BP’s Request to Pause Oil Spill Payments Denied

BP_artIn an emergency request filed in New Orleans federal court on Tuesday, BP (NYSE:BP) asked a United States judge to temporarily halt payments to oil spill victims from a court-supervised settlement fund, claiming that a “brief pause” was needed to ensure that the claims process would not be compromised.

Meanwhile, former Federal Bureau of Investigation director Louis Freeh investigated alleged wrongdoing by fund lawyers. “There is a material risk that payments going out the door have been and continue to be tainted by possibly fraudulent or corrupt activity,” BP spokesman Geoff Morrell said in a statement. “No company would agree to bear the risk of improper payments in these circumstances.”

But Judge Carl Barbier, who appointed Freeh to look into BP’s accusation, denied the company’s request for a freeze on Friday, The Wall Street Journal reported.

BP claimed that two lawyers working for the fund responsible for distributing restitution payments — which were agreed upon to settle damage claims brought by numerous individuals and businesses hurt by the 2010 Deepwater Horizon oil spill — referred claims to a New Orleans law firm, in exchange for a share of the subsequent payments. Because the lawyers in question made decisions regarding the payments, BP lawyers said in court that they could have manipulated the claims process to “the detriment of the company,” reported the publication.