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BP objects to certain Gulf spill payments for ' fictitious losses'

BY BEN LEFEBVRE

NEW ORLEANS -- BP has filed a motion in federal court seeking to hold off on paying certain claims until resolution of a dispute over how to calculate how much money to award businesses claiming damage from the oil company' s 2010 Macondo oil spill in the Gulf of Mexico. The result, BP said, is "significant and increasing sums of money to thousands of claimants for fictitious losses."

BP said in its request for preliminary injunction that there has been misinterpretation of a settlement agreement that governs payments to thousands of claimants, many of them fishermen, hoteliers and restaurant owners who say their businesses were hurt by the massive oil spill after the Deepwater Horizon rig exploded in the gulf.

"It simply is not the bargain that the parties negotiated or this court approved," BP wrote.

BP has said it has already spent more than $24 billion in cleanup and restoration costs and payments on claims made by individuals, businesses and governments related to the accident that killed 11 men and triggered the worst offshore oil spill in U.S. history.

In the filing with the U.S. District Court in Louisiana, BP questioned how the fund calculated how much money the businesses lost because of the oil spill.

"Two-thirds of all BEL awards over $75,000 are based on flawed data," BP said in its filing. "Although the ultimate cost is inestimable, once all current claims are processed the fictitious awards could cost billions of dollars."

BP said in in its filing that it will continue to pay "the vast majority" of other types of claims even if the court grants its request.

The fund' s claims administrator said that BP had already agreed how the fund would determine how much to pay claimaints and that only now complained when the figures turned out higher than BP had expected.

"Simply put, BP undervalued the settlement and underestimated the number of people and businesses that qualify under the objective formulas that BP agreed to," the lawyers representing the steering committee said in a prepared statement.

BP, in its annual report filed in March, said that it can no longer give a reliable estimate for the total cost of the settlement that the company agreed to last year with the plaintiffs' steering committee, other than to say it will be significantly more than $7.7 billion.

Dow Jones Newswires

03/16/2013

 

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