Claims Update from Alabama: Most Larger Claims Are Going Unpaid; Not a Single Claim of More than $1 Million Has Been Paid in Full


At long last, Alabama officials have gotten their hands on some numbers from Kenneth Feinberg’s claims facility – and as everyone suspected, the new statistics indicate that larger claims, for the most part, are going unpaid, and not a single claim of more than $1 million has been paid in full. Not one.

These payment trends support perceptions that BP is “running up its numbers” by paying buckets of claims at only pennies on the dollar, and stalling on larger payments of six-figures and up.

The Press-Register is also pointing out that Feinberg’s operation has been using a different system to pay claims over $500,000. For larger requests, says the Mobile-based paper, the claims center deducts any money already received through BP’s claims process. For smaller claims, the operation plans to deduct those payments only from the final settlement offer. That revelation is coming as a shock to many.

But the real problem of false impressions continues. By focusing on cumulative totals and saying that claims were paid, Feinberg’s operation continues to create the casual national impression that “paid” means “paid in full.” That’s just not the case, far from it. And we keep hearing the real break isn’t at the $500,000 level but more like the $5,000 level – and the lack of transparency leaves us wary of spin. Why can’t the details be posted online (without names, of course)?

It’s also worth noting that the “spin” on payments comes in the context of those low-ball spill estimates, the “Mission Accomplished” NOAA announcement that the vast majority of oil was gone and the Obama Administration’s efforts to downplay the disaster at every turn. In other words, it’s just an ongoing reminder that the Powers That Be are perfectly comfortable distorting the facts to achieve their agenda. Nothing new there.

No wonder nobody really believes them on other issues like seafood safety. That’s what happens when you squander your credibility. The trust is gone.

The Register breaks out the claims payments in Alabama thus:

  • More than 55,000 Alabama individuals and businesses had filed for compensation from his Gulf Coast Claims Facility. More than 21,000 had been paid, with more than 16,000 — 77 percent — being paid at or above the amount they requested.
  • About 1,300 individuals and businesses received less than 25 percent of the amount of money they requested. Another 1,300 received 25 to 50 percent. Another 1,300 claimants received 50 to 75 percent. And about 900 received 75 to 100 percent.
  • More than 1,500 claimants sought $100,000 or more. About 700 were paid, but only 39 percent received the amount they requested.
  • There were 101 claims filed for $1 million or more. Thirty-five of those were paid, but none for the amount sought.

Read more here:

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