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BP spill settlement upheld, may have to pay billions more than it anticipated

  • Over BP’s objections, the 5th U.S. Circuit Court of Appeals today upheld a judge’s approval of the multibillion-dollar settlement with lawyers for businesses and residents who claim the 2010 Gulf of Mexico oil spill cost them money.
  • BP has argued that U.S. District Judge Carl Barbier and court-appointed claims administrator Patrick Juneau have misinterpreted settlement terms in ways that would force it to pay for billions of dollars in inflated or bogus claims by businesses.
  • The ruling means BP may have to pay billions more to Gulf Coast businesses and individuals than it anticipated when it signed off on the agreement in 2012.
Comments (37)
  • solojif
    , contributor
    Comments (106) | Send Message
     
    The same gov't that approves billions in bogus welfare payments each year. Time for BP to drag this out over 20 years like Exxon did. Yes BP did create a mess. And yes those affected should be compensated. Still long BP.
    10 Jan, 11:22 PM Reply Like
  • chopchop0
    , contributor
    Comments (3002) | Send Message
     
    This is why I dumped my BP shares around $44. I know it's a bit up from there, but I've put that $$$$ to use in better names (PSX has gained about 32% compared to 12% from BP).

     

    The government is going to the let the legal parasites feed off of BP's cash flow for awhile it seems.

     

    Unfortunate.
    11 Jan, 02:18 AM Reply Like
  • bigbenorr
    , contributor
    Comments (721) | Send Message
     
    It sounded to me more like the fault of BP's legal department for making a bad deal and now they are trying renegotiate, which is good, but still why didn't they take a more defensive posture sooner? As a BP shareholder, I would like to see them find better legal counsel and stop fretting about bad press. It doesn't matter how bad your image is, crude oil will still sell. Would have saved alot of money had they done that sooner.
    12 Jan, 07:35 AM Reply Like
  • The Geoffster
    , contributor
    Comments (4002) | Send Message
     
    Spot on bigb. BP was outlawyered by a bunch of Gulf Coast plaintiffs' lawyers. It must not have occurred to BP that people and businesses who were not damaged by the spill would file claims or that they could prove damages. In fact, the settlement agreement presumed fault if a claimant resided in the affected area. The fact that there were no actual damages in many cases was overcome by a very generous interpretation of the methodology of calculating damages. It is indeed ironic that one of the antecedents of BP that successfully ripped off Iranian oil should be similarly screwed by good old boys, local hucksters.
    12 Jan, 10:24 AM Reply Like
  • SoldHigh
    , contributor
    Comments (981) | Send Message
     
    It's more about redistributing wealth than anything else. Sad.

     

    That said, the billions paid sets an example and gives incentive for companies to 'do the right thing,' if only because it makes fiscal sense.
    10 Jan, 11:35 PM Reply Like
  • Jake2992
    , contributor
    Comments (820) | Send Message
     
    "That said, the billions paid sets an example and gives incentive for companies to 'do the right thing,' if only because it makes fiscal sense. "

     

    When else do companies "do the right thing"?
    11 Jan, 06:19 PM Reply Like
  • maybenot
    , contributor
    Comments (3070) | Send Message
     
    Good.

     

    Now I can buy even more cheap shares and gather in even more dividends.

     

    Thank you my U.S. government for doing the right thing to BP.

     

    Thank you Market for doing your thing by keeping the price low.

     

    Long BP
    10 Jan, 11:47 PM Reply Like
  • Alex_P
    , contributor
    Comments (148) | Send Message
     
    Is there anything on this world you care about except you and your dividends?
    12 Jan, 01:56 AM Reply Like
  • Erik T
    , contributor
    Comments (73) | Send Message
     
    I'm sure he likes that BP produces so much energy which improves the lives of pretty much everyone in the whole world. But this is SeekingAlpha and it's about investing so that's probably why he focused on the great value that BP has been and remains today.
    12 Jan, 11:48 AM Reply Like
  • Alex_P
    , contributor
    Comments (148) | Send Message
     
    Eric, you are right. But he is also an owner of BP shares, that means he is an owner of BP business. Hence, his statement "Thank you my U.S. government for doing the right thing to BP" is plain ridiculous. I don't think that any of us, owners of BP shares (business) share that sentiment.
    12 Jan, 12:10 PM Reply Like
  • maybenot
    , contributor
    Comments (3070) | Send Message
     
    @ Alex_P -- relax. Not a big deal. Just sharing some thoughts. Life goes on.

     

    But, here is how I see things for me:

     

    BP gives me dividends ($) each qtr. I like money. I need money. I like me.

     

    U.S. govt punishes corporations who screw up our air & water. I like air & water. I need air & water. I like me.

