Compensation czar takes charge of $20 bln BP fund

* Feinberg takes over administration of $20 bln fund

* Feinberg defends independence, vows fairness over claims

* Florida attorney general calls new process unfair

By Matthew Bigg

NEW ORLEANS, Aug 23 (BestGrowthStock) – A $20 billion compensation
fund for economic victims of the BP Plc (BP.L: ) (BP.N: ) Gulf oil
spill opens for business on Monday amid accusations that the
rules established by its administrator are unfair.

Kenneth Feinberg who will run the fund said those who
sustained financial loss because of the spill could claim for
damages and he promised claimants more generous treatment than
they would get if they sued the energy giant for damages.

“The goal here is to try and explain to eligible claimants:
‘It is not in your interest to tie up yourself and the courts
in years of uncertain protracted litigation when … there is a
more efficient quick alternative'” Feinberg told a news
conference on Sunday.

“The goal will be to pay any individual claim within 48
hours of the claim being finalized and seven days for any
business claim,” he said.

BP set up the fund in June under pressure from the White
House to come up with a remedy for the losses sustained in the
fishing, tourism and other industries on the Gulf of Mexico
coast because of the leak that began in April and was capped in
July.

Feinberg was named its administrator because of the
reputation for fairness he acquired administering the 9/11 fund
and determining executive pay for companies bailed out by the
government during the recession.

But the spill fund may provide an even tougher challenge,
according to insurance experts who said calculating claims for
businesses would be particularly difficult.

For the next six months, anyone claiming an emergency
payment can also sue BP at a future date but beyond that period
claimants would forfeit the right file against the company,
Feinberg said.

The position is controversial. Florida’s Attorney General
Bill McCollum issued a statement last week saying the ruling
favors BP and weakens provisions advocated by state attorney
generals along the coast.

‘LESS GENEROUS’

“The current process appears to be even less generous to
Floridians than the BP process. Such an outcome is completely
unacceptable,” McCollum said in a statement.

In his defense, Feinberg said the idea for the cut-off
point was his rather than BP’s.

“I am beholden to neither the administration nor BP. I am
entirely independent,” Feinberg said, adding that entry into
the compensation process was voluntary.

He said no decision had been taken on whether people who
claimed after the six-month window would be able to sue other
companies involved with the rig that exploded April 20, killing
11 workers and triggering the spill.

So far, BP has paid $375 million in compensation, Feinberg
said, though that money was separate from the $20 billion.

Even so, a flood of new claimants were expected to hit the
35 offices set up in the five coastal states of Texas,
Louisiana, Mississippi, Alabama and Florida when they opened
for business.

Claimants could also apply by mail and online at
www.gulfcoastclaimsfacility.com.

(Editing by Alan Elsner)

Compensation czar takes charge of $20 bln BP fund