Tuesday, August 10, 2010

Kenneth Feinberg Makes Another Visit to Pensacola

Today Kenneth Feinberg - the "Pay Czar" spoke to a crowd of about 300 people about his Gulf Coast Claims Facility which will become active on August 23, 2010. The forum took place at University of West Florida and was hosted by UWF and Senator Bill Nelson, (D) of Florida.

Having had the privilege to speak with Mr. Feinberg on two separate occasions prior to this forum I believe he is the best possible administrator that those of us affected by the BP oil spill could hope for.

That said, he is not Santa Clause.

Claimants must be 1) Eligible - which he states will be judged based on proximity to the gulf, industry impact and how dependent the business is on natural resources.

He has made it clear that actual physical damage by the oil is not necessary to be eligible - perception can be enough in certain instances.

2) You have to prove your claim. This may be done with income tax returns, sales receipts, cancelled contracts or any number of other resources. Any claims that are paid will be followed with a 1099 and reported to the IRS.

Initially an "emergency" payment equivalent to 6 months payment in advance will be issued to eligible claimants that have proven their claim. This payment will come with "no strings attached".

Ultimately a final claim amount will be calculated taking into account lost income and projected lost income into the future. At that point the claimant will have the choice of accepting that amount and waiving any right to sue BP or rejecting the claim and pursuing BP through litigation.

Mr. Feinberg specifically spoke to real estate values and said "the fund will not recognize diminished value of real estate". He qualified this with stating that there were instances where a loss would actually have been sustained, but generally speaking everyone with real estate will not necessarily have a loss based on reduced value.

At this time the deadline for "full and final" payments on claims is set for August 23, 2013.

I do not expect that all of us will be thrilled with the outcome at the end of this saga. Surely each of us would love to hit the "undo" button and be reset to April 19, 2010 taking our chances on what the weather would bring our way.

Mr. Feinberg may be the closest thing to an "undo" that we will see.

No comments: