Bloomberg reports this morning that Representative Steve Cohen, with support from Louisiana State Treasurer John Kennedy, said that the Obama administration should consider placing the company in receivership to preserve its assets "because BP is likely to end up in bankruptcy", "bankruptcy is a possibility and state and federal governments need to plan for it".
However, restructuring experts say that bankruptcy is unlikely to make the company avoid paying claims said. BP claims is has already spent more than $1.43B to stop the leak and clean it up. There were bizarre reports yesterday that the company would be increasing he amount of oil collected to up to 60,000 or 80,000 barrels per day, after the company said it had increased collection to 17,000 barrels per day. Apparently the initial estimates of the leak were 1,000 barrels per day (!). Just how much oil is flowing on that leak?
This morning, Fitch downgraded BP's credit rating by 6 notches, from AA to BBB.
Back on June 2nd, a Credit Suisse report said that BP faces more than 200 lawsuits, and BP’s liabilities include $37B in cleanup and potential litigation expenses, but this was when the oil leak was considered much smaller.
The company's chart is a disaster:
However, our straddles continue to perform extremely well (more later).