Make us your home page
Instagram

BP oil spill claims czar to base payouts on full recovery in 2012

The Gulf of Mexico should largely recover from BP's oil spill by the end of 2012, and all final settlement offers to victims who lost revenue from the disaster will be based on that assessment, the administrator of the $20 billion compensation fund said Wednesday.

Attorney Kenneth Feinberg said the Gulf Coast Claims Facility used "various data and expert reports" to determine that a 30 percent recovery is likely in 2011 with full recovery in 2012. He notes, however, that oyster harvesting will take longer.

The fund was set up by BP in August to compensate residents, fishermen and business owners for lost revenue following BP's oil well blowout off Louisiana. It has so far paid about $3.3 billion to 168,000 claimants — including $1.3 billion in Florida — but many are still waiting for any money, and thousands of others claim they were shortchanged. About half of the total 485,000 claims filed have been denied because of ineligibility or lack of documentation.

Feinberg has faced repeated criticism about the slow pace of payments and the small size of checks to victims, as well as complaints about lack of transparency and perceived influence from BP. The hits continued Wednesday.

"While this office had hoped that the methodology would finally provide some transparency, this document provides no useful information to claimants beyond a simplistic multiplier and is based on very optimistic assumptions about unknown environmental and economic conditions," Florida Attorney General Pam Bondi said in a court filing.

Just hours after Feinberg released his plans, U.S. District Judge Carl Barbier in New Orleans ruled that Feinberg must stop telling potential claimants that he is independent from BP. The ruling cuts at the heart of one of Feinberg's central arguments that because he's independent, thousands of people who have been denied any money at all or less money than they feel they deserve should trust his decisions. It could prompt more people to sue rather than accept relatively quick settlements with the fund.

Barbier said Feinberg must clearly disclose in all communications that he is acting for and on behalf of BP in fulfilling its obligations as the responsible party under the Oil Pollution Act.

Feinberg was appointed in June by BP and the White House to oversee the fund. His Washington law firm was paid $850,000 a month for its work through the middle of January, and now Feinberg is discussing with BP how much he should be paid going forward.

Barbier said: "The court finds that BP has created a hybrid entity, rather than one that is fully independent of BP."

BP did not immediately respond to a request for comment. Feinberg did not return a call to his cell phone. A Feinberg spokeswoman said the Gulf Coast Claims Facility would have no comment on the ruling and would move forward paying claims.

Lead attorneys in hundreds of lawsuits filed over last year's rig explosion and massive oil spill had asked Barbier to intervene in the communications between Feinberg and fund claimants. The attorney generals in Mississippi and Louisiana have expressed support for the motion, and Bondi, on Florida's behalf, joined in Wednesday.

Feinberg announced his draft proposal for how final settlements will be paid based on the recovery assessment. Under the proposal, claimants will receive twice their documented 2010 losses. Oyster harvesters will be offered four times their documented 2010 losses.

Some Pinellas hotels were paid for financial losses from visitors who stayed away because they believed the oil spill reached local beaches.

That perception will likely linger beyond 2012, said Keith Overton, chief operating officer at the TradeWinds Island Resorts on St. Pete Beach. "The perception is getting better, but it's going to take time," he said.

Documents released by Feinberg show he based the assessment largely on expert reports from a Texas professor and a consulting firm to determine the long-term impacts to seafood harvests, the tourism industry and the overall gulf economy.

"I think I have canvassed the universe," Feinberg said.

Gregg Nicklaus, an owner at the Sirata Beach Resort in St. Pete Beach, doesn't think anyone can predict at this point when the gulf will be healed.

"It will be a long time before that's known," he said. "The dispersants are still floating in the gulf and there's a large deposit of oil that dropped to the bottom."

Feinberg acknowledges nothing is certain, but agrees with the assessment that recovery is at least likely in 2012.

"I am comfortable with what I am doing today," he said.

Those who aren't ready to take a final settlement can instead file for interim quarterly payments through August 2013, provided they can show proof of continued losses. Claimants can also file for a quick cash one-time payment of $5,000 for individuals and $25,000 for businesses, but they would have to give up their right to any more money or to sue any responsible party. The same release is required for a final settlement. About 90,000 people have taken the quick cash. About 92,000 claimants are so far seeking final settlements.

