BP Settlement Claims

BCA is considered the world's expert on litigating BP and BP's corporate culture - a fact not missed by the media. Since 2007, Brent Coon and BCA have been quoted in more articles (national, regional and local) than any other lawyer or law firm in the country. Front page stories about Brent Coon and BCA have appeared in the Wall Street Journal, New York Times, USA Today and over 200 other periodicals and publications.

Since April of 2012, BCA has worked closely with the Plaintiff's Steering Committee on the BP Settlement and has not been at liberty to discuss the particulars, but our history and efforts in getting the story out to the public prior to the settlement talks can be seen in the articles below.

Brent Coon Making Oil Spill News

Wall Street Journal: BP Results Still Hurt by Gulf of Mexico Spill

April 27, 2016, 8:57 am

By Sarah Kent in London and Christopher M. Matthews in New York

Six years after a deadly blowout sent a slick of oil floating along the Gulf Coast for months, BP PLC disclosed almost $1 billion in fresh charges that bring its total bill from the disaster to more than $56 billion and counting.

The British oil giant is struggling to control the spiraling costs even though it reached a roughly $20 billion agreement—among the largest corporate penalties in U.S. history—to resolve all state and federal claims and was supposed to close a chapter on the spill.

But separate lawsuits related to the Macondo well blowout off the Louisiana coast have inflated the bill further and could drag on for years, reflecting the enormous level of legal complexity surrounding the spill, legal experts said.

BP’s penalties already dwarf the fines levied on individual banks involved in the subprime mortgage crisis or the 1989 Exxon-Valdez spill, which cost the company then known as Exxon $4.3 billion.

BP on Tuesday said it couldn’t predict how much more costs would go up.

“It’s impossible to come up with a best estimate,” Chief Financial Officer Brian Gilvary told analysts.

The mounting bills drew renewed attention on Tuesday, when the company reported a $485 million quarterly net loss that was largely caused by an unexpected $917 million charge mostly related to a separate settlement with Gulf Coast businesses and residents harmed by the spill. The settlement has grown by $5 billion over the past four years.

BP’s shares rose 4.3% on Tuesday, as its financial performance beat analysts’ expectations for a three-month period when oil prices averaged $34 a barrel—the lowest in over a decade. Shares settled at their highest level since January.

“Given Macondo risk is behind us (except for the Hollywood movie in [September]) we think the stock is too cheap,” Bernstein Research analyst Oswald Clint said in a note, referring to the coming disaster drama “Deepwater Horizon.” The movie, which stars Mark Wahlberg, takes its name from the drilling rig destroyed in the explosion.

BP has said the $20 billion agreement that it reached last July—and which was approved by a federal judge earlier this month—to settle Clean Water Act Penalties and claims from several Gulf Coast states gave it certainty over the spill’s largest potential liabilities. “We can now chart our own course,” Chairman Carl-Henric Svanberg told investors earlier this month. BP could have faced billions of dollars in fines more than what it settled for.

Moody’s Investors Service maintained its positive outlook for BP’s debt but said continuing costs related to the spill would drag on the company’s earnings and cash flow.

The Macondo well exploded on April 20, 2010, killing 11 workers and releasing more than 3 million barrels of oil a day into the Gulf of Mexico over 87 days. The spill hurt the Gulf fishing industry, killed untold numbers of wildlife and caused health complaints from people who helped cleanup efforts.

The company’s costs began mounting soon after. In 2010 it set aside an initial $40.9 billion to cover spill costs, including its efforts to cap the well and a $20 billion compensation fund for victims.

The spill forced BP to sell more than $40 billion in assets, pull back its ambitions and craft its business around a smaller set of high-value oil and gas fields.

The continuing fallout from the massive oil spill is weighing on the company during an exceptionally difficult period for the energy sector, with oil prices hitting a 13-year low during the first quarter. A glut in global crude supply is dragging down earnings across the industry and forcing painful spending cuts.

To date, BP has incurred legal and cleanup costs of $56.4 billion, including nearly $9 billion in government fines and more than $8 billion on environmental cleanup. The company still has a host of claims facing it falling into several categories, attorneys involved said.

There is the company’s 2012 class-action settlement with more than 100,000 Gulf Coast residents. BP initially estimated that settlement would cost it $7.8 billion, but that figure has since ballooned to $12.9 billion, including $600 million more in the first quarter. The company said it has processed more than two-thirds of the claims related to the 2012 settlement, but the final cost is likely to be significantly higher.

There are also costs for certain civil claims outside of the 2012 settlement on economic, property or medical damage claims, said Brent Coon, a Texas lawyer representing spill victims. And businesses in the real estate, gaming and financial industry have yet to settle with BP.

Mr. Coon represents some 3,000 victims who opted out of the 2012 settlement and are still pursuing claims against the company. Mr. Coon said there were likely more than 5,000 people who opted out. Those claims will ultimately be decided by the same New Orleans court that handled the settlements in 2012 and 2015.

 Daniel Jacobs, a former lawyer in the Justice Department’s environmental division and now a lecturer at American University in Washington, D.C., said that a group of securities class-action lawsuits against BP in Houston could represent the company’s largest remaining legal exposure to the spill.

Investors who bought BP stock in the days after the well blowout who claim the company misled them about the extent of the spill are suing in Houston federal court, seeking more than $2 billion in damages, according to court filings.

The suit has survived BP’s efforts to dismiss it, and could go to trial. Mr. Jacobs said those suits could cost the company billions of dollars. BP has said the claims are without merit.

BP is expected to begin paying off the $20 billion federal settlement later this year, with payments made expected to average around $1.1 billion annually over a period of 18 years. The company said it plans to sell assets to cover the cost of settlement payments.

Brent Coon discussing Oil Spill Settlement

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