BP likely won't be in any rush to deposit $20 billion in the escrow account anytime soon: The deal's "preliminary terms would give BP several years to deposit the full amount into the fund so it could better manage cash flow, maintain its financial viability and not scare off investors."
The White House also released details this afternoon on how the claims will work. Feinberg will serve as "independent claims administrator," and a panel of three judges will hear any appeals of his decisions on claims of individuals and businesses harmed by the spill. Government agencies will still make claims directly to BP.
BP will put $5 billion a year into the account in each of the next four years, beginning in 2010. In the meantime, it will set aside $20 billion in U.S. assets to assure its commitments.
And the damages may not stop at $20 billion: "This account is neither a floor nor a ceiling on liability," the White House announced.
And it sounds like claimants will still be able to sue BP, even if they do get payouts from this account: "Dissatisfied claimants maintain all current rights under law, including the right to go to court or to the Oil Spill Liability Trust Fund."
BP will also contribute $100 million to a foundation supporting unemployed oil right workers.
The fact that dissatisfied claimants get to maintain all their current rights under law is huge.
But remember what happened to the University of Southern California recently. When the NCAA dropped its hammer on the school, the Basketball program wasn't punished nearly as hard as the Football program because that program had imposed a post-season moratorium on itself, even though they were guilty as the same infraction as the football program.
Likewise, BP, in setting up this Escrow Account may not immunize itself against the tidal wave of lawsuits coming its way, but it may well blunt their impact.
