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BP Business Economic Loss Claim Appeal 2015-1335: Indicia of offshore activity not enough to trigger moratoria review


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 a BEL award to a Rayne, La. lessor/seller of blast-resistant buildings, in a pre-RTP amount of $752,570.00. Its sole appealed basis is that there was evidence that Claimant dealt with the offshore oil and gas industry, and as such, despite the absence of its given NAICS code in the listing of codes in Exhibit 19 that require automatic reviews, Claimant should have been investigated. It points to a website wherein Claimant allegedly represents that it provides its wares to “the offshore sector” and to the fact that based on its 2008 and 2009 tax returns, Claimant called itself [XXXXX] further implying a connection to the oil and gas industry.

BP makes the now familiar argument that excluded Moratoria Losses are defined in Sec. 38.93 of the Agreement as “any loss whatsoever” that qualifies, and avers that the evidence strongly implies that such losses did in fact exist. It requests a remand for such investigation or alternatively proposes a $0 award.

In response, Claimant provides affidavits from both the V-P and CFO of its corporate successor, wherein these individuals attest that at no time did Claimant ever lease or sell buildings to the offshore industry, and that all of the products it sold or leased were for land-based operations. Claimant further noted that the website referred to by BP pertained to a manufacturer of these buildings, which is a separate legal entity from Claimant, whose sole business was retailing or leasing these buildings. This record further shows that sufficient dialogue existed concerning the possible Related Party issue involving the two aforementioned businesses.

A de novo review of this record has satisfied this panelist that the vendors were correct in using their discretion in not ordering a Moratoria loss review for this entity. Thus, the final proposal of Claimant, affirming the award, must be the one chosen.

[Editor’s Note: See also Class Counsel Memorandum on Businesses Subject to Moratoria Review.]

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