Wall Street Prepares For BP Bankruptcy In Wake Of Oil Spill - Atlanta Bankruptcy Law News

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Wall Street Prepares For BP Bankruptcy In Wake Of Oil Spill

The New York Times published an article about recent speculation by investment bankers that oil and gas giant BP may have a blowout of its own following the ongoing oil spill disaster in the Gulf of Mexico. Cleanup costs, lawsuits and loss of productivity may sink the multinational corporation, many say.

Credit Suisse estimates that cleanup costs alone could run as high as $23 billion. And BP already has lost more than one-third of its stock value since the Deepwater Horizon suffered a catastrophic failure, sending millions of gallons of crude oil into a sensitive marine ecosystem.

But in a move that would certainly anger Gulf Coast residents even more, bankers and lawyers believe BP may file for bankruptcy and merge with another company in an effort to block some liabilities. And since BP's stock price is dropping like a stone, many experts believe bankruptcy is only a matter of time.

A bankruptcy attorney in Atlanta may be able to explain just how a company responsible for such a disaster can use the courts to shield itself.

But wouldn't a company with multiple liabilities be an albatross on the shoulders of other oil companies?

Unnamed sources tell the Times that Exxon Mobile (no stranger to oil spills) and Shell already are "licking their chops." BP might be able to file for Chapter 11 bankruptcy and separate the cleanup costs into another corporate entity, according to the article. This move also would shear billions in legal claims from the oil giant.

Embattled BP CEO Tony Hayward told employees last week that the company is on solid footing:

"The strength of cash-flow generation in recent quarters has provided us with a balance sheet that allows us to fully take on the responsibility for the Gulf of Mexico response."

Regardless, BP might face about $14 billion in claims from the region's fishing and tourism industries; others put that number as high as $40 billion.

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