From Barron's Investor's Soapbox:
Credit Suisse says the rig may be considered a ship under maritime law.
WE SUMMARIZE TAKEAWAYS from a conference call to review the potential liability issues surrounding the Macondo well [off the Louisiana coast] disaster: We hosted a conference call with Leopold Sher and Peter Hilbert from Sher Garner Cahill Richter Klein and Hilbert to discuss the legal issues around Macondo.
The call raised as many questions as it answered: What follows are the most interesting takeaways (and questions) from the call (we note these attorneys disclosed their firm has been retained to represent aggrieved parties related to the spill).
The Deepwater Horizon is expected to be considered a "ship" and, therefore, subject to liability limitation provisions of maritime law. Liability limitation has various benefits, including that all claims are filed together in a federal court and that as long as Transocean (ticker: RIG) was without privity or knowledge leading to the casualty, Transocean's pollution liability may be limited to the value of the rig after the accident (i.e. $0).Potential warranty challenges for Cameron International (CAM): The attorneys indicated that maritime law recognizes the right of third parties to file liabilities claims. Liability would be established if the blowout preventer (BOP) could be determined to be defective because of its design, manufacture or warnings (and the same with instructions on proper use). ...MORE