IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF LOUISIANA

MDL NO. 2179
* * * * Damages * * * * * * * *

Economic and Property Medical Settlement

Settlement

1

Structure
United States District Court (Judge Barbier)

Deepwater Horizon Court Supervised Settlement Program Claims Administrator
Pat Juneau

Key Vendors 1. Garden City Group 2. Brown Greer 3. PWC 4. Postlethwaite & Netterville 5. Administrator may add additional Vendors
2

Structure
United States District Court Retains Jurisdiction

Medical

Garretson Resolution Group

3

Structure
United States District Court (Judge Barbier)

Claims Administrator Oversees
Economic Loss
Business Individual

Subsistence

Promotional Fund

Seafood

Property Loss
Vessel Physical Damage Wetlands Coastal

Vo0

Physical Damage to Personal Property Realized Sales

4

General Principles
• • • • • • Class Membership Damage Category Claim (one or more) Geographical Location Causation Standard Zone (Map) Documentation of Causation
 Presumption  % of Loss  Customer Mix  Specific Contract

• Documentation of Loss • Compensation Calculation • Application of Risk Transfer Premium (RTP)
5

Geographical Location – Gulf Coast Areas

Geographical Location

7

Determination of Class Membership
Geographical Location
• “Gulf Coast Areas”
Lived in, worked in, accepted work in, owned or leased property in, vessel home ported in or landed catch in US Waters of the Gulf of Mexico and all adjacent bayou, estuaries, straits and other tidal and brackish waters within Gulf Coast Areas, as specific and described in Ex. 23 (Specified Gulf Waters)

• “Specified Gulf Waters”

Damage Category
1.3 - Individuals and Entities who meet the geographical descriptions of Sections 1.1 or 1.2 above are included in the Economic Class ONLY IF their Claims meet the descriptions of one or more of the Damage Categories described below.
8

Damage Categories
Individual and Entity
• Economic Damage Category [1.3.1.2.] • Seafood Compensation Program Category [1.3.1.1.] • Property Damage Category [1.3.1.7. , 1.3.1.6.] • Subsistence Damage Category [1.3.1.3.] • Vessel of Opportunity (VoO) Category [1.3.1.4.] • Vessel Physical Damage Category [1.3.1.5.] • Coastal Real Property Damage Category [1.3.1.6.] • Wetlands Real Property Damage Category [1.3.1.7.] • Real Property Sales Damage Category [1.3.1.8.] • Individuals/Employees in Otherwise Excluded Industries [1.3.1.9.] • Individuals/Employees in Support Services to Oil & Gas Industry [1.3.1.10] • Businesses/Employers in Otherwise Excluded Industries [1.3.1.11.] • Businesses/Employers in Support Services to Oil & Gas Industry [1.3.1.12.]
9

Economic Damages Categories
• Business • Self Employed Individual • Failed Business • Start-up Business • Failed Start-up Business • Multi-Facility Business • VoO Charter Payment • Subsistence Damage
10

Property Categories
Real Property Claims
• Real Property Sales Damage Claims • Coastal Real Property Damage Claims
• Impaired Use and Enjoyment • Physical Damages to Real or Personal Property

• Wetlands Real Property Damage Claims
• Impaired Use and Enjoyment • Physical Damages to Real or Personal Property

• Vessel Physical Damage

11

Individual Claimants
Individual Claimants (an Individual may have multiple claims): I. II. III. IV. V.
A. B.

With Contemporaneous Tax Documents for 2010 and Benchmark Period With Pay Period or Other Earnings Documentation for 2010 and Benchmark Period With Earnings Documentation for 2010 but without Benchmark period Earnings Without Earnings Documentation who Submit Individual and Employer Sworn Written Statements to Establish Earnings Individual Periodic Vendors
Up to $12,000 RTP of 1 May Apply

VI.
A. B.

Festival Vendors
Up to $12,000 RTP of 1 May Apply
12

Standard Approach
• Causation • Documentation • Calculate Compensation • Apply RTP (if applicable) • Deduct Cash Credits (if applicable)
13

Zone Presumptions
Presumption Zone A Presumption Zone B Zone C Zone D

Seafood Industry Primary

Gets Presumption Gets Presumption

Gets Presumption Gets Presumption

Gets Presumption Gets Presumption Required to meet Causation Nexus Required to meet Causation Nexus Required to meet Causation Nexus Seafood Presumption

Gets Presumption Required to meet Causation Nexus Required to meet Causation Nexus Required to meet Causation Nexus Required to meet Causation Nexus Proof

