Gulf Oil Spill: Tracking the Claims – Mysteries abound in the process


ORANGE BEACH, Ala. — Gary Nichols has received two different percentages of his claims for two restaurants of the same name in the same town.

Owner of Live Bait at The Wharf and the restaurant and night club at the beach of the same name, Nichols said that the Gulf Coast Claims Facility cut him two separate checks in November.

For his business at The Wharf, he received 39 percent of what he claimed. For the other business, he received 28 percent, he said.

“You can’t even really debate with them on it,” said Nichols.

He used the same accountant, the same accounting procedures, to file each claim.

Nichols said he received no claim payment from BP. The oil giant responsible for the April 20 spill that devastated the tourist-driven economy of the Alabama coast later transferred Nichols’ claim to Ken Feinberg’s office.

Then Nichols had trouble getting face-to-face time with an adjuster from Feinberg’s claims facility, until Wednesday.

That was after Nichols addressed Feinberg directly at a town hall meeting in Orange Beach earlier this month, saying, “It’s frustration that’s got me here.”

Nichols has filed for an interim payment, the eligibility methodology for which Feinberg said would be available for public review Feb. 2.

Feinberg also said he would start making interim payments next month.

Despite the months of paperwork and phone calls, Nichols said he won’t take the $25,000 quick payment Feinberg is offering to businesses if they agree not to sue BP, because Nichols believes he is owed hundreds of thousands of dollars.

And although he suffered about a 60 percent drop in business in 2010, Nichols believes his restaurants will survive “because we have the financial means of taking money out of other investments.”

Live Bait along Perdido Beach Boulevard has been open for 16 years, and Nichols has owned it for 14 years.

But he’s worried about what remains in the Gulf. He fears that submerged oil could be washed ashore during a heavy storm, which would mean “we’re history.”

Worries aside and barring a storm- and oil-free year, Nichols is expecting a promising year ahead.

“But we’re anxious to see what happens,” he said.

Billy Parks, 53, lifelong resident of Baldwin County

Occupation: Owner of Billy’s Seafood, which has operated in Bon Secour for 35 years.

The Press-Register reported in mid-November that business was still off between 45 and 50 percent. He had received some compensation from the claims process, he said, but was unclear how many months it was meant to represent.

Outlook: Parks said business has improved a lot, and he is sounding much more optimistic than in previous conversations. “It’s getting back to normal; sales are only down about 20 percent, instead of 75 percent,” he said last week. His seafood operation is getting in fresh shrimp and even oysters from Texas and Florida.

Claims process: Billy’s Seafood hasn’t received any money since a claims check in October. He’s working with an attorney, applying for interim payments, and isn’t sure when they’ll begin work on a final claim. He isn’t sure whether he’s satisfied, since it isn’t yet clear how much compensation he’ll get through the interim process.

Terry Deaton, 56, Dauphin Island

Occupation: Carpenter

The Press-Register reported July 28 that Deaton had been out of work for three months and struggled to make ends meet during that time. He filed a claim at BP’s Dauphin Island claims center on June 28 and was repeatedly told by BP that more documentation was required. Following publication of his story, Deaton received three emergency payments of $2,100 each.

Business: Deaton has been a member of the United Brotherhood of Carpenters since 1989.

Outlook: “The construction business finally seems to be picking up again. Thank goodness, because we’d be in big trouble if we were counting on BP to make things right,” Deaton said.

Claims process: Deaton filed a new claim with Gulf Coast Claims Facility on Aug. 24, the day after administrator Ken Feinberg took over the claims process from BP. Deaton said he heard nothing for 90 days, then got an e-mail telling him, without explanation, that his claim was denied. After several followup phone calls to the GCCF, he said he was told he was ineligible for an emergency payment but could apply for either an interim or final payment — if he would agree to waive his right to sue. “I’m not doing that,” Deaton said. “I’m going to keep my options open, but I’ll be surprised if I ever get another nickel from BP.” He said he’s landed a temporary job in construction at Alabama Power Co.’s Barry Steam Plant. But he still had to cash in his retirement savings and draw unemployment to make ends meet. “It’s such a bureaucracy. They just wear you down,” Deaton said.

Jason Holt, 34, Gulf Shores

Occupation: Owner of Suncoast Beach Service Inc.

The Press-Register reported in November that Holt had received a claims check for 34 percent of his reported losses.

Business: Holt’s company, which supplies condos and hotels with beach chairs and umbrellas, saw revenue drop nearly 70 percent last summer, the Press-Register reported. Holt had to lay off 10 employees to stay in business, and he said he has a work force now about half the size he did last January.

Outlook: Holt said he thinks business will be slow again this summer before growing in 2012 and returning to normal in 2013. “Fortunately,” he said, “a lot of my costs are adjustable, so if it doesn’t recover as quickly as expected, I can make adjustments and survive.”

