BP Plc (LON:BP) has agreed to pay $175 million to shareholders who brought a class-action lawsuit against the company, accusing it of misleading them by understating the severity of the 2010 Gulf of Mexico oil spill to prop up its share price.
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The investors, who blamed BP for massive losses when the true scope of the spill was revealed, had sought as much as $2.5 billion.
The investors were seeking up to $2.5 billion, and BP will no longer need to go to a July trial in Houston federal court.
The energy company has announced the settlement just after the US District Judge, Keith Ellison gave a verdict to narrow down the evidences that would be presented in the court.
The $175m is payable in the 2016-17 year, BP said in a statement.
BP warned, however, that the latest settlement did not bring an end to other securities-related litigation in connection with the Gulf of Mexico spill.
BP also pleaded guilty to a felony count of obstruction of Congress related to spill estimates.
According to Bloomberg, spokesperson of New York Comptroller’s Office, Jennifer Freeman said: “This settlement helps compensate investors for their losses”.
BP has so far set aside $56.4bn to cover the cost of settlements, fines and clean-up costs. The company took around three months to contain the oil spill.
In 2012, BP paid $525m to settle claims from the Securities and Exchange Commission, the United States financial regulator, that it misled the markets over the size of the spill.
Most of the largest items in the cost have now been accounted for, although BP is still facing some remaining outstanding liabilities.
The plaintiffs said they lost as much as 40 percent of their investments due to a decline in BP stock prices in the wake of the spill. Company officials repeatedly estimated that 1,000 to 5,000 barrels of oil were gushing from the well daily, when internal calculations pegged the flow rate at more than 10 times higher.
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Other securities-related litigation is pending, the company said.
