Transocean Ltd shareholders approve a USD $1.0 billion distribution to themselves

I am sorry of this has been posted before, I could not find it when I searched.

I was reading through Transocean Limiteds press releases and exchange announcements. And I noticed that the proposed USD$1 billion distribution of capital to shareholders was approved at a Shareholders Meeting on the 14 May 2010.

Now, I am not a shareholder of Transocean Ltd, nor am I a Director, however I would have thought that as the owner of the Deepwater Horizon now resting comfortably on the bottom of the Gulf, and with a potential series of both civil and potentially criminal legal actions on the way, and a lot of finger pointing going on between BP, Transocean and Halliburton that a USD$1.0 billion capital return to shareholders at this point of time may not seem to be the most prudent of actions if they were serious about having some legal and moral obligations towards a serious contibution to the massive and as yet unknown cleanup costs.

I appreciate that they are saying that all costs and liability are pass throughs to BP, and that maybe the case. But I am also sure it is very convenient to the Transocean shareholders to have taken a USD$1.0 Billion from the Companies bank account and have that now sitting in their own bank accounts, and yes all on the right side of the law, but on the wrong side of moral. I also noticed that the Shareholders agreed to Discharge the Board and the Executives from any liabailties for activities throughtout the year (how kind of them?). Here is the link.

www.deepwater.com...

I also attach some of the announcement below:

Transocean Ltd. Shareholders Approve Proposals at Annual General Meeting

ZUG, SWITZERLAND, May 14, 2010 (MARKETWIRE via COMTEX) --Transocean Ltd. (NYSE: RIG) (SIX: RIGN) announced the results of the 2010 Annual General Meeting held today in Zug. Shareholders approved a number of matters, including the election of five directors, the authorization of a distribution to shareholders in the form of a par value reduction and several other matters.

Shareholders today re-elected four Class II directors, Thomas W. Cason, Robert M. Sprague, J. Michael Talbert and John L. Whitmire, each for a three-year term. Steven L. Newman was elected as a Class II director for a three-year term following the resignation of Robert L. Long from the Board of Directors in connection with his retirement.

Shareholders also authorized the Board of Directors to make a cash distribution to shareholders in the form of a par value reduction in the aggregate amount of 3.44 Swiss francs ("CHF") equal to approximately USD 3.11 per issued share to be calculated and paid in four quarterly installments. Based on the total number of issued shares, including treasury shares, the distribution is approximately USD 1.0 billion. The quarterly capital reduction payments of CHF 0.86 per issued share will be made in USD converted at the exchange rates prevailing approximately two days prior to payment, unless a shareholder timely elects to receive such payment in CHF. The Board of Directors expects to set the respective payment dates of the four installments in July 2010, October 2010, January 2011 and April 2011, or as soon after each of the four periods as is practicable. The actual installment payments will be subject to the satisfaction of applicable Swiss law requirements.

In addition, shareholders approved the following:

-- Transocean Ltd. 2009 Annual Report, including the consolidated
financial statements, and statutory financial statements,
-- Discharge of members of the Board of Directors and the executive
officers of Transocean Ltd. from liability for activities during
fiscal year 2009, as is customary for Swiss corporations,
-- Appropriation of available earnings for fiscal year 2009 to be carried
forward in available earnings,
-- Change of the place of incorporation of Transocean Ltd. from Zug,
Cantoof Zug,
Switzerland,
-- Amendments to the Articles of Association to reflect The Swiss Federal
Act on Intermediated Securities, and
-- Appointment of Ernst & Young LLP as Transocean Ltd.'s independent
registered public accounting firm for fiscal year 2010 and reelection
of Ernst & Young Ltd., Zurich as Transocean Ltd.'s auditor for a
further one-year term.

MAY 25, 2010
Transocean will honor all of its legal obligations arising from
the Deepwater Horizon accident. The dividend proposal was
announced on February 16, 2010, described in the preliminary
proxy statement which was filed with the Securities and Exchange
Commission on March 1, 2010, and approved by shareholders at the
company's annual general meeting on May 14, 2010. The payment
of this dividend will not impact the company's ability to meet its legal
obligations relating to the Deepwater Horizon accident. In addition to
its ongoing operating revenues, the company has insurance coverage
applicable to the Deepwater Horizon, including insurance for the fair
market value of the rig at the time of the accident. Other insurance is
in place for claims asserted following the April 20 accident.

phx.corporate-ir.net...

the meeting minutes reveal this distribution was approved
2 months before the gulf spill happened.



