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A U.S. judge gave preliminary approval to a $7.8 billion settlement between BP PLC (BP, BP.LN) and individual plaintiffs over economic damages resulting from the Deepwater Horizon oil spill.
In an order filed Wednesday, Judge Carl Barbier of the Eastern District of Louisiana said the terms of the proposed settlement, which would compensate business owners in the U.S. Gulf Coast, are "sufficiently fair, reasonable, adequate and consistent with governing law" to warrant preliminary approval. That would allow the distribution of a notice of settlement to the affected parties. A fairness hearing will follow on Nov. 8, the judge said. The settlement, he added, appears to have "no obvious deficiencies" and "falls within the range of possible judicial approval."
The preliminary approval comes after months of intense negotiation between BP and lawyers representing thousands of plaintiffs, including fishermen, restaurateurs and other small business owners that suffered from the crippling of the area's seafood and tourism industry in the wake of the Deepwater Horizon oil spill in 2010. On April 20, 2010, the Deepwater Horizon rig exploded while drilling a BP well in the U.S. Gulf, killing 11 and unleashing the worst marine spill in U.S. history.
The settlement would replace the Gulf Coast Claims Facility, which BP agreed to fund to the tune of $20 billion, with a court-supervised settlement program. Those who accept payments under the proposed settlement agree to waive claims against BP and other defendants except Transocean Ltd. (RIG, RIGN.VX) and Halliburton (HAL). Transocean owned the Deepwater Horizon rig and Halliburton performed the cementing job in the deep-water well that blew out; both of those companies are fighting a legal battle with BP over their share of responsibility in the Deepwater Horizon incident.
Halliburton said in a filing last month that it opposed the settlement between BP and the individual plaintiffs, because it had only a "limited amount of time available" to review it. Halliburton also said that the settlement would make the company responsible for paying at least part of the settlement by "improperly assigning claims against (Halliburton)" to the plaintiffs' steering committee.
-By Angel Gonzalez, Dow Jones Newswires; 713-547-9124;email@example.com