JamisonMoneyFarmer PC oil spill claimants’ team, from left: Bryan Chandler, Lynn Osborn, Bobby Bragg and Joel Lake.
Photo by Robert Sutton
-From: Business Alabama
Shortly after the Deepwater Horizon oil settlement was reached in the spring of 2012, it was obvious that the amount of work necessary to file the claims by the April 2014 deadline would be overwhelming. And since part of the settlement agreement required accounting expertise, extensive networking and referrals among plaintiff law firms and accounting firms would be necessary.
The Mobile-based law firm of Cunningham Bounds has been a leading player at the center of BP-related issues since the spill. One of a number of accounting firms Cunningham Bounds contacted on behalf of its clients was JamisonMoneyFarmer of Tuscaloosa, founded in 1920 and staffed with more than 90 employees. “I don’t want to single out a particular accounting firm, because we’ve worked with a number of them,” according to one attorney at Cunningham Bounds. “But JMF has done an outstanding job.”
“We understood from the beginning that (the settlement) would affect our firm and our clients throughout the state and not just the coastal region,” says Joel Lake, a CPA with JamisonMoneyFarmer and a shareholder in the firm. “But at the beginning, I don’t think anyone envisioned the size and scope of this project with Cunningham Bounds. But we’ve been able to do it with our regular work load, even during tax season.”
Lake, who heads the BP claims team for JMF, notes that JMF’s initial strategy was to form a small core team that would work on the settlement claims until reaching a comfortable point on the learning curve. The idea was for a few team members to learn the correct process and then impart that experience to new members of the team, which has grown from five to 14 people over the past 12 months.
Given the complexity of the agreement, that has not been easy. The part of the settlement that determines who is eligible for damages and how to calculate the damages is 17 pages long. The claims calculation process has two parts: revenue analysis, which determines if a business qualifies for a claim, and the profit analysis, which calculates the amount of the claim. The revenue analysis portion, including preparation and review time, can be less than two hours. But it can take considerably more time if a business has claims for multiple locations, according to Lake.
“The profit analysis, which is only done after the attorneys confirm that the business qualifies under the terms of the settlement agreement and agree with our calculation basis, is a much deeper dive,” Lake says. “The more complex claim calculations can take weeks.”
Lake says all claims are reviewed by BP, its attorneys and accountants. That review process can lead to questions or requests for more information, and BP has the right to appeal the compensation calculation of the claim. In light of this review process, it is critical that the claims are accurate and properly documented.
“That is really important to us — for BP to go through everything with a minimum of questions,” says Bryan Chandler, another CPA and shareholder at JMF. “We have to make sure we have everything documented and that it’s easy to follow.”
“We’ve found that there is no typical claim,” Lake says. “Each business and its accompanying accounting records, tax returns and supporting documentation are different depending on the complexity of their operations and the size of the business. The documentation can be in the hundreds of pages. Thankfully, with today’s technology, we have been able to process the claims electronically, by using an array of software programs. That allows us to quickly analyze massive amounts of data.”
Although CPAs are known for being buttoned-up and numbers-oriented, communication skills also are very important for members of Lake’s team. “Initially, we needed to communicate our process internally and educate business owners and our referral network about the settlement and related eligibility requirements,” Lake says. “We are still talking frequently with business owners who aren’t aware of the extent of the settlement or that they may be eligible.
“In performing the settlement calculations, we communicate with the attorneys multiple times a day, are continually gathering information from businesses and other CPA firms and are constantly communicating internally within our team to ensure the calculations are performed correctly and efficiently. It has been quite a lesson from a team mobilization, management and communication standpoint.” — Charlie Ingram