Judge suspends some BP settlement payments for Gulf spill

U.S. District Judge Carl Barbier on Thursday ordered the claims administrator for BP’s Gulf of Mexico oil spill settlement to suspend payments to certain claimants.

Patrick Juneau, the claims administrator, will have to stop payments to claimants in the “business-economic loss” category — a small-business slice of the claimants — for which matching revenues to expenses “is an issue.”

Those claimants, typically small or fledgling businesses, use a cash-based accounting methodology in which it’s difficult to find documentation of when revenues and expenses occurred. In other words, it’s more difficult to track whether the oil spill or some other cause affected the companies’ fortunes.

BP has paid a total of $3.7 billion since the settlement was reached last year to businesses and individuals who say the suffered from the 2010 oil spill.

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Barbier said all other claims will keep flowing, and that the order is “an interim measure until the court is able to confer with and receive input from the parties in order to confect an appropriate ‘narrowly tailored’ preliminary injunction.”

The order follows a Wednesday ruling by a federal appeals court that reversed Barbier’s denial of BP’s motion for a preliminary injunction to stop settlement payments organized by claims administrator Patrick Juneau. The appeals court also reversed Barbier’s order that supported Juneau’s interpretation of BP’s settlement.

“The Court has confirmed with the claims administrator that claims based on an accrual accounting basis are not being converted to a cash accounting basis,” Barbier wrote in the order Thursday.

Barbier has denied all of BP’s requests for a preliminary injunction. On Thursday, he wrote that suspending all business-economic loss payments “would be overly broad and unnecessary as applied to those claims for which matching of revenues and expenses is not an issue.”

The district judge scheduled a status conference with BP, class counsel and the claims administrator for Oct. 11.