Nine Questions (and Provisional Answers) About the Spill

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If evidence of egregious wrongdoing surfaces, that could alter the bankruptcy outlook for BP. A civil jury assessing punitive damages or prosecutors seeking to make a point with enormous criminal fines could push the company toward insolvency. "The uncertainty of potential punitive damages or the credit risk that might come with serious criminal liability could change the picture," Adler notes.

Politics and public perception will also come into play. The Obama Administration could pressure BP into a reorganization, possibly via bankruptcy court, in which parts of the company were sold off and its leadership replaced. "If we get to the fall and the Loop Current has taken the oil around Florida, bankruptcy becomes a more viable option," says Burton LeBlanc of the plaintiff's law firm Baron & Budd.

How will the oil spill lawsuits proceed?
It may take months, but the 200-and-counting leak-related lawsuits will be consolidated into one or more megacases—excruciatingly complex proceedings teeming with litigants and lawyers—and a single federal judge will emerge as the Solomon of the Spill. One man apparently angling for the job is U.S. District Judge Carl J. Barbier, a former head of the Louisiana plaintiffs' bar and thorn in the side of business. Barbier, who has been hearing preliminary legal motions, announced this month that he preemptively sold his oil-industry bonds to eliminate any "perception of a conflict in these cases."

Whoever ends up presiding over what may become one of the most convoluted courtoom struggles in U.S. history will wield extraordinary authority. Many plaintiffs' lawyers want to do battle in New Orleans, where Barbier sits; corporate defendants prefer Houston, U.S. headquarters of the oil industry. A federal panel in remote Boise, Idaho, will make the geographic call in late July.

Six of the 12 federal trial judges in New Orleans have recused themselves because of oil-industry investments or other connections to the controversy. Not Barbier, who was appointed by President Bill Clinton in 1998. "We think Judge Barbier would be a fine judge to preside over this unprecedented litigation," says Baron & Budd's LeBlanc. The Louisiana Association of Business & Industry would be "skeptical" of such a selection, says vice-president Ginger Sawyer. Her group opposed Barbier's appointment to the bench, noting his lobbying against legislation aimed at restricting civil lawsuits. In 2002, the U.S. Supreme Court vindicated the judge's refusal to step down from a tobacco-liability case, despite the cigarette industry's allegation of bias. The justices said he had no conflict.

Can BP CEO Tony Hayward last?
On June 7, some of the most powerful men in Britain—including Vittorio Colao, chief executive of telecom giant Vodafone; Martin Sorrell, head of the advertising conglomerate WPP; and John Sawers, chief of the British intelligence agency MI6—gathered at BP's London headquarters to show support for Tony Hayward. "We have learned that he is made of steel," said Chairman Carl-Henric Svanberg.

A show of support from VIPs not connected to the company won't protect Hayward, 53, forever. Yes, he's tough and energetic. Also, there is less anger over the spill in Britain. Nevertheless, says Gudmund Halle Isfeldt, an analyst at DnB NOR ASA in Oslo, "both Tony Hayward and the chairman are likely to go." Hayward's penchant for unfortunate turns of phrase—"I'd like my life back," for example—hasn't helped.

Andy Inglis, 50, the exploration and production head, had been considered Hayward's likely successor, except the calamity occurred in his unit. Refining and marketing chief Iain Conn, 47, has made a start at improving performance at BP's troubled refining and marketing operations and is respected by the board. Robert Dudley, 54, formerly headed BP's Russian affiliate TNK-BP but left it in 2008 during a battle with the company's Russian partners. On June 5, Hayward put Dudley, an American, in charge of a unit responsible for the cleanup. "If he does a great job at running the unit, there's no reason he can't go to the top," says Dougie Youngson, an analyst at Arbuthnot Securities in London. A potential outside candidate is Frank Chapman, 56, head of gas giant BG Group. Whoever takes over will have history's biggest image-rebuilding mission on his hands.

With Stanley Reed, Margaret Cronin Fisk, Jim Efstathiou Jr., Pat Wechsler, Brian Swint, Jessica Resnick-Ault, David Wethe, and Justin Blum

Coy is Bloomberg Businessweek's Economics editor. Barrett is an assistant managing editor at Bloomberg Businessweek.

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