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BP Business Economic Loss Claim Appeal 2015-1293: Claiming entity not excluded developer


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.

Claimant was awarded $176,886.22, pre-RTP in its Start-Up Business Economic Loss Claim. BP initially appealed on the basis that the Settlement Program failed to identify Claimant as an excluded developer, and even if not a developer, BP contends, Claimant cannot satisfy the Start-Up framework requirement that a business be in operation at the time of the Spill. However, based on Claimant’s subsequent explanations and representations, BP dropped the allegation that Claimant does not qualify for the Start-Up framework.

As to BP’s allegation that Claimant is an excluded developer, BP refers to certain websites, articles, documents, etc. that BP contends indicate that Claimant was a developer. Claimant counters that it is a lessor of residential buildings and dwellings, as shown by Claimant’s 2010 tax returns, and as such a lessor Claimant did not participate in activities during 2010 which would exclude it as a Real Estate Developer. The real property in question was developed by a separate entity, and there was not a partnership relationship between Claimant and that separate business entity that developed the real property.

The affidavit of Claimant’s managing member and Claimant’s Operational Agreement backs up Claimant’s position on what Claimant is and its purpose. 74% of Claimant’s income from 2009-2012 is rental income and none of its income came from the sale of real property. Claimant’s property is not subdivided or offered for sale. The Cooperative Agreement, ground lease and construction contracts designate [XXXXX], not Claimant, as the developer of the project. [XXXXX] had the authority, responsibility and funding for the development activities. Claimant’s P&Ls have no real estate development expenses or revenues in 2010. While BP does make some creditable arguments relating to its allegation that Claimant is an excluded developer, they are in this panelist’s opinion insufficient to overcome the Settlement Program’s decision, and that Claimant’s arguments and the record on the whole are sufficient to sustain it.

BP’s appeal is denied.

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