[edit on 30-5-2010 by boondock-saint]

reply to post by boondock-saint


It was not approved until 14 May, yes, it was announced 2 months previous. But as a significant event occured after it was announced, AND not yet approved nor was the cash yet released. I believe the board had a fiduciary duty to withhold the distribution pending resolution of the current events.

I have seen before where Boards have witheld dividends, capital returns, etc, due to abnormal events happening post announcements. No capital distribution can be made without shareholder approval, shareholder approval only took place on the 14 May.

Just general stock price info

Shareholders will have the opportunity to vote on the proposed cash distribution at the Annual General Meeting to be held in Zug, Switzerland, on May 14, 2010. For details regarding the proposed cash distribution, we refer to the definitive proxy statement of April 1, 2010 and the invitation to the 2010 Annual General Meeting published in the Swiss Official Gazette of Commerce on April 19, 2010.

From Transocean website.

This was proxy on April 1st, 2010.

Not saying there's nothing shady going on in general but they'd be in worse trouble legally and especially with angry stock holders if they decided to cancel this after the proxy vote.

S&F for the nice catch anyhow.

[edit on 30-5-2010 by Thermo Klein]

reply to post by searchforknowledge


The company already had everything in the works on April 1st. The May 14th date is when the stock-holders voted. After losing so much money on this stock, do you really think the majority of investors are vote against giving themselves money?

reply to post by Thermo Klein


Yeah, but one billion? OMFG. that's like just doing some kind of circle jerk. They were like "let's just form a circle, since we are all jerks here anyway, and just rub one out"

IMHO

reply to post by Thermo Klein


As I said, Right Side of the Law, Wrong Side of Moral.... I wonder what will happen when the public realise that each Rig will be under a Limited Liability Company, probably registered in Monrovia, or the Marshal Islands, or Vanuatu, or some other FOC (Flag of Convenience) and that the liability attributed to that LLC and the Rig / Vessel are not beholden back to the parent company?

So Transocean Limited can sit back now and say whatever they want to say, but legally, they have already collected the insurance payout on the Horizon, (and made a sizable profit on that) they have already commited to return USD$1.0 Billion in a Capital return to shareholders, so what is to stop them putting the LLC that owned the Deepwater Horizon into liquidation? The insurance has been paid out, the cash has been stripped out and returned to shareholders, cash will be paid to the familes for the lost souls and treated as general operating expense. And guess what, NOTHING will be available for civil or criminal claims, as the cash has gone, and on the 14 May the Shareholders provided an indemnity to the Board and the Executive for any operational claims againts them for activities throughout the year.

Overall a great outcome if your a shareholder, or a Director, or an Executive, not so great if your Buba Gump catching shrimp in the Gulf.

As I say, Right side of the Law, Wrong side of Moral.... I wish them well spending their USD$1.0 Billion...

This makes me SICK to my core !!! I am sick and tired of the Greed and Profit mentality of Big Business at the expense of our world, it's resources and and morality to any of it's population.
This thread is just another example of those in power / the Know 'protecting' their wealth because they can ...!!!!!!
This attitude has to stop!!! whether it's Financial Wall Street 'Experts'? shuffling papers and the odd decimal point or politicians on the make for whatever they can get.

This lot don't get it - when there is no world or when the masses finally wake up then their money will mean NOTHING!

I have made some money in my life and still do but from hard graft, physical work and making things..... not pretending to shift paper or moving decimal points and taking the difference.......... I also live by the moral of whatever I earn i split it in different directions - approx 20% goes off to charity or support of others (that's gross not net for any accountants reading).. then I save about 25% and use the rest on living and rewards for myself..... it works and I live within my means !!!!!

BUT this article has got my back up and I am looking now at what I CAN DO to start this change that the world needs !!!

ANY IDEAS GUYS....?

Regards
PurpleDog UK

reply to post by PurpleDog UK


Thanks Purple Dog, I agree, but as I coined it Right side of Legal, Worng Side of Moral if the root cause of the problems we face today.

