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BP Settlement Policy 495 on matching is here to stay


Earlier this week Judge Barbier denied Class Counsel’s long pending Motion to Reconsider Policy 495: Matching of Revenue and Expenses. Class Counsel had sought to limit the application of the policy to cash basis claims, as Judge Barbier, the 5th Circuit and BP had indicated that matching was largely a problem found in claims supported by cash P&Ls, not accrual. The motion also asked Judge Barbier to reduce the number of specialized loss compensation formulas to one, the Annual Variable Margin (AVM) model.

While the denial of the Motion to Reconsider is disappointing, it does nothing to change the fact that Policy 495 requires Claims Administration accounting vendors to exercise their professional judgment in order to determine if a P&L is insufficiently matched. Relying solely on the seven volatility screens is not permitted under the very precise terms of Policy 495. The screens are simply a tool to silo certain claims for the required “further matching analysis.” It is during this further analysis that professional judgment must be brought to bear, as many perfectly matched accrual P&Ls will be flagged by the overly inclusive screens. Finally, in close cases or where ambiguities arise, the decision regarding matching must be made in favor of the claimant.

If the accounting vendors apply their professional judgment, then according to BP, “many” accrual P&Ls will be deemed sufficiently matched at the outset, even if they trip one or more of the seven screens. Indeed, Judge Clement of the 5th Circuit Court of Appeals said that the “vast majority” of accrual basis BP claims are inherently matched.

Finally, if an accounting vendor deems a P&L insufficiently matched, she must defend and document her position by citing something more than a simple trigger event. If the occurrence of one or more triggers was to be determinative of an insufficiently matched P&L, then the Claims Administration could have simply employed robots for the job.


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  1. Eyeswideopen says:
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    As a class member that still hasn’t seen a determination notice on my personal claim. I’m now on BP’s side and will assist them wherever possible on the claw back on all claims to be re-calculated under 495 for those who received and signed a release.

    I refuse to accept a lower amount on a similar situated claim just because the court vendor failed to process my claim under the (FIFO) first in first out.

  2. dave says:
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    In addition, I would suggest claimants start compiling supporting documents ahead of the CA if they suspect they will trigger one or more of the criteria. My approach will be to research the scenarios in which matched financials will trigger the criteria and use them as a reference. For example, variable margin % will vary in the situation where the business provides different services subject to fluctuating rates. So certain months may have had tighter profit margins than others and the business approach was to maintain steady sales prices even thought costs were higher in other months.

  3. Dave says:
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    I had a feeling this was going to be the answer. I think Barbier just wanted a decent sample of claims to go through 495 before he made his decision. We have often said if BP had so many problems with the settlement agreement, then why did they wait till after they agreed to it to complain. Well, I guess the plaintiffs should have made a better argument before the final draft was submitted to the court. It’s tough to swallow but now the uncertainty about the policy is resolved. I’m not getting my hopes up that this means processing will pick up. I agree with what you have been saying Tom, that the CA needs to follow 495 correctly and not use the triggers as the determinant for non or sufficient matching. Maybe something needs to be brought to the court showing actual panel decisions supporting the triggers as determining the matching and ask the court to correct the problem.

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