Former PG&E executives agree to $117-million settlement over California wildfires
Former executives with utility giant Pacific Gas & Electric have reached a $117-million settlement agreement in connection with the 2017 North Bay fires and the 2018 Camp fire, officials said.
The former officers and directors were sued by a victim trust that claimed the deadly fires were the direct result of the former executives’ actions, and the trust announced on Thursday that the agreement was finalized in San Francisco County Superior Court.
A dozen fires that ripped through Northern California in October 2017 were sparked by downed power lines owned by PG&E, according to the California Department of Forestry and Fire Protection. The fires raged across California’s wine country, including Napa, Sonoma, Humboldt, Butte and Mendocino counties, and killed 19 people.
A year later, the Camp fire was sparked in Butte County by faulty electrical equipment operated by PG&E, authorities said. The fire decimated several communities, including the town of Paradise. In total, 85 people died in the fire, making it the deadliest blaze in the state’s history, according to authorities.
PG&E filed for bankruptcy in 2019 after it announced a $13.5-billion settlement with fire victims and their families. The PG&E Fire Victim Trust was created after the agreement under the utility company’s Chapter 11 reorganization plan.
Last year, the trust sued 20 former PG&E officers and directors, claiming they were directly responsible for the fires because of their breach of fiduciary duties to act in the best interest of the utility company.
Investigators with the California Public Utilities Commission found that there were systematic problems with PG&E’s oversight of the nearly 100-year-old power line that sparked the Camp fire. PG&E took over the power line in 1930, according to a December 2019 report.
Pacific Gas & Electric on Friday announced a $13.5 billion settlement for a string of recent fires in Northern California that killed dozens, and destroyed thousands of homes and businesses.
PG&E pleaded guilty to 84 counts of involuntary manslaughter in federal court.
The lawsuit filed by the trust sought to hold the former executives accountable for not properly maintaining vegetation around electrical equipment and for not installing power shutoff equipment at the time of the 2017 fire. The suit also argued that the utility company did not properly update 100-year-old equipment in connection with the Camp fire.
Under its bankruptcy plan, PG&E allowed the Fire Victim Trust to pursue any claims held by the utility company, including against its former directors and officers, which the company says it suffered in connection with the wildfires, the trust said in a news release.
The settlement was finalized in July and the utility company is expected to submitted its approval in court, said attorney Frank Pitre, who is lead counsel for the trust in this lawsuit. Pitre is also a member of the trust’s oversight committee.
“These funds will be used to satisfy the vast majority of outstanding fire victim claims held by certain federal agencies that assisted in battling the fires and providing assistance to victims,” Pitre said in a statement.
That funding will go to agencies such as the Federal Emergency Management Agency, state agencies and other groups that helped house fire victims, Pitre said, which the trust is required to pay as part of the bankruptcy plan.
“With the vast majority of this settlement with the federal agencies satisfied, the trust is close to being able to use all future net recoveries from assigned claims to benefit other fire victims,” Pitre said.
News of the settlement was met with skepticism by Santa Rosa resident Will Abrams, whose home was destroyed in the Tubbs fire in 2017. As one of the approximately 70,000 victims who were affected by the wildfires from 2015 to 2018, Abrams wants to know how much money the Fire Victim Trust is spending to pay for legal fees and to represent their interests.
“One group that absolutely benefits from the suits are the attorneys. The attorneys are getting paid for litigating these cases,” Abrams told The Times. “So if the federal agencies are getting the beneficiaries of this lawsuit and getting some monies out of this, how much of the attorneys’ fees and other fees are coming out of the Fire Victim Trust, coming out of victims’ pockets?”
Abrams has filed a motion in court for more transparency in the bankruptcy process and for the trust to disclose how much money is being spent.
Pitre told The Times his firm is working on a contingency basis but did not disclose how much of the Fire Victim Trust is going to pay for attorney fees.
“The goal was always to try and preserve as much of the $13.5 billion that was earmarked and that was satisfied for the fire victims,” Pitre said.
Abrams said the opaque nature of the bankruptcy proceedings has left him frustrated. Nearly five years after the Tubbs fire, Abrams has still not received any information about how much money he can expect.
“Many victims are without understanding of how much they’re going to get paid,” Abrams said.
In a written statement, PG&E called the agreement “another step forward in PG&E’s ongoing effort to resolve issues outstanding from before its bankruptcy and to move forward focused on our commitments to deliver safe, clean and reliable energy to our customers, and to continue the important work of reducing risk across our energy system.”
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