This is a guest post by Mark Graffagnini of Graffagnini & Assosciates about a web tool he created for startups and other companies to calculate a potential recovery under the BP settlement. Mark is a lawyer who started the firm after much frustration with how other firms are run. He and his team understand the needs of business owners, investors and managers today.
Did you know that your start-up company might have a valid claim for damages under the recent settlement preliminarily approved by the court (the “BP Settlement”)? Well, you might, believe it or not. The BP Settlement provides for many business economic loss claims, and it specifically includes a framework for evaluating Start-Up claims. And guess what?! Your Start-Up doesn’t have to have anything to do with seafood or the Gulf of Mexico for you to have a potential claim! So, even if you wear flip flops or loafers to work and not shrimp boots, you still might have a valid monetary claim.
You might be surprised at the types of businesses that have valid claims. They can include software developers, bars/restaurants, shops, designers, professionals and a whole host of other types of businesses located in one of the various zones emanating from the Gulf of Mexico.
The BP Settlement defines a “Start-Up” as a business that had less than 18 months of operating history as of April 20, 2010 (the date of the oil spill). There are several “zones” in which businesses can make claims. For example, the IP Building is located in “Zone B.” Canal Place is located in “Zone A.” The Marigny is also in “Zone A,” as is the French Quarter. Depending on what zone your Start-Up is located, you may have a claim for compensation under the BP Settlement. Plus, the court has applied different risk transfer premiums (“RTPs”) for different zones. For instance, if you have a business in the IP, then your RTP is 2.00. If you have a Start-Up bar/restaurant business in the Marigny, then your RTP is 2.50. What does that mean? You multiply your calculated losses by the RTP. So, if you had a compensable loss of $2,500 in a relevant year and an RTP of 2.5, then your potential claim would be $6,250 + 2500 = $8750! Are you starting to think it might be worth looking into whether you have a claim?
I recently created a “BP Claim Estimator” to estimate a potential loss from all types of businesses, including Start-Ups. The calculator can be found here: www.bpcalculator.com. Make sure to read the disclaimers for the BP Claim Estimator. It does not provide you with actual results. It also does not determine whether you meet the more complex causation requirements under the BP Settlement. What it might do, however, is help give you a “quick and dirty” look at whether it’s worth your precious time
as an entrepreneur to either calculate your claim yourself or hire a professional accountant or lawyer to help you do so. This tool is mostly a fun tool designed to provide an extremely rough estimate of what a potential BP claim might look like for your business.
If you’re math-minded and want to read in-depth about the claims calculation process and the causation requirements, then here is a copy of the portion of the BP Settlement most relevant to Start-Up companies. If you would like to take a look at a more in-depth (but still very rough) guideline to the process, then you can visit http://wp.me/P20ZE8-6.
Disclaimer: This post discusses general legal issues, but it does not constitute legal advice in any respect. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction. Silicon Bayou News, the author and the author’s firm expressly disclaim all liability in respect of any actions taken or not taken based on any contents of this post.