Every Corporate Raider, every Politician, ever Lobbyist, every Wall Street Banker, every International Law Firm Partner, every Big Four Partner, I believe have lost sight of their MORAL Compasses.

In todays world, these well educated guys are not rewarded on Moral Principles, no longer does the world have Corporates who will stick with a Law, or Accounting firm because they expose morals around good Public engagement, looking after the minority shareholders, ensuring all stakeholders, including creditors, customers, staff, employees, etc... hardly anyone in Public Corporate Life, Government, give a rats arse about these basic values we were brought up with, and hence the guys in the Legal, Banking, Accounting fraternities don't have much choice but to either get on the darker side of grey, or get the heck out of the account, as someone else will do the dark work.

The Political parties are actually worse, a young guy looking at a Partner career in a large law firm, or accounting form has a career path of 15 to 20 years, these guys that become casual labour politicians have a much shorter timeframe to make their stamp on the world, they are in it to get as much as the can out of it within sometimes a 3 to 4 years term (or less), tell me how well grounded their moral compass can be when all they are looking to do is get the biggest and quickest buck through some shonky side deal, they have cooked up with an even shokier corporate, with an even shonkier lawyer.... this is reality.....

reply to post by searchforknowledge


The problem is they create the laws that enable them to operate this side of their laws but wrong side of what would be a moral choice... It appears to me that doing the right thing happens far too infrequently..

reply to post by thoughtsfull


I sadly agree, operating on the grey side makes it easy to take short cuts, pay someone off here, pay someone off there, but in the end the chickens come home to roost, but for the big guys out there, thats irrelevant as they have already made off with the treasure and our laws are such fickle crap in the end its all agreed that its all to hard to chase them and everything is dropped and people move on.

reply to post by searchforknowledge

...But I am also sure it is very convenient to the Transocean shareholders
to have taken a USD$1.0 Billion from the Companies bank account
and have that now sitting in their own bank accounts,
and yes all on the right side of the law, but on the wrong side of moral.

I also noticed that the Shareholders agreed to Discharge the Board
and the Executives from any liabailties for activities throughtout the year...

on the first part (the payouts)
the monies were negotiated over a long period of time, i'm sure...an agreement made that an undeclared dividend would be paid out one-way-or-another, even if the proposal didn't pass shareholder voting.
The 'accident', still to be proven, still seems to lay at the feet of BP rig bosses who told the operators to skirt the protocols, as 'they' were in-charge !

So there is no moral obligation that can be pressed on the Transocean business to supercede the disbursement of funds.


on the second part (the immunities);

sort of sounds like Congress' type of stealth dealings, with their automatic pay raises and such... including the hand-off situation they have with prosecutions due the FTC, SEC, Freddie/Fannie, And Others!


have a hot tub session & relax

Who cares? Transocean is still on the hook for any liability associated with the sinking of the oil rig and the resulting spill. Some of that distribution is going to wind up in my 401k and after the hit I took in 2008, I can use it.

reply to post by St Udio


I don't need to have a "hot tub and relax". I don't live in the Gulf area, the people their have now been given the biggest hot tub, regardless if they wanted it.. they now have one toxic # hole of a hot tub to live in for years, as for congress having any morals, the US congress gave up on the moral debate decades ago, I doubt congress could even spell moral...

reply to post by JIMC5499


You better read the fine print if you believe that...... don't spend your day money waiting to collect on this one, it will be tied up in the courts for decades..

reply to post by searchforknowledge


point 2: i'm sure Transocean Ltd. had a bundle of insurance to cover this rig until it was officially handed over to BP. All the other rigs that are operating properly are independent of other business transactions and seperate from the oil head gush going on, so too with this payout...
It should remain untied to the present disaster situation.

the first 'dividend' payout since 2002 by Transocean
see:
finance.yahoo.com...

look at some of the other key statistics of the (NYSE: RIG) profile
the payout will be .77¢ per share per quarter on some 319.93M shares outstanding

the days of honorable men & corporations (with the present exception of MicroSoft philanthrophy) are over... i did benefit from the largesse of one honorable man & his corporation : i.e. Milton S. Hershey, Hershey Chocolate... but that was in another era when character and honor were attributes one sought to gain (although there were still the knaves running amok, the Morgans, Rockafellers, Bernard Baruch, et al)


thanks, edit person

[edit on 30-5-2010 by St Udio]