Patterico's Pontifications

7/7/2010

DOJ Demands BP Give Notice of Asset Sales

Filed under: Law,Obama — DRJ @ 8:53 am

[Guest post by DRJ]

The Obama Administration’s DOJ has sent a letter to BP demanding that it provide advance notice of any significant sale of assets or cash transfers. BP indicated it would respond in due course.

Perhaps BP is wondering what legal authority the Administration has to make such a demand. Me, too.

— DRJ

45 Responses to “DOJ Demands BP Give Notice of Asset Sales”

  1. I don’t think that DOJ has that authority. Although I do think BP should pay, The government has the right to order them around like they have been.

    chiianna (44cff2)

  2. Unless the government is a secured creditor or has some kind of perfected security interest in the assets, I would tell the government to F.O. and wait until all the rest of BP’s stakeholders find out.

    daleyrocks (1d0d98)

  3. I would tell the government to F.O. and wait until all the rest of BP’s stakeholders find out.

    Consider that whatever the admin has already said to BP behind closed doors was enough to shake them down for $20,000,000,000. Maybe they are working together to control the damage with some theater, but BP is certainly facing a serious threat from Obama’s admin.

    Part of what’s going on, in my opinion, is Obama is seizing new and ridiculous powers because he’s doing it to someone no one can defend. Of course, now he has precedent. Or maybe they really are lawless bozos.

    Dustin (b54cdc)

  4. Dustin – Telling them in advance is tantamount to giving them veto power. Plus there is ample probability of leaks. NFW.

    daleyrocks (1d0d98)

  5. I would not mind BP going out of business. But then, I would not mind Obama going out of business, either.

    nk (db4a41)

  6. Perhaps BP is wondering what legal authority the Administration has to make such a demand. Me, too.

    Because I said so cracker.

    Barrack Hussein Obama (fb8750)

  7. And if BP refuses? At this point, I would guess BP is giving serious consideration to filing Chapter 11 bankruptcy and if the government keeps hounding them and attempting to power them into submission, they take a risk in perhaps pushing BP more quickly into this decision.

    And where would that leave the government, as well as the people in the Gulf region?

    Dana (1e5ad4)

  8. Is BP in serious economic difficulty?

    WSJ news item:
    “July 7, 2010 — 9:00 a.m. EDT
    BP Open to Abu Dhabi Stake
    DUBAI— BP PLC’s Chief Executive Tony Hayward met this week with Abu Dhabi’s powerful Crown Prince Mohammed bin Zayed Al Nahyan and would be open to seeing the oil-rich sheikdom buy a stake of up to 10% stake in the U.K. oil giant…”

    As I have previously mentioned, they need to get into a BK Court to protect their assets before they send any part of that $20B/$100MM to anyone.

    AD - RtR/OS! (568b48)

  9. Obama and Holder are rank amateurs and idiots. First the $20b n is a cap on the damages, but who knows what the actual final tally will be? Second the Administration’s astounding incompetence in the cleanup and mitigation efforts to-date will be used by BP as an offset to the damage claims. Third BP is a British entity, there is nothing to stop it from filing an insolvency proceeding in the UK for its worldwide operations. And the UK courts are not going to be more forgiving and understand to US creditors than to UK creditors.
    Fourth the the more likely intention of the Administration is to try to prevent BP from transferring from its USA division assets to its parent company leaving the US BP entity largely a hollow shell. This is the most probable course of action for BP, especially in light of the attitude taken by the Administration, indeed they would probably be in breach of their fiduciary duty to the shareholders if they didn’t try to do this along with pushing for the maximum claims offset due to the US government’s incompetence. There way to many UK pensioners depending on BP dividends for the UK government to not be pressing BP to reduce their losses in the US to the minimum possible. Once again our Peter Principle President is acting in the worst possible way for the long term US national interest.

    cubanbob (409ac2)

  10. > Perhaps BP is wondering what legal authority the Administration has to make such a demand.

    i think these days BP’s default response is “thank you, sir, may i have another?”

    Aaron Worthing (A.W.) (e7d72e)

  11. “Because I said so!” – Big Mom

    Frank Drebbin (8096f2)

  12. btw, slightly off topic, but the DOI is appealing the decision striking down the 6 month moritorium, and seeking a stay on the ruling in the meantime. you can read the raw document, here: http://graphics8.nytimes.com/packages/pdf/national/Hornbeck_Reply_as_Filed.pdf

    frankly, it is stating alot of things that seem to be full of sh–.

    I predict that the 5th circuit will not stay it, and will not overturn the lower court at all. then it goes to the Sup. Ct. where i think i gave it around 80% chance of survival.

    also they seem to be improperly questioning the factual basis of the lower court.

    Aaron Worthing (A.W.) (e7d72e)

  13. it is stating alot of things that seem to be full of sh–.

