BP PLC (NYSE: BP) won preliminary approval of its proposed $7.8 billion settlement of claims relating to the 2010 Deepwater Horizon oil spill in the Gulf of Mexico.
The settlement was considered to be fair, reasonable, adequate, entered in good faith, free of collusion, and within the range of possible judicial approval, U.S. District Judge Carl Barbier said Wednesday while granting the approval, according to Businessweek.
BP reached an agreement with the Plaintiffs' Steering Committee (PSC) on April 18 before bringing the proposal to the court for approval.
A hearing for final settlement approval is set for Nov. 8.
The $7.8 billion settlement will be paid from a $20 billion trust which BP created to pay individual and business claims in addition to local, government and state claims and damages related to the oil spill. BP has already paid out $8.1 billion in damages and has spent $14 billion in operational expenses related to the spill.
The settlement is one of the largest class-action settlements in history, according to Reuters. A trial was originally scheduled to begin on Feb. 27, but it was postponed because of negotiations between BP and private plaintiffs.
The settlement agreements reached between BP and the PSC are the result of lengthy and detailed arms-length settlement negotiations conducted in good faith over many months, a statement from BP said following the preliminary filing of the settlement.
The settlement agreement between BP and the class represented by the PSC seeks to settle more than 100,000 claims related to the Deepwater Horizon spill. The spill occurred on April 20, 2010 when a blowout, explosion and fire occurred on the Deepwater Horizon semi-submersible offshore drilling rig on the Macondo Well in the Gulf of Mexico. The events led to eleven deaths, dozens of injuries and a massive discharge of oil into the Gulf of Mexico that continued for nearly three months, according to the settlement.
The legal proceedings leading up to the settlement took 20 months and included 311 depositions, 80 expert reports and roughly 90 million pages of documents.
Other legal proceedings related to the oil spill are continuing. Former BP Engineer Kurt Mix was arrested April 24 on charges of destroying evidence pertaining to the spill that had been requested by the government, Businessweek reported.
A statement from BP said that the company had clear policies requiring preservation of evidence in this case and has undertaken substantial and ongoing efforts to preserve evidence, but that it could not comment on the case against Mix.
BP American Depositary Receipts fell 4 cents to $42.32 in afternoon trading.