Former PG&E executives to pay $117 million to settle claims over California wildfires

1 October 2022

USA – Former top officers with PG&E Corp. have agreed to pay $117 million to settle claims over the utility’s role in the massive wildfires of 2017 and 2018.

The PG&E Fire Victim Trust announced Thursday that it had settled its lawsuit against former officers and directors of PG&E following the wine-country fires in 2017 and the 2018 Camp Fire, which killed 85 people and destroyed much of the town of Paradise.

A full list of officers and directors wasn’t immediately available. PG&E’s chief executive at the time of the Camp Fire, Geisha Williams, resigned shortly after the 2018 catastrophe in Paradise. Since then, the utility’s top management and board of directors has turned over almost completely under pressure from Gov. Gavin Newsom.

The Fire Victim Trust was set up to resolve wildfire victims’ claims against PG&E after the utility filed for bankruptcy in 2019 — but the $117 million settlement won’t go to the victims.

Instead, the money will be paid to various federal agencies, such as the Forest Service and Department of the Interior, whose property was damaged in the fires, said Frank Pitre, the lead attorney for the Fire Victim Trust.

PG&E exited bankruptcy owing the federal government millions of dollars and fire victims $13.5 billion, Pitre said. But a deal was made so the government wouldn’t take any of the money earmarked for victims. Instead, the feds agreed to get their money from the proceeds of lawsuits filed by the Victim Trust against various third parties, such as the former officers and directors.

In that sense, Pitre said Thursday’s settlement will help the fire victims. The federal government’s claims have been mostly satisfied, and now future lawsuits by the Victim Trust — against the utility’s tree-trimming contractors, for instance — will raise cash for the victims.

The roughly 70,000 victims are owed $13.5 billion under the agreement PG&E made to leave bankruptcy. So far the Victim Trust has disbursed $4.9 billion, but it’s uncertain whether victims will get the full amount they were promised. PG&E funded the trust with equal amounts cash and shares of PG&E stock, and thestock has traded considerably below the $14 mark needed to pay the claims in full.

The stock fell 38 cents a share Thursday, to $12.38, on the New York Stock Exchange.

Investors have been wary of buying PG&E’s stock in part because of the utility’s lingering vulnerability to wildfires. The company expects to pay claims exceeding $1 billion from last year’s Dixie Fire and this week disclosed it’s facing a criminal investigation in connection with the Mosquito Fire. The three-week-old fire has burned 76,775 acres in Placer and El Dorado counties and was 85% contained Thursday.

1. October 2022/by GFMCadmin