Gulf business owners say BP is 'nickel and diming' them

Miami HeraldJuly 1, 2010 

As hundreds of business owners shuffle through the claims process to recover losses caused by the oil disaster, BP's promise that it will "deny no legitimate claim" is taking on a bitter meaning.

"They have not denied our claim. They have just not paid it all," said Tommy Holmes, owner of Outcast Marine, a fishing-tackle supply company in Pensacola.

Holmes lost $73,000 in May and expects losses in June to exceed $100,000. BP has paid him $26,000 for May and refuses to pay the rest, he says. Holmes plans to sue them.

"They're nickel and diming us — and they're getting away with it," he said.

The problem: BP's definition of what it is willing to cover.

BP spokesman Robert Wine said the company is "trying to put shop owners in the position financially that they would have been in had the incident not occurred." That includes sending them monthly checks every month they demonstrate a loss and paying for inventory that would have been sold.

That's where Holmes sees a disconnect. "If we sell it for $1 and our profit is 40 cents, what's left is 60 cents. They don't want to pay us for the inventory that's sitting on the shelf and we can't pay for it," he said.

He purchases his tackle and supplies in January for the summer months but doesn't pay his distributors until the fishing season, when business is good.

"They give us credit like that because we've built up a relationship with them for 23 years," Holmes said. "But now I'm going out of business and my vendors are next. This whole thing is snowballing."

Keith Wilt, head of a Panama City resort chain, The Resort Collection, told the state's Oil Spill Response and Claims Process working group last week that he submitted a claim on June 4 for $42,000 and still hasn't gotten the money.

"There's a basic misunderstanding of our business model," he told the group.

Many business owners don't know what documents are required to submit their claims, and every day past 30 days that a claim is not paid, the claimant is entitled to receive interest on it, said Lisa Echeverri, executive director of the state Department of Revenue and a member of the working group.

All those hurdles were expected to be lowered when President Barack Obama announced on June 15 that BP had agreed to set aside a $20 billion escrow account to pay claims. The president named a manager, Kenneth Feinberg, to run the account independently.

Obama swung through the Pensacola area on June 14, then went on national TV and vowed to bring more money, order, and transparency to the BP clean-up effort, but businesses are still waiting for help.

"The process is not perfect," said Darryl Willis, BP's head of claims process at a meeting of the state's Oil Spill Economic Recovery Task Force on Wednesday.

He said the transition to the independent escrow account is still being worked out.

As of Tuesday, BP has cut about 6,000 checks in Florida and paid out $20 million in claims, 15 percent of the $132 million written by BP across the five Gulf states. There are 11 claims offices open in Florida. The company has processed 201 claims from companies that have experienced losses of more than $5,000, for a total of $1.4 million, and another $6 million is expected to be paid next week.

Willis said Feinberg's first priority is to make sure payments are made and then to focus on making sure that anyone affected can file a claim.

But Willis wouldn't commit to paying for anything other than profit losses.

Attorney General Bill McCollum has appointed his deputy chief of staff, Bill Stewart, to help oversee the claims process. His office has published a BP claims manual and said that while BP has responded promptly to initial calls for help, callers must wait up to a week to get the process complete.

"You're not going to be able to document the losses," said Eugene Stearns, a Miami lawyer who specializes in claims recovery told a working group put together by McCollum and Gov. Charlie Crist. "Documenting everything precisely is nearly impossible to do."

Chief Financial Officer Alex Sink, whose consumer advocate has also been monitoring the claims process, said that despite all the assurances from BP, progress has been slow for people like Holmes.

"They're being promised things like, submit a claim for May or June and we'll forward a payment for you for July, and they're getting a small partial payment," she said.

(Miami Herald staff writer Robert Samuels contributed to this report.)

Complete coverage of the oil spill at MiamiHerald.com

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