BP Loses Bid to Stall Spill Payments During Appeal

BP Plc must pay hundreds of millions of dollars in damage claims while it seeks U.S. Supreme Court review of disputed payments in its $9.2 billion accord over the 2010 Gulf of Mexico oil spill, a court ruled.

The U.S. Court of Appeals in New Orleans yesterday rejected the U.K.-based energy company’s request to maintain a temporary halt on payments to businesses that can’t prove they were directly damaged by the spill. U.S. District Judge Carl Barbier today ordered the settlement’s administrator to resume making the stalled payments.

BP settled with most private-party plaintiffs in 2012, initially estimating the cost of the agreement at $7.8 billion. The company contends a flawed interpretation by the claims administrator helped raise the price to $9.2 billion or more.

Barbier in December suspended payments to all businesses harmed by the spill, even those with losses unquestionably linked to the disaster, while the appeals court weighed BP’s concerns.

On May 19, the appeals court refused to reconsider its earlier rejection of BP’s complaint that its claims administrator was misinterpreting the accord and approving hundreds of millions of dollars in “fictitious” claims.

“We are disappointed and will seek review by the U.S. Supreme Court of this ruling,” Geoff Morrell, a spokesman for the London-based company, said in an e-mail yesterday about the appeals court denial of a continued halt on payments.

‘Buyer’s Remorse’

Lawyers for spill victims have accused BP of “buyer’s remorse” and trying to renege on a settlement that is proving more costly than anticipated.

“We are pleased that the court has refused BP’s latest request to further delay claims payments,” Steve Herman and Jim Roy, lead attorneys for the spill victims, said in an e-mail.

The appeal is In Re Deepwater Horizon, 13-30095, 13-30315, U.S. Court of Appeals for the Fifth Circuit (New Orleans). The lower-court case is In re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, 10-md-02179, U.S. District Court, Eastern District of Louisiana (New Orleans).

Before it's here, it's on the Bloomberg Terminal.