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BP Business Economic Loss Claim Appeal 2015-1743: Matching test #2 triggered, yet 4C correctly applied


The following is an Appeal Panel Decision issued pursuant to Section 6 of the BP Deepwater Horizon Economic & Property Damages Settlement Agreement and the Rules Governing the BP Appeals Process. Links may have been added to assist the reader. The original decision may be found here, as well as a glossary of BP Settlement terms.

BP appeals this BEL award on the grounds that the Settlement Program did not properly investigate spikes in Claimant’s revenue.

Based on a review of the record, it appears that the following analysis occurred: First, a number of minor adjustments were made to the P&Ls which might be considered “errors” under Policy 495. Second, the “seven criteria” were applied to the P&Ls. Criteria # 2 was triggered. Criteria #2 is triggered when “total revenue recorded in any month . . . exceeds 20% of the claimant’s annual revenue for the year which includes that month.” Specifically, Claimant’s October 2008 revenue exceeded 20% of Claimant’s 2008 annual revenue.

Based on this trigger, the Settlement Program looked into this spike in the October 2008 revenue. The Settlement Program concluded that the spike corresponded with an increase in variable expenses. Satisfied that the P&Ls were “sufficiently matched,” the Settlement Program declined to apply the AVM methodology and instead processed the Claim using the standard BEL methodology.

Based on the above, it’s apparent that this Claim was analyzed in accordance with Policy 495. The Settlement Program is has broad discretion in determining when a claim is sufficiently matched. That discretion was not abused in this matter.

Claimant’s Final Proposal is adopted.

[Editor’s Note: See Why Policy 495’s seven volatility screens are not conclusive of insufficient matching. See also Appeal 2015-1682.]

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