Issue link: http://read.dmtmag.com/i/121480
THE BP OIL SPILL SETTLEMENT: HOW MUCH IS YOUR CLAIM? By Joe Tommasini, CPA and Bill McCoy, CPA JOE TOMMASINI, CPA BILL MCCOY, CPA D oes BP owe you money? If so, have you asked for it? Your trade association or business may be eligible for compensation from the BP Oil Spill Economic and Property Damages Settlement Program. The settlement program provides funds for lost profits to individuals, businesses and trade associations. You may be due a settlement without even knowing it. The settlement program was created as a result of the April 20, 2010, explosion of the Deepwater Horizon oil well located on the BP Operated Macondo Prospect in the Gulf of Mexico. This started as an undersea oil gusher and flowed for three months. In response to numerous lawsuits that were filed, the Gulf Coast Claims Facility (GCCF) was created for individuals and businesses in the Gulf area to receive compensation from BP without having to turn to a lawyer. Unfortunately, the GCCF failed to serve the hundreds of thousands of individuals and small businesses which had filed a claim. Instead of judging quickly and fairly, the GCCF was being controlled by BP and was dragging out and denying claims without reason or explanation. On May 2, 2012, Judge Carl Barbier approved the Economic and Property Damages Settlement Program and on June 4, 2012, it began operating. This program promised a completely revamped methodology of computing claims which would be much more simple and transparent. Claims would be processed timely, and payment would be made swiftly after settlement of the claim. The settlement includes all areas of the states of Mississippi, Alabama, Louisiana, and certain coastal areas of Texas and Florida. You do not have to prove that your lost profits were a direct result of the oil spill, only that there is a specific pattern to your losses as dictated by the settlement. There is no cap on the amount of the settlement, which means there is no limit on the total claims which will be paid out by BP. Not all types of businesses are eligible to file a claim under the settlement agreement, so you will need to consult with someone who is knowledgeable of the settlement agreement terms. Your business location determines what zone you reside in. The zone then determines the decrease and increase percentages used to determine if a business can file a claim. The calculations used to determine eligibility are based on monthly revenue figures for 2007 through 2011. The settlement is trying to establish a "V" pattern of a decrease in monthly revenue during the post spill months of 2010 compared to 2007, 2008 and 2009 and a subsequent increase in 2011, when there should have been a recovery. This process is known as causation testing and is required to be met before a claim may be filed. If you meet the percentage changes in monthly revenues, as dictated by your zone, then you can file a claim. If you do not meet the prescribed "V" pattern, there are other scenarios where you could possibly be eligible, but the burden of proof rises. (Continued on page 9) 6 CONNECTIONS | SPRING 2013