Early on, the process first allowed for claimants to seek six-month emergency payments to help keep them afloat, but many weren't satisfied with what they received and felt the requirements were too cumbersome.

Under the new guidelines for final settlements, those documentation requirements would be even "more rigorous and exacting than the minimal documentation" previously required, according to the draft methodology.

Tony Kennon, mayor of Orange Beach, Ala., a tourist town hit particularly hard by the spill, called the new requirements absolutely astounding.

"We have businesses handing in 2,000 pages of documents. How much more rigorous can you get other than handing over your firstborn?" Kennon said. "The strategy continues to minimize BP's payout."

Times staff writer Steve Huettel contributed to this report, which also used information from the Associated Press.

.Fast Facts

How to comment

A two-week public comment period on the payment proposal runs through Feb. 16. Comments may be e-mailed to MethodologyComments@gccf-claims.com or mailed to GCCF, P.O. Box 9658, Dublin OH 43017-4958. Learn more at gulfcoastclaimsfacility.com/methodology.

BP oil spill claims czar to base payouts on full recovery in 2012 02/02/11 [Last modified: Wednesday, February 2, 2011 9:58pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, wires.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. Trump shuts down CEO advisory councils as main group acts to disband

    Business

    President Donald Trump's main council of top corporate leaders disbanded on Wednesday following the president's controversial remarks in which he equated white nationalist hate groups with the protesters opposing them. Soon after, the president announced on Twitter that he would end his executive councils, "rather than …

    President Donald Trump meets with Merck's chief executive, Kenneth Frazier, second from left, and other leaders of the pharmaceutical industry in the Roosevelt Room of the White House last January. On Wednesday, Trump's main council of top corporate leaders disbanded following the president's controversial remarks in which he equated white nationalist hate groups with the protesters opposing them.
[New York Times file photo]
  2. A long-awaited vision for Tampa's Westshore Marina District

    Real Estate

    TAMPA —Eleven years after plans to develop a waterfront tract on the Tampa side of the Gandy Bridge were first announced, a new rendering gives a hint of what Westshore Marina District ultimately will look like.

    Rendering of Marina Pointe, a condo project overlooking Tampa Bay as part of the Westshore Marina District. [Courtesy of Masterfile Corp.}
  3. Buddy Brew Coffee to open downtown Tampa location

    Business

    TAMPA — Buddy Brew Coffee plans to open a new location in downtown Tampa at Park Tower in early 2018. The specialty coffee craft roaster, which was founded in 2010, has five other locations throughout Tampa including the Oxford Exchange, Sarasota, Hyde Park Village and Terminal F inside the Tampa International …

    A cappuccino is displayed at Buddy Brew in Tampa in January 2017. [CHARLIE KAIJO | Times]
  4. Where to pig out for National Bacon Lovers Day

    Food & Dining

    That's right: Sunday is the national day devoted to all things bacon, National Bacon Lovers Day. Which, really, isn't too different from the other 364 days of the year. But here's a little roundup of some special places to celebrate everyone's favorite meat snack (seriously, even vegans have a grudging respect …

    A creme-filled doughnut topped with maple frosting and bacon at Dough on MacDill Avenue in Tampa.
  5. The Penny Hoarder tops 79 fastest growing Tampa Bay companies on Inc. 5000

    Business

    ST. PETERSBURG — The Penny Hoarder on Wednesday further cemented its reputation as one of the country's fastest growing companies. The personal finance web site business ranks 25th nationwide and tops in the Tampa Bay market for growth on the 2017 Inc. 5000 list of fastest growing businesses.

    Vishal Mahtani (left), vice president of business development, Alexis Grant (center), executive editor, and Kyle Taylor, CEO and founder of The Penny Hoarder, celebrate the news with their staff  Wednesday of making the new Inc. 5000 ranking of fastest growing companies in the country. They enjoyed champagne during a catered lunch at their office in downtown St. Petersburg after ranking 25th nationwide and tops in the Tampa Bay market for growth on the just released 2017 Inc. 5000. [DIRK SHADD   |   Times ]