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Thousands Face Bankruptcy After BP Oil Spill

Posted By admin || 4-Aug-2010

Thousands Face Bankruptcy After BP Oil SpillBP has already begun making moves to head off a series of lawsuits that could be coming down the pipeline from residents and businesses in the Gulf region directly impacted by the oil spill.  The company has already become setting aside $20 billion in a fund designed to pay out lump sums to those who have been directly affected by the disaster.  Ken Feinberg, who was appointed by the White House, will administer the claims process for this fund when he begins his appointment in the next three weeks.  But how will these funds be distributed and will the lump sum payments be enough to stop a slew of bankruptcy filings by those who have lost their livelihoods due to the BP oil spill?

"The fund will offer lump sum payments in return for an agreement not to pursue claims in court," a spokeswoman said. Claimants will also be able to receive an emergency payout to cover their lost income for up to six months without waiving their right to sue BP. BP had been making monthly payouts.

As some analysts have already pointed out, many of the people affected by the BP oil disaster are not very educated or trained in other types of work.  Many of the people depended on the now decimated fishing industry for their livelihood. Is six months worth of living expenses enough to keep them from bankruptcy?  Even those who have highly sought after skills are remain unemployed for a year or more.  How much better will unskilled individuals fare if they need to transition into new industries or even new cities? How many of them will eventually face foreclosure and need to file bankruptcy because of this disaster?  The reality is that many of these people will take the payouts from BP and they will eventually need to file bankruptcy anyway because the BP oil disaster didn't just take their jobs, it took their entire way of life.

Categories: Bankruptcy
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