Schexnaydre Law Firm, LLC

Claims Administrator Issues Protocol for Matching Issue

By David Schexnaydre, Esq.

The Claims Administrator has now issued its protocol for evaluating claims to determine whether there is an issue with matching of revenues to expenses.  The Claims Administrator will conduct the following analysis:

 If the monthly profit and loss statements submitted by a claimant meet any one of the following criteria, then the claim shall be identified for a further matching review as described in paragraph 6 of this Declaration:

(1) negative total revenue is recorded for any month included within the Benchmark   Year(s),  Compensation Year or 2011;

(2) total revenue recorded in any month included in the Benchmark Year(s), Compensation Year or 2011 exceeds 20% of the claimant's annual revenue for the year which includes that month;

(3) the monthly profit and loss statements or other documentation submitted shows that the claimant's business experienced a period of dormancy during the Benchmark Year(s), Compensation Year or 2011;

(4) total variable expenses when summed up are negative for any month within the Benchmark Year(s) or Compensation Year;

(5) total variable expenses for any month within the Benchmark Year(s) or Compensation Year exceed 25% of the claimant's annual variable expense for the year which includes that month;

(6) variable margin percentages  when  compared  between  any two months included within the Benchmark Year(s) and Compensation Year vary by  more  than  50  percentage points;  or,

(7) in any given month within the Benchmark Year(s) or Compensation Year, the variance between that month's percentage of annual revenues as compared to that same month's percentage of annual variable expenses exceeds 8 percentage points.

Any claim, whether based on accrual or cash-basis records, that does not fall within one of the foregoing seven criteria shall be presumed to be "sufficiently matched," and proceed to determination and payment, provided, however, that if in the professional judgment of the CSSP Accounting Vendors, a claimant's financial records contain other significant indicia that  the claim may not be "sufficiently matched," the CSSP reserves the right to identify such claim for further matching review.

 The further matching review is described as follows:  With respect to any claims where matching is determined to be an issue, the Accounting Vendors will exercise their professional judgment to determine whether that claim is "sufficiently matched" based upon the review of information submitted and available to them, including when applicable the nature and complexity of the industry or business in question, particularly with regard to claims based upon cash-basis accounting records.  The Claims Administrator will submit any claims that are determined to be "sufficiently matched" to its quality review process.  If, after the quality review process, a claim is confirmed to be "sufficiently matched," it will then proceed to determination and payment.

The Claims Administrator warns, though, that "the application of the foregoing criteria...likely will result in a relatively small number of BEL claims reaching the determination and eligibility stage of the process, given the level of detailed review that will be required to assess each BEL claim, and all of which may require additional resources."

We take this to mean that this will be a very technical and time-consuming process.  Therefore, it is probably best to not place an expectation of when you are going to receive any funds from the BP Settlement Fund.  We also believe it is impossible to know how this process might change the estimated amount of any given claim.  Everyone involved will just need to work through this new process to see what, if any, changes to claims will take place.


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