New agreement nets city $200,000 from BP settlement

An agreement worked out by Mayor Andrew “FoFo” Gilich and approved this afternoon by the Biloxi City Council will result in a $200,000 net increase for the city from the BP oil spill settlement.

Gilich negotiated a deal over the weekend with the law firm Page, Mannino, Peresich & McDermott that will increase the city’s net payment from BP to $4.1 million. Last week Gilich questioned whether a 20 percent contingency fee owed PMPM from the city’s previously announced settlement was appropriate. Gilich proposed a resolution to the City Council last Thursday that allowed negotiation with PMPM for a lesser fee. After a closed session, the council recessed and the Mayor announced both sides were discussing the matter.

“In a spirit of cooperation, we were able to reach an amicable agreement that results in Biloxi receiving $200,000 more than it would have under the original agreement with PMPM,” Gilich said. “We believed the previous City Council did not have authority to bind future councils to certain legal fees, and we questioned whether a 20 percent fee was appropriate for a settlement. PMPM’s position was that it had a valid contract. We talked out our differences and PMPM offered a $200,000 payment to the Biloxi General Fund.”

“Based on everything involved, Biloxi considers the $200,000 payment an appropriate way to resolve this,” Gilich added. “We respect the law firm’s commitment to our city. The agreement benefits everyone – the City of Biloxi, PMPM and the citizens.”

In April of 2012, the then-Biloxi City Council contracted with PMPM to pursue a claim against BP, agreeing to a contingency fee of 20 percent of any payments received for economic damages suffered by Biloxi because of the April 20, 2010 oil spill in the Gulf of Mexico. It was announced last month that Biloxi agreed to accept a $4,943,751 settlement offer from BP.

Under the contingency-fee agreement, PMPM was scheduled to receive $988,750.20, plus reimbursable expenses of $26,416.21. Biloxi’s net payment would have been $3.9 million after legal fees and expenses. PMPM’s $200,000 payment pushes Biloxi’s actual total past $4.1 million.
See photos from the meeting this afternoon
See photos from the meeting Thursday