Exxon

#1
kptvol

kptvol

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#1
I decided to put this here, mainly because there are quite a few posts in this forum about oil prices. Just saw where Exxon was originally fined $5 billion for the Exxon Valdez spill. That was 21 years ago. Exxon still hasn't paid. The fine was later cut in half by the Supreme Court to 2.5 billion. Now, the Supreme Court is probably about to drop it even lower. How is this justifiable considering the company has gone over two decades without paying? Additionally, Exxon just posted the greatest single year profit of any company in the history of the world ($40 billion). I'd like to hear Volnation's thoughts on the matter.
 
#4
#4
What I would like to hear is, how is it Goggle and Mr. Softy profits margins are in the 20's somewhere, but those greedy big oil companys profit margins are about 9 to 10%..Yeah, lets tax them more. :)
 
#6
#6
kptvol said:
Yes. Exxon is appealing the 2.5 bil in punitive damages.
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That's what I thought. They've already paid billions in fines and cleanup. The question is whether they now owe in addition to that.
 
#7
#7
Correct me if I'm wrong, but didn't Exxon have to pay for the original cleanup and all of that stuff immediately afterwards?

If they are just haggling over punitive damages, then I can kinda see their argument, although it is bad PR for them to be doing right now and they may come out better submitting to the shake down by the courts. :no:

I don't like having to say that, but that may be a way to throw someone a political bone.
 
#8
#8
If they already paid for the cleanup where does the additional 2.5 billion go? The ducks and fish families that perished in the oil slick? Somebody call Obama, I think this deserves news coverage.
 
#9
#9
5 billion over 20 years doesn't seem like too much for a company like Exxon to cover. When you factor in the fact that they hired a known drunk to captain the Exxon Valdez, I'd say they deserve no breaks on the initial punishment. I also wonder if that blunder is affecting decisions to not drill more of our own oil.
 
#10
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kptvol said:
5 billion over 20 years doesn't seem like too much for a company like Exxon to cover.
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There's a legitimate argument as to whether they owe the additional money or not, but how much money they make is irrelevant. The judicial system is in place to settle disputes, not play Robin Hood.
 
#11
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GAVol said:
That makes no sense. There's a legitimate argument as to whether they owe the additional money or not, but how much money they make is irrelevant.
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That's true. However, it's been 20 years. Shouldn't this have been resolved long ago? It seems like if anything they'd be getting punished for not paying after all these years.

Anyway, my point is that I feel the punitive damages are absolutely justified. If the fine were of a backbreaking amount, I'd understand the need to seek a reduction.
 
#12
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kptvol said:
That's true. However, it's been 20 years. Shouldn't this have been resolved long ago? It seems like if anything they'd be getting punished for not paying after all these years.
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I think they've already paid out billions in fines and cleanup. The courts will decide if they owe more. You don't really expect anybody to just roll over and pay a $5 billion judgment do you?
 
#13
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GAVol said:
I think they've already paid out billions in fines and cleanup. The courts will decide if they owe more. You don't really expect anybody to just roll over and pay a $5 billion judgment do you?
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They've paid for cleanup, but I don't think they've paid anything else. The courts already did decide that they owe more, back in the 80s. I don't blame Exxon for fighting it. I'm not super pleased that the Supreme Court has already cut the number in half and is considering reducing it again. Exxon was at fault. They deserve to pay. The sum isn't unreasonable.
 
#14
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GAVol said:
I think they've already paid out billions in fines and cleanup. The courts will decide if they owe more. You don't really expect anybody to just roll over and pay a $5 billion judgment do you?
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Unfortunately, that is the way of the world. I agree with you that courts are not to be put in place to shakedown companies, but during this climate, there is no way XOM can expect to get public sentiment or any judicial favoring. They may as well save face and cough up the $2.5 billion. :no:


P.S: Just curious, who would XOM pay the punitive damages to? The State of Alaska? US Gov't? The ducks? :question:
 
#15
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Rasputin_Vol said:
Unfortunately, that is the way of the world. I agree with you that courts are not to be put in place to shakedown companies, but during this climate, there is no way XOM can expect to get public sentiment or any judicial favoring. They may as well save face and cough up the $2.5 billion. :no:


P.S: Just curious, who would XOM pay the punitive damages to? The State of Alaska? US Gov't? The ducks? :question:
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Evidently the fishing indurstry of Prince William Sound was completely ruined by the wreck. So, the money is supposed to go to it's citizens. Also, the fine will encourage Exxon not to be reckless. I mean, they knew their captain was drinking on the job and did nothing. They don't deserve any mercy. Evidently the people most affected by this incident have already received about $15,000. That is not even close to being sufficient.
 
#16
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kptvol said:
The sum isn't unreasonable.
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Evidently the people most affected by this incident have already received about $15,000. That is not even close to being sufficient.
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I'm uneasy with someone who wasn't involved in the trial determining what is reasonable or unreasonable.

If it were as clear as you suggest, it wouldn't be making it to the Supreme Court.

Finally, the amount of money Exxon made in the last few years should have nothing to do with the reasonableness of a judgment made 20 years ago.
 