Secondary Tourism Industry Restaurants Other Industry Causation

Gets Presumption

Gets Presumption

Gets Presumption Gets Presumption All Presumption

Gets Presumption Required to meet Causation Nexus Seafood/Tourism Presumption

14

Summary of Revenue Pattern Requirements for Causation Tests
Zone A Zone B (Non-Tourism and Non-Seafood) Zone C (Non-Seafood) Zone D

Test
Down Up Down Up Down Up Down Up

V-Test Modified V-Test* Down Only test*

N/A

-8.5%

5%

-8.5%

5%

-15%

10%

N/A

-5%

5%

-5%

5%

-10%

7%

N/A

-8.50%

N/A

-8.50%

N/A

-15%

N/A

*= For the Modified V-Test and the Down Only Test, additional requirements apply, as described in Exhibits. 15

Business Economic Loss Framework
April 20, 2010

Benchmark Years

Compensation Period
May Jun Jul Aug Sep Oct Nov Dec

2007

2008

2009

2010

Benchmark Period same months claimant selected for compensation period averaged if use < 2009

Claimants Selects any 3 months or more consecutive

16

Risk Transfer Premium
• An enhancement factor multiplied by the Compensation Amount • Accounts for risk of future injury, future oiling, uncertainty, etc. • Works as a multiplier • If someone has an RTP of 2.0, it is an effective multiplier of 3.0 Example:

Compensation Amount = $100,000 RTP = $200,000 Total Compensation = $300,000
17

18

Real Estate Sales Losses
• In qualified Zones • Realized Sale of Residential Property • Enter Contract after April 21, 2010 and Close Before December 31, 2010 (Limited Exception for Contracts Entered before April 20, 2010) • Compensation = Sales Price x 12.5% (No RTP)

19

Coastal Real Property Damage
• Loss of Use and Enjoyment • Property Tax Value Based as Normalized Across Gulf • (Tax Appraised Value x 1.18%)= Normalized Tax Value • Normalized Value x (30-45%)= Base Compensation • —Percentage Recovery based on Oiled/Non-Oiled • ―Minimum of $800-$1,100 on Base depending upon Zone • RTP = 2.50

20

Wetlands Real Property Damage
• • • • • $25,000 Per Acre Primary Oiled- 50 foot depth $11,000 Per Acre Primary Non-Oiled- 30 foot depth $10,000 Per Acre Buffer- 30 foot depth $4,500 Per Acre Buffer Non-Oiled- 30 foot depth Based on length of linear footage of SCAT and NRDA assessment lines • Minimum of $4500 - $35,000 • RTP = 2.50

21

VoO Charter Payment
Chart A WORKING VoO PARTICIPANTS Boat Size Amount of Compensation

Less than 30 feet 30 feet-45 feet 46 feet-65 feet Greater than 65 feet
Chart B

$41,600 $49,400 $62,400 $88,400

NON-WORKING VoO PARTICIPANTS Boat Size Amount of Compensation

Less than 30 feet 30 feet-45 feet 46 feet-65 feet Greater than 65 feet

$4,800 $5,700 $7,200 $10,200
22

Subsistence Claims
Claimants Eligible • Natural persons who fish or hunt to harvest Seafood or Game in a traditional or customary manner, to sustain his or her basic personal or family needs. This includes:
a)Commercial Fishermen b)Seafood Crew c)Individuals holding a recreational fishing license, provided they satisfy other elements of the claimant definition

23

Subsistence Claims
• • • Copy of fishing license (unless excluded from fishing license requirement) Identification of Fishing Area Claim form and Supporting Affidavit re number of people relying on Seafood and Game harvested by claimant, species and amounts of Seafood and Game relied upon Administrator may request an interview Value of lost natural resources (in average post-spill retail prices) Cap of $10,000 per extended family Administration can exceed cap after investigation RTP = 2.25

• • • •

24

Seafood Compensation Program
• Oyster Compensation Plan • Shrimp Compensation Plan • Blue Crab/Other Seafood Compensation Plan • Finfish Compensation Plan • Seafood Crew Compensation Plan
25

Seafood Compensation Program General Principles
• $2.3 Billion Seafood Fund • $1.9 Billion Initial Distribution per Neutral’s Determination of Fair and Adequate Compensation • File Claim Now and Be Compensated Now
• Exception for Seafood Crew Category 2 and 3

• Bar Date 30 Days, Post District Court Approval • Secondary Pro-rata Distribution of Balance
• • • • • Transition Payments Quick Pay Payments Estimate of Claims Volumes Prior GCCF Payment Offset Opt - out Volume

26

Category Shrimp Oyster

Compensable Claims
• • • • • • Vessel Owner/Commercial Fisherman Vessel Lessee Claims Boat Captain Claims Leaseholder Interest Claims Leaseholder Lost Income Claims Vessel Owner/Oyster Harvester Vessel Lessee Claims Boat Captain Claims Vessel Owner/Commercial Fisherman Vessel Lessee Claims Boat Captain Claims Individual Fishing Quota Holder Claims Vessel Owner/Commercial Fisherman Vessel Lessee Claims Boat Captain Claims Crew Claimants with Standard Documentation Crew Claimants with Documentation Supplied by Employer Crew Claimants with Documentation Supplied by 27 Non-Employer

Finfish

• • •

Blue Crab/Other Seafood Crew (excluding Captains) for all Seafood Industries

• • • • •

Seafood Average Revenue
2007-2009 The Gulf Coast Area Shrimp
$264.89m 110.58million (lbs.)

