Oil Spill Claims: BP to set up $20 Billion Escrow Fund
The oil spill claims process may improve after the announcement today that British Petroleum will deposit $20 billion into an escrow fund to pay people who have been financially damaged by the Gulf oil spill. The $20 billion escrow fund was announced after BP Chairman Carl-Henric Svanberg, CEO Tony Hayward, and other company executives met with President Obama and members of the administration. The White House blog gives an account of the meeting. The oil spill claims fund will be administered by attorney Kenneth Feinberg, who was administrator of the fund to pay victims of the 9/11 terrorist attacks. Claimants are not required to file oil spill claims with Feinberg’s escrow fund; the existing oil spill claims procedure is still available. The $20 billion escrow fund simply adds another, possibly fairer, way of obtaining compensation.
Much of the success of the escrow fund will depend on how quickly the funds are deposited, and how quickly and smoothly Feinberg is able to set up and administer the escrow account. Feinberg received generally high marks for his handling of the 9/11 fund. For background, you can read articles on Kenneth Feinberg in the New York Times, Washington Post, NOLA.com and Wall Street Journal. The Christian Science Monitor wrote, “As the administrator for the $7 billion September 11th Victim Compensation Fund created by Congress after the 9/11 terrorist attacks, he gained a reputation for both skill and compassion. And dealing with Feinberg is likely to be far faster than going to court to sue BP.”
Some attorneys for Gulf Coast residents said it is too early to know whether the escrow fund will address all complaints people have had about BP’s claim-payment process. The Obama administration said that the $20 billion is not a cap on BP’s liability, and the company will have to pay more if legitimate claims exceeds $20 billion. Also, the administration said people will be allowed to file lawsuits to collect damages if they are unsatisfied with the amount they are offered from the escrow fund.
Although it is too early to know how well the escrow account will work, some lawyers for Gulf Coast residents commended the administration on obtaining a $20 billion deposit from BP. Prior to the escrow announcement, some commentators were speculating that the company could end up in bankruptcy. By obtaining the commitment that BP will deposit $20 billion into an escrow fund, and the commitment that BP will forego paying dividends this year, it seems that the President has increased the odds that BP will survive as an operating company and that there will be money available to compensate Gulf Coast residents for their losses.
Primary topic: Escrow fund to pay oil spill claims.
Related posts:
