BP looks to halt Gulf oil spill payouts

British oil giant BP has asked a US judge to temporarily halt all payments to Gulf Coast businesses and residents made after the company's 2010 oil spill while an investigation is conducted into alleged misconduct by a lawyer who helped administer the multibillion-dollar settlement program.

BP Plc argued in a court filing on Tuesday 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".

The US District judge didn't immediately rule on BP's most recent request to temporarily halt settlement payouts.

The April 2010 blowout of BP's well off the Louisiana coast triggered an explosion that killed 11 workers on the Deepwater Horizon drilling rig and led to millions of gallons of oil spilling into the Gulf. Shortly after the disaster, BP agreed to create a $US20 billion compensation fund.

BP initially estimated that it would pay $US7.8 billion to resolve claims by tens of thousands of Gulf Coast residents and businesses. Now the company says it no longer can give a reliable estimate for how much the deal will cost.

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

BP appealed that decision, and a panel from the 5th US Circuit Court of Appeals heard the case last Monday.

Last month, Juneau announced that his office is investigating allegations that a lawyer 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 has resigned and denied the allegations.

Former FBI director Louis Freeh was appointed on July 2 to lead an independent probe of the allegations involving Sutton and to take a broader look at the settlement program.

BP spokesman Geoff Morrell said the company believes a temporary pause of all claims payments is "prudent and necessary" during Freeh's investigation.

"Put simply, BP did not bargain for, and should not have to bear the risk of, improper payments due to fraud or corruption," the company's lawyers said.

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Source: http://finance.ninemsn.com.au/newsbusiness/aap/8691151/bp-looks-to-halt-gulf-oil-spill-payouts

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