By Marc McAree
Environmental mishap leads to unwelcome derivative claim
Directors and officers have a fiduciary duty to anticipate problems, assess risks, devise an appropriate response strategy, and implement safeguards. Miscalculating the risks or ignoring a potential threat altogether simply fuels future litigation. And sometimes those legal challenges come from an unexpected quarter — a company's own shareholders.
F
rom a terrorist attack to an oil well blowout to a serious workplace accident, threats to a company's financial via- bility come in many guises.
Several recent environmental disasters
provide compelling object lessons. The Exxon Valdez spawned more than
two decades of litigation. Exxon paid bil- lions of dollars to clean up the spill and compensate fishermen for actual damages. Litigation led to another $383.4 million paid in damages. But the legal fight about interest on damages continued. Not surprisingly, the Deepwater
Horizon oil rig explosion on April 20, and the ensuing environmental disaster in the Gulf of Mexico, has also spawned litigation. Just in the two immediate weeks
after the incident, more than 70 lawsuits were filed in United States Federal Court against BP plc companies, Transocean Ltd. companies, Halliburton, and Cameron International; 59 were class actions. By mid-June, the number of lawsuits filed had ballooned to more than 6,000. Many of the early claims came from
commercial fishermen, fish processors, seafood wholesalers and retailers, and charter boat and ferry boat operators. There have also been hundreds of claims by local and state governments, environ- mental groups, hotel owners, restaurants,
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