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BP Business Economic Loss Claim Appeal 2017-542:Commercial Landlord’s Partial Ownership of Shopping Center Allows for Partial 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

The Claims Administrator awarded $41,477.42, pre-RTP to this commercial landlord in Birmingham, Alabama (Zone D). Policy 495 criteria were triggered and the AVM methodology wasused to restate the financials. BP appeals, raising issues regarding Claimant’s partial ownership of a shopping center that it labels a double recovery issue.
Claimant is the owner of four commercial properties in the Birmingham area. It presented a consolidated BEL claim with consolidated P&Ls. As to one of the properties, Claimant disclosed to the Settlement Program that it owns a minority interest of 40.74%. BP argues that the revenue from the partial ownership of this shopping center should have been excluded since Claimant is not the entity that owns this property. As BP sees it, the property at issue should file its own claim as a stand alone entity. BP calls this a double recovery issue and criticizes the Settlement Program for failing to investigate it.
In response, Claimant argues that BP’s argument is not based on any provision in the Settlement Agreement. Claimant points out that no double recovery has occurred because the program accountant applied only the appropriate ownership percentage of revenues and expenses to the calculation. The Calculation Notes reflect that the accounting vendor properly considered Claimant’s partial interest in the property and made adjustments reflecting only the proper percentage of revenue and expenses:
The P&Ls provided include the entire portion of revenue and expenses for the property the Claimant only owns 40.74% interest.
Accounting Review identified the revenue and variable expenses associated with this facility and created adjustments to accurately
reflect the Claimant’s ownership. The source documents were used to identify the revenue and expenses.
The professional accounting staff properly recognized, vetted and adjusted for the double recovery issue that concerns BP. The net result was a properly calculated award that only reflects Claimant’s partial ownership interest in the property. No error or other basis for disturbing the award has been demonstrated.  Accordingly, Claimant’s Final Proposal is selected and BP’s appeal is denied.

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