Recovering Your BP Losses

Learn what you could gain from a new court-supervised settlement.



Scott Carruthers is working to inform Northwest Florida businesses about their right to file claims against BP.

Scott Holstein

A good portion of Matt Turner's business involves work with the marine industry. When the BP oil spill happened in 2010, most of that work dried up. But Turner didn't think he had a cause of action against the oil giant, because his business is located in Tallahassee.

"We do a lot of aluminum welding on boats and trailers and stainless work that is directly connected with the marine industry. For a whole year, that part of the business was non-existent. The work dried up because of fears of what effect the oil spill would have," said Turner, of Metal Fabrication & Sales. "My business is located 45 minutes from the coast, so I thought I would just have to take it on the chin."

But a federal judge in Louisiana has given business owners like Turner a new chance to file a claim against BP for financial damages they sustained as a result of the oil spill. And they have until April of 2014 to make that claim to tap into more than $13 billion in BP damages funds.

"I do fit the profile," Turner said. "But is it going to be $5 or $5,000? I have no clue."

Lori Mattice is another who may have a valid claim — and she's grateful to know she has time to file it. Like Turner, she never thought to make a claim because her real estate office is located far from the coast in Tallahassee and she thought the time for filing was long gone. But she knows for sure she lost at least one sale — a property on Ochlockonee Bay.

"It fell through because of the spill. (But) I just didn't know (the claims process) might apply to me," said Mattice, who has owned Mattice & Mattice Real Estate LLC for 15 years. "Something is better than nothing. And I'm trying to let other real estate companies in the area know about this."

Oil and Your Business

Under this new claims process, approved by a federal judge in November, businesses do not have to prove that BP was directly responsible or the direct causation of their revenue losses. Instead, it is a black and white, numbers-driven process.

A court-drawn map has created a geographic area around the Gulf of Mexico — if your business is located within that area, you are eligible to file a claim, although the test for eligibility grows a tad tougher the further from the coast you are. The map includes all of Louisiana, Mississippi and Alabama, certain counties in Texas and all of Northwest Florida, from Escambia County on the west to Perry on the east, then down the Gulf Coast.

It does not include inland areas like Orlando or any of the state's east coast.

Those eligible include anyone with a federal tax ID, including non-profits and charities.

"I've gone to Tallahassee businesses and, at first, they laugh at me, asking, ‘How did BP affect me?'" said Scott Carruthers, head of Carruthers Law Group. "They're not making the connection. People in Tallahassee were focusing more on the bad economy. But BP took a bad situation and made it worse."

"I've gone to Tallahassee businesses and, at first, they laugh at me, asking, ‘How did BP affect me?'" said Scott Carruthers, head of Carruthers Law Group, which has offices in Tallahassee and Santa Rosa Beach. "They're not making the connection. People in Tallahassee were focusing more on the bad economy. But BP took a bad situation and made it worse."

The money that businesses might win back from BP could have a "real economic impact" on the region, Carruthers said. "The ultimate value of this fund is $13 billion. Imagine what Northwest Florida's portion of that money could do."

Among his clients, who are scattered across Northwest Florida, are a car dealership, construction companies, restaurants, contractors, a pool builder and nearly 200 seafood workers scattered between Destin and Apalachicola.

"And what I'm finding now is that there are many more businesses eligible for settlements away from the coast," said Carruthers, whose biggest client so far is an Internet company.

The 1,200-page settlement is online at the court-sanctioned deepwaterhorizoneconomicsettlement.com. (By contrast, the Patient Protection and Affordable Care Act, aka ObamaCare, is 906 pages). There is a map of the zones and a way for you to just plug in your address to figure out what zone you're in.

And that's just the beginning. Laments Carruthers, "They don't make it easy."

Determining Eligibility

Any business that was operating at the time of the oil spill has a potentially viable claim. But the eligibility is based on revenues — and the financial test gets a little tougher the further away the business is located from the coast.

First of all, businesses cannot be in an excluded industry. That includes gaming, real estate developers, banks and other financial institutions, insurance companies and any business that previously signed a Gulf Coast Claims Facility release with BP, as well as governments.

However, Canita Gunter Peterson, tax shareholder with Thomas Howell Ferguson, cautions that even some companies that think they may fall into the excluded category could actually be eligible. It's best, she said, to double check with folks knowledgeable about the agreement. Even quasi-government organizations may meet the test.

Her accounting firm has been getting multiple inquiries each day from businesses curious if they might qualify. And she is reaching out to educate many others who are almost incredulous when they learn they might be able to file a claim.

"Individuals may think that industries such as seafood and hotels are the only ones covered," she said. "But almost any business could qualify for significant compensation, such as lawyers, accountants, retail establishments, almost any category of business. This is a once-in-a-lifetime settlement."

