Client:

Weatherford International PLC (NYSE: WFT) is a global leader of oil and gas field services. Perkins Coie attorneys have represented Weatherford in several high-stakes insurance recovery matters for many years.

Issue:

Weatherford was sued in a number of bodily injury and property damage lawsuits in 2010 arising from the Deepwater Horizon incident and the ensuing oil spill in the Gulf of Mexico. In addition, Weatherford was a party to a number of other related litigations brought by owners and operators involved with the drilling and exploration at the Macando well. Weatherford turned to its liability insurers to both defend and indemnify Weatherford in the various litigations.

Challenge:

Our client sought to use insurance proceeds to expedite its resolution of all pending Deepwater Horizon-related litigation before full-blown litigation began in the Eastern District of Louisiana.

Solution:

Perkins Coie attorneys negotiated with Weatherford’s domestic and Bermuda-based insurance companies for nearly nine months and ultimately reached a $75 million settlement with those insurers. Weatherford used the insurance proceeds to fund a settlement with British Petroleum (BP), in which BP agreed to indemnify Weatherford for all underlying litigation arising out of the Deepwater Horizon incident in exchange for the $75 million payment.

This was a novel approach to the resolution of both the insurance coverage dispute and the underlying litigation pending against Weatherford. The unique aspect centers around the fact that the insurance proceeds were not paid directly to the underlying tort claimants but rather to an uninjured third-party, BP, which in turn agreed to indemnify Weatherford in the underlying tort litigation. As a result of this unconventional approach, Weatherford not only resolved all of its Deepwater Horizon litigation on an expedited basis but did so cost effectively, saving itself and its insurers significant sums in both defense costs and settlements.