BP Oil Is Still Paying on Claims. Could Your Association or Individual Community Members Be Eligible?
As virtually every resident, property owner and business owner along the Florida Gulf Coastknows, BP Oil has entered into a class action settlement designed to compensate victims of the April, 2010, oil spill from BP’s Macondo well. The fund was originally established at $20 billion with the requirement under the settlement agreement that if it is depleted before all claims are paid, BP is required to replenish it. As of this time last year, there was $300 million remaining in the fund.
The Deepwater Horizon Settlement was approved by a Louisiana Federal District Court on June 2, 2012, and a court-appointed claims administrator has been evaluating and paying spill-related claims ever since. The original claims deadline of April 22, 2013 has now been extended until at least September 13, 2014. In another bit of fortunate news, the U.S. Supreme Court ruled today that BP must continue paying claimants while it pleads its case to our nation’s highest court. Today’s decision comes after the U.S. Fifth Circuit Court of Appeals in New Orleans ruled that businesses claiming damages from the 2010 spill don’t have to prove direct harm, under the terms of the settlement.
For rental property owners, business owners and all types of community associations located in the areas covered by the settlement who have not yet filed claims, now is the time to act.
The settlement created six distinct categories of claims. The category most commonly applicable to community associations is the Business Economic Loss (BEL) category. Eligibility for BEL claims depends upon whether the claimant’s property is located within the covered geographical area and whether the Claimant can show a loss in revenue. If so, chances are that the claim will be paid. The coverage area is comprised of four separate geographical zones identified as Zones A through D. Properties in Zone A receive the most favorable treatment and can qualify for payment without having to prove that their revenue losses were directly caused by the oil spill. As you know, most associations can show losses related to delinquencies as well as to increased insurance premiums and other rising costs to operate and administer their communities.
Zone A includes stretches of the FloridaGulf Coastfrom Pensacola to the Florida Keys. Zones B, C and D extend inland from the coast for as much as 100 miles. You can determine whether your property is within a coverage area, as well as your particular Zone, by reviewing the Deepwater Horizon Claim Center’s website at: http://www.deepwaterhorizoneconomicsettlement.com/maps.php or by reviewing this interactive map: http://220.127.116.11/zonelocatoreconomic/
The formula employed by the Claims Administrator to determine economic losses is not necessarily logical or intuitive. Evaluation of a BEL claim involves comparing averages of income and expenses during a pre-spill “Benchmark Period”—a series of months selected by the claimant—with a corresponding “Compensation Period” during 2010. Certain revenues and expenses are excluded when making this comparison. If the comparison establishes a loss, a risk transfer premium may apply, increasing the potential claim by as much as 150%. In most cases, it will be impossible to determine whether your association has a viable claim without having your financial information reviewed by a professional with a working knowledge of the settlement and the protocols employed by the Claims Administrator. Consequently, many associations will no doubt leave “money on the table” by assuming they have no loss and failing to secure the proper guidance to determine whether they have a viable claim.
While aspects of the settlement are still being appealed and uncertainties remain, one thing is certain: those who miss the claims deadline will not be paid, even if they have compensable losses. Becker has been handling these claims for communities, individual property owners as well as business owners in the eligible zones. If your community is located in one of the four zones and you have not filed a claim or even considered doing so, now is the time to contact us to discuss your options before the window of opportunity closes forever. If you and/or your fellow board members or your association members in your community rent out their units or own businesses in any of the four zones, the same logic applies.