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BP Business Economic Loss Claim Appeal 2016-300: Successor entity is class member (decision overruled)


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 present appeal by a credit intermediation service, questions the actions of the Program vendors in converting its original BEL claim into a Start-up BEL claim and ultimately their failure to find that Claimant was the corporate successor to entities that were in fact doing business at the time of the Spill on April 20, 2010.

The record shows that [XXXXX] was founded in 2003 and gradually transitioned over the years into an asset protection entity. [XXXXX] was formed in February 2009 as the marketing arm of [XXXXX] [XXXXX] was first incorporated and began doing business under the name [XXXXX] in February, 2009, then changed its name to [XXXXX] after the Spill. Both [XXXXX] and [XXXXX] were sold to Claimant in June, 2010, after the Spill.

BP argues that the Program vendors were correct in their denial of Claimant’s claim because the Claimant was not in operation until June of 2010. In the opinion of this panelist, this is a hyper technical and incorrect finding. An extensive de novo review of this record persuades this panelist to disagree with both BP and the Program vendors in this regard. Considerable financial and legal documentation was provided by Claimant to establish that it was, indeed, the successor-in-interest to the aforementioned entities, starting with [XXXXX] which entities were in operation for years before the Spill. The June, 2010 purchase agreement was essentially a merger with the prior business entities, and the record shows a close identity and continuity of management, personnel, assets, physical location and nature of business activity with Claimant’s predecessors.

This panelist is cognizant of several sections of the Settlement Agreement (including Sections 2.1 and 2.2.4) which envision the eligibility of closely reorganized and restructured businesses such as Claimant, and is particularly influenced by the fact that Claimant’s corporate predecessors made no claim to this Program, so there is no risk of multiple claims being made. Lastly, this panelist is influenced by the Claimant-friendly spirit of the Settlement Agreement as embodied in Sections 4.3.7 and 4.3.8 thereof.

Accordingly, there is a finding that Claimant’s BEL claim was improvidently denied, and should be recomputed by the Program vendors.

[Editor’s Note: This appeal panel decision was reversed by Judge Barbier under Discretionary Review.]

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