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BP Business Economic Loss Claim Appeal 2017-1918: SP Has Discretion To Modify Financials (Expenses and Income) Even In Absence of Accounting Errors

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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 BEL claim of Claimant was denied for failure to satisfy the V-Shaped Revenue Pattern. Claimant appeals, alleging the Program should not have removed year-end adjustments made to its P and L’s.  Appellant contends the modifications made by the Claims Administrator created financials that were less accurate and less well matched than the source P and L’s. Claimant suggests “if the year-end adjustments in the source P and L’s were not errors, then the change by the reviewers is justified
only if it creates more accurately matched P and L’s.”
Despite these contentions, as BP pointed out, the Settlement Program’s modifications ensured that financials incorporated a consistent basis of accounting for January through December. Without the adjustments by the Program Accountants, claimant’s P and L’s would be on an accrual basis from January through November and then on a completed contract basis in December. Further, despite contention that the application of the AVM Methodology would correct any inconsistencies in the financials, this process only adjusts expenses, whereas the Accountant’s modifications herein affected revenues as well.
The District Court has consistently recognized the discretion of the Program to adjust revenue prior to applying a matching methodology, even in the absence of an accounting error. There was sufficient basis for the Claims Administrator to exercise its discretion in this case and, therefore, that discretion will not be disturbed. Claimant’s appeal is dismissed.

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