Deepwater Horizon: Judge Changes Management of BP Claims Fund

 
on March 08 2012 6:03 PM

The federal judge handling the government's case against BP (NYSE: BP) took control of the third-party claims in a $20 billion fund Thursday, removing it from 9-11 Fund administrator Kenneth Feinberg.

The move was part of the settlement in the case against BP and other corporate defendants, including Triton and Anadarko Petroleum, in the Deepwater Horizon explosion and oil spill from 2010.

U.S. District Judge Carl Barbier in New Orleans, who oversees the case, will appoint a federal judge as manager of the fund, which had been managed previously by Feinberg.

The judge will divvy up the $7.8 billion settlement that BP and thousands of business and property owners negotiated last weekend. That averted a trial originally scheduled to begin Feb. 27.

Since its creation, the claims facility has paid out $6.1 billion to more than 200,000 claimants.

In all the claims facility received more than a million claims from more than 570,000 claimants, reported Reuters. 

The transfer of management means the court will put in place a new claims review system, one where claimants can recover 60 percent of their money immediately. If they qualify under the new program, the rest of the money will be allotted to the claimants.

BP's settlement doesn't insulate it from claims put forth by U.S. prosecutors, and the company could still have to pay billions more in environmental fines if Barbier finds BP and its other defendants grossly negligent for their role in the accident.

Eleven workers died when a pocket of natural gas traveled back up the Deepwater Horizon's wellbore and ignited on April 20, 2010. The fire caused the rig to sink and spew 5 million barrels of oil into the Gulf of Mexico.

To date, it is the worst environmental disaster in U.S. history.

BP shares closed on Thursday at  $47.11.

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