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 |  Subject: BP: No more money for bogus oil spill claims  Sat Jul 06, 2013 5:07 am | |
| Remember Kenneth Feinberg?
The former BP claims czar was reviled along the Gulf Coast for being slow and stingy when it came to compensating victims of the 2010 Gulf oil spill.
Now, BP is complaining that the man who replaced him – Louisiana lawyer Patrick Juneau – is playing too fast and loose with its money, writing checks to individuals and businesses who do not have legitimate claims.
The British oil giant wants to put the brakes on Juneau, who was appointed by a federal judge to replace Feinberg last year. BP’s legal challenge is scheduled to be heard by the U.S. Court of Appeals for the Fifth Circuit in New Orleans on Monday.
The company says that Juneau is misinterpreting the terms of its 2012 settlement agreement with private plaintiffs in the oil spill case, accusing him of approving payments to people and businesses who were not harmed by the catastrophe.
“We are asking the Fifth Circuit to follow established legal principles of contract law and interpret the agreement as written and intended: paying only those claimants who suffered actual losses,” said Geoff Morrell, a spokesman for BP.
Juneau reported this week that he has processed about a quarter of the 194,800 claims he has received to date, and made compensation offers worth about $3.86 billion. That’s almost half the $7.8 billion that BP initially expected for the total cost of the settlement, according to the Financial Times.
The flow of money “has ignited a feeding frenzy among trial lawyers attempting to secure money for themselves and their clients that neither deserves,” Morrell said.
Until now, BP has been paying compensation bills out of a $20 billion trust fund it set up for victims in 2010. But by the end of March, commitments from the trust amounted to $18.3 billion, leaving just $1.7 billion for future claims.
Once that money is gone - at the current pace, sometime in September - future payments will take a bite out of BP's bottom line.
Lawyers for the private plaintiffs defended Juneau’s administration of the claims fund and said BP is simply trying to duck its responsibilities to the people of the Gulf Coast.
“BP generates almost $400 billion a year. It now cries ‘foul’ when it is projected to pay about three months of earnings to compensate families and businesses for the Deepwater Horizon disaster,” said Mobile lawyer Robert “Bobo” Cunningham, a member of the Plaintiffs Steering Committee. “It is ironic that BP talks about people ‘getting something for nothing’ when that’s exactly what BP is trying to do.”
Alabama Attorney General Luther Strange said BP made a mistake by not establishing a cap on total claims payments as part of its settlement deal.
“They made a bad deal, and now they've got to live with it,” Strange said. “I’m not sympathetic to their plight. They’re a sophisticated company with tremendous resources. It was entirely their decision to enter the settlement. They have an obligation to honor it.”
Former FBI Director Louis Freeh was appointed Tuesday to investigate alleged misconduct by one of the lawyers who worked for Juneau’s administration – a development that has given momentum to BP’s challenge.
Strange said he welcomed Freeh’s appointment and that his involvement should help restore confidence in the claims process.
“If there’s fraud of any kind, we want to know about it. We’re not going to tolerate that,” Strange said. “At the same time, people deserve to be fairly compensated, and BP must continue to be held accountable.”
http://blog.al.com/wire/2013/07/bp_no_more_money_for_bogus_oil.html#incart_river_default#incart_hbx |
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