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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 owns commercial rental property in Pelham, Alabama, and appeals the denial of its claim, arguing that the Settlement Program wrongfully adjusted its rental revenues. Fluctuations in recorded payments indicated that Claimant’s single tenant did not always pay its rent in the month in which it was due, and the Settlement Program adjusted Claimant’s record revenues to the months when they were earned from when they were received. As a result Claimant failed to satisfy the revenue pattern requirements of Exhibit 4B. This adjustment, contends Claimant, was an erroneous application of Policy 495. Thus, we again have the issue of whether the Settlement Program in certain circumstances under Policy 495 is permitted to reallocate financials or is it just limited to only correct “errors.”

Recognizing that there may be a conflict among the Appeals Panel Decisions on this issue, this panelist feels that when a cursory examination identifies the anomaly in the recording of when services are rendered and payment received, the specific information is immediately available upon inquiry, and an appropriate allocation readily apparent, the Claims Administrator has an obligation to make corrective entries. The Program Accountants, exercising their discretion are permitted to adjust claimant’s P&Ls as to the “timing of the recognition of…revenues.” Policy 495 gives the Settlement Program authority to adjust Claimant’s rental income revenue in the professional discretion of the Program Accountants. Using their professional judgement in light of the information contained in the Declaration Analysis Page (Source) and lease agreement, Program Accountants adjusted Claimant’s P&Ls as to timing of revenue to reflect periods the lease payments related to. There was no error in the Program Accountants doing so under the circumstances of this claim. The denial of Claimants claim is affirmed and the Claimant’s appeal is denied.

[Editor’s Note: This appeal panel decision was affirmed by Judge Barbier under Discretionary Review.]

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