    Is that lighter,or heavier, than drilling mud?

    AD - RtR/OS! (568b48)

  14. Is that lighter,or heavier, than drilling mud?

    racist!

    redc1c4 (fb8750)

  15. A.W.,

    The MMS never issued a new order and DOJ is intentionally appealing Judge Feldman’s ruling the slow way. They both know the oil companies won’t drill while the issue is in limbo, so they want to prolong this as long as possible. It’s bad faith but it’s legal bad faith.

    DRJ (d43dcd)

  16. The department of ignoring justice should go pound sand with their Muslim buddies. Arizona should advise the Obama Administration to eat shit, and coal fired power plants and utilities around the country should advise the EPA to get lost.

    kansas (7b4374)

  17. I would think that the oil-services companies that requested the injunction in the first place would be filing for an expidited review by the 5th Circuit so that they can get back to work?

    AD - RtR/OS! (568b48)

  18. DRJ

    Okay maybe i am missing something, but… doesn’t the judge’s original order give them all the authorization they need?

    Aaron Worthing (A.W.) (e7d72e)

  19. These drillings are financial investments.

    And right now, they are unsound investments.

    Obama wins.

    Dustin (b54cdc)

  20. Well, 0 won!

    DRJ — I suspect that the original order allows it, but it would be reckless waste of money to start drilling knowing that that order might be overturned; you’d lose whatever you’d put into the hole.

    htom (412a17)

  21. htom

    if i was their lawyer, i would rely on the original order. i would give almost guarantee it being upheld by the 5th circuit, and give it 80% chance of surviving if it goes to the Sup. Ct.

    Aaron Worthing (A.W.) (e7d72e)

  22. AW, but these companies can just drill somewhere else without the hassle and risk.

    I wish they would go for it and take it to court, but they don’t have to do that if they just want to turn a profit.

    Dustin (b54cdc)

  23. I can bet $60,000,000 on drilling at A, or bet $60,000,000 on drilling at B. Drilling at A has a 20% chance of being a loss because of government actions. Drilling at B does not have that risk, only the normal risk of a dry hole. Choose.

    htom (412a17)

  24. There doesn’t seem to be any compelling reason for them not to file for Chapter 11 now – even their shareholders must realize that it’s a massive shakedown until they’re bled dry.

    Dmac (93e7cb)

  25. But didn’t the Won get elected emperor of the world? In his eyes anyway.

    PatAZ (9d1bb3)

  26. What is happening in the Gulf right now is a perfect example of trickle down economics that the left claims does not exist. As the drilling stops, the economic hardship filters its way down through the regional economy, fishermen, car dealers, restaurants, etc., etc. But the phenomenon does not really exist. It’s a mirage.

    daleyrocks (1d0d98)

  27. Dustin

    well that all makes sense so long as we assume that it costs as much to drill here as elsewhere. the very fact that they are presently here means that it will at the very least soak up transportation costs. and i am not sure there is any such thing as a risk-free location. i mean i am sure it looked pretty low risk to drill oil in venezuala before chavez took over and started nationalizing crap.

    of course, normally i would say this is all example of obambi not realizing that the result of his regulation would be to drive away those industries elsewhere. but in this case, i consider it more a feature than a bug.

    By comparison, i regularly joke that the local government in D.C. runs the place like they had no idea that if you drive 10 miles in any direction, you are out from under their thumb. seriously, its like they hate prosperity, or are really, really dumb. actually its probably stupidity more than anything else.

    Aaron Worthing (A.W.) (e7d72e)

  28. Alas, the days of the “Great Writs” are long gone. What a perfect place for a “Quo Warranto” with the executioner’s block awaiting those who acted without proper authority.

    Longwalker (4e0dda)

  29. Longwalker, these things can be arranged; and with this bunch, probably should be.

    AD - RtR/OS! (568b48)

  30. Obama should just give them the $20 mil in TARP funds; then, when BP pays it back in the form of fines, that will balance the books — correct? The fact that the money came from the pockets of the taxpayers, and returned into the hands of the government, doesn’t mean anything bad . . . right?

    Icy Texan (e3fa84)

  31. AW:

    Okay maybe i am missing something, but… doesn’t the judge’s original order give them all the authorization they need?

    They still have to get permits and approvals from the MMS and the government isn’t issuing those permits:

    “Offshore drillers and the judicial branch scored a victory Tuesday when the Federal District court in New Orleans ruled against the Obama administration’s six-month moratorium on deepwater drilling in the Gulf of Mexico. Don’t get excited, however. The appeals process could outlast the moratorium itself, and even if it didn’t, the administration has other ways keeping companies from drilling in the Gulf.

    “The moratorium had no legal precedent or technical basis, and we were expecting that ruling based on the judge on the case,” says Brian Uhlmer, director of research at Pritchard Capital Partners. “Unfortunately it was more of a moral victory than an actual victory.”

