09202017Headline:

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 2017-258: Policy 218 Applied to Convert Thirteen-Period Revenue and Expense Statements Into Twelve Month To Deny Claim

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


Claimant’s BEL Claim was found not to meet the requirements of Exhibit 4B of the Settlement Agreement. Claimant appeals.
Claimant’s argument is set forth in the Notice of Claimant Appeal of Denied Claim where Claimant states that its accounting system is based upon thirteen periods. Pursuant to Policy 218, Program reviewers may convert such thirteen period accounting system to twelve months in order to calculate the claim under the Settlement Agreement. The Claimant’s accounting team applied Policy 218 and converted Claimant’s thirteen period system to twelve monthly periods and Claimant passed causation and was entitled to payment. The formula derived by Claimant’s accounting team closely matches Claimant’s monthly sales tax returns filed with the State of Florida and previously uploaded to the portal for the claim.
The revenue numbers utilized by the Program were not derived in accordance with Policy 218 and do not accurately reflect Claimant’s relevant monthly revenue and should not be utilized in calculating the claim. Claimant respectfully requests reversal of the Program’s denial of this claim and remand for award determination utilizing the correct monthly revenue numbers.
The Settlement Program (in Accounted Causation Calculation Schedule Doc ID discusses how and why it dealt with the thirteen periods in this Claim: “The Claimant contemporaneously maintains non-monthly P&Ls. Because the settlement agreement requires actual monthly P&Ls, these contemporaneous P&Ls have been converted to calendar month P&Ls by prorating the amount of each line item by the number of days within each month for each period. The Claimant’s contemporaneous P&Ls
have been entered on Additional Support-Period P&L.  Additional Support Monthly P&Ls converts these figures into monthly figures. The results of the conversion have been utilized for causation and compensation calculation purposes.
The Claimant provided their own allocation of revenues. They used the sale and use returns and as foundation and allocating the gross sales based on the percent of sales on the sale and use returns. Due to these figures not representing actual monthly accounting review used the thirteen period conversion method described above.”
Policy 218 provides: “ The Program’s accountants have the ability to convert 13-period revenue and expense statements into a twelve month year by allocating each period’s revenue and expense items into their respective months. For example, if Period 1 starts on 1/1 and ends on 1/28 and Period 2 starts on 1/29 and ends on 2/25, 100% (28 days/28days) of the Period 1 revenue and expenses will be included in January as well as 10.71% (3 days/28 days) of Period 2 revenue and expenses. The remaining 89.29% (25 days/28 days) of the Period 2 revenue and expenses will be included in February.”
The Settlement Program’s professional accounting staff used its professional judgment in analyzing and restating Claimant’s financials and had valid reasons to apply Policy 218 rather than utilizing Claimant’s sales tax returns and it explained why it did what it did in the Calculation Schedule cited above. De novo review convinces this
panelist that the actions of the Settlement Program were necessary and appropriate.
Accordingly, it is held that the Claim should have been 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.