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BP Business Economic Loss Claim Appeal 2016-954: “Construction methodology is for construction companies – Claimant is not a construction company”


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 its BEL award, raising a singular issue. Appellant contends the Settlement Program erred by using the AVM methodology instead of the Construction framework.

Claimant manufactures machine parts and provides repair services for amusement park rides. Claimant suggests its business is project based and has irregular cash flows akin to a construction business. Appellant argues the Program incorrectly assumed its income was steady month to month and contends the fact that the company was on an accrual basis demonstrates that expenses recorded each month were more indicative of the actual transactions that occurred each month.

Nevertheless, as BP points out, claimant described itself as a machine shop on its tax returns and this characterization seems consistent with the actual nature of the business. The construction methodology is for construction companies and Claimant is not a construction company even though it may have some similar attributes. The Program considered this issue and did not abuse its discretion by applying the AVM methodology. Accordingly, claimant’s appeal is dismissed and the award in thus case is affirmed.

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