Steffy: What a BP settlement could look like

With news Sunday that the start of the mammoth BP trial was delayed for a week, the speculation has immediately moved to talk of a settlement and what it would look like.

In recent months, it appeared that BP and the government would come to some sort of deal before the case made it to court. That thinking gained momentum as a minority party in the Macondo well, MOEX Offshore 2007 LLC, agreed to settle government claims for $90 million.

But since then, speculation has shifted, as attorneys representing private claimants — mostly business owners and survivors of the Deepwater Horizon disaster — have seemed increasingly certain that they were nearing a settlement with BP.

Details are emerging of how such as settlement would be structured, but it raises questions about whether a deal with the government is proving more difficult than originally thought. BP is considering a plan in which it would shut down its Gulf Coast Claims Facility and divert the $14 billion that remains in that fund towards a settlement, Bloomberg News reported this morning.

The claims fund, set up in the summer of 2010 to pay claims for businesses hurt by the spill, has doled out about $6 billion so far.

The settlement would, essentially, move the claims facility into the court proceeding, making it the mechanism for paying private claims in the case. Ironically, some of the plaintiffs involved in the court case had either previously claims rejected by the fund or had chosen not to participate in that process, which is being overseen by a private attorney appointed by the government and paid by BP.

Any such settlement, though, appears to be moving on a different track from BP’s talks with the government, which continues to wrangle with the oil company and other defendants over possible criminal charges and fines for violations of the Clean Water Act.

BP could be liable for almost $18 billion in fines if the judge overseeing the case determines the company was grossly negligent.

With so many parties involved, and so many moving parts to the settlement discussions, it’s possible that even if a deal is reached with one group, other aspects of the case could still go forward before U.S. District Judge Carl Barbier in New Orleans on Monday.

4 Comments

  1. Jerry Martin

    Oh jolly good, with the rising gas prices who do you think is paying for it? Just another under the table wheeling and dealing by corrupt governments.

    #1
  2. Adler

    Isn’t it funny that Obama extorted $20 Billion from BP to pay claims, yet his handpicked administrator only approved payments totalling $6 Billion.

    One wonders how many of those “plaintiffs involved in the court case, who had previous claims rejected by the fund” because they were fraudulent, will now receive money anyway.

    #2
  3. AnimuX

    BP will appeal it later and reduce the settlement significantly, just like Exxon with victims of the Exxon-Valdez spill. Some of the private citizens who suffered business and personal losses will be dead of old age before the payments come through.

    #3
  4. CAD1936

    I think there is a PROBABILITY that BP, as usual, will set up some type of appeal. They have friendly appellate courts with judges owing their appointments to big business and, as usual, will try screw the American citizens. However it will be hard to get a reversal in a non jury case like this one.

    #4