Gulf Oil Spill Litigation Revisited;The True Problem is lack of "Strong Documentation".

The Gulf Oil spill was a horrible environmental disaster. Thousands and thousands affected, businesses ruined, fish, sealife and wildlife affected probably for generations to come. Billions of dollars in actual losses. British Petroleum has "taken it on the chin" legally, financially and via extreme damage to it's reputation worldwide.


We've all seen many environmental disasters during our generation, and no matter what your overall criticisms are of BP I honestly believe they did act quickly(albeit incompetently) to stop the spill, clean it up, assess the damage , develop community relationships and set up a $ 20 billion "claims fund " for damages. Well of course life is not perfect, and the man's firm heading the fund(Kenneth Feinberg) is being paid $850,000 a month by BP. Most claimants feel they're being lowballed, "the claims procedure is unfair and tainted", etc, etc.. To me , while the claims procedure is far from perfect, there is little doubt than it is much better to receive $100 today vs. $250 in 5 or 10 years. That is what every "John Doe Shrimper or Fisherman " is facing. Is BP using that to their advantage ? You bet your as_ they are! But what other alternative is there?


In my opinion the two biggest problems plaguing the integrity of the entire claims process are;


1. Potentially fraudulent claims, and


2. Lack of strong financial, tax and economic documentation to support the "claimed losses".


Here's the issue in a nutshell. Many, if not just about all the "Gulf Businesses " are purely cash. So as a seasonal business owner who is cash-based, prepares his or her tax returns, the natural (I'm not saying honest) inclination is to lower your sales, which in turn lowers your profits which ultimately lessens your tax liability. Make sense? I would bet you dollars to doughnuts that with some "creative accounting " many of the businesses actually show losses. That's all well and good , except if God forbid a huge oil spill takes place and a litigation and claims process ensue. You, for better or for worse, are stuck with your tax return figures. Nothing you can do about it!


So this is why it looks like an individual who really is losing $50,000 ,( but his tax returns showed a loss for 2007 and 2008), "is being lowballed by BP ". These factors coupled with BP's fear of "the good old-fashioned fraudulent claim" have diminished the ultimate effectiveness(lower payouts, mistrust, etc.) of the fund.


Did anyone say "cut off your nose to spite your face"? Short of going back and filing amended tax returns for years past(1040x"s), what really can be done? It's a "no win situation". Your thoughts?