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Recent 5th Circuit Opinion - What does it mean?
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Recent 5th Circuit Opinion - What does it mean?

The 5th Circuit Court of Appeal issued a ruling last week on the appeal that was argued on July 7th regarding how certain types of accounting principles apply when computing the "amount" of a client's claim for losses.

The simple preliminary summary of the 5th Circuit's Order is that Judge Barbier, will need to revisit and determine the proper accounting methodologies to be utilized when applying the formulas of the Settlement Program to certain business economic loss (BEL) claims moving forward. For now, the Claims Administrator will not be paying BEL claims until that resolution is reached for the classes of BEL claims covered by the Order.

It is important to understand that this appeal only dealt with how certain BEL claim "amounts" are calculated. The 5th Circuit's ruling in no way changes who qualifies and how causation is determined. Right now, the only thing in flux is possibly changing how we calculate the amount of a client's claim. We will need to see over the next few weeks or months what guidance the Program and Court gives us.

You're likely to get calls from clients and other attorneys and professionals about the meaning of the Order. The simple answer is: it does not impact who is entitled to file claims and it does not affect how causation is determined.

The Program remains intact and operational under the Program's terms. In fact, the only thing that has temporarily stopped is the payment of certain BEL claims as the District Court re-evaluates the accounting methodology used for those claims that are impacted by the Order.

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