In oil spill claims, different standards for large and small businesses


MOBILE, Ala. – A spokeswoman for the Gulf Coast Claims Facility confirmed Monday night that the operation is using different standards for large and small businesses when calculating payments.

Gulf Shores accountant Bert Sanders said the different rules are the reason why some large coastal businesses in Alabama have received just a small fraction of their stated losses through the process.

Oil spill claims czar Ken Feinberg’s operation divides business claims into those above and below $500,000. For those above:

  • It deducts from the emergency payment any money already received through BP PLC’s claims process. For smaller businesses, the operation plans to deduct those payments only from the final settlement offer.
  • It bases payments for large companies on 2009 figures. For smaller businesses, it either averages the earnings from 2008 and 2009 or uses whichever year is higher.

The beach economy was down significantly from 2008 to 2009 following the collapse of the economy in late summer 2008.

Sanders, whose firm, Grant, Sanders & Taylor PC, is handling many business claims, said he found out about the different standards last week.

“I was stunned and shocked and so was my partner,” he said. “Our response was, ‘You did what?’”

Feinberg has paid nearly $2 billion to individuals and businesses across the coast, including more than $350 million in Alabama.

But the operation has been dogged by complaints in recent weeks that large businesses are receiving only a fraction of what they’re requesting.

Pedro Mandoki, owner of Mandoki Hospitality Inc., which manages half of the 608 units at Gulf Shores Plantation on the Fort Morgan peninsula, filed a claim for $1.4 million and has received two checks covering only 5 percent of that.

Sanders said that almost the entire difference was due to the two standards.

The claims operation’s website notes that for larger businesses and more complicated claims, accountants use “similar methodology but also perform a detailed analysis of the specific business, its condition and its trends,” to calculate the payments.

But the website also says that payments are calculated “according to … established rules and guidelines that apply uniformly to all claimants.”

“All the claimants deserve to be treated equally, not just the small businesses,” Sanders said.

Feinberg’s spokeswoman, Amy Weiss, did not respond when asked whether the different rules were inconsistent with the idea of uniform application.

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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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