On April 20, 2010, a blowout, explosion, and fire occurred aboard the Deepwater Horizon,
an offshore drilling rig, engaged in drilling activities on the
“Macondo Well” off the coast of Louisiana. These events led to eleven
deaths, dozens of injuries, and a massive discharge of oil into the Gulf
of Mexico that continued for nearly three months.[1]
Hundreds of lawsuits with thousands of claimants involving British Petroleum (BP) were filed. On August 10, 2010, all federal lawsuits related to economic and property damages were centralized in (excluding securities suits) in the US DISTRICT COURT for the EASTERN DISTRICT OF LOUISIANA.
The official name of the case: In Re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010 (If you have questions regarding eligibility or other details about the settlement, use the contact form at the end of this article.)
Settlement Agreement Approved by Judge Barbier
Judge Barbier
On December 21, 2012, US District Court Judge Barbier issued an Order approving a settlement agreement, applicable to most businesses in the covered area. The BP Settlement Program applies to all types of businesses, though many that may have claims have not pursued them. The settlement changed who qualifies for economic relief, and how claims are evaluated and compensated for direct or indirect economic losses in 2010.
THE DEEPWATER HORIZON BP OIL SETTLEMENT PROGRAM
The Deepwater Horizon Court-supervised Settlement Program is the court-run class action settlement program designed to compensate for losses resulting from the April 20, 2010 oil spill. The Settlement Program provides objective formulas to evaluate and compensate businesses and professionals for their direct or indirect economic losses incurred after the spill. (For specific questions about the Settlement Program, use the contact form at the end of this article.)
THE BASIC QUALIFICATION REQUIREMENTS
Requirement 1: A business in the covered states and counties.
Requirement 2: In business during the relevant time frames. (The time frames may vary with the provisions for start-ups and failed businesses)
The 1,200+ page settlement agreement defines many ways to qualify, based principally on geographic location and industry. Geography is defined by zones. There are varying financial calculations for qualification within each zone.
GEOGRAPHY COVERED BY THE BP SETTLEMENT AGREEMENT
Geography Covered by BP Oil Settlement Agreement
The Settlement covers Louisiana, Mississippi, Alabama, and certain coastal counties in eastern Texas and western Florida,[2] and specified adjacent Gulf waters and bays. Generally, to be eligible, businesses must have conducted activities in the area during the period between April 20, 2010 and April 16, 2012.
EACH ZONE HAS DIFFERENT QUALIFYING REQUIREMENTS
In Zone A, largely comprised of barrier islands, there is no financial test to meet. Most businesses and individuals in Zone A automatically qualify. Zone C varies anywhere from 1 mile to approximately 20 miles inland. Zone D may be up to 325 miles inland. In Zones C and D the qualification calculations are different. While the entire states of Louisiana, Mississippi and Alabama are included, there are specific counties in Texas and Florida.[3]
The agreement is nuanced with many exceptions.[4] Given the complexity, claimants are well advised to consult with an attorney. This may begin with an Authority to Represent.
ELIGIBLE BUSINESS NEED NOT BE TIED TO TOURISM
Almost any business[5] located in a Florida Gulf Coast county, (from the panhandle to the Keys) the states of Alabama, Mississippi, Louisiana and select counties in TX, may be eligible. The business need not be tied to tourism, seafood or the Gulf in order to qualify. For businesses with multiple locations, there is a specific provision in the settlement agreement for “multi-facility entities.”[6]
PROOF THAT BUSINESS LOSSES WERE CAUSED BY THE BP SPILL UNNEEDED
There is no need to show that the oil spill itself was related to damages.[7] The objective economic loss formulas do not require the traditional legal “cause”.[8]
NO CAP ON THE AMOUNT OF MONEY TO BE PAID IN CLAIMS
The amount of claims to be paid under the settlement agreement are not capped. Judge Barbier held a fairness hearing on November 8, 2012, and issued final approval on December 21, 2012. With that final approval BP became bound to pay all valid claims as determined by the settlement.[9]
CLAIMS NOT FILED BY THE DEADLINE ARE LOST
Claims must be filed prior to the deadline of April 22, 2014. Any claim covered by the settlement agreement not filed by that date, barring an extension by the Court, will forever be barred.
SETTLEMENT EXCLUDES CERTAIN INDUSTRIES
Most industries are eligible under the settlement. However, there are excluded industries:
The settlement contains provisions that may cover businesses that were not operational through all of 2010.[11] The system was created this way, given the difficulty of proving the relationship between business issues and the spill. The agreement is designed to take into account both the direct effects of the spill and indirect effects that would be hard for many businesses to prove by a traditional legal process.
THE NEED FOR PROFESSIONAL REVIEW OF FINANCIAL INFORMATION
Economic Recovery Group: A Business and Consumer Law Firm
Because of the complexity of the agreement, a cursory review of financial statements by business owners may result in the conclusion that they cannot participate. When a team of lawyers, CPA s and Chartered Financial Analysts review the same materials often six and seven-figure claims are identified. An appropriate team of professionals is advisable to determine the existence and value of any possible claim.
