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BP Business Economic Loss Claim Appeal 2016-1157: Asset purchase disqualifies claim


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 the disposition of its BEL claim which was denied on the basis the company was not in operation at the time of the Spill. Claimant purchased the assets of on December 31, 2010 and incorporated its own business in 2011. Claimant argues there was an operating history with the same employees, at the same location and with the same type of business from 2007-2011. Accordingly, claimant suggests it would be illogical to treat the business as only having begun when the sale of the assets occurred “because that disregards the prior operating history of a business simply due to a change of ownership”.

Unfortunately for Claimant, the District Court has squarely addressed this exact scenario and determined that claimant has no claim under these circumstances. In Discretionary Review Decision 2015-1820, the Court evaluated a company that did not exist at the time of the Spill since the business was previously operated by a separate and distinct entity. Claimant bought the assets of the predecessor company after the Spill. As in the immediate case, this transaction involved a sale of assets from one company to a separate entity with a different set of owners. Under these circumstances, the District Court found it was appropriate to deny the claim on the grounds the claimant entity was not operating at the time of the Spill. The same result was obtained involving the same issue in Discretionary Review Decision 2016-263.

Accordingly, the District Court has made it clear that the denial of this claim under the operative facts was entirely warranted. Claimant’s appeal is dismissed.

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