New oil spill claimants line up after money starts rolling in


Thirty-five thousand new claimants applied for compensation from the Gulf oil spill in the past week, an increase of more than 50 percent from the previous week and an indication that new efforts to make payments more generous are winning over coastal residents and businesses.

The surge of filings brought the total number of businesses and individuals seeking damage payments from the Gulf Coast Claims Facility to more than 125,000 as of Thursday night. The operation has paid a combined $1.1 billion to 55,000 claimants, data show.

About $220 million has been paid out in Alabama, while more than $98 million has been disbursed in Mississippi.

Two weeks ago, the facility’s total claims outlay amounted to only $345 million, and elected officials and business owners were sharply criticizing the operation and its director, Ken Feinberg, accusing him of failing to match promises that he had made.

On Friday, Feinberg said that he was pleased to see the thousands of new claimants, and took it as a sign that he’s doing something right. “It’s good to be liked down there again,” he said by telephone from Washington, D.C.

Feinberg has made two major changes in the past two weeks to speed payments, increase check sizes and expand eligibility. On Sept. 24, he began clustering claims by industry, which allowed his adjusters to compare estimates by business owners of their revenue losses.

Shortly thereafter, he eased geographic restrictions on businesses and individuals, which allowed people whose connection to the beach was more tenuous to receive checks.

David Wright, the owner of a home construction company based in Elberta, initially had his claim denied, but after Feinberg’s changes, Wright’s claim was paid in full.

Once he received the check, Wright said, some of his former workers whom he had to lay off over the summer told him that his success made them decide to file for claims as well.

Several have since been paid, he said.

Feinberg said that his biggest problem right now is that 47,000 claims were accompanied by insufficient documentation to verify a loss, and thus cannot be paid. Of those, Feinberg said, 5,000 were filed with no supporting paperwork at all.

Amy Weiss, Feinberg’s spokeswoman, said that the financial documents most commonly missing are income tax returns, pay stubs, revenue statements for 2010, and profit and loss statements.

Bert Sanders, an accountant with Gulf Shores-based Grant, Sanders & Taylor PC, said that Feinberg’s process is undoubtedly better now than it was two weeks ago.

But, Sanders said, he has about 10 clients who filed claims in late August and have yet to hear anything from Feinberg’s operation.

Also, while many of his clients are receiving payments that match their estimated losses, for the most part, there are still discrepancies, he said.

At least one business received a check this week for only a quarter of what the owner asked for, while a condo association got a check for 10 times more than it requested.

“What it shows me is that there’s some problem with the methodology being used in calculating the amounts, or they’re not getting looked at real close before the payments are submitted,” Sanders said.

For Robin Lambert, Feinberg’s changes came too late to help her restaurant, Old Bay Steamer in Fairhope. In mid-September, Old Bay Steamer — which filed for bankruptcy protection last year — received a claims check for $16,000 after Lambert had requested $159,000.

She closed for good two weeks ago, and on Thursday will be auctioning off her inventory, from salt shakers to the giant royal red statue that used to stand outside.

Feinberg has said that his adjusters may re-evaluate the claims of business owners like Lambert, and award further payments. Lambert said Friday that she filed for a supplemental payment two weeks ago, but hadn’t heard anything back.

She chuckled when asked whether she thought she could get the money in time to bid on her own restaurant Thursday. “That would be sweet,” she said. “But I’m not going to hold my breath.”

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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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