Schexnaydre Law Firm, LLC

BP and the PSC File Court-Ordered Declarations

by David Schexnaydre, Esq.

This past week, BP and the PSC both filed their Declarations in response to Judge Barbier's October 25, 2013 Scheduling Order Regarding BEL Remand (Document 11735 in the MDL). Specifically, the parties were ordered to file "any and all additional fact evidence that purports to show whether the parties discussed, prior to the time the Settlement Agreement was executed, the intended meaning of Exhibit 4C (i.e., whether or not Exhibit 4C requires that expenses and revenues be matched for all claims, or only some claims)." (Emphasis in original.)

The PSC's Declarations, in essence, establish that at no time during the settlement negotiations did the parties discuss, much less agree, that there would be any attempt to "move" or "match" expenses into or out of the plaintiff-selected Benchmark Period or Compensation Period; nor was there any discussion or agreement that the Claims Administrator would attempt to determine which particular expenses "corresponded" with the monthly revenues that had been recorded on the monthly P&Ls in the months selected by the claimant.

BP's Declarations, on the other hand, basically contend that the main focus of the discussions were to ensure that any methodology agreed upon would satisfy the requirements of Federal Rules of Civil Procedure Rule 23 and that there be "consistent treatment of similarly situated claimants" using "a lost profits calculation that would be consistently applied to claimants and that would generate similar outcomes for similarly situated claimants."  

What is obviously missing from the Declarations filed by both sides is any evidence of any discussions of the methodology one would use to achieve the "matching" of revenue and expenses for cash basis claimants. To me, this is evidence that the parties did not intend for any such "matching" process to take place. After all, the parties crafted a 1,000+ page settlement agreement that is very detailed in every area discussed.  Yet, there is no terminology whatsoever establishing an agreed-up method for reallocating expenses from one month to another depending on how revenues are reported on a claimant's P&Ls. How could the parties enter into a settlement agreement that does not address what BP contends is such a major issue and is the subject of repeated motions to Judge Barbier and an appeal to the Fifth Circuit?    

The answer, in my opinion, is that the parties did not intend for any such reallocation of expenses. Rather, this manufactured argument by BP is simply their way of delaying the payments under the Settlement Agreement so they can use the time value of money to their benefit and/or to use delay as a way to get the "little guy" claimants to take less. Seems like corporate bullying to me. After all, what types of businesses use cash basis accounting? Small businesses. 

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