Costs for the Gulf of Mexico oil spill by BP (NYSE:BP) have risen to about $6 billion, and it is growing on a daily basis, according to chief claims manager Geir Robinson.
Testifying before the House and Senate Insurance committees, Robinson added that $400 million has been paid out to individuals and businesses affected by the accident.
Of that, individuals and businesses residing in Louisiana have received the bulk of that, accounting for payouts totaling $152 million.
Concerned over the ability of the company to pay the increasing costs related to the oil spill, Robinson said, "It (the $20 billion fund) is neither a floor nor a ceiling. There is every indication that the full resources of BP" will be available to pay claims and other expenses related to the incident. "There is no indication we are about to go bankrupt."
It does reveal the caution the government must take in attempting to punish BP, as there is only so far they can go before BP could no longer respond.
This is why it is ridiculous for a number of people to attack the BP compensation fund and the parameters Kenneth Feinberg has built around it.
To allow claims to be paid and then the claimants to go ahead and sure BP afterwards, would be a joke, and would crush the company, with no one receiving anything.
Those who want to sue BP have the right to, they just have to bypass the claims process represented by the fund to do so. Get guaranteed money now or take a chance on getting more later; possibly years later.
Add to that the approximate 30 percent lawyers would get, and it makes little sense for claimants to go that way, unless they were a big business that could handle the shortfall while pursuing a case.
Other oil companies connected to the accident may be allowed to be sued if people receive full claims, something Feinberg is in the middle of making a decision on.
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