BP Deposits Initial $3 Billion in $20 Billion Gulf Claims Trust

BP reports it has established a trust and made a $3 billion initial deposit of the previously-announced $20 billion escrow account to pay claims arising from the Deepwater Horizon oil disaster in the Gulf of Mexico.

“The purpose of the escrow account was to assure those adversely affected by the spill that we indeed intend to stand behind our commitment to them and to the American taxpayers,” said Bob Dudley, CEO of BP’s Gulf Coast Restoration Organization. “Establishing this trust and making the initial deposit ahead of schedule further demonstrates our commitment to making it right in the Gulf Coast.”

Two individual trustees have been named to the newly-established trust that will administer the account: John S. Martin, a former U.S. District Judge for the Southern District of New York, and Kent Syverud, dean of the Washington University School of Law.

Citigroup will serve as corporate trustee and paying agent for the account. Arrangements have been made for checks drawn on the fund to be cashed free of charge at any of the 160 Whitney National Bank branches across the Gulf Coast region.

The Obama Administration confirmed that the Department of Justice’s negotiations to establish an escrow account for the Deepwater Horizon oil spill have been completed.

“We are pleased that BP made an initial contribution and has taken an important step toward honoring its commitment to the President and the residents and business owners in the Gulf region,” Associate Attorney General Tom Perrelli said in a statement. “We have made clear that the company still needs to ensure that the necessary funds will be available if something happens to the subsidiary that established the trust and we look forward to completion of an appropriate security arrangement in the near future.”