Gulf Oil Spill: Tracking the Claims – Struggles persist for those seeking compensation


Greg Kennedy thought his claim was a no-brainer.

He and two partners, brothers Marty and Johnny Hoffman, own Waves Shopping Center on West Beach Boulevard in Gulf Shores.

In October, one of their tenants, Shakes Frozen Custard, closed up shop after the slow summer, when tourists shied away from the beach because of the Deepwater Horizon oil spill.

The shopping center has since missed out on $15,000 in rent.

Kennedy said he and the Hoffmans have tried to attract a new tenant, but haven’t had any luck.

“We haven’t even had a call,” Kennedy said. “Anybody who is going to open a business down here is going to start in January so they can be ready in time for spring break. We’re not holding out a whole lot of hope.”

The partnership, Hoffman Kennedy LLC, filed for an emergency claim from the Gulf Coast Claims Facility last year to offset losses resulting from the oil spill, but was denied.

“Our losses are so definable, so digitized, so clear,” Kennedy said. “It’s a no-brainer, we thought.”

He said owners of the individual stores in the shopping center have received payments, as have employees working there.

“It makes no sense,” he said.

Terrance Roberts, 49, Mobile

Occupation: Owner of T-Rob Seafood since 2007. He holds a second job managing a warehouse.

The Press-Register reported beginning May 13 that Roberts was worried about whether he would be able to maintain his mobile seafood business, which he operated out of a truck, through the summer. He had received two $5,000 checks from BP and was awaiting Ken Feinberg’s takeover of the claims process.

Outlook: Roberts is still uncertain about the future of his business. He wants to make sure that seafood is safe, and he’s continually tracking reports from scientists studying Gulf seafood. “Until it gets closer to April, then we really don’t now,” he said recently. “I’m going to take my money and invest it back into my business, because that’s my dream.”

Claims process: After months of submitting paperwork with the Gulf Coast Claims Facility, Roberts accepted a $5,000 quick-claim payment around Christmastime. “It’s over with for me,” he said of efforts to be made whole through the claims program. “To me that was kind of like a pressured signing. If you’re hungry and somebody offers you something to eat, it’s hard to say no.”

Paul Johnson, 32, Coden

Occupation: Commercial fisherman and co-owner of Three Men and a Boat on Heron Road, where Johnson, his brother and father fish, shrimp, crab and pack and sell oysters.

The Press-Register reported that Johnson, who is a sixth-generation fisherman, and his family reopened after closing the shop for more than two months following the oil spill. Johnson has filed multiple personal claims with BP and the Kenneth Feinberg administration and received payments of more than $10,000.

Outlook: Johnson said Three Men and a Boat continues to struggle after the spill. “Before this all happened, I would pull in an average of 400 gallons of oysters a week,” Johnson said. “Now, I may be averaging 60. It’s dropped off that much.”

Claims process: In addition to a $2,500 check he received from BP the first week of the original claims process, Johnson received additional payments from BP prior to Feinberg taking control, but he declined to give the amounts. Johnson told the Press-Register that he received a $7,000 check from the Feinberg administration, and his business received $1,000. “I am not taking a final payment,” Johnson said. “I think they are just waiting people out.”

Sheila Hodges, Baby boomer, Foley

Occupation: Owner of Century 21 Meyer Real Estate.

The Press-Register reported beginning Aug. 15 that after suffering summer vacation cancellations from the spill, the company has struggled to receive full compensation from its claims, first from BP and now from the Ken Feinberg-led process. In November, Hodges said that Meyer Real Estate filed a multimillion-dollar claim, but got a check for less than 10 percent of its request.

Business: Hodges, who became full owner of the firm in the mid-1990s, said she’s helped the company grow for the last 25 years. There are regularly 250 full-time employees, but that shoots up to 700 or 800 people during the peak summer season, she said. There’s also a sales department with up to 50 agents.

Outlook: Hodges said that her business outlook is positive, and the beachside companies are using marketing tools to reach out to potential tourists beyond the south Alabama area. At this time last year, vacation reservations were up 15 percent from 2009. This year, rentals are below last year’s high, but still beating the 2009 reservations. “We’ll just keep building on that,” Hodges said.

Claims process: Meyer Real Estate has now received about 80 percent of its claim, up from less than 10 percent of its request in November. Hodges said that in a December meeting, her company was able to point out the errors the Gulf Coast Claims Facility’s accountants had made in evaluating her claim, and she said she was assured her company would receive 100 percent. But when the check arrived in January, it was only 80 percent — and the claims facility never called or wrote to explain the difference. She said there’s a breakdown in communication between what Feinberg promises and what comes out of his organization. “It’s the lack of professionalism,” she said. The company has enough to survive this year, she said, but her company’s profitability is suffering.

Kathleen Walker-Gordon, 53, Bon Secour

Occupation: Unemployed

The Press-Register reported that Walker-Gordon, who comes from a family of charter fishermen, was unemployed and planned to take a job through a friend to provide housekeeping services for beachfront condos when the oil hit. She filed a claim with BP and heard nothing. However, after Kenneth Feinberg took control of the claims process, Walker-Gordon received a check “for what I would have made had I been able to work,” she said.

