With damaged assets on Florida Panhandle, St. Joe Co. goes after Deepwater culprits
Wake up and good morning. What Florida company is stepping out on its own and going after the oil exploration corporations it believes made a mess of the Gulf of Mexico and, in turn, its own bottom line?
St. Joe Co., that's who. The giant real estate development company, which last year moved its headquarters from Jacksonville to the Panhandle (or Northwest Florida, as St. Joe hopes to rebrand it), on Tuesday said it sued Transocean, the owner of the Deepwater Horizon rig that BP was leasing when the Macondo well blew on April 20. (See photo.)
This is St. Joe's third legal action taken in the aftermath of the Deepwater Horizon incident. Previously, it filed lawsuits against Halliburton (more on this cementing contractor lawsuit here) and MI-SWACO (more on this drilling fluid contractor lawsuit here).
Why the gung-ho legal attack? Because St. Joe owns approximately 577,000 acres in Florida, 70 percent of which are within 15 miles of the coast of the Gulf of Mexico. Since the incident, St. Joe says it has suffered a substantial decline due to higher costs, an interruption to its business, and the diminution in the value of its assets. St, Joe's stock price declined by over 40 percent in the days following the explosion.
According to the lawsuit, Transocean "failed to live up to its responsibilities" by not making necessary mechanical repairs to the rig, and by failing to conduct routine equipment inspections mandated by regulations on more than 300 pieces of equipment on the Deepwater Horizon. The lawsuit claims that at the time of the disaster, the inspection of the blowout preventer -- the rig's last line of defense against the unchecked discharge of gas, oil, and other pollutants -- was at least five years overdue. Here's more from St. Joe on its Transocean lawsuit.
Transocean obviously anticipated the coming legal wrath from its role in the BP spill in the gulf. Once based in Delaware, it's already moved its headquarters to Switzerland in search of, among other things, more protection from liability. As this New York Times story notes, a federal bankruptcy judge this summer found that one of Transocean’s merger partners had repeatedly abused the legal system to try to avoid potential liability in a pollution case in Louisiana. Transocean is also the target of tax inquiries in the United States and Brazil. (Nor is Transocean alone. Halliburton left the U.S. and put its headquarters, of all places, in Dubai.)
For St. Joe, the sad reality is the company's land assets -- especially its most valuable beachfront holdings - are concentrated in the Panhandle and have all suffered major blows to their value. St. Joe's expensive rebranding efforts of the Panhandle's longstanding Redneck Riviera image into the company's preferred Florida's Great Northwest has also been damaged. And the opening this spring of a St. Joe-subsidized, larger airport north of Panama City practically coincided with the Deepwater Horizon disaster.
-- Robert Trigaux, Times Business Columnist