June 11, 2010
British Petroleum has, from the start of the Deepwater Horizon oil spill, sought to reaassures governments, businesses and citizens that it would pay for the clean up and damages. But as the sprill continues and the toll mounts, some are worrying about the company's ability to make good on its word.
At the start of the oil spill BP stock was as $60 and the company was flush with cash. But this week some financial analysts began to speculate openly that BP might be forced into bankruptcy by the cost of the spill and clean-up. BP Stock recently fell to $29 before rebounding.
Florida Attorney General Bill McCollum says he isn't taking any chances. He wants BP to put up some cash now.
McCollum sent a letter to BP asking the company to deposit no less than $2.5 billion into an interest-earning escrow account so Florida can be assured of its availability to the state and its citizens and businesses over the long-term recovery period.
"Based on recent estimates from an economist, Florida could ultimately see losses as great as $2.2 billion, as well as a sharp decline in employment in the industries directly impacted by the Deepwater Horizon oil spill," McCollum wrote. "As Florida braces for what will likely be a staggering blow to its economy with significant impacts to our state's workforce and the revenues of the state and local governments, it is essential that BP establish immediately a dedicated escrow account solely for the purpose of paying claims and damages to Florida and its citizens."
There has been no response from BP to McCollum's letter. However, BP has said it would speed up payments to Gulf Coast businesses affected by the spill.
