Court orders BP to pay $130-million administrative bill, BP loses appeal

BP 435x292 Court orders BP to pay $130 million administrative bill, BP loses appealU.S. Magistrate Judge Sally Shushan on Wednesday ordered BP to pay $130 million in administrative costs to the Deepwater Horizon Claims Center – an advance payment for the oil-spill fund administrator’s third-quarter costs, which BP had earlier refused to pay.

Judge Shushan said that BP’s demands for analysis, metrics and explanatory notes of each item in the DHCC’s budget request were unwarranted. In an August 3 letter, BP officer Maria Travis told a senior claims official within the center that administers damage claims to individuals and businesses harmed by BP’s massive 2010 Gulf oil spill that BP would not pay the office’s expenses until BP was satisfied that the claims were being paid properly.

BP has made several attempts to freeze claims payments, saying that many of them were inflated or fictitious. On top of those allegations, BP attacked claims administrator Patrick Juneau and his interpretation of the settlement agreement reached between BP and the plaintiffs’ lawyers in March 2012. The agreement established a formula, largely designed and approved by BP, that claims administrators use to determine who has a justifiable claim and how much they are owed.

In its latest attempt to avoid payments, BP accused the court-approved settlement program of “poor productivity and excessive costs.”

Judge Shushan acknowledged in her ruling that BP had a right to “reasonable approval” of the administrative budget, but indicated that the claims center’s budget was “a matter of routine” and thus BP’s sudden demand to justify each part of it before paying the administrative bill was unreasonable. BP has until Monday to pay the $130-million bill “in its entirety.”

BP immediately appealed the magistrate’s decision on Wednesday to U.S. District Judge Carl Barbier, who is overseeing BP oil spill litigation in New Orleans. The judge, however, rejected the appeal.


Law 360