7/28/2019 BP urges court to reject costly view of spill agreement

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BP urges court to reject costly view of spill agreement

Source Link : http://www.therecord.com/news-story/3883553-bp-urges-court-to-reject-costly-view-of-spill-agreement/

NEW ORLEANS With billions of dollars in the balance, BP asked a U.S. appeals court Monday toreject a claims administrator's interpretation of the company's partial settlement over the 2010 Gulf ofMexico oil spill.

The administrator, Patrick Juneau, is approving millions of dollars in "fictitious" payments for businesslosses based on what BP believes is a flawed interpretation of the agreement reached with victims'lawyers in 2012, according to BP.

"Stop the hemorrhaging of cash," Theodore Olson, a BP lawyer, told a three-judge panel of the U.S. Courtof Appeals in New Orleans, urging the judges to reverse a lower-court ruling and rein in Juneau."Irreparable injuries are taking place, and monies are being dispensed to parties from whom it will unlikelybe recoverable."

The company has already been forced to add hundreds of millions of dollars to the estimated $7.8 billioncost of the settlement and have to pay billions more than expected, BP said in court papers.

The panel didn't indicate when it will rule.

An attorney for the plaintiffs, Samuel Issacharoff, said BP was aware as early as April 2012 of the methodthat would be used and the likely results.

Both sides conducted tests of the business economic loss framework in the settlement in June 2012 and"the parties came up with virtually the same results," he said.

BP underestimated the price tag, Issacharoff told the judges. "They costed it out in a way we thought waserroneous from the very beginning."

Peter Hutton, an analyst at RBC Capital Markets in London, said the London-based company "feelsaggrieved, and this is their last shot."

"If they can't get what they see as due process, it will have implications for their confidence doingbusiness in the States," Hutton said before Monday's oral arguments.

U.S. District Judge Carl Barbier in New Orleans in March ruled that Juneau is interpreting the contractproperly. He dismissed BP's lawsuit against Juneau in April and rejected a request for an injunctionbarring certain payments while the company appealed.

An adverse appeals court ruling would have financial implications, Hutton said. If BP has to pay billionsmore than expected "it would take up much of their contingency funds and leave them little to spare," hesaid in an interview.

"We are asking the Fifth Circuit to follow established legal principles of contract law and interpret theagreement as written and intended: paying only those claimants who suffered actual losses," GeoffMorrell, a BP spokesperson, said in a statement before Monday's hearing, referring to the appeals court.

"Not only is the claims administrator's misinterpretation contrary to the plain language of the settlementagreement and the intent of the parties, but it has ignited a feeding frenzy among trial lawyers attemptingto secure money for themselves and their clients that neither deserves," Morrell said.

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