Originally posted by Reuters - February 28, 2012
NEW ORLEANS, Feb 28 (Reuters) - BP Plc is seeking to settle a lawsuit over the massive 2010 Gulf of Mexico oil spill by tapping into a $14 billion fund it set aside to compensate fishermen and businesses harmed by the disaster, lawyers familiar with the talks said.
In exchange, the claimants, represented by a group called the Plaintiffs' Steering Committee, would drop their lawsuit in a court case scheduled to start in New Orleans on March 5.
U.S. District Judge Carl Barbier delayed the trial by a week on Sunday to allow talks between BP and the PSC (SES: DM0.SI - news) , which represents fishermen, oystermen, hoteliers and restaurateurs who say their livelihoods were damaged by the April 20, 2010, explosion of the Deepwater Horizon drilling rig and subsequent oil spill.
The settlement would tap the Gulf Coast Claims Facility (GCCF), a $20 billion fund BP set up in August 2010 to compensate victims. The fund, overseen by Kenneth Feinberg, has already paid out about $6.1 billion to compensate about 200,000 individuals and businesses, leaving about $14 billion in available funds.
"The discussions are ongoing," said Brent Coon, a Houston lawyer who represents about 8,000 clients who have filed claims with the Gulf Coast Claims Facility. "There is an effort to shift the center of gravity of the claims process over to the (oil spill case) and away from the GCCF."
A deal could be announced this week, said another source familiar with the discussions, who spoke on condition of anonymity.
Spokesmen for BP and the plaintiffs group declined to comment.
Eleven people were killed on the oil rig and 4.9 million barrels of oil escaped from the mile-deep Macondo well in what is by far the worst offshore U.S. oil spill.
A settlement would remove a significant portion of the complex litigation in the trial, which is expected to take nearly a year. It could also be a key step toward reaching a global settlement with BP's drilling partners, and with federal and state governments.
Much work would remain. The U.S. government has sued BP and others for violating the Clean Water Act and other laws, which could result in fines totaling tens of billions of dollars.
U.S. Attorney General Eric Holder told U.S. lawmakers on Tuesday the Justice Department is prepared to go to trial.
BP has been negotiating a possible settlement with the U.S. government regarding violations of U.S. environmental law, but there are no signs a deal is close. Gulf states also want compensation and BP is suing and being sued by its drilling partners.
Apart from BP, which owned 65 percent of the Macondo well, the main corporate defendants are Vernier, Switzerland-based Transocean Ltd, which owned the Deepwater Horizon, and Houston-based Halliburton Co (NYSE: HAL - news) , which provided cementing services for the well. They are also suing each other. Several other companies are also involved in the trial.
On Monday, Transocean (NYSE: RIG - news) took a $1 billion charge related to the spill, the clearest indication yet the contract driller is preparing to settle.
The case is In re: Oil Spill by the Oil Rig "Deepwater Horizon (Euronext: HOR.NX - news) " in the Gulf of Mexico, on April 20, 2010, U.S. District Court, Eastern District of Louisiana, No. 10-md-02179. (Writing by Chris Baltimore; additional reporting by Jeremy Pelofsky in Washington, D.C. and Jonathan Stempel in New York (Frankfurt: A0DKRK - news) ; editing by Andre Grenon)
Original link - http://uk.finance.yahoo.com/news/bp-seeks-settlement-oil-spill-210824644.html