Monday, October 11, 2010

BP (NYSE:BP) Paying Feinberg and Firm Cool $850,000 Monthly to Run Compensation Fund

In an effort to be more transparent, Kenneth Feinberg revealed the payment he and his firm - Feinberg Rozen LLP - are receiving from BP (NYSE:BP) to run the $20 billion compensation fund to pay victims of the Gulf of Mexico oil spill.

Feinberg said the firm is being paid $850,000 monthly to manage the claims portion of the fund, which started when he accepted the job in the middle of June.

At this time Feinberg hasn't disclosed what he personally is getting for running the fund, but that doesn't seem to be relevant; how could it be?

Someone has to run the fund. And unless someone is going to donate several years of their life for nothing to run it, they're going to get paid for it. Already there's heavy pressure on Feinberg and his team to make things run smoother and quicker, and he's taken a lot of abuse from meetings around the Gulf region with victims waiting for their money.

There's also the fraud factor, which has in fact been one of the major impediments to running the claims process quicker, and this is coming from those who have legitimate claims, but are inflating them to extraordinary levels, which all causes the need to examine documents more closely, if there are any documents at all.

In other words, a lot of the alleged public outcry is manufactured by many who are trying to game the system and are angry their attempts aren't successful.

The implication that Feinberg and his team work for BP means something negative simply makes no sense. It doesn't matter who would've been chosen to run the claims process, they were going to get paid. How is that an issue? How is it even a story?

As far as the compensation to the firm, the $850,000 monthly payment will continue through 2010, and then will be reviewed at that time to make decisions on a contract going forward.

The fund is scheduled to operational for four years.


  1. This is ludicrous. I thought the tobacco lawyers were raping the industry but this is absolutely obscene. At this payment rate, the fund will be depleted just to pau "legal" fees

  2. In stories on the report, it is stated that the money for Mr. Feinberg's firm is not coming out of the fund. It is paid separately from BP. It does not affect the fund at all.