Start-up businesses with less than 18 months of operating history as of the date of the oil spill are also potentially eligible for compensation.

"The settlement has good features, but there are some limitations," Carruthers explained. "One of those limitations is that BP only recognizes that it created an impact on business from May to December 2010. If your loss continued beyond or started after, this settlement does nothing for you."

Among those businesses most adversely affected are in Southwest Florida, especially tourism-related businesses that thrive during the winter months — the exact opposite of Northwest Florida's tourist season. They'll see little help to overcome the loss of tourism traffic during the winter months of 2011, when Northern Europeans who usually flock to the area decided to stay home or seek out other beach vacations to avoid any threat of oil in the sand.

Remember, the court-supervised settlement basically says that the closer a business is to the Gulf, the easier it is to prove loss. Wherever you are located, you just need to have the revenue numbers to back up your claim.

For instance, in Zone D, which includes Tallahassee, businesses must show a consecutive three-month, 15 percent decline in gross revenue between May and December 2010 as compared to 2009. Then, they must show a 10 percent rebound for those same three months in 2011.

If you meet that test, you're eligible to make the claim and then go to a damage calculation analysis.

If you don't meet that requirement, Carruthers said, there are alternative tests but they are complicated.

Gathering Financials

The ease of meeting the mathematical equation to be considered for compensation depends on how good your financial record-keeping has been.
At Thomas Howell Ferguson they are asking businesses to give them records of their net monthly revenue from 2007 through 2011 to first see if they meet the causation test.

"We can run initial calculations to see if they have met the nexus," Peterson said, adding that her firm does that at no charge. "If they haven't met it, they don't have to worry about getting more data."

For those who can go further in the process, it's important to know that BP has the ability to appeal any calculation greater than $25,000. A three-judge panel will rule on the appeal.

"BP has filed a significant number of appeals," Peterson said. "If you don't submit the right documentation — or what you have doesn't reconcile back to the claim — you'll probably have problems."

Basically, it will all hinge on your monthly profit and loss statements. The larger the claim, the more financial documentation will be required and the slower the process is likely to be.

Other Claim Avenues

Dana Matthews, senior partner with the Matthews & Jones law firm in Destin, is bypassing the court-supervised settlement, opting instead to have his clients file a claim directly against BP under the federal Oil Pollution Act. The only problem there is the short time frame left to file. The deadline is April 19, 2013 — a problem if you haven't already started the process. (Matthews concedes that the deadline might be stretched, but right now, that's an unknown, so all his clients are meeting it.)

As for the court-supervised settlement, he said, "The problem is … whatever the class settlement provides you, you have to accept. If you get a denial, you have no recourse. If you file a $100,000 claim and you get $5,000, you have to accept it."

Of course, it isn't easy for anyone to really understand filing under the Oil Pollution Act and meet the deadline that is coming on like a runaway freight train.

"This has been one of the most masterful public relations manipulations of the American public conscience that BP has been able to orchestrate," Matthews said. "The information is buried in the BP website. It doesn't state the date."

M&J is working with about 250 claimants at this point and has been fielding hundreds of calls from potential clients. One client owned a surgery center along Interstate 10. The lion's share of the center's business came from out-of-state and overseas. Their marketing tool was to encourage patients to come for surgery and then convalesce on the beach. But after the oil spill, the patients didn't come and the center shut down because it couldn't pay its bills.

Carruthers is considering filing some of his clients' claims under Florida's Oil Protection Act, which has a four-year statute of limitations, pushing the deadline to file to April of 2014. (The federal OPA has a three-year statute of limitation.) An added benefit to filing under the Florida law — the polluter must pay attorneys' fees.

"It's kind of a Hail Mary, frankly, but it could have a substantial impact on businesses that didn't know about the (2013) federal deadline," he said.
No matter how your business files its claim, however, Matthews warns you not to hold your breath.

"The expectation of getting any money on any time basis under any scenario is not good," he said. "If you think you have a claim, get your claim filed and go about your life and don't worry. It'll be something or not, but it won't be happening on a time frame you expect."

On March 15, BP filed a request for an injunction to stop payments under the settlement agreement its attorneys had previously agreed to. The company's argument is that "fictitious" claims with large payouts are being approved, but others contend the oil giant underestimated its liability.

"They are now hell bent on trying to re-write the agreement after the fact. I find this incredibly preposterous and immensely unfair at so many levels," Carruthers said.  "But it just goes to show what a huge multinational corporation can do with virtually unlimited funds and arrogant sense of might-makes-right, all while promoting through its ads an image of caring and ‘commitment' to the people of the Gulf."

Since no one can predict the ultimate outcome with any degree of certainty, Carruthers said his advice to businesses in North Florida is to quickly file their claims under the existing rules — just in case BP ultimately succeeds in re-writing the agreement.