BP seeks return of hundreds of millions in disputed overpayments

NEW ORLEANS – After more than a year of arguing that the business economic losses BP was paying out were overinflated and did not represent real losses, BP has inched closer to  potentially recovering hundreds of millions it says should have never been awarded.

In a court filing, BP said it should be able to “recover overpayments made pursuant to the now-invalidated interpretation of the Settlement Agreement. To do otherwise would be to create discrepancies between similarly-situated claimants based solely on the happenstance of when the awards were made. BP is entitled to restitution, plus interest, of money wrongly paid.”

BP is asking that business economic losses (BEL) claims already paid out be recalculated and refunds provided by claimants, and their attorneys and other professionals, who allegedly received overpayments.

The move comes after several challenges by BP concerning BEL claims they say were misinterpreted by Claims Administrator Patrick Juneau and resulted in claimants receiving payments without necessarily proving their losses were connected to the 2010 BP Deepwater Horizon oil spill.

BP began to challenge the claims process in November 2012, only months after it agreed to a May 2012 settlement, when it became clear that businesses, such as those located hundreds of miles away from the oil spill, were being granted BEL claims by Juneau and that the amount of claims paid out would easily outpace the $7.8 billion it originally estimated it would pay out. Despite several requests for an injunction to stop payments while appealing the court’s interpretation of BEL claims to the United States District Court for the Eastern District of Louisiana, United States Court of Appeals for the Fifth Circuit and, most recently, the U.S. Supreme Court have allowed the payments to continue.

Although U.S. District Judge Carl Barbier, who is overseeing the case, maintained that BP did not have a right to challenge the claims process because it came in an amicable settlement, in December he ordered Juneau to develop a a policy for handling BEL losses that more closely matches business revenues with expenses.

Juneau instituted a new calculation for BEL claims in May that more closely matched income and expenses during the oil spill period. BP is requesting that the new calculating method be used on claims that have already been paid out.

Case no. 2:10-md-2179.