Tampa, Florida


Email Tom Young Tom Young on LinkedIn Tom Young on Twitter Tom Young on Facebook Tom Young on Avvo
Tom Young
Tom Young
Attorney • (813) 251-9706

BP Business Economic Loss Claim Appeal 2016-1255: Bankruptcy of Significant Customer Sufficient Under Settlement Agreement Ex. 4B

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 a wholesale granite and marble business located in Long Beach, MS. The Settlement Program determined Claimant is not entitled to any award because Claimant does not satisfy Exhibit 4B’s Decline-Only test and denied the claim on grounds that Claimant failed to submit documentation that identified factors outside of the control of the Claimant that prevented recovery of revenues in 2011, as required by Exhibit 4B of the Settlement Agreement.
The second prong of the Decline-Only test requires that a claimant provide“specific documentation identifying factors outside the control of the claimant that prevented the recovery of revenues in 2011.” See Settlement Agreement, Ex.4B at 4-5; Policy 474 (I.3). Exhibit 4B provides examples of outside factors such as:
1.The entry of a competitor in 2011
2.Bankruptcy of a significant customer in 2011
3.Nearby road closures affecting the business
4.Unanticipated interruption resulting in closure of the business
5.Products/Service replacement by Customer
6.Loss of financing and/or reasonable terms of renewal
Claimant did submit documentation from an objective third party, a collection agency, which details how several of its customers were unable to pay amounts they owed to Claimant in 2011, together with records from the Mississippi Secretary of State that listed many of Claimant’s customers a s having been dissolved in 2011 and apparently no longer in business.
The Settlement Program found that the documentation submitted did not satisfy the Settlement Agreement for third-party corroboration, despite the submission of the report prepared by the collection agency, an unrelated third party, documenting the amount of money it could not collect from Claimant’s customers in 2011.
The objective third party evidence described was sufficient to show factors why Claimant was unable to recover revenue in 2011. Many of its customers went out of business. Claimant attempted to recover revenue by engaging a collection agency, but in the end many of its customers’ accounts were uncollectible.
The Settlement Program was incorrect , given the Claimant-friendly aspects of the Settlement Agreement, to deny this claim on the basis that Claimant did not provide objective evidence from third parties. Exhibit 4B’s non-exclusive list, detailed above, lists bankruptcy of a significant customer as a relevant outside factor. Bankruptcy or dissolution of a significant group of one’s customers during the period in question is sufficiently equivalent to the second example to qualify for analysis of the claim under the Settlement Agreement. Accordingly, the Denial is reversed, and the case remanded for further proceedings consistent with this opinion.

Leave a Comment

Have an opinion? Please leave a comment using the box below.

For information on acceptable commenting practices, please visit Lifehacker's guide to weblog comments. Comments containing spam or profanity will be filtered or deleted.