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BP Settlement Payments for Construction, Professional Services Companies Delayed

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Two weeks ago, the United States Supreme Court allowed payments to resume to companies affected by the BP Deepwater Horizon Disaster. Such payments had been halted since an appeals court issued an injunction in October 2013.

While this was good news for long suffering Gulf Coast businesses, in reality it will take some time for the Claims Administrator to restart the payment process. Complicating matters is a court edict requiring the application of new accounting rules, the implementation of which will require a herculean administrative effort.

The new procedures, known as Policy 495, require special treatment for claims supported by P&L’s which have expenses that are not “sufficiently matched” to their corresponding revenues. Seven tests are to be applied to determine whether any particular P&L is “sufficiently matched.” If found deficient, the claim will be reviewed in accordance with the requirements of Policy 495.

While all Business Economic Loss claims (BEL) will be subjected to Policy 495’s seven tests, claims submitted by construction, professional services (lawyers, accountants, architects, engineers, etc), agriculture and educational entities will receive specialized treatment. Processing protocols for these types of entities have yet to be developed. Hence, payments made to such businesses will likely suffer additional delays.

The eighty-eight pages of Policy 495 are too numerous to discuss in this article, suffice it to say that claims subjected to the protocol will likely decrease in value (although the odd claim may actually increase). While we oppose the implementation of Policy 495 in its current form (Class Counsel has filed a motion with Judge Barbier to Reconsider the policy’s reach), we support the Claims Administration’s efforts to sort through the requirements to reach an efficient and expeditious conclusion to this compensation program.

Stay tuned.

3 Comments

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  1. Jim Murray says:
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    Having read the 88 pages of policy 495, I sincerely hope the PSC fights this policy as far as they can go. It will dramatically affect claim payment amounts. I still do not understand how this policy stands. The appeal court has spoken on the settlement agreement, and the supreme court has refused the injunction and all signs point to the court not getting involved in the matter. How and Why should claimants be stuck in a settlement agreement that has been allowed to change and is no longer the agreement that was signed up for. PSC, do your job and get this policy as well as policy 345 v3 removed or modified.

  2. Eyeswideopen says:
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    It’s now time to demand that the PSC and the court allow us a BACK END OPT OUT.

    Class members in good faith, relying on notice and representations made by BP and class counsel that did not opt-out of the subject class are now trapped as new factors are implemented not considered at the time of the opt-out deadline.

    Policy 495 has negated millions spent on work product required to verify the passing of the causation test and the determination of the compensation amount. These requirements provide in class notice misled claimants into a settlement that will now deem some claimants class members with no recovery and they lost there rights to peruse litigation.

    Class members were promised a clear and transparent claim process and agreed to the terms. Policy 495 material changes the settlement this is confirmed by BP’s motion for Restitution on prior signed releases and once again they fall short on requesting true up’s for claims previously paid. The Declaration of Brian L.Gaspardo is flawed and self serving as he failed to identify any and all under paid claims as a result of policy 495.

    Class Notice Reads:
    1.You have a right to know about the proposed settlement of this class action lawsuit and about your options relating to the proposed Settlement. This Notice explains the lawsuit, the E&PD Settlement, your legal rights, what benefits are available, who may be eligible for those benefits, and how to get them.

    5.The Court has not decided the case in favor of Plaintiffs or BP. Instead, after extensive, arm’s length negotiations, the Plaintiffs and BP have agreed to settle this case to avoid the cost, delay, and risk of a trial. The Class Representatives and their lawyers think the proposed E&PD Settlement is best for all E&PD Class Members.

    12.How do I know if I am eligible to receive a payment from the Economic & Property Damage Settlement.

    A. There are separate eligibility rules for each of the claim categories in the E&PD Settlement. The Settlement Claims Eligibility and Benefits Chart beginning on page 11 of this Notice illustrates who may be eligible to receive a payment in each category. A number of these categories include geographic zones. Visit the website to review detailed zone maps.

    Chart page 11: Economic Damage Claim

    In general, the payment amount for Economic Damage claims is calculated by comparing actual post-spill earnings to the earnings that might have been expected in that post-spill period. There are also considerations for specialized circumstances, such as start-up businesses, failed businesses, multi-facility businesses, new entrants to employment, and festival vendors.

    An RTP* multiplier will be applied to the payments for some types of Economic Damage claims.

    Any money previously received from BP or the GCCF for the same economic loss will be deducted from the Settlement payment.

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