Fewer large claims paid in full, says oil spill claims center


MOBILE, Ala. – Less than half of Alabama oil spill claims for more than $100,000 and no claims of more than $1 million were paid in full, according to data received Monday by Gov. Bob Riley from claims czar Ken Feinberg.

As of Nov. 17, Feinberg said:

  • 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.

A spokesman for Riley did not immediately have comment on the letter Monday night.

The governor has been critical of Feinberg’s process, particularly in its treatment of large businesses in tourism-dependent south Baldwin County. Many companies with large claims have complained of getting checks for just a small fraction of their losses.

The months-long oil spill that erupted April 20 wrecked the tourist season along the coast. It left scores of businesses — such as restaurants, charter boat outfits, retailers, cleaning services and condominium rental companies — struggling to stay alive, according to owners who have packed public meetings to describe their experiences.

The Press-Register reported last week that Feinberg’s operation has been using different standards to handle claims above and below $500,000.

For larger requests, it deducts any money already received through BP PLC’s claims process. For smaller claims, the operation plans to deduct those payments only from the final settlement offer.

And while smaller claimants get to base their payments on revenue from the better financial year between 2008 and 2009, the claims operation was basing payments for several large claimants on the worse 2009 numbers.

Business owners and officials have said that Feinberg’s adjusters have softened on the latter stance and have offered larger checks to some businesses.

Sheila Hodges, owner of Meyer Real Estate, received a check a few weeks ago for less than 10 percent of her multi-million claim. But she said Monday that after several conversations with Feinberg’s adjusters, she is now waiting on a supplemental payment that she hopes will bring her total compensation to about 80 percent of her losses.

Feinberg has paid nearly $2.1 billion to almost 135,000 claimants throughout the Gulf Coast, according to data from his operation’s website. But Hodges said the partial payments to many businesses obscure the way the claims situation is viewed by outsiders.

“For Feinberg to claims he’s paid X number of claims, it’s misleading,” she said. “The rest of the country thinks the money is flowing out to us, but they’re still leaving people struggling to keep their businesses open, or in my case how to plan for next year.”

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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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