BP Heads to Court to Fight Fictitious Spill Claims

Joe Goldman |

BP’s (BP) legal team is in court on Monday, trying to fight millions of dollars in Deepwater Horizon oil spill-related payments that the company believes are fabricated and inflated.

The British oil giant believes that Patrick Juneau, who oversees the claims process, is approving millions of dollars in “fictitious” payments to people who do not deserve a settlement. A lower court previously refused to block such payments, so BP is now in the Court of Appeals in hopes to reverse the ruling.

“We ask the Fifth Circuit to follow established legal principles of contract law and interpret the agreement as written and intended: paying only those claimants who suffered actual losses,” said Geoeff Morrell, a BP spokesperson.

According to BP’s website, the company has distributed over $11 billion in claims from its $20 billion trust since 2010. However, according to the Birgmingham News, BP has already committed over $18.3 billion in funds, allotting only $1.7 billion for future claims. BP never established a hard cap on spill-related payments, so it could be on the hook for much more pending an unfavorable ruling from the court.

BP will accept claims until April of 2014. Unless the legal system works in its favor, the company could be liable for a blank check made out to gulf business owners.

BP shares traded slightly higher on Monday's news, rising one-tenth of a percent to $41.21. Shares are down more than four percent over the last month.

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Companies

Symbol Name Price Change % Volume
BP BP p.l.c. 33.68 -0.28 -0.82 4,579,521

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