Business owners, public officials say claims process inequitable


Business owners and public officials in Baldwin County say they are alarmed by reports of employees receiving more money for oil spill claims than owners of the businesses they work for.

It is just another aspect of their biggest problem with Ken Feinberg’s Gulf Coast Claims Facility — that business owners near Baldwin County’s once-lucrative beaches get checks that cover only a fraction of losses suffered after the oil spill began keeping tourists at bay.

David Wright is an extreme example. The owner of an Elberta company that builds high-end homes for people who plan to either retire or vacation on the coast, Wright had to lay off his 15 workers when his customers canceled contracts after the April 20 spill.

Rob Manney, a supervisor on Wright’s crew, said he got checks totaling 80 percent of his personal claim with Feinberg’s operation.

Wright’s business claim was denied.

“How do you pay an employee and not the business?” Wright asked. “It’s anti-business.”

Feinberg did not respond to requests for comment made to his media representative.

Orange Beach Mayor Tony Kennon said he has spoken to at least three business owners with similar stories, though each of them got something from Feinberg.

“When your employee gets more than you get, yeah, there’s a problem there,” Kennon said.

The claims process under Feinberg passed its one-month mark this week. By Thursday, Feinberg’s statistics showed that 61.2 percent of business claim payments have been for less than $10,000, while 61.7 percent of individual claim payments were in that same dollar range.

Feinberg’s initial, emergency claims period covers up to six months’ worth of lost earnings.

Officials have said that without meaningful checks from Feinberg’s facility, scores of companies near the beach could close before next summer’s tourist season.

“Without the businesses, nobody has a job,” Kennon said.

Feinberg took over the claims process from BP PLC on Aug. 23 after the oil giant had been plagued by complaints of slow payments and bad customer service during the time it handled oil spill compensation.

As of Thursday [Sept. 23], Feinberg’s group had approved more than 28,000 claims for payment and distributed about $345 million to individuals and businesses. BP paid $398 million during its four-month claims process.

Feinberg has denied about 2,000 claims. Another 20,000 claimants had their applications returned for more financial documentation, and about 15,000 more claims await review. Feinberg has said he’s processing claims at a rate of 1,500 a day.

Wright’s claims denial letter did not give a reason for the decision. According to an e-mail, Brandy Jackson, a staff member for U.S. Rep. Jo Bonner, R-Mobile, inquired on Wright’s behalf and was told that the claim was denied because Wright was a building contractor.

Feinberg has said that the criteria he uses for eligibility include how close a business is to the shore, how dependent it is on natural resources such as fish or the beach, and what industry it is in.

Wright said that he doesn’t understand how he could be excluded. He reported having contracts to build an $875,000 vacation home in Elberta and a $600,000 house for retirees in Fairhope this year. Both owners delayed the work indefinitely after news of the spill, he said.

“They’re not going to spend a half-million dollars to build a house down here if they can’t use the Gulf,” he said.

Manney, Wright’s construction supervisor, applied with Feinberg’s process the day it opened, and shortly thereafter got a check for about half of what he requested. Two weeks later he got a letter in the mail saying the facility had recalculated his loss and written him another check, bringing his total payout to about 80 percent of what he had requested.

He said he’s happy, but he’s almost embarrassed now to see Wright and so many others who haven’t had the same fortune.

“I’m grateful I got paid; it saved me from going under,” he said. “But why do they just pick and choose who they want to pay?”

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Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
Cooper Law Firm

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