The Herald Bulletin

Overnight Update

Nation & World

July 17, 2013

BP seeks halt to Gulf oil spill settlement payouts

NEW ORLEANS — BP asked a federal judge on Tuesday to temporarily halt all settlement payments to Gulf Coast businesses and residents who claim they lost money after the company's 2010 oil spill while former FBI Director Louis Freeh investigates alleged misconduct by a lawyer who helped administer the multibillion-dollar settlement program.

BP PLC argues in a court filing that it shouldn't be required to take the risk that hundreds of millions of dollars in claims payments could be "tainted by fraud, corruption and malfeasance."

"A temporary suspension in ... payments will eliminate the serious risk of any further irreparable harm to BP while having little negative impact upon the claimants," attorneys for the London-based oil giant wrote.

U.S. District Judge Carl Barbier didn't immediately rule on BP's most recent request to temporarily halt settlement payouts.

In April, Barbier refused to block what could be billions of dollars of payments to businesses after BP argued that he and court-supervised claims administrator Patrick Juneau have misinterpreted the settlement and forced the company to pay for inflated and fictitious losses.

Barbier, who appointed Juneau, upheld his interpretation of settlement terms governing payments to businesses. BP appealed that decision.

A three-judge panel from the 5th U.S. Circuit Court of Appeals heard the case last Monday. The panel didn't indicate how soon it would rule.

Last month, Juneau announced that his office is investigating allegations that an attorney on his staff, Lionel H. Sutton III, received a portion of settlement proceeds for claims he had referred to a law firm before he started working on the settlement program. Sutton resigned on June 21, a day after Juneau provided Barbier with a report outlining the allegations. Sutton denied the allegations when Juneau discussed them with him, according to the report. .

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