Location, location, location -- the three most important things about real estate could also be the three biggest factors in determining BP's (NYSE: BP) future. Like many energy companies, Deepwater Horizon owner Transocean (NYSE: RIG) keeps its American headquarters in Houston, Texas. In this third part of our four-part interview, Wayne State University environmental law professor Noah Hall explains why Houston could make all the difference in the world for BP.

Noah Hall: BP is going to most likely want the litigation to be venued in Houston. The plaintiffs will probably want it venued in New Orleans. If the cause is venued in Houston, the thinking goes that both a judge and a jury will be a little bit more sympathetic to the day-to-day realities of oil drilling --- a dangerous, risky business. After the fact, you might say that clearly, there were precautions that should have been taken that weren't. The question at the time: Was what BP did grossly negligent -- so out of conformity with the industry -- that they deserve to be hit with punitive damages? And you might get different answers to that question if you tried the case in New Orleans versus Houston. A multidistrict litigation panel will decide where to venue these cases and how to consolidate them.

Mac Greer: Does bankruptcy become much more likely if BP is found to be grossly negligent?

Noah: Yeah, yeah. I would say, if they are found to be grossly negligent and punitive damages [are] on the table, yes. In Exxon (NYSE: XOM) Valdez, the actual damages were about $500 million, and the original jury ordered $5 billion in punitive damages; so punitive damages were 10 times the actual economic damages. The 9th Circuit Court of Appeals reduced those punitive awards in half. And then ultimately, the U.S. Supreme Court just two years ago ruled that under federal maritime law, the punitive damages cannot exceed the actual damages, so they knocked Exxon's punitive down to only $500 million. Here, though, if the actual damages are $40 billion, and you get hit with a $40 billion punitive on top of it, bankruptcy, or at least a significantly weakened financial position, making them vulnerable to a hostile takeover or some other radical change in their ownership, is possible.

Mac: If we're talking a year from now, which of these scenarios do you think is most likely: BP exists as a stand-alone company still; BP has been acquired by another company or companies; or the third option: BP has taken bankruptcy?

Noah: I'm going to go with the first -- with maybe the difference that they do some radical rebranding and perhaps even get out of the retail business. It wouldn't really be that big a deal to them. In fact, keep in mind a lot of the retail side of BP they acquired from Amoco anyway. I'm not sure if this is even a feasible option, but they might decide to just go back to the American oil company, the Amoco gas stations.

Mac: Yeah, a name change is definitely in order.

Noah: People asked these same questions after Exxon, after the Valdez. And then not only did Exxon go out and acquire Mobil, but they decided after they acquired Mobil to stick with the Exxon name. Obviously, the Exxon name took a hit for a couple of years … and Chevron's the same thing. Not that most Americans pay attention to it, but there's these scathing documentaries about Chevron's environmental and human rights violations around the world. But American consumers are, I think, fairly forgiving, or at least have short memories. But that's kind of outside my area of expertise. I feel fairly confident that, putting aside a hit from their retail brand, the actual liability that they will face as a matter of law should not bankrupt BP within the next year.

Mac Greer doesn't own any of the stocks discussed. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy