08212017Headline:

Tampa, Florida

HomeFloridaTampa

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 2016-2076: No Out-Of-Zone Revenue for Furniture Manufacturer

0 comments
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.

The Claims Administrator awarded $744,434.33 to this furniture manufacturer and sales company in Greenwood, Mississippi (Zone D). The financials were deemed adequately matched as none of the Policy 495 criteria were triggered.
BP’s single issue appeal asserts that the Claims Administrator failed to investigate whether Claimant’s financials included revenue from out-of-zone facilities. In its briefing, BP argues that Claimant has offices and factories in Vietnam, Indonesia,India and China. In addition to its Mississippi headquarters, BP also points to showrooms operated by the Claimant in High Point, North Carolina and Dallas, Texas. BP declares that Claimant generates revenue from its factories and from its showrooms that BP believes are contained within its P&Ls. BP further argues that the Settlement Program was unaware of the showrooms or overseas facilities. BP argues that the Administrator could not investigate or exclude revenue from out-of-zone facilities of which it was unaware. Accordingly, BP seeks remand for this purpose or alternately submits a Final Proposal of $0.
Claimant argues that it has no out-of-zone revenue because the showrooms and factories do not qualify as facilities. Moreover, Claimant points out that the only revenue reported in the P&Ls is generated at the facility in Mississippi. As to the showrooms, Claimant states that these are only operated two weeks per year during the market season with no full-time sale staff and no separate generation of revenue. As to the manufacturing sites, Claimant argues that these locations did not produce revenue during the Benchmark Period nor were any operations performed or managed there as defined in Policy 467. The only employees at these locations are for quality for control and design functions.
Careful de novo review discloses that the Settlement Program was, in fact, aware of the foreign manufacturing locations. The Calculation Notes reflect that the program accountant recognized expense accounts for these operations in the financials and made inquiry:
Accounting Review notes the presence of China office, Vietnam
office, and India office expense accounts within the breakout General
and Administrative. The Claimant stated that this does not refer to
any other facility as this business operates at one location only. The
Claimant states that these expenses refer to employees sent to these
locations to carry out quality control/assurance on pieces being
shipped to Claimant’s sole location in Greenwood, MS.
De novo review also fails to disclose any evidence of sales occurring at the showrooms or overseas locations. This panelist is satisfied that the program accountant adequately inquired into this issue and concluded that no out-of-zone revenue was included in the financials. This conclusion is supported by the record. Accordingly, BP’s appeal is denied.

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.