The city of Biloxi, Mississippi, said Tuesday it has agreed to accept $4.9 million from BP PLC to settle economic loss claims stemming from the 2010 Deepwater Horizon explosion, which sent hundreds of millions of gallons of oil spewing into the Gulf of Mexico.
The deal, which is part of the massive, $18.7 billion global settlement reached last week with the federal government, five Gulf states, and more than 400 local government entities, has Biloxi receiving payment in about 30 days, according to a Tuesday statement.
“Although we believe Biloxi’s total damages from lost taxes are greater than the amount of the settlement, there is no guarantee an extended legal battle will generate a higher number,” Biloxi Mayor Andrew “FoFo” Gilich said in the statement. “If we chose to reject the settlement offer, we’d be looking at several more years of litigation without any guarantees. This is a prudent choice considering the alternatives.”
Mississippi Gov. Phil Bryant announced last week that the state will receive a total of $2.2 billion from the overall settlement and use a large portion of that money to help restore the ecology that was damaged.
Gilich said he will urge the Biloxi City Council to use the money to establish a special reserve account that can be used to leverage other federal and state money for economic development, and to help ease cash pressures caused by delayed Federal Emergency Management Agency reimbursements for ongoing capital projects in the city.
BP's $18.7 billion pact last week came soon after the company failed to convince the U.S. Supreme Court to reconsider BP's liability under the Clean Water Act. On June 29, the high court declined to hear appeals by BP Exploration & Production Inc. and Anadarko Petroleum Corp., letting stand a 2012 ruling by U.S. District Judge Carl J. Barbier that rejected Anadarko's argument that the oil spilled out of a blowout preventer owned by oil rig owner Transocean Ltd.
In its announcement of the $18.7 billion settlement, BP said its U.S. upstream subsidiary BPXP will pay $7.1 billion to the U.S., Alabama, Florida, Louisiana, Mississippi and Texas over 15 years for natural resource damages, which BP said is on top of the $1 billion already committed for early restoration.
The company also said an additional $232 million will be set aside for the natural resource damage interest payment at the end of the payment period to cover any further natural resource damages that are unknown at the time of the agreement.
A total of $4.9 billion will be paid over 18 years to settle economic and other claims made by the five Gulf Coast states, and up to $1 billion will be paid to resolve claims made by the local government entities, according to the company.
Under the agreement, Louisiana will receive $6.8 billion; Florida, $3.25 billion; Alabama, $2 billion; Mississippi, $1.5 billion; and Texas, $788 million, according to statements made by each state’s attorney general.
The class's lead counsel are Stephen J. Herman of Herman Herman & Katz LLC and James Parkerson Roy of Domengeaux Wright Roy Edwards & Colomb LLC.
BP is represented by Robert C. Brock, Kimberly O. Branscome, Richard C. Godfrey, J. Andrew Langan, Hariklia Karis, Matthew T. Regan, Scott W. Fowkes, Mark J. Nomellini and A. Katrine Jakola of Kirkland & Ellis LLP, Don K. Haycraft and R. Keith Jarrett of Liskow & Lewis, and Brian D. Israel and Joel M. Gross of Arnold & Porter LLP.
The claimants are represented by Gladstone N. Jones III, Lynn E. Swanson, Catherine E. Lasky and H.S. Tad Bartlett III of Jones Swanson Huddel & Garrison LLC and Robert B. Remar, Jeffrey W. Willis and Julia B. Stone of Rogers Hardin LLP.
The case is In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico on April 20, 2010, case number 2:10-md-02179, in the U.S. District Court for the Eastern District of Louisiana.
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