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BP oil spill: Oil giant challenges Gulf payments

BP oil spill settlement payments are being aggressively contested by London-based BP. The company may seek to recover what BP calls 'overpayments' that businesses received from the court-supervised settlement program for the BP oil spill in the Gulf of Mexico.

By Michael KunzelmanAssociated Press / June 26, 2013

The Deepwater Horizon oil rig burns more than 50 miles southeast of Venice, La. during the 2010 BP oil spill. BP warned lawyers for many Gulf Coast businesses that it may seek to recover at least some of their clients' shares of the multibillion-dollar settlement if it successfully appeals a key ruling in the legal wrangling spawned by the nation's worst offshore oil spill.

Gerald Herbert/AP/File

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New Orleans

With an ad blitz and a tersely worded letter, BP is mounting an increasingly aggressive campaign to challenge what could be billions of dollars in settlement payouts to businesses following its 2010 oil spill in the Gulf of Mexico.

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In letters that started going out Tuesday, BP warns lawyers for many Gulf Coast businesses that it may seek to recover at least some of their clients' shares of the multibillion-dollar settlement if it successfully appeals a key ruling in the legal wrangling spawned by the nation's worst offshore oil spill.

The London-based oil giant says it is sending hundreds of the letters to attorneys for businesses the company believes received excessive payments from the court-supervised settlement program.

"BP reserves whatever rights it may have to pursue any legal method to recover such overpayments," company attorney Daniel Cantor wrote in the letter. 

James Roy and Stephen Herman, two of the lead plaintiffs' lawyers who helped broker the deal with BP, warned Cantor that his letter "misstates the law and violates BP's obligations under the Settlement Agreement."

"No process exists to alter the amount of an award after it has been paid," they wrote in a letter dated Monday. "It is obvious that the timing and tone of your letter is an attempt to discourage claimants from pursuing claims under the Settlement Program."

Meanwhile, BP also was placing a full-page advertisement in three of the nation's largest newspapers Wednesday that accuses "trial lawyers and some politicians" of encouraging businesses to submit thousands of claims for inflated or non-existent losses.

"Whatever you think about BP, we can all agree that it's wrong for anyone to take money they don't deserve," says the ad, which was scheduled to appear in The New York Times, Wall Street Journal and Washington Post. "And it's unfair to everyone in the Gulf — commercial fishermen, restaurant and hotel owners, and all the other hard-working people who've filed legitimate claims for real losses."

In April, U.S. District Judge Carl Barbier upheld a court-appointed claims administrator's interpretation of the multi-billion dollar settlement it reached with a group of plaintiffs' attorneys.

The London-based oil giant appealed the decision. A three-judge panel from the 5th U.S. Circuit Court of Appeals is scheduled to hear the case July 8.

"The Court has rejected BP's argument multiple times," Roy said in a statement. "Simply put, BP has buyers' remorse because it guessed wrong on the cost of a deal, which it — for nearly two years — negotiated, co-authored, agreed to and sought Court approval of. The notion that BP is somehow trying to portray itself as a victim is preposterous."

BP's ad claims Barbier's ruling "interprets the settlement in a way no one intended" and results in settlement payouts to businesses that didn't suffer any spill-related losses.

"Even though we're appealing the misinterpretation of the agreement, we want you to know that the litigation over this issue has not in any way changed our commitment to the Gulf," it says.

BP spokesman Geoff Morrell said the newspaper ad is consistent with the company's efforts to keep the public informed of its economic and environmental restoration efforts.

"It explains the actions we are taking to defend the contract we agreed to and to assure the integrity of the claims process," he said in a statement. "But it is also intended to make clear that BP remains as committed today as it was three years ago to doing the right thing. While we are actively litigating the payments by the claims program for inflated and even fictitious losses, we remain fully committed to paying legitimate claims due to the accident."

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