Oyster
$65.66 m 21.34million (lbs.)

Fin Fish
$69.81m 53.15million (lbs.)

Blue Crab
$42.41m 54.61million (lbs.)

Other
$33.35m 8.86 million (lbs.)

TOTAL: $476.12 (millions)

28

AVERAGE 2007 – 2009
Revenue (millions) Volume (million)

2010
Revenue (millions) Volume (millions)

REDUCTION
Revenue (millions) Volume (millions)

Shrimp Oyster Blue Crab FIN FISH Other

$264.89 $65.66 $42.41 $69.81 $33.35 $476.12

174.40 21.34 54.61 53.15 8.86

$241.50 $51.62 $39.78 $54.98 $43.03 $430.91

135.10 14.81 39.64 45.21 8.43

-8.8% -21.4% -6.2% -21.2% 29.0%

-22.5 -30.6 -27.4 -14.9 -4.8

% Drop Revenue

-9.5%

29

(Vessel Owner, Vessel Lessee, Boat Captains)
• Claimant Specific Historical Revenue All or Part of 2009, 2008, 2007 • Adjust for Non-Labor Variable Cost Actual Records Range of 12% - 54% • Revenue Loss Presumed • Share Vessel Owner/ Lessee Boat Captain • Apply RTP • Cash Credit Deductions • Final Compensation

General Approach

31

Seafood Crew Compensation Plan 3 Categories
Category 1 Tax Return

Loss
37%

2.25

RTP

Pay Period Records 2009, 2008-2009,2007-2009

Category 2 Employer Statements 37%
Work Availability 80 million Distribution Available Cap of $9,500 pre-RTP

2.25

Category 3 Claim Statement 2 Sponsor Statements

$5,000

None

$5000 Fixed Amount 50 million Distribution Available

32

Compensation Methods
Accelerated Compensation Method • Vessel Size Model for Shrimp • Oyster Leasehold Acres • Individual Fishing Quota/Shares – Fin Fish • Crab Traps Revenue Model • Trip Tickets/ Equivalent • Tax Returns
33

Seafood Compensation Program Projection
Species Shrimp Oysters Oyster Lost Income Oyster Leasehold Interest Crab & Other Blue Crab Other Fin Fish
(2007 - 2009 Average, $ Mm)

Benchmark Revenue

Estimated Initial Compensation ($MM)

Owners

Captains

Crew

Oyster Leaseholders/ Crap Trap Owners/Quota Holders

Total

Full Expected Compensation

Compensation As A % Of Industry Total Revenue

$264.89

$462

$335

$81

NA

$877

$1,044

3.94

$65.66

$76

$68

$13

$60 $579

$218 $579

$259 $689

3.94 10.49

$42.41 $33.35 $69.81 $476.12

$55 $10 $50 $654

$28 $5 $33 $470

$10 $2 $10 $116

$4 $1 $50 $694

$97 $18 $144 $1,933

$116 $22 $171 $2,300

2.73 0.64 2.45 4.83
34

Total

Seafood Compensation Program
Stakeholder Split
Captain

Risk Transfer Premium
Captain

Species

Loss Percentage

Vessel Owner/ Lessee

Crew

Vessel Owner/ Lease

Crew

Leaseholder

Shrimp <30' 30' - 45' 45' - 75' (Ice) 45' - 75' (Freezer) >75' (Ice) >75' (Freezer) Oysters Fin Fish Blue Crab All other 35% 35% 35% 35% 35% 35% 40% 25% 35% 10% 45% 45% 45% 45% 45% 45% 40% 45% 50% 50% 45% 40% 30% 30% 25% 25% 40% 35% 30% 30% 10% 15% 25% 25% 30% 30% 20% 20% 20% 20% 8.25 8.25 8.25 8.25 8.25 8.25 8.75 6.00 6.00 5.50 7.25 7.25 7.25 7.25 7.25 7.25 7.75 5.00 5.00 4.50 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25
35

