Fearon, which represents Mr. Whitley, couldn’t be reached for comment.