    The White House immediately promised to appeal the ruling, the process of which could take longer than the moratorium itself. And even if that ruling were to come within the six-month period, Uhlmer notes that the Minerals Management Service could effectively maintain the moratorium by not providing approval for new drilling, or by simply canceling permits.

    “We believe the hubris of the current administration will not allow themselves to accept this as a defeat and will make sure they come out as the apparent decision makers,” Uhlmer says

    He notes that the White House appears to be seeking aid to the tune of $100 million due to the jobs lost by the moratorium. “I guess that’s their way of making it right,” Uhlmer says.”

    They’ve also erased BP as a finalist for the offshore safety award.

    DRJ (d43dcd)

  32. They’ve also erased BP as a finalist for the offshore safety award.

    LOL

    Dustin (b54cdc)

  33. I wish BP would would tell them to go f#ck themselves. Sadly, they do not seem to be willing to stand up for themselves.

    JD (fbeb58)

  34. “Second the Administration’s astounding incompetence in the cleanup and mitigation efforts to-date will be used by BP as an offset to the damage claims”

    That’s certainly true, and would be an excellent argument to any claim by the Federal Governent. But how exactly would that work in regards to a hypothetical negligence/ interference w/ econoic advantage claim brought by an out of work fisherman, for instance?

    Sean P (6f6c60)

  35. Sean P – Since Obama claimed it was in charge of the cleanup effort, the government has a duty to use its best efforts in that regard. If it is found negligent in its efforts, in effect mitigating the damages of others, there might be grounds for BP or other third parties to recover some of their losses from the government for its negligence. Just speculating here.

    daleyrocks (1d0d98)

  36. I’m no legal authority, but I don’t think you can sue the federal government unless it gives you the permission to do so.

    If I’m wrong, I certainly welcome the correction. There are a lot of people who post here that are more qualified in the law than me. Well, actually, “a lot,” pretty much means everybody.

    Ag80 (363d6e)

  37. Ag80 #34 – wot ? You mean you haven’t been an Attorney General for the past 30 years, starting in ’80 ?

    I’m *shocked*, I tell you, shocked !

    Alasdair (205079)

  38. “I don’t think you can sue the federal government unless it gives you the permission to do so.”

    Ag80 – I agree, but in a situation such as this where they have explicitly stepped into BP’s shoes, they have an affirmative duty to minimize BP’s losses. If they are negligent in doing so, is there a cause of action or remedy against the government?

    daleyrocks (1d0d98)

  39. A democratic government has no right to order private companies around, The Marxist AH in the white house assumes he is the greatest thing since sliced bread and the world is at his beck and call. May he meet the same fate as previous idiots like his hero Hitler.

    Scraprion (4e0dda)

  40. “Second the Administration’s astounding incompetence in the cleanup and mitigation efforts to-date will be used by BP as an offset to the damage claims”

    That’s certainly true, and would be an excellent argument to any claim by the Federal Governent. But how exactly would that work in regards to a hypothetical negligence/ interference w/ econoic advantage claim brought by an out of work fisherman, for instance?

    Comment by Sean P — 7/7/2010 @ 8:49 pm

    Unfortunately the claimant such as the out of work fisherman brings a claim of X but BP takes the gross amount and subtracts from it the percentage the governments actions in retarding the mitigation and pays him the difference. BP can and probably would use that line of argument successfully. The fisherman can’t sue the government (sovereign immunity) and can’t be made whole by BP because of the governments actions.

    cubanbob (409ac2)

  41. …”provide advance notice of any significant sale of assets or cash transfers”..

    Do I smell a divorce?

    The one is but again making some attempt to gain press points by appearing to be tough. He but proves he has none by attempting to create authority were none exists.

    Once this ugly thing is stopped BY BP!, the tide will turn and many will indeed be put in their place! But for now, it’s drill baby drill! In order to shut this wild thing off that is.

    GAWD I do love it when those that created laws can’t even figure out WTF they actually meant when they created such and will now bill the taxpayer billions in order to come to a census about whats whats!

    The legal fees will be double the shut down and cleanup costs!

    RTF (789ab8)

  42. The good thing about this fight between Obama and BP is that one of them is going to lose.

    nk (db4a41)

  43. Actually, I suspect we all will, in different ways.

    When POTUS makes dumb mistakes, it hurts how we view our own government, and drives good people out of politics.

    When businesses are treated like lepers, it damages business practices for good companies, of which there are many.

    I’m no fan of either BP or BHO. But I think we all lose in this one.

    My opinion only.

    Eric Blair (c8876d)

  44. Yeah. I fear you said it right, Eric.

    nk (db4a41)

  45. The good thing about this fight between Obama and BP is that one of them is going to lose.

    “When elephants fight, it is the grass that suffers.”

    AD - RtR/OS! (2e91a1)


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