A few days ago I had speculated about whether BP's establishment of a compensation fund at the behest of the U.S. government was premature. After all, isn't it the job of civil courts to determine corporate liability? I just couldn't see what would possess BP's execs to do this given their fiduciary obligations to shareholders.
The justification is a bit clearer now:
Hat tip to The Market Ticker for noticing this one. I'm not an attorney so I can't determine whether any claimant will be limited to accepting BP's "make whole" payments in exchange for a promise not to litigate. The claimants would have to be willing to sign a lengthy, iron-clad agreement prior to collecting their check. Some people will still be willing to take their chances in court. BP has certainly reduced the number of claims they can expect.
The justification is a bit clearer now:
In the end, one aim of the fund—and a prime reason BP agreed to it—will be to minimize lawsuits against the company. To do that, Mr. Feinberg will offer big lump-sum payments to workers and businesses as an enticement to stay out of court.
"At some point, I will have to make an offer—'You take this amount in full satisfaction of your claim, but only if you waive your right to future litigation,'" Mr. Feinberg said. "And if I package it right, people will see that it makes no sense to fight it out in court."
Hat tip to The Market Ticker for noticing this one. I'm not an attorney so I can't determine whether any claimant will be limited to accepting BP's "make whole" payments in exchange for a promise not to litigate. The claimants would have to be willing to sign a lengthy, iron-clad agreement prior to collecting their check. Some people will still be willing to take their chances in court. BP has certainly reduced the number of claims they can expect.
