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By Jessica Dye
Feb 26 (Reuters) - A U.S. federal judge on Wednesday deniedBP Plc's request to halt payments from the $2.3 billionfund it created to compensate commercial fishermen for financiallosses after the British company's 2010 offshore oil spill,according to court records.
BP had sought to block the payments after alleging that someindividuals supposedly injured by the spill, clients of attorneyMikal Watts, did not exist. The company said it has already paidout more than $1 billion from the so-called Seafood CompensationFund.
U.S. District Judge Carl Barbier in New Orleans, who isoverseeing litigation stemming from the spill, denied the motionon Wednesday, according to an entry on the court docket. Thejudge also granted Watts's motion to stay BP's civil actionagainst him over the alleged fraud pending a related federalcriminal investigation.
BP spokesman Geoff Morrell said in a statement the companybelieved that Watts' representations "improperly increased theperceived value of the potential seafood claims duringsettlement negotiations and resulted in an inflated $2.3 billionfund."
In a statement, lawyers for BP plaintiffs, Steve Herman andJim Roy, said they were "pleased the court will not let BP holdthe entire seafood program hostage as part of its continuingeffort to rewrite history and the settlement agreement."
Watts did not immediately respond to requests for commentWednesday evening.
The ruling followed a hearing in the New Orleans federalcourt, where litigation related to the Gulf of Mexico spill hasbeen consolidated. Also on Wednesday, a federal judge in arelated case indefinitely postponed a criminal trial set tobegin March 10 for David Rainey, a former vice-president ofexploration for the Gulf of Mexico.
Rainey was charged with obstructing an investigation byCongress into the Gulf spill, and another count of lying tolaw-enforcement officials. The judge overseeing his case, U.S.District Judge Kurt Engelhardt, dismissed the obstruction count,which federal prosecutors have appealed. Prosecutors laterre-filed the obstruction of Congress charge in a supersedingindictment.
In an order made public Wednesday, Engelhardt said thatRainey's trial will be delayed pending the appeals court'sresolution of the appeal, which "will likely provide criticalparameters for further proceedings in this matter."