THE EVALUATION PROCESS AND CONTINGENCY FEES
A professional evaluation begins with an authorization to a law firm to represent the client’s interests in the BP Settlement Process. Once a client provides monthly profit-and-loss statements and related tax returns for the years 2007 through 2011,[12] that information is evaluated. The evaluation ideally includes both financial and legal professionals.
The first step is to determine if a valid claim exists. When the work is done for the client on a contingency basis, should the team determine no claim exists, the client will have no costs. If the evaluation indicates a valid claim, further work will be done to prepare and file the claim. In the event of an unsuccessful claim, the client owes nothing. For a successful claim, an agreed upon percentage of the paid claim will determine the professional fees.
TIME FRAMES INVOLVED IN THE CLAIM PROCESS
When an evaluation indicates a valid claim, the Settlement Program requires final documents. Upon receipt and preparation of the final documents, the claim is submitted to the court’s Claims Administrator. The administrator makes a finding and issues a Letter of Determination within one to two months. Currently payments are being made within four to six months following the Letter of Determination.
The Claims Administrator is expecting more than 800,000 claims. Claims are being handled on a first in/first out basis. As more claims are filed, the time line for payment may extend. With that in mind, it is better to file sooner rather than later.
BENEFITS OF LEGAL COUNSEL
This settlement is overseen by the United States Federal District Court in New Orleans. An individual is free to represent himself. This is called “pro se.” Without the assistance of legal and financial professionals, the risk of failing to maximize the value of a claim exists. This is a legal proceeding and the general rule of court is that “pro se” litigants are required to follow the same rules as those represented by counsel.
A recent Claims Administrator report highlighted the significant number of claims being denied outright or returned for deficiencies because they were prepared by individuals or inexperienced and unqualified non-lawyer para-professionals.[13]
Having an attorney also addresses many concerns about the confidentiality of financial information. Attorneys are bound by attorney-client privilege and confidentiality requirements.[14]
A discussion of issues in making a decision to file a claim can be found at: Considerations in Filing a BP Oil Spill Claim.
INDIVIDUAL QUESTIONS REGARDING THE BP OIL SPILL SETTLEMENT PROGRAM
If you have a particular question regarding the settlement program, feel free to contact me ...
Dale Suslick
Sanibel's Right Choice Realtor
P.S. Sanibel Captiva Pine Island Lehigh Acres Home Values up!
Hundreds of lawsuits with thousands of claimants involving British Petroleum (BP) were filed. On August 10, 2010, all federal lawsuits related to economic and property damages were centralized in (excluding securities suits) in the US DISTRICT COURT for the EASTERN DISTRICT OF LOUISIANA.
The official name of the case: In Re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010 (If you have questions regarding eligibility or other details about the settlement, use the contact form at the end of this article.)
Settlement Agreement Approved by Judge Barbier
Judge Barbier
On December 21, 2012, US District Court Judge Barbier issued an Order approving a settlement agreement, applicable to most businesses in the covered area. The BP Settlement Program applies to all types of businesses, though many that may have claims have not pursued them. The settlement changed who qualifies for economic relief, and how claims are evaluated and compensated for direct or indirect economic losses in 2010.
THE DEEPWATER HORIZON BP OIL SETTLEMENT PROGRAM
The Deepwater Horizon Court-supervised Settlement Program is the court-run class action settlement program designed to compensate for losses resulting from the April 20, 2010 oil spill. The Settlement Program provides objective formulas to evaluate and compensate businesses and professionals for their direct or indirect economic losses incurred after the spill. (For specific questions about the Settlement Program, use the contact form at the end of this article.)
THE BASIC QUALIFICATION REQUIREMENTS
Requirement 1: A business in the covered states and counties.
Requirement 2: In business during the relevant time frames. (The time frames may vary with the provisions for start-ups and failed businesses)
The 1,200+ page settlement agreement defines many ways to qualify, based principally on geographic location and industry. Geography is defined by zones. There are varying financial calculations for qualification within each zone.
GEOGRAPHY COVERED BY THE BP SETTLEMENT AGREEMENT
Geography Covered by BP Oil Settlement Agreement
The Settlement covers Louisiana, Mississippi, Alabama, and certain coastal counties in eastern Texas and western Florida,[2] and specified adjacent Gulf waters and bays. Generally, to be eligible, businesses must have conducted activities in the area during the period between April 20, 2010 and April 16, 2012.
EACH ZONE HAS DIFFERENT QUALIFYING REQUIREMENTS
In Zone A, largely comprised of barrier islands, there is no financial test to meet. Most businesses and individuals in Zone A automatically qualify. Zone C varies anywhere from 1 mile to approximately 20 miles inland. Zone D may be up to 325 miles inland. In Zones C and D the qualification calculations are different. While the entire states of Louisiana, Mississippi and Alabama are included, there are specific counties in Texas and Florida.[3]
The agreement is nuanced with many exceptions.[4] Given the complexity, claimants are well advised to consult with an attorney. This may begin with an Authority to Represent.
