BP agrees to 20B from the jump. Is 20B enough? Absolutely, NOT. We are talking about BP lying about the actually oil spill from day one. We are talking about not having enough haz-mat suits for folks dealing with that crude. We are talking about an economy in that region, which has reached to Florida, which will impact them for YEARS, not just this year, YEARS.
Also, 100M is set aside for unemployed oil workers in that region because while the environment is being destroyed, they still want to drill for oil.
BP Establishes $20 Billion Claims Fund for Deepwater Horizon Spill and Outlines Dividend Decisions
Following a meeting with the President of the United States, the BP Board announces an agreed package of measures to meet its obligations as a responsible party arising from the Deepwater Horizon spill.
Agreement was reached to create a $20bn claims fund over the next three and a half years on the following basis:
• BP will initially make payments of $3bn in Q3 of 2010 and $2bn in Q4 of 2010. These will be followed by a payment of $1.25bn per quarter until a total of $20bn has been paid in.
• While the fund is building, BP's commitments will be assured by the setting aside of U.S. assets with a value of $20bn. The intention is that this level of assets will decline as cash contributions are made to the fund.
• The fund will be available to satisfy legitimate claims including natural resource damages and state and local response costs. Fines and penalties will be excluded from the fund and paid separately. Payments from the fund will be made as they are adjudicated, whether by the Independent Claims Facility (ICF) referred to below, or by a court, or as agreed by BP.
• The ICF will be administered by Ken Feinberg. The ICF will adjudicate on all Oil Pollution Act and tort claims excluding all federal and state claims.
• Any money left in the fund once all legitimate claims have been resolved and paid will revert to BP.
The fund does not represent a cap on BP liabilities, but will be available to satisfy legitimate claims. Further and more detailed terms regarding the establishment and operation of the claims fund and the ICF will be finalized and announced as soon as possible.
Big news, BP will not pay out dividends for the rest of the year. Shareholders take a hit.
President Obama's remarks to the agreement:
BP Chairman of the Board, Carl Henric Svanberg and catch his phrase of caring about the SMALL PEOPLE:
The independent fund for damage claims will be directed by lawyer Kenneth Feinberg, who oversaw payments to families of victims of the Sept. 11, 2001, terrorist attacks. At present, Feinberg is known as Obama's "pay czar," setting salary limits for companies getting the most aid from a $700 billion government bailout fund.
The $20 billion is not a cap — if legitimate claims outstrip that amount, then BP will required to pay more. A three-person panel will decide appeals of rejected claims.