8.75

Shrimp Compensation Plan Expedited Model
Size Full Expedited Model: <30' 30' - 45' 45' - 75' (Ice) 45' - 75' (Freezer) >75' (Ice) >75' (Freezer) Reduced Expedited Model: <30' 30' - 45' 45' - 75' (Ice) 45' - 75' (Freezer) >75' (Ice) >75' (Freezer) N/A $25,000 $50,000 $200,000 $150,000 $290,000 N/A $111,938 $232,313 $531,000 $435,750 $684,750 N/A $62,438 $145,688 $333,000 $291,375 $457,875
Proof: Trip Tickets Equivalent Records Tax Returns Vessel Size

Qualifying Revenue

Owner-Operator Compensation (including RPT) $196,875 $242,531 $431,438 $763,313 $622,500 $871,500

Vessel Owner/Commercial Fisherman Vessel $104,063 $135,281 $270,563 $478,688 $416,250 $582,750

Boat Captain Compensation

$32,500 $40,000 $90,000 $275,000 $225,000 $400,000

$92,813 $107,250 $160,875 $284,625 $206,250 $288,750 N/A $49,500 $86,625 $198,000 $144,375 $226,875

Class Member: Eligibility: Home Port (Panhandle - LA - Texas Line) Historical Revenue ((2007-2009) Boat Captain - Based on Specific Vessel Reduced: Revenue Lower

36

Individual Claimants
Individual Claimants (an Individual may have multiple claims): I. With Contemporaneous Tax Documents for 2010 and Benchmark Period With Pay Period or Other Earnings Documentation for 2010 and Benchmark Period With Earnings Documentation for 2010 but Without Benchmark Period Earnings Without Earnings Documentation who Submit Individual and Employer Sworn Written Statements to Establish Earnings

II.

III.

IV.

Step 1: Calculate Claimant’s Lost Earnings Step 2: Apply Risk Transfer Premium (if applicable) Step 3: Determine Claimants Compensation

37

Reserved Claims
• Economic Damage by an Entity or Individual Based on Their Employment by an Excluded Entity • Bodily Injury Claims • Shareholder Claims • Moratoria Loss Claims
• Menhaden Claims

• Punitive Damages Against Halliburton and/or Transocean • Assigned Claims Against Halliburton and/or Transocean

38

Excluded Industries And Entities
State Municipalities Opt Outs Court Employees BP (or other defendants) Employees • Banking Industry • Funds, Trusts and Other Financial Vehicles • Defense Contractors and Their Sub-Contractors and Suppliers • • • • Gaming Industry Insurance Industry Oil & Gas Industry Real Estate Developers or Sellers • BP Branded Fuel • GCCF Fully Released Claims • • • •

39

Transition Status
From March 8, 2012 through April 20, 2012 Payments Issued
(a) 100% Final Payments (b) Interim Payments (c) Business Quick Payments (d) Individual Quick Payments (e) 60% Final Payments

TRANSITION ACTIVITY
6,432
94 1,112 828 869 3,246

$189,107,347.91
$12,203,944.44 $17,419,111.89 $20,504,354.63 $4,320,302.49 $134,082,371.07

40

Claims Appeal Process
• Claims can be reconsidered and reviewed to assure accuracy, transparency, independence and adherence by the Settlement Program to the terms of this agreement. • <1 million dollars—Single Member Appeal Panel >1 million dollars—Three Member Appeal Panel • BP and Claimant subject to filing fee • Claimant Prevails on BP Appeal, award is increased by 5% • Court has Inherent Jurisdiction
41

Claims Processing Under Settlement Program
• Must file a Claim Form • Documents and information with GCCF will be automatically transferred • All payments under Settlement Program are final payments with a release • A Claimant can file multiple claims • Claims Program will expire by the later of:

• Once a Claimant receives a payment for a Claim, Claimant has 6 months to file all remaining claims • 6 months after the Effective Date (final judgment and all appeals) • April 22, 2014
42

Presentment Provisions
4.2.5: Economic Class Members with expired offers from the GCCF who Opt Out of the Economic Class shall be deemed to have satisfied the presentment requirements under the Oil Pollution Act of 1990 (“OPA”) 7.3.2: Regardless of whether the Agreement becomes effective, Claims with a sum certain and some documentation and/or other proof that are submitted to the Settlement Program shall be deemed to satisfy presentment and all requirements of 33 U.S.C. §2713.

43

Settlement Value
• No Cap on the Settlement • Seafood Compensation Program $2.3 billion • Common Benefit/Class Counsel Fees and Expenses Paid by BP on top of Payments to Class Members • Administration Expenses Paid by BP • Notice Program and ‘Supplemental Information Program ($5million) Paid by BP • Gulf Tourism and Seafood Promotional Fund ($57million) paid by BP • Settlement Guaranteed by Two Guarantors After BP Exploration and Production
• BP North America • BP p.l.c.
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