#17
#17
volinbham said:
I'm uneasy with someone who wasn't involved in the trial determining what is reasonable or unreasonable.
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I went out on a limb and assumed the parties seeking punitive damages would agree with me.

It seems pretty clear that Exxon screwed up badly. As a direct result, the livelihoods of quite a few people was taken away. After 20 years, those people are still waiting to be compensated.

If the 5 billion was an unreasonable amount of money (now or twenty years ago), then that problem should have been resolved with the first cut. I see no reason why the amount should be lowered again. And if it is, what's to stop it from getting lowered yet again? I'd like to see a lawyer weigh in on all this.

I hope it's coming across that I'm more displeased with the Supreme Court than with Exxon.
 
#18
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kptvol said:
It seems pretty clear that Exxon screwed up badly. As a direct result, the livelihoods of quite a few people was taken away. After 20 years, those people are still waiting to be compensated.
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You might have a point and you might not, but to be fair, Exxon has already paid for the cleanup and huge fines which theoretically were to compensate those affected. The question is whether an additional civil judgement has a leg to stand on. It's not as if Exxon has gotten off scot free here.
 
#20
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myrobbins7 said:
What I would like to hear is, how is it Goggle and Mr. Softy profits margins are in the 20's somewhere, but those greedy big oil companys profit margins are about 9 to 10%..Yeah, lets tax them more. :)
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I have never, and will never, trust the figures that these enormous corporations give for their profit margins. The complexity of how they account for revenues and expenses is mind-boggling, not to mention the fact that it seems like every year the largest corporations end up amending their fiscal statements as they adjust for write-offs, bad debt, etc.

When you are making $40 billion every three months, the economy is buckling under the crushing effects of, among other things, the fact that the price for your main product has tripled in two years, then you have one heck of an incentive to minimize that profit margin number as much as you possibly can.



kptvol said:
5 billion over 20 years doesn't seem like too much for a company like Exxon to cover. When you factor in the fact that they hired a known drunk to captain the Exxon Valdez, I'd say they deserve no breaks on the initial punishment. I also wonder if that blunder is affecting decisions to not drill more of our own oil.
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I honestly don't think they are fighting it so much over the money in that case as much as the principle. If they could get hit in $2.5 billion damages in 1970's dollars, imagine the punitive damages award if the same thing happened this year, and with them making over $100 billion a year.

My guess is that, as long as that fight has been going on, they've spent a hundred million in attorneys' fees, maybe more. Its not the $2.5 billion. Its what it represents.

Besides which, under some circumstances, a judgment like that can yield statutory interest, which is often set at around 6 %. So there may be a fight over that, if it applies.

volinbham said:
I'm uneasy with someone who wasn't involved in the trial determining what is reasonable or unreasonable.

If it were as clear as you suggest, it wouldn't be making it to the Supreme Court.

Finally, the amount of money Exxon made in the last few years should have nothing to do with the reasonableness of a judgment made 20 years ago.
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The amount of the punitive damages award is, I am sure, a reflection of what they were making then. With corporate punitive damages awards, the profitability of the company is a factor in the amount fo the award. Very common.
 
#21
#21
lawgator1 said:
I have never, and will never, trust the figures that these enormous corporations give for their profit margins. The complexity of how they account for revenues and expenses is mind-boggling, not to mention the fact that it seems like every year the largest corporations end up amending their fiscal statements as they adjust for write-offs, bad debt, etc.

When you are making $40 billion every three months, the economy is buckling under the crushing effects of, among other things, the fact that the price for your main product has tripled in two years, then you have one heck of an incentive to minimize that profit margin number as much as you possibly can.
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I know I'm on a self-imposed vacation from the board due to the influx of idiots, including Gainesvol, but this post nearly made me hurl.

If I thought you knew one single thing about what you were saying, I would have actually thrown up.
 
#22
#22
I believe that Sarbanes - Oxley would have something to say about trusting the figures put out by publicly held companies. They cannot manipulate the numbers in any way near the way you suggest.
 
#23
#23
An attorney commenting on the ethics or lack thereof from other professionals is rather amusing though.
 
#24
#24
what does Exxon's profit have to do with whether they owe damages or not? I ask since the OP suggests there is a correlation.
 
#25
#25
BigPapaVol said:
I know I'm on a self-imposed vacation from the board due to the influx of idiots, including Gainesvol, but this post nearly made me hurl.

If I thought you knew one single thing about what you were saying, I would have actually thrown up.
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Tell me where I'm wrong. I'm not saying that they aren't playing inside the rules. I am saying that they are maximizing every expense or offset to revenue they can find right now. Its not wrong or illegal. I'm just saying that you have to recognize that they are going to be on the outer edges of every ploy they can think of to try to dumb the profit number down right now because they know that they are being scrutinized.

Don't see how anyone can disagree with that.


Know what makes me laugh? And BPV you might agree with me on this save for the political angle. The other day, McCain gave a speech where he said he was mad at Big Oil, not just because of their recent profits, but because they aren't investing money in new and alternative sources of energy.

What!? Like any of us should really expect Exxon or Mobil to plunge their profits into technologies that would make themselves obsolete.
 
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