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BP Business Economic Loss Claim Appeal 2017-997: Exh. 5 Mandates That Separate Facilities are Each a Legal Entity and Cannot File Consolidated Claim

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 the denial of its BEL claim which the Claims Administrator determined failed causation.
Claimant provides wastewater utilities services in various locations in Alabama. It is headquartered in Birmingham and operates four other locations, each of which has its own limited liability company and EIN number.
Claimant filed a consolidated claim as a Multi-Facility Business; however, because each of the other four “facilities” are separate legal entities, the Program determined that Claimant could not present a consolidated claim.
The record demonstrates that Claimant’s Birmingham headquarters provides all customer service billing regulatory reporting, business development oversight of operations, maintenance, and engineering for all four locations. It maintains consolidated profit and loss statements, although it is able to separate the facilities if necessary. With the exception of the Meridianville location, all facilities are reported on the owner’s personal income tax return.
Claimant provided an affidavit from the sole owner who testified that Claimant has no other income apart from that created by the four locations and that none of them have the necessary services, personnel, software, or equipment to function as a stand alone entity without the support from the headquarters.
BP argues that a consolidated claim for separate legal entities cannot be maintained under the Settlement Agreement which defines an “Entity” as “an organization or entity, . . . operating or having operated for profit or not-for-profit, including a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture or an unincorporated association of any kind or description.”
BP further argues that Exhibit 5, which provides the compensation framework for a Multi-Facility Business, defines the same as a “business entity that, during the period April 1, 2010 through December 31, 2010, maintained Facilities in more than one location and had at least one Facility within the Gulf Coast Areas.”
BP contends that Exhibit 5 pertains to one “entity” with several locations, not multiple entities.”
After a thorough review, this panel is satisfied that BP’s construction is correct and that the claim was appropriately denied.

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