Claims process: In November, Holt drove to the RSA Tower in downtown Mobile to meet face-to-face with claims czar Ken Feinberg. After nearly two months of waiting, Holt got a check two weeks ago that, added to his original payment, covered nearly all of his reported loss. He is now preparing to file for an interim claim, although he said he would prefer to take a final settlement “if the offer is fair.”

Jimmy Waller, Elberta

Occupation: Charter fishing captain.

The Press-Register joined Waller on his 65-foot fishing boat on June 7, his second day working as part of a BP program that hired boat owners to work in spill recovery. Waller was worried about how he’d keep his business running. He owes more than $300,000 on his boat, and has a family, including a 3-year-old son with cerebral palsy, to support. He counts himself as one of the lucky ones, having received claims payments both when BP was running the process and from Feinberg.

Business: Having worked in the charter fishing business since he was 15, Waller now owns the “Big Adventure,” based in Orange Beach. In the winter, he is a private duck hunting guide.

Outlook: Waller said he hopes his phone starts ringing next month with customers wanting to book deep-sea fishing trips. “A lot of people who canceled trips last year said, ‘We want to go next year,’” Waller said. “I haven’t heard from them yet.” Waller said that whether he has a successful season this year depends on people’s perceptions of how safe the fish is to eat. “If 90 percent of my people say, ‘We know fishing’s open, but we’re scared of the quality of the fish,’ then I’m going to have to make up for that,” he said.

Claims process: Right now, Waller is about halfway through a six-month claims check he received in October. He said he hopes he gets another one when this runs out. Meanwhile, he said he’s got a letter from the Gulf Coast Claims Facility asking whether he wants to take a final settlement offer now and stop applying for claims. It’s like an episode of “Deal or No Deal,” he said, adding that he’s evaluating his options as he tries to decide whether to take a briefcase of money. “I’ve talked to a few people and asked what they’re going to do,” Waller said. “I think everyone’s kind of waiting for other people to do it first.” Waller said he wants to see how the upcoming season goes before he decides.

Keith Lee, 48, Foley

Occupation: Owner of Worldwide Interiors in Orange Beach.

The Press-Register reported beginning July 23 that an already-lean stretch for south Baldwin County’s furniture sellers worsened with the Gulf oil spill. In June 2006, Lee’s company had sales of $90,000. Last June, revenue was about $8,800. BP paid Lee a pair of emergency $5,000 payments.

Outlook: The business remains, but Lee said he is still losing money. “I hope that changes. The spill has significantly affected the economy of the entire region. And that region may not recover from the economic injury overnight.”

Claims process: “Right now, there are some very significant questions in my mind about the methodology and the basis they are going to use for determining the final offer,” Lee said, adding that he is concerned that claims officials will not be able to distinguish among varying business models. “I don’t have the sense that they will develop a methodology that is going to be fair. I’m not very optimistic, but I hope they will put their money where their mouth is.” Lee said that he is still in the application process. “My understanding is that the interim and the final determination are the same application. I’m going to complete that application. I haven’t done that yet. It’s a time-consuming process. (This all) is far from over.”

Jimmy Olive, 66, Satsuma

Occupation: Owner of Southern Gulf Seafood in Saraland since 1987.

The Press-Register reported beginning July 28 that Olive asked the public for help “convincing customers that the seafood that markets are selling is safe to eat and has no oil.” Olive filed a claim with BP in May, and then another in August with the Gulf Coast Claims Facility. In September, he received a check from the Gulf Coast Claims Facility that covered his overhead from the start of the spill through December, and it reimbursed him for the net profit he showed during the same period last year.

Outlook: Business is starting to pick up again, Olive said, partly because much of his clientele consists of long-term customers. “They’re the ones who have kept me in business,” he said. “It hasn’t been Mr. Feinberg.” Olive is more optimistic about his business now than he has been since the spill. “But it’s a long way off from where it was” before the oil spill. He is buying more seafood and selling more of it, but because his prices are marked down, his profit margin has suffered. “I’m not going to make as much, but I’m not going to close till I’m ready to close.”

Claims process: Olive said he expects to accept a $25,000 quick claim, though he’s still working with his accountant to ensure that would be the best deal for him. “I’ll use figures and facts to figure out what I need to do,” he said. “It’s going to take a good amount of money over $25,000 for me not to settle for $25,000.”

Karl Mueller and Paul Mueller, 36 and 41, both of Josephine

Occupation: Co-owners of Pirates Cove Marina, a restaurant and docking facility near the end of Baldwin County 95 southeast of Elberta and across Arnica Bay from Orange Beach. It has been a family operation since 1957.

