There was a bit of significant news coming out of the BP litigation last month. On Jan. 7, 2016, Judge Carl Barbier approved Claims Administrator Patrick Juneau’s recommendations to pay out the balance of the $2.3 billion Seafood Compensation Program (SCP) Fund established by the historic BP settlement. Unlike other portions of the economic settlement which are not capped, BP agreed to pay this entire capped fund to eligible commercial fisherman. To accomplish this, multiple distributions have been and will be made until the SCP fund is depleted.
The initial round of SCP payments expended approximately $1.1 billion of the SCP Fund. In December 2014, the Claims Administrator released $500 million of the remaining $1.2 billion in the First Supplemental Distribution. Despite some SCP claims not receiving a determination in the First Supplemental Distribution and an even smaller handful who have not received an initial determination, the Claims Administrator has agreed to begin additional distributions to pay the remaining funds. The balance, expected to be between $600 million and $700 million, will be distributed according to the same formula used in the First Supplemental Distribution.
The Claims Administrator proposed to complete the additional distributions in two parts: a “Supplemental Distribution Round Two” and a “Residual Distribution.” The Supplemental Distribution Round Two, estimated to be worth $15 million, will include approximately 300 claimants whose claims were finalized after the First Supplemental Distribution and those requiring a “true up” on payment(s) awarded in the First Supplemental Distribution. Once the Supplemental Distribution Round Two is completed, the Residual Distribution will proportionally pay out the remaining funds, which are estimated to be worth $600 million.
We are pleased with the Claims Administrator’s handling of these distributions to the Gulf’s commercial fishermen. Their fertile fishing grounds were horribly impacted by the oil spill, and they are justifiably concerned over the still unknown environmental effects caused by chemical dispersants. The Claims Administrator’s decision to begin supplemental distributions while only a small handful of SCP claims remain pending is the most efficient manner to distribute these funds.
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