Do we need a Federal Escrow Fund?

I’m sure this will be a popular post … but set aside your emotions for a moment about the BP disaster… and consider the insistence by the federal government that an independent agency take over the claims resulting from the oil spill,  purportedly overriding BP’s authority, and that of the other 12 entities on board the oil platform, in those matters. The suggested prototype is the independent examiner appointed to handle claims resulting from the events of 9/11 … but recognize that those events were NOT directly caused by a legal entity with rights and responsibilities and shareholders, or that was subject to a myriad of legitimate national and international governing bodies.

Who should decide how much to pay whom for oil spill claims?

What I wonder is whether BP … in most cases, any corporation … shouldn’t have some rights and control over the claims paid from funds ultimately belonging to their shareholders? Take special note that in BPs case, a powerful example of the global economy in which we live, 18 million British citizens own stock in BP, many of them retirees.

Emotions are running high and many people would prefer to see BP hanging from the nearest rafter. At the same time, shouldn’t a company be allowed to settle claims in a fair and reasonable manner? There are plenty of ways in which individuals and organizations can seek redress if they disagree on the results, either through appeal or in claims or civil courts if a reasonable settlement cannot be made.

What paperwork?

Many examples have already been reported … and I’m certain there will be thousands more … of Gulf businesses claiming unsubstantiated damages … with limited or poor accounting records, and little proven evidence of the earnings they seek to recover based on the  years prior to the oil spill. It’s no surprise that many fisherman and other small businesses don’t keep great accounting records, and in cash businesses, may have “forgotten” to record some of their transactions? But now that they have to demonstrate the level of earnings that have been lost … and I think we’d agree that it’s a fair expectation that they be able to demonstrate that history … it seems reasonable that BP should have some rights to adjudicate those claims like most US corporations do in disputed matters.

What do you think? Would you think differently if you were a shareholder, like so many Britons, with a stock so critical to their retirement? If it was your company, would you insist on certain rights to protect your shareholders?

Let’s talk about it.

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