     Case: 18-30901      Document: 00515073505         Page: 1    Date Filed: 08/12/2019




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                           United States Court of Appeals
                                                                                    Fifth Circuit

                                      No. 18-30901                                FILED
                                                                            August 12, 2019
                                                                             Lyle W. Cayce
                                                                                  Clerk
CLAIMANT ID 100024160,

              Requesting Party-Appellant,

v.

BP EXPLORATION & PRODUCTION, INCORPORATED; BP AMERICA
PRODUCTION COMPANY; BP, P.L.C.,

              Objecting Parties-Appellees.



                   Appeal from the United States District Court
                      for the Eastern District of Louisiana
                             USDC No. 2:18-CV-5899


Before ELROD, GRAVES, and OLDHAM, Circuit Judges.
PER CURIAM:*
       Grand Panama Resort Management (“GPRM”) filed a claim under the
Deepwater Horizon Economic and Property Damages Settlement Agreement.
The Settlement Program denied it, and the district court denied discretionary
review. For the reasons discussed below, we vacate and remand.




       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
    Case: 18-30901    Document: 00515073505       Page: 2   Date Filed: 08/12/2019



                                   No. 18-30901
      GPRM operated a condominium resort in Panama City, Florida. In 2010,
GPRM transferred its operations to a joint venture entity, Grand Panama
Resort Services (“GPRS”). GPRM owned a 50% share of GPRS, and it received
income from GPRS.
      GPRM filed a claim for compensation with the Court Supervised
Settlement Program. The Claims Administrator denied the claim. It did so
based on GPRM’s classification as a failed business. Under the Settlement
Agreement, a failed business cannot receive compensation if it reported
negative earnings before interest, tax, depreciation, and amortization
(“EBITDA”) for the twelve-month period before May 1, 2010.            GPRM had
negative EBITDA during that time period. So its classification as a failed
business was fatal to its claim.
      The Appeal Panel affirmed. It concluded GPRM was a failed business
because it had “cease[d] operations and wound down.” The Appeal Panel relied
exclusively on a report prepared by an accounting firm for GPRM, which said
“[t]he business ceased operations in September 2010 as a result of the Spill,”
so “no profit and loss statements are available for September 2010 forward.”
Discussing the accounting report’s significance, the Panel wrote: “Although it
is a close question, Claimant is hoisted on its own petard by its admission that
it ceased operations in September 2010.” The Appeal Panel cited no other
evidence to support its conclusion that GPRM “cease[d] operations and wound
down.”
      GPRM sought discretionary review in the district court. The district
court declined to review the claim. GPRM timely appealed. We review a
district court’s denial of discretionary review for abuse of discretion. BP Expl.
& Prod., Inc. v. Claimant ID 100281817, 919 F.3d 284, 287 (5th Cir. 2019).
That occurs when “the decision not reviewed by the district court actually
contradicted or misapplied the Settlement Agreement, or had the clear
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                                  No. 18-30901
potential to contradict or misapply the Settlement Agreement.” Id. (quoting
Holmes Motors, Inc. v. BP Expl. & Prod., Inc., 829 F.3d 313, 315 (5th Cir.
2016)).
      We agree with GPRM that the denial of its claim rested on a
misapplication of the Settlement Agreement.           The Settlement Agreement
defines a failed business as an “[e]ntity that commenced operations prior to
November 1, 2008 and that, subsequent to May 1, 2010 but prior to December
31, 2011, either (i) ceased operations and wound down, or (ii) entered
bankruptcy or (iii) otherwise initiated or completed a liquidation of
substantially all of its assets, as more fully described in Exhibit 6.” Exhibit 6
contains a similar definition of a failed business.
      Here the Appeal Panel assumed that “ceased operations” are sufficient
to show that a business “cease[d] operations and wound down.” But a company
“must have both ceased operations and wound down to be a failed business.”
Claimant ID 100081155 v. BP Expl. & Prod., Inc., 920 F.3d 925, 929 (5th Cir.
2019). These are two different inquiries, and “having ceased operations or
having wound down alone does not render an entity a failed business.” Id. A
business has wound down if “it set into motion a process to bring its corporate
existence to a close by collecting its assets, disposing of its assets, discharging
its liabilities, and taking other actions necessary to conclude the business.” Id.
at 930. It does not need to have finished winding down before December 31,
2011, but it does need to have “set into motion a process” of winding down by
then. Id. The Appeal Panel conducted no analysis of whether GPRM wound
down, yet it concluded that GPRM “cease[d] operations and wound down.”
That was a misapplication of the Settlement Agreement. See id.
                                  *     *      *
      The judgment of the district court is VACATED and REMANDED for
further proceedings consistent with this opinion.
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