Update: preliminary settlement approved
Introductory slideshow HERE
BP and the Plaintiffs Steering Committee (PSC) have filed a proposed
settlement agreement and a joint motion to approve the proposed classes of economic loss and
medical benefits claimants. [
Documentation requirements and Compensation Frameworks are detailed in the the Exhibits to the Agreement. The Index is HERE.]
A
class action economic damage complaint styled Bon Secour Fisheries, et al v. BP was filed simultaneously. BP and the PSC explain in their joint memorandum:
"Without regard to total payout figures, the parties negotiated claims frameworks, programs, and processes, including details such as what types of proof would be required for claimants to receive a settlement benefit, what categories of claims would be paid, whether certain claimants would benefit from causation presumptions, and how settlement benefits would be calculated. The negotiations were exclusively focused, from the outset, on producing claims frameworks that could be administered simply, fairly, objectively, and consistently, and, in every instance, according to the merits of the underlying claims. The principle was two-fold: to design claims frameworks that fit a wide array of damage categories, and, within each category, to treat like claims alike, so as to proceed with both fairness and predictability"
The Agreement and motions are available at the website of the
Gulf Coast Claims Facility, now operated by Patrick Juneau - the court-appointed administrator who has replaced BP's Administrator Kenneth Feinberg. Individuals and businesses in Louisiana, Alabama, Mississippi, and parts of Texas and Florida are in the proposed economic loss class. Seafood processors
As the map above shows there are identified economic loss Zones, with compensation generally decreasing with remoteness. Those directly involved with the seafood industry - such as seafood harvesters, processors and shoreline businesses - are presumed to have suffered losses. They will get three or four times their 2010 losses based on a `Risk Transfer Premium' which is added to the loss shown for the three month spill period in 2010. (Compared to a baseline of 2009 or three prior years average).
Rigorous documentation of lost profits (not lost revenue) is required, with exceptions and adjustments for people with inadequate records.
Businesses more remote from the shore and the spill have to prove their lost profits by more rigorous economic tests such as the V, modified V and Upturn losses. (see, e.g. Section IV - Compensation Calculation). Businesses with losses more tangentially related to the spill also have a lower RTP.
Claims are to be paid at full value. There is no cap - except for the `seafood compensation program ' for commercial fishermen and oystermen - claims which are capped at $2.3 billion. Seafood processors are in the broader category of business losses - not the seafood compensation program.
Causation requirements and the
compensation framework are tailored to the Loss Zone structure. Shoreline business losses are presumptively causally related. As one gets farther away greater losses are required to establish causation. Depending on the nature of the business enhancements (RTP) are added to the basic 2010 loss ranging from .25 of covered losses to 3.0. An RTP factor of 3.0 yields a recovery of four times the 2010 loss - the maximum number allowed by Kenneth Feinberg's Gulf Coast Claims Facility.
Future losses are covered by the Risk Transfer Premium (RTP), which varies by type of business and Zone. It is is defined In
Exhibit 15, the RTP Chart :
"an RTP (risk transfer premium) shall mean the amount paid to a Claimant for any and all alleged damage, including potential future injuries, damages or losses not currently known, which may later manifest themselves or develop, arising out of, due to, resulting from, or relating in anyway to the Deepwater Horizon Incident, and any other type or category of damages claimed, including claims for punitive damages. To the extent that an RTP is to be paid to a Claimant, it shall be a factor which is multiplied with those Compensation Amounts which the Exhibits to this Agreement specify are eligible for an RTP to calculate a sum which is added to the Compensation Amount paid to the Claimant."
Medical Benefits
Compensatoin ranging from $1,300 to $60,000 for acute ocular, respiratory, ear/nose/throat, dermal, and neurophysical/neurological/odor-related conditions detailed in a Matrix of specified physical conditions
- Exhibit 8 - Notice of settlement
Claims Excluded
Bodily Injury Claims;
• BP Shareholder Claims;
• Moratoria Loss Claims;
• Claims relating to menhaden (or “pogy”) fishing, processing, selling, catching, or harvesting;
• Claims for Economic Damage by Entities or Individuals based on employment in the Banking,
Gaming, Financial, Insurance, Oil & Gas, Real Estate Development, and Defense Contractor
industries, as well as Entities selling or marketing BP-branded fuel (including jobbers and
branded dealers); and
• Claims for punitive damages against Halliburton and Transocean.
* State and U.S. government cleanup and penalty claims. Also excluded are economic losses due to the federal drilling moratorium. Plaintiffs steering committee members will pursue those claims, which will not be resolved until the 5th Circuit rules on that "proximate cause" or duty issue.
 |
Patrick Juneau - court appointed
administrator |
Categories of recognized economic harm claims
1. Economic Loss
Individual Loss of Wages
Business Economic Loss
Multi-Facility Business Economic Loss
Start-Up Business Economic Loss
Failed Business Economic Loss
Failed Start-Up Business Economic Loss
2. Property Damage
Loss of Use/Enjoyment of Real Property
Coastal Real Property Damage
Wetlands Real Property Damage
Realized Real Property Sales Loss
3. Vessels of Opportunity Charter
Payment
4. Vessel Physical Damage
5. Subsistence Damage
6. Seafood Compensation Program
Mitt Romney attended a fundraiser hosted by John Paulson, the hedge fund man who designed and won the huge Abacus credit default swap bet against the home mortgage market. Goldman Sachs brokered the trades and paid a $550 million settlement to the SEC, saying that they had made a "mistake".
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