PG&E Won't Commit to Paying Settlements to 2015 Fire Victims

(Bloomberg) -- PG&E Corp. is so cash-starved that it won’t commit to paying settlements reached with people who lost their homes in a 2015 wildfire caused by a tree falling on a power line.

The disclosure by a lawyer for the utility giant was greeted warily by a state judge at a hearing Thursday in Sacramento. He declined to grant PG&E’s request, in light of its plan to file for bankruptcy this month, to put off an April trial over damages from the Butte Fire that torched 70,000 acres and destroyed almost 500 homes.

The September 2015 fire in the Sierra Nevada foothills did modest damage compared with Northern California blazes in PG&E’s service area in 2017 and 2018 that, taken together, killed more than 100 people, razed tens of thousands of homes and burned hundreds of thousands of acres.

PG&E Won't Commit to Paying Settlements to 2015 Fire Victims

Financial uncertainty over as much as $30 billion in liabilities from the 2017 and 2018 wildfires has created a state of “limbo” in which PG&E can’t commit to previously reached settlements, said Kristen Bird, a lawyer for the company.

PG&E is in “a mode of trying to conserve resources,” Bird told Superior Court Judge Allen Sumner. “We are not in a position to tell anybody if they are going to get paid or how much.”

Steve Campora, who has settled cases with PG&E from the 2015 fire, said the company’s claims that it cares about victims and the rebuilding of communities is the "height of hypocrisy" if it’s unwilling to stand by its settlements. Property owners have litigated the case for three years, arrived at a settlement, "and now you can’t tell them whether they’re going to get paid?" he said.

Bird told Sumner the company has settled with about 2,800 plaintiffs, or 1,500 households, in the case. The trial set for April 1 is over unresolved claims involving an additional 150 households.

PG&E has paid insurance claims of almost $1 billion from the Butte Fire and faces about $75 million in unresolved claims, according to lawyers representing victims. One of those attorneys, Amanda Riddle, said PG&E is refusing to say if it will honor 11 of its settlements.

“PG&E continues to be more concerned with its executives’ and investors’ compensation than it is with the victims that have suffered so greatly due the company’s recklessness,” Riddle said.

Andy Castagnola, a PG&E spokesman, said in an email that the company remains “open to discussions with individual plaintiffs and their counsel to better understand their views about their cases and to make the best effort to identify a possible settlement range.”

Sumner ordered PG&E to confirm by Jan. 22 whether it will honor the outstanding settlements.

PG&E said it plans to file for bankruptcy around Jan. 29. Under federal law, the filing would automatically put on hold thousands of claims filed in California courts by victims of fires. Criminal and regulatory actions can advance.

“Bankruptcy has not been filed,” Sumner said at the hearing, adding that until then “this court has jurisdiction.” The judge scheduled a Feb. 4 hearing in the case, adding that he is “fully aware that by then this court’s authority may have turned into a pumpkin. But if PG&E does not file we need to have something on the calendar.”

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