NEW ORLEANS Aug 7 BP Plc must pay $130
million to a court-appointed administrator overseeing payments
to thousands of people who claimed they were hurt by the 2010
Gulf of Mexico oil spill, a federal judge ruled on Wednesday, in
a fresh legal setback for the oil company.
BP had balked at funding the third-quarter operating budget
for the administrator, Louisiana lawyer Patrick Juneau,
complaining that his bill contained "excessive costs."
But U.S. Magistrate Judge Sally Shushan in New Orleans ruled
that it was "unreasonable" for BP to halt funding.
Fees have topped $560 million since Juneau's team started
work in June 2012, shortly after BP reached an agreement with
businesses and residents to compensate them for spill-related
The fees amount to about 18 cents for each of the $3.1
billion paid out so far, data from the claims administrator and
the settlement show. BP's finance director projected last week
that the fees could eventually top $1.5 billion.
BP did not comment on Shushan's ruling.
It is trying to halt payouts, at least temporarily,
complaining that Juneau's payout formula is too generous, and
that it has uncovered evidence of fraud and conflicts of
interest in how claims are assessed.
Shushan's colleague, U.S. District Judge Carl Barbier,
previously rejected BP's request to freeze payouts. BP is
appealing that ruling, and its appeal is pending before a
federal appeals court in New Orleans.
On Monday, BP submitted court papers suggesting new evidence
of fraud and conflicts.
Juneau previously announced an internal probe of allegations
that a former worker in the program referred claimants to
lawyers in exchange for a share of payments.
The costs to BP of running the program include payments to
court-appointed vendors and appeals panelists.
Also included are the administrative costs to process
remaining claims from the Gulf Coast Claims Facility, a fund set
up to pay claimants before the current settlement was reached.
BP has incurred about $42.4 billion of charges related to
the April 20, 2010 explosion of the Deepwater Horizon drilling
rig and rupture of the company's Macondo well. Eleven people
died, and the resulting offshore oil spill remains the largest
in U.S. history.
The company originally expected the payout program to cost
$7.8 billion, but last week boosted its estimate to $9.6 billion
and said it could go much higher.
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.