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Limited liability resulting from the Deepwater Horizon incident?

Right away after the explosion of the Deepwater Horizon Swiss company Transocean Ltd moved to have their liability for damages limited to the cost of the “sunken ship” ($27 million) citing an 1851 law that says the owner of a sunken vessel is liable only for its value after the accident.

Transocean expects to receive $560 million in insurance, so subtracting what they consider their maximum liability they’d just about meet their three year revenue projection under the BP contract.

Hmm…

Many of the judges are recusing themselves from hearing cases involving the oil spill; but I’d say if a federal judge in Houston makes a ruling we’ve certainly found a judge that can no longer recuse himeself (though he might be a candidate for impeachment)… my guess is Transocean will not get their ruling quickly, and likely will not get a ruling they like ever.

Transocean CEO Steven Newman told investors in addition that its contract with BP holds BP entirely responsible for all damages and liability from the spill.

I guess Newman isn’t totally confident of the petition filed in federal court, or his contractual liability limits so he’s working both ends… and is probably worried that a review will show negligence on his company’s part — which could cause a judge to throw out any and all liability limits.

BP, Halliburton, and Transocean are each responsible, and each of them should (and hopefully will) be held accountable for this mess — and their massive profits will be used to undo the damage their greed has caused.

As I’ve said before — make the problem expensive enough for them to allow to continue; and any future problem much more expensive for them to clean up — and we won’t have to worry much about the spill continuing… or ever happening again (just take highest quarter’s profits from the last year, divide by 90 — and that’s the daily fine).

Originally posted 2010-06-16 02:00:17.

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