BP Plc (BP/) faces billions of dollars in additional payments after failing again to convince an appeals court that the company is being forced to pay claims that aren’t directly related to the 2010 Gulf of Mexico oil spill, Bloomberg said on May 20.
The decision leaves BP with two options -- pay claims the company has called “fictitious,” or appeal further to the U.S. Supreme Court. Paying these claims will cost additional billions of dollars, BP has said in court filings. Payments for disputed business economic losses have been on hold while BP appealed.
A three-judge panel of the U.S. Court of Appeals in New Orleans earlier rejected BP’s view that the claims administrator for the company’s $9.2 billion settlement had misinterpreted the agreement and was paying for economic losses that weren’t caused by the spill. BP yesterday lost its bid for reconsideration by the full appeals court.
BP contends a flawed interpretation by Patrick Juneau, the claims administrator, has raised the accord’s price tag “substantially higher” than that projected cost, according to the company’s April 29 earnings statement.
BP has taken a cumulative pretax charge of $42.7 billion to cover all out-of-pocket and some anticipated spill-related costs, including government penalties, according to the statement. BP has said it couldn’t predict how much money Juneau’s interpretation of the agreement will add to the ultimate cost of the settlement.
Copyright: Bloomberg, 2014