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BP Business Economic Loss Claim Appeal 2015-1297: Failed business claim denied


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 appeals it award of $0.

Claimant shut down its business after the oil spill. As such, the Settlement Program determined that the Failed Business framework applied to the Claim. In accordance with Exhibit 6 of the Settlement Agreement the Settlement Program calculated Claimant’s Total Enterprise Value using financial data for the twelve months prior to the spill. Then, the Settlement Program calculated the Net Liquidation Value of Claimant’s assets. Claimant’s award was calculated by subtracting the Net Liquidation Value from the Total Enterprise Value. Unfortunately for Claimant, that calculation resulted in a negative number.

Claimant appeals, arguing that the Settlement Program should have used her 2007- 2009 financial information. In her appeal brief, Claimant, who filed pro se, asks a common sense and understandable question:

“I would like to take the opportunity to ask why BP allowed me to submit my 2007 and 2008 financial information if they were not going to use it?”

This Panelist suspects that the answer is that financial data for all years is routinely requested on all claims, as the Settlement Program may not yet know on the front end which financials will or will not be relevant.

That said, the Settlement Agreement is quite clear that the Failed Business framework only looks at the financials for the twelve months prior to the spill. A review of the calculations show that the Settlement Program used the correct data and further that the math appears correct.

Consequently, BP’s Final Proposal is adopted.

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