IRS Beats Insurer in Bankruptcy Appeal Over BP Oil Spill Payout

The Internal Revenue Service has priority over a $1 million payout received by a Florida staffing company from the Deepwater Horizon oil spill settlement, outstripping the bankruptcy claim of an insurer, the Eleventh Circuit ruled.

The appellate court’s opinion affirmed that the IRS tax lien takes precedence over Sunz Insurance Co. regarding a payment BP Inc. made to Payroll Management Inc. The decision affirms earlier rulings from both the bankruptcy court and the US District Court for the Northern District of Florida.

The payout is part of a settlement in which BP compensated Payroll Management for economic losses caused by ...