     

    So, yes, ultimately, it does all come down to me. :) -- just being honest.
    12 Jan, 12:37 PM Reply Like
  • IgnisFatuus
    , contributor
    Comments (2092) | Send Message
     
    I'm am thrilled he is looking out for his interests and not relying on the gov't or someone else. One hard lesson I learned in life is no one, and I mean no one, will watch out for your interests better than yourself.
    If that sounds "hard hearted" well, it is.

     

    EDIT: Long BP COP and CVX
    12 Jan, 12:44 PM Reply Like
  • wizjinx
    , contributor
    Comments (255) | Send Message
     
    While the BP divi is nice, total return seems more important so I'm selling (or will tomorrow morning) and taking a nice profit (bought at $39ish months ago), and will move the money into either COP or maybe just add to some other positions I really like that offer a good divi and capital growth prospects, such as QCOM or BAX. If the actual total sum BP has to pay out is anywhere close to $90B as has been suggested, this stock will find hard times again for awhile.
    12 Jan, 07:47 PM Reply Like
  • Sonia
    , contributor
    Comments (357) | Send Message
     
    Shakespeare was right - Kill all the lawyers. Crooks soliciting claims from people who had no losses, and judges - also lawyers - putting money in their pockets.
    10 Jan, 11:49 PM Reply Like
  • The Geoffster
    , contributor
    Comments (4002) | Send Message
     
    'Twas ever thus and ever thus shall be.
    12 Jan, 10:27 AM Reply Like
  • TimeOnTarget
    , contributor
    Comments (2161) | Send Message
     
    Not all lawyers, not by a long shot. Most deplore misuse of the judicial system and frivolous claims. All you ever have to do is deal with one of those and it puts a bad taste in your mouth for life.

     

    By the way, you may want to examine the quote you used in the context in which it appears in Henry VI, Part II. The quote appears in an exchange among rebels who are seeking to overthrow the established legal order and, essentially, redistribute all property equally among people -- and hence for one of the rebels to come to power by the masses essentially liking him after he gives them all this new food, beer, etc. The context of the quote about the lawyers was that in order for them to do this, they would first have to kill all the lawyers, who were essentially seen as an impediment to the wanton theft of existing property rights.

     

    I don't think this is the concept you were trying to convey.
    12 Jan, 02:23 PM Reply Like
  • Mjg326$$
    , contributor
    Comment (1) | Send Message
     
    How can somebody be a "crook" for filing claims that meet the criteria of the Settlement Agreement that BP co-authored, and asked a Federal Judge to approve?? BP agreed to specific formulas that established causation, because they admitted they caused financial harm to thousands of businesses, and that it would be impossible to prove a business' losses were caused by their oil spill. It's just that simple!
    13 Jan, 12:01 AM Reply Like
  • vikkitrader
    , contributor
    Comments (34) | Send Message
     
    I believe this appeal was only one of two, this one being the challenge by plaintiffs to the validity of the class action settlement (by ended up siding with plaintiffs, but only to a limited extent). There still remains the expedited appeal BP took to the question of whether the claims administrator is properly deciding the business loss claims (BP says causation is required).

     

    If BP wins that appeal, this one will seem minor by comparison.
    10 Jan, 11:54 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3310) | Send Message
     
    Wealth re-distribution.

     

    Hope & change
    11 Jan, 01:52 AM Reply Like
  • 5349200345108
    , contributor
    Comment (1) | Send Message
     
    Go long BP, another buying opportunity.
    11 Jan, 01:00 PM Reply Like
  • daffyduck1
    , contributor
    Comments (4) | Send Message
     
    I find these judges are only out to fund there own pensions this LA judge must be getting some nice funding of course I can only say this I am probably incorrect but it's good for a laugh I am long BP
    11 Jan, 01:08 PM Reply Like
  • bigbenorr
    , contributor
    Comments (721) | Send Message
     
    I wouldn't put anything past anybody.
    11 Jan, 04:59 PM Reply Like
  • bigbenorr
    , contributor
    Comments (721) | Send Message
     
    Especially in Louisiana....
    12 Jan, 07:37 AM Reply Like
  • The Geoffster
    , contributor
    Comments (4002) | Send Message
     
    The Federal Judge who approved the settlement was a former president of the Louisiana plaintiffs' bar.
    12 Jan, 10:29 AM Reply Like
  • TimeOnTarget
    , contributor
    Comments (2161) | Send Message
     
    @bigbenorr --

     

    Isn't that the truth. I've never seen a place as bad as Louisiana as far as the number of totally frivolous lawsuits. It is like they are not just tolerated, but accepted as just another way to make money. It takes a thoroughly corrupt a judicial system to allow that to happen.

     

    I think there are only one or two Fortune 500 companies headquartered in LA and I am surprised there are that many. Any company that has done business in LA for any length of time would dearly love to move all their operations elsewhere because of the frivolous lawsuits.