ELIGIBLE BUSINESS NEED NOT BE TIED TO TOURISM
Almost any business[5] located in a Florida Gulf Coast county, (from the panhandle to the Keys) the states of Alabama, Mississippi, Louisiana and select counties in TX, may be eligible. The business need not be tied to tourism, seafood or the Gulf in order to qualify. For businesses with multiple locations, there is a specific provision in the settlement agreement for “multi-facility entities.”[6]
PROOF THAT BUSINESS LOSSES WERE CAUSED BY THE BP SPILL UNNEEDED
There is no need to show that the oil spill itself was related to damages.[7] The objective economic loss formulas do not require the traditional legal “cause”.[8]
NO CAP ON THE AMOUNT OF MONEY TO BE PAID IN CLAIMS
The amount of claims to be paid under the settlement agreement are not capped. Judge Barbier held a fairness hearing on November 8, 2012, and issued final approval on December 21, 2012. With that final approval BP became bound to pay all valid claims as determined by the settlement.[9]
CLAIMS NOT FILED BY THE DEADLINE ARE LOST
Claims must be filed prior to the deadline of April 22, 2014. Any claim covered by the settlement agreement not filed by that date, barring an extension by the Court, will forever be barred.
SETTLEMENT EXCLUDES CERTAIN INDUSTRIES
Most industries are eligible under the settlement. However, there are excluded industries:
- certain financial institutions
- gaming businesses (casinos, etc.)
- insurance entities, investment funds and financial vehicles
- defense contractors
- governmental entities
- any entity selling or marketing BP-branded fuel
- certain oil and gas concerns
- real estate developers
- businesses and individuals who released their claims through the GCCF.[10]
The settlement contains provisions that may cover businesses that were not operational through all of 2010.[11] The system was created this way, given the difficulty of proving the relationship between business issues and the spill. The agreement is designed to take into account both the direct effects of the spill and indirect effects that would be hard for many businesses to prove by a traditional legal process.
THE NEED FOR PROFESSIONAL REVIEW OF FINANCIAL INFORMATION
Economic Recovery Group: A Business and Consumer Law Firm
Because of the complexity of the agreement, a cursory review of financial statements by business owners may result in the conclusion that they cannot participate. When a team of lawyers, CPA s and Chartered Financial Analysts review the same materials often six and seven-figure claims are identified. An appropriate team of professionals is advisable to determine the existence and value of any possible claim.
THE EVALUATION PROCESS AND CONTINGENCY FEES
A professional evaluation begins with an authorization to a law firm to represent the client’s interests in the BP Settlement Process. Once a client provides monthly profit-and-loss statements and related tax returns for the years 2007 through 2011,[12] that information is evaluated. The evaluation ideally includes both financial and legal professionals.
The first step is to determine if a valid claim exists. When the work is done for the client on a contingency basis, should the team determine no claim exists, the client will have no costs. If the evaluation indicates a valid claim, further work will be done to prepare and file the claim. In the event of an unsuccessful claim, the client owes nothing. For a successful claim, an agreed upon percentage of the paid claim will determine the professional fees.
TIME FRAMES INVOLVED IN THE CLAIM PROCESS
When an evaluation indicates a valid claim, the Settlement Program requires final documents. Upon receipt and preparation of the final documents, the claim is submitted to the court’s Claims Administrator. The administrator makes a finding and issues a Letter of Determination within one to two months. Currently payments are being made within four to six months following the Letter of Determination.
The Claims Administrator is expecting more than 800,000 claims. Claims are being handled on a first in/first out basis. As more claims are filed, the time line for payment may extend. With that in mind, it is better to file sooner rather than later.
BENEFITS OF LEGAL COUNSEL
This settlement is overseen by the United States Federal District Court in New Orleans. An individual is free to represent himself. This is called “pro se.” Without the assistance of legal and financial professionals, the risk of failing to maximize the value of a claim exists. This is a legal proceeding and the general rule of court is that “pro se” litigants are required to follow the same rules as those represented by counsel.
A recent Claims Administrator report highlighted the significant number of claims being denied outright or returned for deficiencies because they were prepared by individuals or inexperienced and unqualified non-lawyer para-professionals.[13]
Having an attorney also addresses many concerns about the confidentiality of financial information. Attorneys are bound by attorney-client privilege and confidentiality requirements.[14]
A discussion of issues in making a decision to file a claim can be found at: Considerations in Filing a BP Oil Spill Claim.
INDIVIDUAL QUESTIONS REGARDING THE BP OIL SPILL SETTLEMENT PROGRAM
If you have a particular question regarding the settlement program, feel free to contact me ...
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Dale Suslick
Sanibel's Right Choice Realtor
Website: http://SanibelCaptivaSold.com
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