BP showing reluctance over Gulf oil spill payouts
The company suspects some of the claims may be invalid or fraudulent.
Even to a lot of Gulf Coast residents, the 2010 oil spill that ruined much of the Gulf Coast and killed off fisheries and tourism has become a memory. It's certainly not reported as front-page news in the national media, and to a large extent, people have moved on -- at least most.
BP wants to do the same. But, as claims pick up, the company is growing suspicious. Reuters reported that the company is now paying an average of $73 million each week in the form of claims payments, which the company believes may include fraudulent or invalid claims.
On July 2, a U.S. district judge appointed an independent investigator to investigate BP's allegations of impropriety within the Court Supervised Settlement Program (CSSP).
According to a BP spokesman, "(T)here is a material risk that payments going out the door have been and continue to be tainted by possibly fraudulent or corrupt activity."
This, in part, stems from a report that a lawyer working for the CSSP administrator had referred claims to a New Orleans law firm in exchange for a cut of the payments.
Last week, Reuters reported that BP went before a U.S. appeals court to argue that a class action settlement was being misinterpreted by the CSSP administrator. This was allowing unaffected businesses to receive money.
As the April deadline for claims gets closer, the number of claims has risen by 18% in the past six weeks for a total of 195,403. The increase comes as lawyers and politicians step up the push to encourage business owners to apply before the deadline.
While BP appears ready to pay, and has more than $42 billion set aside for costs associated with the spill, it doesn’t want to pay false claims.
A BP spokesman said, "No company would agree to bear the risk of improper payments in these circumstances."
Even if the company is justified in its hesitation, it's not getting a sympathetic audience from U.S. Courts. While the courts haven't ruled on the motions, in their questions to BP attorneys, the judges have indicated a reluctance to change the current terms.
Last week, Judge James Dennis said, "The agreement defines what is a lost profit in a particular way, and you have had a chance to not agree with that -- several chances. How can we go beyond the four corners of the agreement?"
In other words, "Quit whining. You ruined our coast. Get over it and pay up."
Disclosure: As of this writing Tim Parker had no position in the stock mentioned and is a Florida Gulf Coast resident.
More from Benzinga
A lot of scumbags came out of the woodwork or better yet, sewers to ride the surf or wave of BP in the Gulf..
Of course leading the way, were ambulance chasers and squealing pigs.
Read an awful lot of stories and accounts...
The legitimate, fishers, shrimpers and boaters; Had it bad enough with out the slugs trying to attach
themselves to the non-existent or dry docked dinghies...
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
The solid report comes a month after the retailer closed all of its Canadian operations.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.