     

    One time I was watching TV with a friend who was a doctor. Some plaintiff's attorney commercial came on, so he picks up the phone and calls. Actually gets a hold of the attorney himself. So my friend says "How much will you give me for a slip and fall in the supermarket?" The attorney asks "when did this happen." My friend says "It's gonna happen tomorrow." The guy tells him he will have to call back. Although that wasn't in LA, that is the LA plaintiff's bar mentality.
    12 Jan, 01:47 PM Reply Like
  • TimeOnTarget
    , contributor
    Comments (2161) | Send Message
     
    @The Geoffster --

     

    Now that is some valuable color on the situation. Thanks. Yep, it explains a whole lot. Between having Tony Hayward who cost BP billions every time he opened his mouth and was too stupid to even figure that out and then having their judge be the former head of the LA plaintiff's bar -- well, let's just say Lady Luck hasn't exactly been smiling on BP lately . . . .

     

    You don't see many people say it, but despite the fact that it appears there could have been a lot more done to prevent the blowout in the first place, I found BP's response to the situation to be fairly good.

     

    Here is a link to an article on the shut-in if anyone is interested.

     

    http://bit.ly/1iVFrzC

     

    This issue of PNAS has a number of other interesting articles about the spill too.
    12 Jan, 01:56 PM Reply Like
  • The Geoffster
    , contributor
    Comments (4002) | Send Message
     
    As someone commented earlier, it's all about redistribution. Louisiana might be a red state, but the ghost of Huey Long still haunts. One of my favorite musings about Loiisiana politicians is that they can't be bought, only rented.
    12 Jan, 05:04 PM Reply Like
  • deercreekvols
    , contributor
    Comments (5055) | Send Message
     
    Long BP and wondering when "The Specialist" will start crowing?

     

    Keep in mind JPM has paid close over $20B in fines over the last few years and continues to be a "darling" stock. No reason for BP to fret over this, in my opinion.
    11 Jan, 02:51 PM Reply Like
  • daphnex2
    , contributor
    Comments (119) | Send Message
     
    The judges in LA are just as bad as the ones in CA. CA has just coughed up with about $65 Mill to fund a new agency to give illegals drivers licences. Will sanity ever prevail in bureaucracy?? I doubt it.
    11 Jan, 04:23 PM Reply Like
  • maybenot
    , contributor
    Comments (3070) | Send Message
     
    @ daphnex2 -- well, at least the "illegals" who pick/clean/harvest our food for backbreaking low wages will be legal when they drive.

     

    Gawd I love the cheap food they provide me. Thank you "illegals."
    11 Jan, 05:21 PM Reply Like
  • daphnex2
    , contributor
    Comments (119) | Send Message
     
    Agricultural firms provide necessary documents for their workers and they are not illegal. This is not worthy of further exchanges.
    12 Jan, 03:45 PM Reply Like
  • maybenot
    , contributor
    Comments (3070) | Send Message
     
    thank you.
    12 Jan, 03:54 PM Reply Like
  • jerry hyer
    , contributor
    Comments (26) | Send Message
     
    The way things are going for BP maybe they should just sell off everything they own in the US and go away. And with them goes thousands of jobs and taxes. The USA should wake up and see that BP is doing the right thing and help them weed out the vermin that is trying to get something for nothing. If they don't maybe what I should do is file a class action suit for lost stock value to the unfortunate oil spill. Let's face it I did lose money due to the spill, but no matter I wouldn't think of taking a dime from BP for an accident. I'm very long BP and will be for a long time. For me $600 every three months dividend is great. Jerry Hyer
    11 Jan, 08:59 PM Reply Like
  • BudH
    , contributor
    Comments (279) | Send Message
     
    Do- gooder judges like to play Robin Hood, take from the rich and give to the poor. If they can find a legal rationalization. And there's plenty of those.
    12 Jan, 10:29 AM Reply Like
  • vikkitrader
    , contributor
    Comments (34) | Send Message
     
    The same judges who enforce credit card and mortgage agreements entered into voluntarily by people who can no longer afford to both feed their kids and pay the monthly bills ought to also enforce a settlement agreement an oil major wrote and signed, even if it may no longer be able to raise dividends and afford the claims.

     

    That's all Judge Barbier is doing.
    12 Jan, 05:41 PM Reply Like
  • The Geoffster
    , contributor
    Comments (4002) | Send Message
     
    The way the settlement administrator, Pat Juneau, has interpreted the settlement has been a windfall to claimants who suffered no economic damages and a boon to the Gulf Coast.
    12 Jan, 05:50 PM Reply Like
  • jimpattersonoh
    , contributor
    Comments (3) | Send Message
     
    Dig into the facts, folks. This isn't about wealth redistribution by the courts. It's about enforcing a foolish settlement agreement that BP signed, voluntarily and with the advice of their own legal counsel. It may be a bad deal for BP, but it is a deal nonetheless.
    12 Jan, 11:21 PM Reply Like
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