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May 20, 2014

BP Loses Appeal to Halt Payments for ‘Fictitious’ Oil Spill Settlement Claims

In a five to three decision, the Fifth Circuit Court of Appeals has rejected energy firm BP’s bid to stop questionable payouts from its legal settlement. “BP faces billions of dollars in additional payments after failing again to convince an appeals court that the company is being forced to pay claims that aren’t directly related to the 2010 Gulf of Mexico oil spill,” reports BloombergBusinessWeek.

Critics maintained the settlement helped some firms with no connection to the oil spill receive large payouts, some in the millions of dollars. As of January 2014, more than 38,000 claims at an estimated $3.7 billion had already been paid out.

As detailed in the “Faces of Lawsuit Abuse” video these claims include:

· A $173,000 payout to an adult escort service that BP said was filed with unsigned and undated financial records;

· $23.1 million paid to an alligator farm that earned profits the year of the spill after two previous years of losses?

The Fifth Circuit ruled against BP, precipitating its appeal to the full judicial panel.

The court’s decision against the company, leaves BP with two options, the Bloomberg article continues. “Pay claims the company has called ‘fictitious,’ or appeal further to the U.S. Supreme Court.”Paying these claims will cost additional billions of dollars, BP has said in court filings. Payments for disputed business economic losses have been on hold while BP appealed the 5th Circuit’s decision.

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