Thursday, July 15, 2010

Feinberg BP's Risk Manager

Forbes reported:

Feinberg said that at his request, lawyers for BP will be involved in drafting releases that exempt BP--but not other potential defendants--from any future liability for the spill.

"This makes sense, since the release is designed to provide BP protection from lawsuits, and BP is paying $20 billion to satisfy claims," Feinberg said in an e-mail message.

The $20 billion victims fund was marketed as a first step by the Obama administration, not a permanent liability cap. It's amazing how BP injects risk management at every turn in the oil catastrophe.

BusinessWeek showed Feinberg's marketing to victims:

Kenneth Feinberg, who is overseeing a $20 billion fund to pay damage claims from BP Plc’s oil spill, pledged to create a system “more generous and more beneficial” to spill victims than taking the company to court.

Given the ExxonValdez case took two decades to resolve, Feinberg's promise won't be tested in reality anytime soon. What damage will BP oil cause over a twenty year period? That won't be compensable as Feinberg and BP rush to close out and cap liability. Recall this is Day 87 and most of the oil spilled is unaccounted for.

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