Outlook: Walker-Gordon remains unemployed, though she said she was able to find short-term employment as a housekeeper late last fall.

Claims process: Walker-Gordon said she filed again after she lost her most recent housekeeping position, and received a final $5,000 check. “I wasn’t going to wait to see what they might come up with,” she said. “A lot of people took the $5,000 because they could not afford not to. People have got to survive.”

Erik Nist, 38, Fairhope

Occupation: President and owner of Alabama Beach Vacation Rentals, or, in Gulf Shores.

The Press-Register reported beginning July 11 that Nist and his wife, Anna Lisa, had not received a check from BP for lost rental income from two condos they own. Nist was debating with BP over the amount of the only check he had received for his vacation rental management business. The couple filed their BP claim in April, the first Monday after the Deepwater Horizon oil well exploded.

Outlook: Erik Nist said he’s “confident we’re going to have a busy year.” The business was down by about 12 percent this month, but he’s optimistic things are going to “pick up.”

Claims process: “Nothing has changed at all,” in claims payments made to the business, said Erik Nist. They have received only about one-third of the money they claimed as lost income from the condo rental business, he said. “We had a CPA justify our claims and the Gulf Coast Claims Facility has not taken that into account,” said Nist, adding that he’s still “exasperated” with the process. For people who haven’t been affected by the oil spill and don’t understand his anger, Nist used the analogy of filing taxes. He said it’s like filing your taxes and expecting a certain amount back that you justified to the government. But the government “comes back to you in December and says you get 30 percent of that amount.”

Jeanne and Bob Donald, 59 and 62, Gulf Shores

Occupation: Owners of Hope’s Cheesecake.

The Press-Register reported that Hope’s Cheesecake saw its cheesecake orders plummet by half in the usually busy summer months, after the Deepwater Horizon oil spill in April. Jeanne Donald had to lay off her chief baker, and picked up the slack by working 12-hour days.

Business: The Donalds opened Hope’s Cheesecake after moving from Valdez, Alaska, to Gulf Shores 15 years ago. In Valdez, where they experienced the Exxon Valdez oil spill, Jeanne Donald worked for the city of Valdez, and Bob Donald was a mental health counselor.

Outlook: “Our Christmas sales were down about a third of what they were last year,” said Jeanne Donald. “We worked real hard to contact people outside of the spill area to get orders from corporate customers, and that helped. January is down quite a bit. We’ll have spring break starting the first of March, and we usually get a shot in the arm about that time. We don’t see a lot of increase until about Memorial Day. I’m hoping people are going to come back to the beautiful beach. I hope there’s been enough promotion and advertising. If they come back to the beach, then everything down here will benefit.”

Claims process: The Donalds feel, to date, they have gotten “satisfaction” from the claims process. From May through July, they received a series of checks for $5,000, $10,000 and $25,000. In response to their petition for emergency funds, they received a check in September for $26,000. In November, Jeanne Donald said, “We filed a final claim for the loss of revenue for the rest of 2010, and anticipated losses. They have received our claim, that’s all I know.”

Belinda and Albert “Coy” Wilkerson, 62 and 51, Bayou La Batre

Occupation: Shrimpers and oyster workers.

The Press-Register reported beginning May 2 that the Wilkersons were concerned about the future of the seafood industry. The couple got more than $70,000 while working in BP’s program that paid out-of-work fishermen to aid in spill cleanup. They own two boats — one for shrimping, the other for oysters — and both have worked in the industry their entire lives.

Outlook: The Wilkersons will likely retire from the seafood business. After the oil spill, one of their two boats sank off the shores of Mississippi, Belinda Wilkerson said. They recovered the vessel, but it’s not running. She said the couple used some of the claims money to pay bills, and “we’re just going to live off our little Social Security checks, if we can.”

Claims process: The couple settled for a $25,000 quick payment to escape the claims process, Belinda Wilkerson said. But she was disappointed that both she and her husband were not offered settlements, even though they worked in the business together. “We only got credit for one boat,” she said. “I don’t understand none of this. I just got tired of it. I don’t think you’re going to get more out of them, anyways.” The $25,000 payment was a quick settlement that claims czar Ken Feinberg offered to businesses. He offered $5,000 to individuals.

Chuck Campbell, 52, Orange Beach and Birmingham

Occupation: Co-owner with wife, Shannon, of Liberty Linen and Janitorial Supply and At Work Uniforms of Orange Beach.

The Press-Register reported Nov. 14 that the Campbells had been rejected for a $1.4 million loan to consolidate debt after losing about $250,000 in 2010. Campbell said they are continuing to seek the loan and are now talking to Wells Fargo in Foley about a loan through the Small Business Administration.

Outlook: The couple bought Uniform Rental Service in 1989, changed the name, and the business evolved into two companies supplying linens, cleaning supplies and uniforms to Gulf Coast condominiums and other businesses. Campbell said the company has been working with the Business Support Center in Gulf Shores to secure financing, but that he has found that most banks do not want to work through the SBA programs. “I think it is excess paperwork,” he said.