The Press-Register reported in late 2010 that the Muellers were struggling to get claims adjusters to clarify what documentation was needed, since their early claims were delayed by what they were told was insufficient documentation.

Outlook: “It’s real hard to gauge business this time of year. The weather’s erratic, and therefore business is erratic under the best circumstances. Talking to people who know about bookings in Gulf Shores, it sounds like the coming year is going to be pretty good, but that remains to be seen,” Paul Mueller said.

Claims process: The Muellers supplied more documentation last week amounting to a stack of paperwork three-quarters of an inch thick, Paul Mueller said. They continue to pursue interim claims, he said, but hope to start work on a final claim soon. “Since the last time we dealt with them, the list of documentation they want has grown,” he said. He remains dissatisfied with the process and the amount of money they’ve recovered so far from the Gulf Coast Claims Facility.

Jeff Fisher, 48, Theodore

Occupation: President and co-owner of B&R Campers, a family-run enterprise on U.S. 90 in south Mobile County.

The Press-Register reported that sales for B&R Campers fell dramatically after the Gulf oil spill, with the company blaming the beach-going nature of camper buyers. As of mid-September, the company had received no restitution for the claims it had filed. In late September, “almost immediately” after Fisher aired his frustrations with the claims process in the Press-Register, he said he got a check. There was “no rhyme or reason to what they paid.” Fisher said the amount, if designed to cover one month, would have been “more than fair.” For five months, at the time, he called it “less than fair.”

Business: B&R Campers was started by Jeff Fisher’s father, Bill Fisher, more than 30 years ago in downtown Mobile. Bill Fisher and his family then moved it to U.S. 90 in south Mobile County. B&R, said Robbye Fisher, stands for “Bill and Robbye.” Her late husband, she said, added Western wear in 1981 to offset the slow winter season sales of recreational vehicles. Today, Robbye Fisher manages the Western wear store, and Jeff Fisher and his two brothers run the RV side of the business.

Outlook: Jeff Fisher said that he had to trim his workforce from 15 people to seven part-time employees. “Just as I predicted, December was not kind to us, and January was not kind to us. Let’s all hope that our market comes back. Our market traditionally will start mid- to late February.”

Claims process: Since receiving the one check in mid-September, Fisher said he has received nothing more. “The ironic part,” he said, “is that I’ve never spoken to a single person that works for Feinberg.” After earlier filing for a quick claim, Fisher said that B&R’s next claim — he planned to have filed by end of January — would be for “our final settlement. I’m not at liberty to give the exact amount, but it’s six figures.” In the meantime, he said, “as a family we’ve taken money out of our pocket to keep the business going.”

Jay McRae, 52, Mobile

Occupation: Chief financial officer of the family-owned Cedar Point Fishing Pier on the Dauphin Island Causeway, where thousands of people pay $5 each to fish annually.

The Press-Register reported on June 12 that when officers tried to enforce an oil-related fishing closure in Mississippi Sound, they were involved in an altercation with Jay McRae’s father, Roland Cecil “Mac“ McRae Sr., that sent the 74-year-old pier owner to the hospital. No charges were filed, and no disciplinary action was taken against the officer after an independent investigation. The family contested a BP agreement to pay 57 percent of its claim.

Outlook: Jay McRae said the outlook for the business’ future is still precarious and will remain that way until there is some clarity as to what monetary settlement the family will ultimately receive through the claims process, as well as when the impacts, if any, on fish such as flounder, redfish and ground mullet commonly caught from the pier are determined. “Not much has changed, except that it’s the middle of winter and we have no business.”

Claims process: In October, McRae was upbeat about the claims process because the family had received all the money it was owed from all the clams filed throughout the summer. Now, however, he is frustrated again because in December the family received only 6.5 percent of the total in a second, six-month interim claim filed in November. Discussions with the Gulf Coast Claims Facility since that December payment have not resulted in additional payments or clear answers as to how processors decided to pay only the “miniscule” amount, as he called it. McRae said the family is in a “holding pattern” right now, waiting for Feinberg to release, as he has said he would, the formula to be used to decide final payments. Acceptance of those payments precludes claimants from suing BP in the future. “It’s just a big mess. It seems like the people in south Mobile County who actually work for a living are getting the short end of the stick.”

Mike Giannini and John Giannini, 50 and 44, both of Orange Beach

Occupation: Co-owners J&M Tackle in Orange Beach

The Press-Register reported on Aug. 15 that the Gianninis, who are brothers, had filed claims for losses since May. John Giannini said that he was satisfied with the process, but that he was hesitant to go into specifics because he didn’t want to jeopardize future claims.

Business: J&M tackle started in 1988 as a convenience store and tackle shop with 2,000 square feet of retail space and some diesel fuel pumps out front. It has since grown into a 15,000-square-foot operation with a booming mail-order side business, the owners said.

