BP Settlement Relieves Feinberg of Duties; New Claims Process to Start

The man who has paid out billions of dollars to victims of the massive 2010 Gulf of Mexico oil spill has been formally relieved of his duties, and a federal judge has set up a new process to let more people and businesses collect some of their money.

The order by U.S. District Judge Carl Barbier in New Orleans follows a March 2, 2012, agreement in principle under which BP Plc will pay an estimated 100,000-plus plaintiffs at a cost of about $7.8 billion.

A new administrator will replace lawyer Kenneth Feinberg to handle claims from the $20 billion Gulf Coast Claims Facility (GCCF), a fund set up to compensate fishermen, hotel owners, property owners and others for losses from the April 20, 2010, explosion of the Deepwater Horizon drilling rig and subsequent oil spill.

The disaster killed 11 people and unleashed an estimated 4.9 million barrels of oil into the Gulf of Mexico.

Feinberg, who oversaw a compensation fund for victims of the Sept. 11, 2001, attacks, has received about 1.06 million claims from roughly 574,000 claimants under the GCCF, and paid out about $6.1 billion to roughly 221,000 claimants.

According to the judge’s order, claimants with final offers from Feinberg can recover 60 percent of their money immediately. If they are deemed eligible under the new program, then they may receive the remaining 40 percent or wait for new awards, which may be higher but take months to determine.

Until the new program is set up, claims will be reviewed during a transition period, and successful claimants can get 60 percent of their money. Remaining claims would be determined under the new program.

Lawyers on the Plaintiffs’ Steering Committee, which negotiated the settlement with BP, have said the new program will be fair and transparent, although some lawyers outside that process have questioned whether it will be an improvement.

“In the new deal, God knows when you’re going to get your money,” said Daniel Becnel, a Louisiana lawyer who has many clients that have been processing claims through the GCCF.

Lynn Greer, a Richmond, Va., lawyer, will coordinate claims during the transition period. Lafayette, La., attorney Patrick Juneau will administer claims during that period and would continue to do so under the proposed court-supervised program.

Through March 7, about 41 percent of the $6.1 billion GCCF payout had gone to people and businesses in Florida. Another 29 percent went to Louisiana, 16 percent to Alabama, 7 percent to Mississippi, 4 percent to Texas and the remainder elsewhere. The bulk of claims are from retail and other services; food, beverages and lodging; and fishing and seafood processing industries.

The case is In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, U.S. District Court, Eastern District of Louisiana, No. 10-md-02179.