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BP Business Economic Loss Claim Appeal 2017-414:Cross-Year Revenue Adjustments Fatal To Claimant


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, a Monroe, Louisiana plumbing contractor, appeals the denial of its BEL claim which the Claims Administrator determined did not pass the Exhibit 4 causation requirements.
Claimant’s financial statements triggered matching criteria under Policy 495. The Program accountants identified cross-year revenue; specifically, $15,819.01 of revenue recorded in January 2009 was for work performed in December 2008. Similarly, $71,827.40 of revenue recorded in January 2011 was for work performed in
December 2010. These were adjusted and, after application of the AVM, Claimant failed to pass causation.
On appeal, Claimant complains that the Program “cherry picked” these two months to restate revenues. Claimant further argues that it is not atypical in the plumbing industry to be paid the following month for work performed in the current month. Claimant suggests that these were not “errors” and that the restatement be reversed and the claim reanalyzed or, alternatively, that every month be restated accordingly.
Policy 495 is designed to achieve sufficient matching of revenue and expenses and affords the Program’s accounting vendors significant latitude and discretion in making adjustments. The policy provides that P&Ls “will be restated if the accounting vendors identify either an error or a mismatch of revenue and variable expenses which can be explained and supported by appropriate documentation.” Here, the revenue recorded in January 2009 and 2011 related to work performed in the previous month and the accountants correctly adjusted the revenue accordingly. Fatal to Claimant’s argument is its own statement confirming that these were the only two months in which cross-year revenue appeared.
The adjustments were proper as was the denial. The appeal is denied.

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