Outlook: Mike Giannini said that the outlook for the business is bright. Despite less than 100 percent compensation for the slow business, the store has been able to largely absorb 2010’s downturn. “I’m hoping (the claims money) is enough and this was just a bump in the road. We are fortunate to have a very strong business and a loyal customer base.”

Claims process: Mike Giannini said that his interim claims have been reimbursed at 66 to 75 percent of the amount requested. He’s in the process of filing a final interim claim. He said he would wait 1-2 years before filing a final claim because he wants to see if there is any permanent damage to the fishing-supply industry or residual harm to fishing in general. The main problem with the claims process under Feinberg is the lack of transparency, said John Giannini. “A check will seemingly show up at random with no explanation of how they got that amount,” Mike Giannini said.

Randy Boggs and Susan Boggs, 46 and 42, Elberta

Occupation: Boggs, a professional fisherman, and his wife, Susan, have owned Reel Surprise Charters at SanRoc Cay in Orange Beach for 11 years.

The Press-Register reported beginning July 21 that Boggs was “scared” the oil spill would kill his business. He had gotten three checks totaling $11,000 as compensation for lost income, which he had estimated at $600,000 since the spill. His boat payments total $12,000 monthly.

Outlook: Susan Boggs said they are “preparing for this to be the best year ever.” She said her and her husband are trying to be optimistic. “You can either think that way or think the worst.”

Claims process: The couple is in the process of filing a final claim, according to Susan Boggs. To ensure she’s done the paperwork correctly, she asked the Gulf Coast Claims Facility for the couple’s six-months emergency claim paperwork. When the claims facility refused to give her the information, Boggs said they appealed to Orange Beach Mayor Tony Kennon and U.S. Rep. Jo Bonner, R-Mobile., which resulted in a phone call and meeting with local claims adjusters in Orange Beach. In the end, Boggs said she was told she could not have the information. “They need to be more transparent with their claimants,” said Boggs, adding, “It’s a frustrating process.”

Hoang Huynh and Loi Le, 40 and 40, Grand Bay

Occupation: The husband and wife have both shucked oysters for Coast Seafood in Bayou La Batre since 2001.

The Press-Register reported on June 18 that both were laid off from their jobs less than a week after the Deepwater Horizon rig explosion. Speaking through an interpreter, Huynh said that all he knows how to do is shuck oysters, while Le said she doesn’t speak English and can’t work anywhere else. The couple have four children.

Outlook: Both remain unemployed. Huynh said that he had been told by his boss that no workers could be rehired until next year.

Claims process: Huynh and Le each filed claims with BP on April 28. Huynh has gotten four checks totaling $6,454. He made about $22,000 annually shucking oysters. Huynh said the amount BP has paid him is “fair.” Le said that she initially received two checks, each for $2,500, and a third for $1,170. Huynh said his wife was eventually paid the additional money she was due. He said they both continue to get the correct amount of money they are owed for loss of income under the Ken Feinberg-led claims process.

Daniel Craven, 53, Gulf Shores

Occupation: Attorney

The Press-Register reported beginning June 6 that one of Craven’s clients had documented $10,000 worth of condominium rental cancellations due to the spill. He teamed with the law firm of Daniell Upton Perry & Morris in Daphne to represent several hundred clients, most of them condominium owners at the Gulf, in filing claims with BP. On Nov. 14, he said his clients had received close to what they asked for, and some had received everything they sought in their claims. The attorneys continued to work on lawsuits for property owners who contend loss of value, and those cases will be part of a multi-district litigation being handled in New Orleans.

Outlook: “I’m in a wait-and-see attitude like everybody else. I have clients who have filed interim or final claims in late December, but were told that BP is not looking at them until Feb. 1. The reason is, they’ve been inundated with quick claims or individuals filing for a $5,000 settlement or businesses taking $25,000 to settle. If you are a business owner you are faced with a dilemma. If you continue to lose money you are better off filing an interim claim. But if you believe the market may come back, you may be better off filing a final claim.”

Claims: “We’ve spent a lot of time handling these quick claims for condo owners and businesses and we’re having good luck getting those in” and processed quickly. “But with all these interim and final claims, we won’t really know how that review process will work for another month to six months.”

Editor’s note: “Tracking The Claims” is chronicling the experiences of dozens of oil spill victims as they deal with the claims process and work to regain their feet and chart their futures. This is the sixth installment of the series since Aug. 15.

(The Press-Register’s Reneé Busby, Jeff Dute, David Ferrara, Rena Havner Philips, David Helms, Roy Hoffman, Kathy Jumper, Robert McClendon, Dan Murtaugh, Rhoda Pickett and George Talbot contributed to this report.)

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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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