BP (NYSE:BP) and President Obama reached an agreement on they will handle the company's compensation claim and claim process. A $20 billion fund will be set up to compensate the victims of the oil spill.
After a four hour meeting with BP officials, Obama made the announcement of the agreement. BP has also said they will set up an additional $100 million fund which sole purpose would be to be used to compensate oil rig workers that will lose six months pay due being laid off because of Obama's moratorium on deepwater drilling.
"The structure we are establishing today is an important step toward making the people of the Gulf coast whole again, but it will not turn things around overnight. This is about accountability. At the end of the day that's what every American wants and expects. The people of the Gulf have my commitment that BP will meet its obligations to them. This $20 billion amount will provide substantial assurance that the claims people and businesses have will be honored," said Obama. He ensured that the $20 million is not a cap on BP's liabilities and will pay more if needed
The claim process fund will be run by Kenneth Feinberg, who was in charge on the September 11th compensation claims process and overseeing payments to families of victims. There will be a three member panel who will be in charge of the claims that are turned down. This setup helps setup a formal process instead of vague promises by BP.
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