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BP expects Gulf spill deal to cost $7.8B
(AP) NEW ORLEANS - BP's settlement of lawsuits filed by more than 100,000 victims of the worst offshore oil spill in U.S. history goes a long way toward resolving pending claims. But the question remains, will Americans who live along the Gulf of Mexico go for it?
BP expects to pay out $7.8 billion and anticipates that a separate claims fund run by Ken Feinberg will cease at some point.
New vehicles will be set up and supervised by the court to pay claims as part of Friday's settlement.
People waiting for money from Feinberg's Gulf Coast Claims Facility can take what the settlement vehicles offer them or opt out and make a claim directly to a BP-run entity. If they don't like what they get from that entity, they can sue.
And many just might.
The U.S. Justice Department said Friday's settlement is not the end of the road.
"The United States will continue to work closely with all five Gulf states to ensure that any resolution of the federal law enforcement and damage claims, including natural resources damages, arising out of this unprecedented environmental disaster is just, fair and restores the Gulf for the benefit of the people of the Gulf states," the agency said in a statement.
BP's payout estimate includes what the company internally predicts legal fees for the numerous plaintiffs lawyers in the case will be, though the issue has not yet been discussed between the two sides, according to a person with direct knowledge of the settlement terms who spoke on condition of anonymity because those details are confidential.
That could be a deal-breaker for people who have spent nearly two years trying to get money directly from BP or through the Feinberg-run fund that took over the claims process in August 2010, four months after the Deepwater Horizon disaster. Many have been pursuing their claims without a lawyer and therefore have not had to pay such fees. They also could balk at the idea of potentially having to start their entire claims process over again, or at least the prospect of delaying the compensation they desperately need.
And the government could weigh in. That's because the $20 billion fund run by Feinberg was set up not only to pay claims by individuals and businesses, but also environmental damages and state and local response costs. It is not clear if such damages have already been covered.
One positive development: Pending offers before the GCCF will be honored, according to the person with knowledge of the settlement terms.
Feinberg declined to comment on the settlement when reached on his cellphone. The trustees that oversee the fund's assets have not yet weighed in publicly.
The spill soiled sensitive tidal estuaries and beaches, killed wildlife and closed vast areas of the Gulf to commercial fishing.
The suits consolidated in federal court in New Orleans were filed by fishermen who lost work, cleanup workers who got sick and others who claimed harm from the oil giant's April 20, 2010 Gulf disaster.
The momentous settlement will have no cap to compensate the plaintiffs, though BP PLC estimated it would have to pay out about $7.8 billion, making it one of the largest class-action settlements ever. After the Exxon Valdez disaster in 1989, the company ultimately settled with the U.S. government for $1 billion, which would be about $1.8 billion today.
BP still has to resolve claims by the U.S. government, Gulf states and its partners on the doomed Deepwater Horizon rig, which exploded and sank 50 miles off Louisiana after a BP oil well a mile below the ocean's surface blew out. Eleven rig workers were killed and, according to the government, more than 200 million gallons of oil spewed before the well was capped nearly three months later. The remaining claims from the government could add billions more to BP's tab, and BP has already paid out billions in cleanup costs and to compensate victims.
BP said it expects the money for Friday's settlement to come from the $20 billion compensation fund that it previously set up and that Feinberg has been administering. According to the Deepwater Horizon Oil Spill Trust, current total trust assets are approximately $9.5 billion.
The spill exposed oil industry failings and forced BP chief executive Tony Hayward to step down after the company's repeated gaffes, including his infamous statement at the height of the crisis: "I'd like my life back." He was jettisoned off to work for a BP affiliate in Russia and has since left that company. BP's environmentally-friendly image was tarnished, and independent gas station owners who fly the BP flag lost business from customers who were upset over the spill.
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The only thing which will change the oil & gas industry is massive penalties which get key executives fired by shareholders.
Money is the only language they can understand.
Otherwise, they can't hear and don't care because they have cash stuffed in their ears.
The Rehabilitation Act of 1973, Americans With Disabilities Act, and prior Supreme Court cases, require that the new fund set up to compensate Plaintiff Steering Committee attorneys, that withhold 6% of settlements, as ordered by Judge Barbier, http://www.laed.uscourts.gov/OilSpill/OilSpill.htm BE JUSTIFICATION for these attorneys to provide extended representation to disabled claimants! Please bring this to the attention of others---Even if these attorneys obtain settlement agreements for their primary clients.
The Rehabilitation Act of 1973, Americans With Disabilities Act, and prior Supreme Court cases, require that the new fund set up to compensate Plaintiff Steering Committee attorneys, that withhold 6% of settlements, as ordered by Judge Barbier, http://www.laed.uscourts.gov/OilSpill/OilSpill.htm BE JUSTIFICATION for these attorneys to provide extended representation to disabled claimants! Please bring this to the attention of others---Even if these attorneys obtain settlement agreements for their primary clients.
This disaster is a perfect object lesson of the value of two-valve isolation. Spend half a mil and potentially save billions.
I hope B.P.has learned it.
"More than 200 million gallons of oil spewed before the well was capped nearly three months later."
What I want to know is what will BP do with the sludge that has spread in pockets and ridges away from the spill area and will be releasing deadly toxins in the environment for decades to come?
just
don't
care.
Once that becomes clear, everything else makes sense.
We can only hope for mercy from the oil companies.
PLEASE!!! all all Americans,pray and beg big oil to forgive us for getting in the way of their corporate intrests.
Repub Rep Joe Barton had the right idea when he on live tv at the Congressional Hearings in 2010 licked all the oil off Tony Hayward's boots and apologised to BP.