Gulf Spill Update: Florida Real Estate Developer Sues Halliburton
The St. Joe Company, a real estate developer in Florida that owns 577,000 acres of land near the Gulf Coast, filed a suit against Halliburton Co. on Aug. 4, asking for more than $1 billion in damages. St. Joe filed the complaint against the oil-services company, it said, because Halliburton, which helped to build the oil well, "ignored multiple warning signs" that the rig was unsafe and could have helped prevent the disaster. Halliburton is perhaps best-known as the company Dick Cheney ran as chief executive before becoming vice president under George W. Bush.
Although the well was owned by BP, St. Joe said in the complaint that Halliburton's work encasing the well in cement was not properly managed, "allowing oil and gas to escape the well, which caused the catastrophic blowout."
"We believe that Halliburton was grossly negligent and bears full responsibility for this tragic accident," said William A. Brewer III, partner at Bickel & Brewer, and lead counsel for St. Joe.
St. Joe claims the fallout from the spill has resulted in lost business at its resorts. The company has suffered a huge decrease in its stock price -- which fell by 40 percent shortly after the explosion -- and a $1 billion drop in market capitalization.
real estate developer, based in Watersound, Fla., is not the only one suing Halliburton; other Gulf Coast residents and businesses have filed lawsuits against the company. And many have targeted other players in the disaster, including BP PLC and Transocean Ltd.
However, St. Joe is one of the first publicly traded companies seeking compensation by claiming damages due to a loss of investor equity.
Brewer said that St. Joe sued Halliburton first because they expect this to be the quickest way to collect damages and repay shareholders. He said that suits against other companies involved in the disaster are to follow.
The company, which develops resort, residential and commercial properties, about 70 percent of which lie within 15 miles of the Gulf Coast, posts weekly updates and photos of pristine beaches on its website to allay visitors' fears about the condition of the water and beaches due to the Deepwater Horizon catastrophe.
"We have had two incidents of minor tar ball activity from June 19-June 22," it states on the website for its Water Color Inn and Resort on Santa Rosa Beach, Fla. "In both cases the clean up effort was completed swiftly. Furthermore, the owner of Water Color Inn and Resort, The St Joe Company, has contracted an outside firm to do daily inspections of the beaches.... We will continue to monitor the conditions on our beach."
Photos show the beach as of Aug. 2, with families enjoying clear water on white, sandy beaches. Hotels are just one part of St. Joe's business. The company also develops resort communities. In its report on second-quarter 2010 earnings, the company announced a net loss of $8.6 million. The statement also noted that contracts on a total of 36 homesites throughout its communities were accepted in the second quarter.
While the company continues to move forward after the oil spill, said St. Joe CEO Britt Greene in a statement, the losses have been a burden on the company. He said that his company's lawsuit against Halliburton "represents an important first step in our effort to achieve a full and complete recovery for the damages suffered by St. Joe."
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