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The BP Deepwater Horizon Oil Spill Settlement: Good News - You May Qualify



Businesses with locations in Alabama, Mississippi, Louisiana, and the Florida and Texas Gulf Coasts may qualify for a portion of the settlement proceeds related to the Deepwater Horizon oil spill. Organizations headquartered outside of this region may not be aware that their local offices or business interests may qualify.


Background: In the wake of the April 2010 Deepwater Horizon oil spill in the Gulf of Mexico, a wide range of businesses suffered economic losses. In May 2012, a federal court in New Orleans expanded the region in which businesses that suffered economic losses during the spill period may qualify for a settlement. The expanded region that may qualify under the settlement now covers the west coast of Florida, the northeast coast of Texas, and all of Alabama, Mississippi, and Louisiana.

How to Qualify: If your office or business is located in an area hit hardest by the oil spill and in a certain zone, causation is presumed and you can begin preparing economic loss damages for a claim. If your business is outside of that zone, you must submit documentation showing a drop in income in 2010 compared to income from periods prior to the oil spill, and an increase in income after the oil spill.

To prove the changes in income, business owners must provide three specific items:

  • You must identify a “compensation period” of three consecutive months between May and December in 2010
  • A proven decline in revenue during the time of the oil spill must be proven during the compensation period relative to one of the following three periods:
    • The same three months in 2009
    • The average of 2008 and 2009
    • The average of 2007 through 2009
  • To show that business income increased after the oil spill, you must demonstrate that income improved during the same months as those in the compensation period

This financial information must be provided through federal tax returns and profit and loss statements from 2007 through 2011. Documents reflecting the business structure and ownership of the business claimant, documentation of payment received or costs incurred from BP, and a W-9 form are required.

The statute of limitations for these claims runs until April 20, 2014. Therefore, business owners must act fast, as it is expected that the settlement funds may be depleted before that date.

Answers to frequently asked questions may be found here.

CohnReznick has extensive business interruption claim experience working directly with businesses impacted by natural disasters such as Hurricanes Sandy and Katrina. Our expertise is centered on guiding business owners in the aftermath of natural and manmade disasters and providing specialized advice for navigating the complex compensation processes related to the Deepwater Horizon oil spill.

What Does CohnReznick Think?

It is important that business owners are educated about their options as they address losses resulting from the oil spill.  Based on our extensive experience in developing and compiling the documentation required to file a claim, engaging CohnReznick to assist will allow you to focus your efforts on rebuilding and expanding your business.


For additional information, or to discuss how CohnReznick Advisory Group can assist you in recovering business interruption damages, please contact:

For information on CohnReznick’s business advisory services, visit our webpage.

Circular 230 Notice: In compliance with U.S. Treasury Regulations, the information included herein (or in any attachment) is not intended or written to be used, and it cannot be used, by any taxpayer for the purpose of i) avoiding penalties the IRS and others may impose on the taxpayer or ii) promoting, marketing, or recommending to another party any tax related matters.

This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

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