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BP Asks to Halt Spill Settlement Payments During Freeh Probe

July 16 (Bloomberg) -- BP Plc asked a federal judge to temporarily halt payments from the court-supervised settlement program set up after the 2010 Gulf of Mexico oil spill while Louis Freeh investigates possible misconduct.

BP filed its request for an emergency halt to the distributions today in federal court in New Orleans.

“A temporary pause of all claims payments is prudent and necessary during Judge Freeh’s investigation into allegations of corruption within the claims program,” BP spokesman Geoff Morrell said in a statement. “Already two of the three senior attorneys at the program have been terminated, and there is a material risk that payments going out the door have been and continue to be tainted.”

U.S. District Judge Carl Barbier ordered the investigation by Freeh, a former federal judge and director of the Federal Bureau of Investigation, on July 2, after a staff attorney at the program was suspended for allegedly taking fees from law firms while processing their clients’ claims from the oil spill settlement.

The case is In Re: Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, MDL-2179, U.S. District Court, Eastern District of Louisiana (New Orleans).

To contact the reporter on this story: Edvard Pettersson in the Los Angeles federal courthouse at +1- epettersson@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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