Spill fund freezes payouts, asks for clarification *updated*

Update: The freeze on payments to victims was lifted after the fund received clarification on a court order to set aside money to cover plaintiffs’ legal fees.

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A fund set up by BP to compensate victims of the worst U.S. oil spill froze payments until it gets clarification on a court order to set aside money to cover plaintiffs’ legal fees.

The court in Louisiana said the Gulf Coast Claims Facility should withhold 6 percent of payments for the fees, according to a statement on the website of the independently run fund. The facility is asking the court about any further obligations and whether the order is retroactive for previous claims, it said.

“The GCCF has temporarily frozen all payments to claimants and the issuance of any payment determination letters” from Dec. 30, David Pitofsky, a lawyer representing the facility, wrote in a letter posted on the website. “The GCCF seeks to confirm its interpretation of the order with the court.”

BP had paid $7.4 billion to individuals, businesses and government entities affected by the oil spill by Dec. 23, the company said on its website. It’s setting aside $20 billion for victims and to pay for environmental damage after the disaster in the Gulf of Mexico in 2010. The District Court for the Eastern District of Louisiana made the order on Dec. 28.

David Nicholas, London-based spokesman for BP, declined to comment on the decision, saying it was a matter for the fund.

1 Comment

  1. ProfesorC

    The Bard was right.

    #1