Bankruptcy

Ripple Effects of the Gulf Oil Spill

By Chris Kramer

Anyone who has listened to the news in the last few months likely knows that the oil spill in the Gulf of Mexico is wreaking havoc on the environment and costing BP obscene amounts of money. But the disaster could also affect Americans in less obvious ways. Here are a few things to watch out for in the coming weeks and months.

Oil-Spill-Related Scams

The Federal Trade Commission has released warnings that unscrupulous scammers have taken to targeting those interested in helping with oil-related jobs. These are the signs of a scam disguised as part of the relief effort:

• Appearances all over: The FTC reports that offers for fake jobs have appeared online, in newspapers and in email inboxes. Many of these offers appear to be from BP itself, but are in fact well-designed scams.
• Application process or training: The scams often ask for upfront fees, whether for an application process or for training materials and courses. In general, the FTC cautions to regard with suspicion any company that asks for money up front, before providing you with any good or service.
• Fake authorization: Some scammers are apparently claiming that they?ve been authorized by BP to train and hire cleanup crews, but it?s generally a bad idea to take such claims at face value.
• Volunteer and paid positions: Note that scams are not limited to cleanup jobs advertised as paid. The FTC mentions that some scams advertise themselves as volunteer opportunities, but still charge certification, application or similar fees.

The FTC web site also outlines attributes common to many online job scams and also offers links to legitimate work and volunteer opportunities for those interested in contributing to cleanup efforts in the Gulf.

Oil-Spill-Related Bankruptcies?

One hot debate in the news right now seems to be whether or not BP will have to file for bankruptcy as a result of losses linked to the oil spill. But a more likely scenario is that small businesses (and potentially individuals that own and work for those businesses) may require bankruptcy protection as a result of losses stemming from the spill.

Because so much of the economy in the Gulf Coast area depends on oil and/or water industries (like fishing and tourism), many Americans stand to lose serious money as oil contaminates more and more of the region.

A recent article from the Wall Street Journal notes that various Gulf Coast companies, particularly those in oil- and gas-related fields, could be in need of the serious financial restructuring that a Chapter 13 or Chapter 11 bankruptcy filing might offer.

Full post as published by The Bankruptcy Blog on July 12, 2010 (boomark / email).