Quick check offered to Gulf oil spill victims who won’t sue BP or seek final settlement


OCEAN SPRINGS, Miss. – The administrator of a $20 billion fund doling out money to Gulf oil spill victims said Monday that people who want more cash can now get a quick check within two weeks, but there’s a catch: Cashing it means giving up the right to sue BP or receive any more payments.

Attorney Kenneth Feinberg, who took over the claims process from BP PLC in August, said individual claimants who already received some compensation from the fund can get a $5,000 check, but they can’t sue BP and won’t be eligible for a final settlement. Businesses could seek a $25,000 check. The payments would be issued within two weeks.

The other options are to seek quarterly interim payments for losses until August 2013, or file for a lump sum final settlement. Getting the lump sum also means giving up the right to sue BP over its April 20 oil well blowout that spewed more than 170 million of gallons of crude into the sea. Some who haven’t decided whether to accept the final payment or to sue BP can opt for the interim payments in the meantime.

“No more documentation required, no requirement that you add any evidence of damage,” Feinberg said of the new option to receive quick cash.

By Wednesday, Feinberg said, the Gulf Coast Claims Facility will have paid about $2.5 billion to roughly 170,000 claimants, but many have been complaining the process is taking too long or they are being shortchanged. Some large businesses with claims of more than $500,000 say they haven’t been paid at all.

Mississippi seafood processor Keath Ladner said his claim for roughly $1.7 million has been pending for three months, and the losses keep growing. He employs about 70 boats and is one of the largest processors in the state.

Ladner received some money early on, but nothing in months, and said he wouldn’t even consider accepting the $25,000 quick payment.

“I think that’s the perfect definition of extortion,” he said, adding that it feels like Feinberg is keeping people like him waiting for money so they have to accept any “scraps.”

The money “wouldn’t even cover my past due rent expenses,” Ladner said. “If I have to lose everything down to my last pair of shoes, I will have attorneys sue for everything I’ve lost.”

Feinberg said the new quick-cash payments are largely for people who feel they’ve already been paid adequately and just want to get on with their lives. He said it could clear the books of thousands of claimants and allow the facility to focus on those seeking interim or final settlements.

Feinberg also said the fund would soon provide free attorneys to claimants who wish to discuss their options before choosing what to do. While BP would pay the attorneys’ fees, Feinberg said claimants can count on a representative free of influence from the oil giant and the claims fund.

Tony Kennon, mayor of Orange Beach, Ala., a tourist-rich stretch of coast that was hit hard by the summer’s oil, questioned the new payment option and fears many may just take the check out of desperation.

He said many business owners who still haven’t been paid, or were paid fractions of their losses, have no idea how much more they may get in the coming months.

“They don’t know how long they’ll have to hang on if they don’t take this new quick cash route,” Kennon said. “It could be construed as a pittance for folks who out of desperation have to get some cash now.”

The Gulf Coast Claims Facility has received more than 460,000 requests for money. The facility has denied 233,000 of those filings.

Feinberg said up to 3,000 claims are “very suspicious” and are under review. Federal authorities say seven people have already been indicted for allegedly filing fraudulent damage claims.

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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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