Shareholders Sue Oil Bosses for $1 Billion+

NEW ORLEANS (CN) – ATP Oil and Gas Corp. lied about the effects the 2010 offshore drilling moratorium had on its revenue, and the $1.5 billion in notes it sold that year are going for just 4 cents on the dollar, a pension fund claims in a class action.
     The Firefighters Pension and Relief Fund of the City of New Orleans sued on behalf of shareholders of ATP Oil and Gas Corp., which, presumably because it is bankrupt, is not named as defendants. Named as defendants in the federal complaint are 11 of the company’s officers and J.P. Morgan Securities. ATP is or was an offshore oil developer.
     The class consists of investors “who purchased or otherwise acquired 11.875 percent Senior Second Lien Exchange Notes (the ‘Notes’) pursuant and/or traceable to the company’s December 16, 2010 exchange of approximately $1.5 billion in such notes, seeking to pursue strict liability remedies under the Securities Act of 1933.”
     Less than two years after selling the notes, on Aug. 17, 2012, ATP filed for Chapter 11 bankruptcy: “the truth was revealed that ATP had: (1) severely downplayed the impact that the United States Department of Interior moratoria had on the company’s business and revenues; (2) violated the provisions of certain credit agreements to which the company was a party; and (3) issued a Registration Statement that contained false and misleading statements and/or omissions of material fact,” the complaint states.
     It continues: “As a result of the false and misleading misstatements and omissions detailed herein, plaintiff and the class suffered hundreds of millions of dollars in damages. As the truth was revealed, the price of the notes fell precipitously, and as of the date of the filing of this complaint, the notes are trading for approximately four cents ($0.04) on the dollar.”
     The federal government issued two moratoria, in the summer and fall of 2010, after the Deepwater Horizon disaster caused the largest oil spill in the history of the Gulf of Mexico.
     ATP officers named as defendants are then-CEO T. Paul Buhlman, CFO Albert L. Reese, Jr., Chief Accounting Officer Keith R. Goodwin, Chris A. Brisack, Arthur H. Dilly, Gerard J. Swonke, Brent M. Longnecker, Walter Wendlandt, Burt A. Adams, George R. Edwards and Robert J. Karow.
     Defendants J.P. Morgan Securities “was the underwriter of the exchange and served as a financial adviser and assistant in the preparation and dissemination of ATP’s false and misleading Registration Statement and exchange materials,” according to the complaint.
     The shareholders seek compensatory damages for violations of the Securities Act.
     They are represented by Andrew Lemmon of Hahnville, La.

%d bloggers like this: