Uh oh: BP stops paying the bills?
posted at 2:20 pm on July 8, 2010 by Ed Morrissey
Workers attempting to clean up the worst oil spill in American history have another disaster on their hands — an economic disaster. According to TV station WDSU, crews expecting a monthly paycheck came up empty yesterday, as BP failed to meet its agreed payroll date. The lawyer representing hundreds of the workers says BP won’t tell him when their money will come, either:
Hundreds of fishermen from Lake Charles to Moss Point, Miss., were supposed to get checks from BP on Wednesday but didn’t. Wednesday night, their lawyer wanted answers. Jeffrey Briet represents more than 500 fishermen, and he said the payment system he set up with BP required his clients to be paid every 30 days.
Now that process has suddenly changed without warning, Briet said.
“Not only did they spring it on us that the process has changed, but the people I’ve been dealing with for six weeks who’ve done a good job said, ‘We don’t know what the process is going to be. We’re not authorized to talk to you about it. Someone from BP will contact you,'” he said.
But Briet said he hasn’t heard from BP or its lawyers. He said the claims people have been given so much conflicting information about the process that they can’t provide answers.
Generally speaking, when a company fails to make payroll or meet its Accounts Payable on time, it’s a sign of potential collapse. Sometimes, it’s just a simple issue of red tape within large corporations. It’s hard to tell which is which, but with BP transferring $20 billion into a trust fund and spending a few billion more on the cleanup, it’s certainly not unreasonable to wonder about its cash flow and stability.
The workers doing the cleanup need to get paid. They’re not wealthy; their regular incomes have been ruined by the spill and the response to it, and for many workers this is the only way they can make ends meet. Most of them live paycheck to paycheck — and having to wait 30 days for those checks creates difficulties even when the checks come on time.
Update: In the comments, some are confusing this with the $20 billion trust fund. The trust exists to pay damage claims from the spill, not to fund the clean-up. That’s why it’s being kept in a separate trust, and out of BP’s hands (although the method chosen for that stinks on ice). BP has to pay for the cost of the cleanup from its own accounts.