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It has been wisely said that, “Just because you are paranoid, it does not mean that people aren’t out to get you.” BP’s share price (LSE:BP.) (NYSE:BP) is being battered once again by the never-ending repercussions of the Deepwater Horizon tragedy in the Gulf of Mexico. The oil giant is beginning to look like the 97-lb. weakling who gets sand kicked in his face by thugs at the beach. And it’s beginning to look a lot like the U.S. government is out to get them.
In the wake of seemingly endless claims and litigation, BP presented its case today before U.S. District Court Judge Carl Barbier, seeking to have “hundreds of millions of dollars” in nearly 800 excessive and false claims already paid to claimants returned. Apparently, Judge Barbier is well-paid. Whilst BP pleaded for “equity and fairness,” Barbier ruled that the company was splitting hairs. It’s more like BP is funding claimants’ heirs.
BP’s suit was focused particularly on 208 claimants to whom they paid $185 million in excessive claims as well other claimants who should never have been awarded damages at all.
I’ve said it here before, and I will say it again. Don’t ever mess with the U.S. Environmental Protection Agency. Once they find you are a sizable money source in violation of the Clean Water Act, they will come after you like a vampire on a dark night. And they carry a lot of weight in the judicial system.
The basis for BP’s claim rested on the accepted fact that the overpayments occurred as a result of the original method of calculating claimant’s losses. That method, as any first year accounting major would realize, did not including matching revenues and expenses. On 02 October 2013, Patrick Juneau, the claims administrator, ordered Judge Barbier, to correct the inadequacies of the accounting methodology. He did. Today, however, Barbier viewed the October 2013 decision, not as a rule to be followed, but as a stake-in-the-ground.
Just in case you’ve been living under a rock, it is interesting to note that Judge Barbier is also the same judge who ruled that BP was grossly negligent, causing the Deepwater Horizon spill. He is also the same judge who will be determining the financial penalties that will be assessed against BP as a result of that ruling.
I don’t know whether the powers that be at BP are paranoid or not. They should be.
BP shares closed down 0.24% at 464.95 in London today. The NYSE is still open as of this time. Shares are down now precisely the same percentage at 45.61.