Claims process: Campbell said that all claims filed as of late January have been paid. “We are thinking about filling another one, now that some time has passed and we see some of the unforeseen results of the spill on our customers, and subsequently our business,” he said.

Ralph Atkins, 67, Mobile

Occupation: Owner of Southern Fish & Oyster Co., on the Eslava Street dock in downtown Mobile, selling seafood to individuals, restaurants and other seafood resellers since 1934.

The Press-Register reported Nov. 15 that business was still off 50 percent, but the holidays might bring some relief. Atkins also said he’d received a “small quantity of money the other day, nowhere near what it should be” from the Ken Feinberg claims apparatus.

Outlook: “We had a pretty good Thanksgiving, and we got a nice little boost for a couple weeks at Christmas, but now it’s stopped in the water. Part of it is the economy, but part of it is still the negative results of the oil spill,” Atkins said. The cold weather has scattered the shrimp while fuel costs are tending to keep the fishermen at home, he said. He’s talked to some seafood dealers who may leave the industry altogether.

Claims process: Atkins called the recent meetings with Feinberg in Bayou La Batre and elsewhere “dog and pony shows.” He has filed an interim claim but is still talking with his accountant about their next move. Seafood dealers aren’t being paid anything close to what restaurants are getting, he said. “The last money I got was in October — they keep changing around the rules and telling you something different,” he said. “And they’re giving all this money to the Department of Conservation, which doesn’t know anything about marketing.”

Eddie Spence, 50, Gulf Shores

Occupation: Co-owner of eight Shrimp Basket restaurants and The Steamer and Baked Oyster Bar; sole owner of Mikee’s Seafood and Shrimpy’s Mini Golf.

The Press-Register reported that Spence and business partner David Cahoon delayed plans to open a Shrimp Basket in Mobile, given the uncertainty created by the oil spill, but had opened in October on Old Shell Road. Claims had been filed with BP for all the restaurants, with money received for May and part of June and July. Revenue at the five beach restaurants was down 25 percent to 35 percent in June, compared to the same period in 2009. On Nov. 14, Spence said he had received payment in full on all but four of their 10 restaurants. The four were in Orange Beach and Gulf Shores, and were underpaid from 6 percent to 56 percent, he said. Spence attended one of Ken Feinberg’s public meetings and gave him the information to show the discrepancy. “He told me, ‘It looks like they got slighted.’”

Outlook: “Business is OK. It is not where we were pre-oil, but it’s fine. Seafood is going up in price and that cuts our profit margins way down,” Spence said. He will not raise prices to offset the increased costs. “How can you raise your prices in an unstable market? You’ve got to suck it up. Our profit margins are real slim. I am still optimistic. But there’s a lot of skepticism that we still have the risk of oil washing up on the beach and ruining our summer. Personally, I’m looking for a big year.”

Claims process: “I’m through with everything except my final settlement. My in-house accountants are working on that with Bert Sanders, (a Gulf Shores accountant). I’ve received my emergency claims. I hope BP handles the final claims in a timely fashion. I’m ready for this to be over with and move on.”

Greg Miller, 55, Fort Morgan

Occupation: Owner, Fort Morgan Realty

The Press-Register reported June 21 that guest check-ins were down 90 percent at Miller’s business. On Aug. 23, the Press-Register reported that the claims process had been a “nightmare,” according to Miller. He’d received about 20 percent of what he thought he was owed through the BP claims process. He had hoped the process would be more equitable under claims czar Kenneth Feinberg. 

History: Miller’s mother started the real estate company in 1973. Today, it manages about 70 rental properties on the peninsula, a handful in which Miller and his wife, Susan Miller, have ownership stakes. Susan Miller has said that the couple’s rental properties were meant to be their children’s inheritance. Some of the homes owned by the Millers’ clients are run strictly as investment properties; others are owned by people who live in them for much of the year.

Outlook: Miller said he’s already had to sell one of his rental properties because of its negative cash flow. Money from the property management business is being used to prop up the rental property business — losses that have been poorly compensated by the Feinberg emergency process, he said.

Claims process: Miller said that the claims facility has compensated him fairly for the property management, poorly for his rental property business and not at all for his real estate business. Miller said he filed the rental properties as a six-month emergency claim. On one of his rental properties, the facility paid in full, plus a couple bucks, he said. Three it totally denied. Others were paid at varying percentages. In total, the facility shorted him about $156,000, by his reckoning. Each of the properties has a similar rental history and many are within a stone’s throw of each other on the peninsula, Miller said, so the wide spread in the facility’s payments is baffling. Other property owners whose beach rentals he manages have had similar experiences, he said.

Miller said he will now file interim claims for his rental properties. He said it irked him that Feinberg has said he’d be “generous” in assessing claims. “I don’t want him to be generous,” Miller said. “I want him to pay what he owes.”

(The Press-Register’s Guy Busby, Renee Busby, David Ferrara, David Helms, Roy Hoffman, Kathy Jumper, Jillian Kramer, Robert McClendon, Dan Murtaugh and Katherine Sayre 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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