Pittsburgh Bankruptcy Attorney Jim Newell Quoted on Expected Bankruptcy Filings Resulting from Gulf Oil Spill

James D. Newell, a shareholder in the Bankruptcy & Creditors' Rights Practice of Buchanan Ingersoll & Rooney's Pittsburgh office, was quoted in an article published in the August 5, 2010, edition of The Daily Deal. The article, titled "The gusher," discussed how filings from the Gulf oil spill could take years to surface.

According to the article, "The oil spill in the Gulf of Mexico has undoubtedly tarred the finances of many regional businesses, but it may be years before it's clear which industries will need the most cleaning in bankruptcy court. … Some estimates have said that the damage to the local fishing industry could be more than $2.5 billion, while the Florida tourism industry alone could lose as much as $3 billion. In addition to the financial impact from the spill itself, the ensuing fishing and drilling moratoriums installed by the federal government are sure to cause more pain for many businesses."

The article went on to note that "[W]ith such a widespread impact, both in the immediate area as well as the entire Gulf Coast, there will be a lot of victims. Who are — or will be — the first casualties? Which industries will be affected the most going forward? Are they one and the same?"

Newell weighed in saying, "The seafood industry is already experiencing significant decreases in production. Part of the concern is on consumer confidence, not only the folks out there catching fish and the industry itself, but on the seafood processors."

Additionally, the article addressed how "local hotels, motels, restaurants and all the businesses in coastal areas that rely heavily on recreational saltwater fishermen … are all struggling."

The article explained how Newell and other industry professionals predict an increase in bankruptcies, however, do not expect it to happen right away.

"My guess is in six months, the biggest problem will be litigation [relating to the spill] and claims payments, rather than [the oil spill itself]," Newell said. "I think by next year, there will [no longer be an] effect on tourism, but rather the moratorium on deep-sea drilling [will have] the real economic impact. For every person in seafood or tourism, there is at least one or two involved in drilling."