Claimant ID 100081155 v. BP Exploration & Production, Inc.

Summary

The Fifth Circuit held that the district court misinterpreted the Deepwater Horizon Settlement Agreement's definition of a "failed business." The court ruled that the first definition requires both "ceased operations" and "wound down" as separate elements, and the third definition's "liquidation" means selling assets to settle debts, not merely disposing of assets. The court applied de novo review to interpretative issues arising from the district court's discretionary review. The case was vacated and remanded for proper application of the settlement agreement.

Holdings

1. The district court erred by not requiring both 'ceased operations' and 'wound down' as separate elements. The conjunction 'and' requires an entity to have both ceased operations and set into motion a process to bring its corporate existence to a close to be a failed business under the first definition.
2. The district court erred in interpreting 'liquidation' as simply disposing of assets. The term 'liquidation' means converting assets into cash to settle debts, as indicated by dictionaries, contextual clues, and Exhibit 6 of the Settlement Agreement. An entity must have sold its assets to settle its debts to be a failed business under the third definition.

Questions Presented

1. Whether the district court erred in interpreting the first definition of a 'failed business' under the Settlement Agreement, which requires that a business both 'ceased operations and wound down'.
2. Whether the district court erred in interpreting the third definition of a 'failed business', which requires that a business 'otherwise initiated or completed a liquidation of substantially all of its assets' to settle debts.

Disposition

vacated