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BP Business Economic Loss Claim Appeal 2015-1306: Dormancy not alternative causation


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 is located in Port Arthur, Texas, Zone D. Policy 495 criteria were triggered and the AVM was used to restate the P/Ls.

Following an award, BP appealed arguing that, among other things, the Claims Administrator erred by including “Room Tax” as revenue in its calculation of the award. Room Tax is a pass through which should have been excluded from revenue because it does not reflect actual profit. Policy 328 confirms this and directs the Vendor Accountants not to include any income which is not typically earned. The Claimant conceded this point on its Final Proposal and award offer.

BP further complained that the Claimant was “dormant” during a three month period while it was furnishing rooms and buying equipment prior to opening. Claimant was only “dormant” on the revenue side but it was spending substantial funds on expenses related to operations and start up.

I find no error in the Administrator’s treatment or this period. The award is affirmed as amended by the Claimant.

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