BP Gets High-Profile Friends on Board in Payout Dispute
BP (NYSE:BP) won’t quit the fight to reduce its liability in the country’s biggest oil spill ever. With different motions pending in New Orleans district courts, a group of 12 academics fronted by a well-known conservative judge filed a brief questioning the methods of payout administrator Patrick Juneau in hopes of limiting BP’s exposure in the disastrous Gulf of Mexico spill.
In what has become an extremely contentious affair, the latest movement occurred when a “Brief of Amici Curiae” was filed by the group in New Orleans, according to a Reuters report. The so-called “friends of the court” expressed concern that proper accounting principles weren’t governing the payouts given by veteran administrator Patrick Juneau and his team overseeing the BP settlement. Led by Paul Clement, George W. Bush’s former solicitor general, the team is attempting to influence the outcome of BP’s appeal though it claims it won’t benefit either way.
The document entered the record in New Orleans courts on May 10 and may influence the outcome of the latest effort made by BP in the administration of the Deepwater Horizon settlement. Though the British oil giant had planned to spend over $8 billion on the settlement, the surge in claims could push the number to $13 billion and beyond. At that point, BP would feel the bite in its quarterly profits and investors would see the effects in earnings reports.
Throughout the battle over the administration of settlement money, Juneau has maintained his team abided by written terms to the letter. Among the weaknesses in BP’s agreement is the fact there was no ceiling to the figure that could be claimed. BP believed $8 billion would cover the bill in its entirety, yet there is nothing in writing that would stop the amount from going to $13 billion and beyond.
Clement’s team aims to slow the volume of the payouts yet to be made. Businesses claiming losses and/or additional expenses as a result of the spill are pouring into the claims center and could potentially send the total payout soaring by next year. BP is so worried it mentioned the company could be the target of a takeover if the number grows too large. In either case, the earnings will suffer if the superstar legal group and company lawyers don’t find a way to stop large numbers of payouts from being approved.
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