SEPTEMBER 3, 2014 — Halliburton (NYSE: HAL) announced yesterday that it had reached an agreement to settle a substantial majority of the plaintiffs' class claims asserted against the company as a result of the April 20, 2010 Macondo well incident in the Gulf of Mexico.
Halliburton was the cementing contractor on the ill-fated Deepwater Horizon and the role of the cementing in the disaster has been central in investigations of the incident, including that of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling. You can read the Commission's Final Report HERE
The approximately $1.1 billion settlement, which includes legal fees, is subject to approval by the United States District Court for the Eastern District of Louisiana, and will be paid into a trust until all appeals have been resolved in three installments over the next two years. The company's previously accrued loss contingency provision relating to the multi-district litigation proceedings is currently $1.3 billion.
The agreement includes the following:
- Claims against Halliburton that BP assigned to the settlement class in BP's April 2012 settlement,
- Punitive damages claims against Halliburton by a class of plaintiffs who allege damages to property or associated with the commercial fishing industry arising from the Deepwater Horizon Incident, and
- Affirmation that Halliburton has no liability for compensatory damages to the members of the settlement class in the BP April 2012 settlement.
Payments will be held in the trust, pending the finalization of this settlement which is contingent on final Court approval, including any appeals of:
- The BP 2012 settlement with the settlement class,
- The District Court's earlier determination that the contractual indemnity provided by BP to Halliburton is valid and enforceable, and
- The District Court's earlier dismissal of economic damage claims against Halliburton.
Additionally, the settlement is subject to an agreed-upon level of participation by the current claimants which, if not achieved, allows Halliburton to terminate the agreement.