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BP Business Economic Loss Claim Appeal 2016-211: Revenue reallocation permitted, but should not be “routine”


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 overnight recreational facility (located in Pell City, Alabama, Zone D). The Administrator’s accountants reallocated Claimant’s revenues after inquiry showed the majority of its income was received during the six weeks of active camping which occurs during June and July each year. Upon reallocation, the Claimant failed all causation tests. Had the Vendor Accountants not performed this reallocation, the Claimant would be entitled to an award.

Claimant argues that this reallocation has created spikes in its revenue and it was not an “error” that should have been corrected prior to utilizing the AVM. We on the Appeals Panel have wrestled with this “first step” reallocation of revenues. This panel member does not view them as prohibited in a claim, such as this, which does not fit neatly into a category in which it would be prohibited, however, neither should the reallocation of revenues become routine.

Policy 495 permits the Vendor Accountants to use their discretion to reallocate revenues when the specifics of a business indicate it. This is one of those businesses which seem to not prohibit reallocation due to the vast majority of its revenues being received in a two month period.

The affirmance of the denial of this claim is specific to this claim and should not be construed that the panel will not continue to carefully examine the exercise of “discretion” by the Vendor Accountants.

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