US Court Rules Against BP on Oil Spill Settlement Payments Dispute

A federal judge denied BP PLC's plea to halt payments from a settlement fund set up to reimburse businesses and individuals for losses from the 2010 Deepwater Horizon accident.

During a hearing in New Orleans Friday morning, U.S. District Judge Carl Barbier rejected BP's arguments that the fund administrator, Patrick Juneau, was misinterpreting how claims should be assessed and payments calculated, according to lawyers who attended the hearing. BP claims the fund has made millions of dollars in payments for "fictitious" claims.

Lawyers representing the claimants argued the claims formulas were approved by BP. "The court's ruling speaks for itself," said Steve Herman, one of the lead lawyers representing thousands of businesses and individuals.

BP said in a statement that it has already appealed an earlier decision on the fund's payments to the U.S. Court of Appeals for the Fifth Circuit.

BP said it still believes that Mr. Juneau's interpretation of payment formulas is wrong, resulting in "unjustified windfall payments to numerous business claimants for non-existent, artificially calculated losses."

The ruling wasn't a surprise given Judge Barbier's previous rejection of BP's arguments, said Tom Claps, an analyst and legal expert with Susquehanna Capital, who has closely followed the case. It will be very difficult for the oil giant to score a victory at the appeals court because the settlement was "extensively negotiated, drafted and approved by BP and its legal team," Mr. Claps said.

The hearing took place during a break in the ongoing civil trial aimed at determining the degree of culpability that BP and other companies have for the accident. Judge Barbier has heard six weeks of testimony from employees of BP, drilling rig owner Transocean Ltd., cement contractor Halliburton Co. and expert witnesses.

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