Fire Victim Trust to issue new round of payments to PG&E wildfire claimants

To date, victims have received up to 60% on their claims for homes, businesses and loved ones lost in the 2015 Butte Fire, the 2017 North Bay wildfires and the 2018 Camp Fire. That will now bump up to 66% starting April 25.

"We have worked diligently from the beginning to compensate fire survivors for their losses, and we will continue to do so to bring closure to this process for each of you," Fire Victim Trust Administrator Cathy Yanni said in a March 12 letter.

Since its 2020 inception, the trust has been dogged with questions over long-awaited compensation. A fierce struggle between shareholders, bondholders, insurers and other creditors over PG&E's assets in bankruptcy court left more than 70,000 victims to split $13.5 billion, with only half in cash and the rest in the utility's ailing stock.

The trust has slowly sold off chunks of shares, waiting for the stock price to rebound, which didn't happen to notable degree until 2022. Following eight sales of a total 410 million shares, trust administrators offloaded the last chunk 67.7 million shares in December, clearing $1.2 billion for the fund.

That brought the total for victims to more than $14 billion, exceeding the trust's initial value and many expectations.

Still, the amount falls far short of covering victims' $19.2 billion in awarded claims. The trust has paid out more than $11.2 billion so far.

The ability to disburse new payments, the trust said in its letter, hinged on the final stock sale as well as meeting its goal of issuing settlement offers for 100% of claims.

Roughly 1,000 of those offers, or 3% of the total, have yet to be accepted by victims who may consider their allotted amount unfair and have decided to challenge the determinations. In those instances, the extent of their recourse is to go through an arbitration process that is ultimately still decided by the trustee.

A handful of corporations and well-positioned individuals used courtroom maneuvering during bankruptcy proceedings to preserve the right to challenge their offers in court — an option unknown to many other victims.

The size and timing of future payouts from the trust, of which there will be at least one more, will depend on resolving negotiations over the last undecided claims, according to the trust.

The trust attributed the resolution of 900 claims this year to tightened deadlines and extensions. The claims for the select few with the right to sue, including some worth tens or hundreds of millions of dollars for corporations like Comcast, AT&T and Adventist Health, have all been resolved.

Trust spokesperson Steve Burns said payments for finalized claims will be issued on April 25. Those without legal representation may receive funds that same day, while others could have to wait longer depending how law firms representing them handle disbursement.

To receive the upcoming or future payments, recipients must sign two releases. One protects insurers from any liability related to settlement claims. The other would keep victims from making any future claim against the trust or those charged with its administration and oversight. The latter is standard, the trust states on its website, and both were set out in the bankruptcy plan ratified by a majority of victims before the trust's creation.

The trust has been seeking release signatures since last September, but some fire victims have balked at the prospect of what they see as giving up further rights in a long process they feel has already forced them to accept less than they're due. The trust said that close to 70% of claimants have signed so far.

"They continue to arrive at a steady pace, so we are not overly concerned at this point," Burns said.

The broader issue of liability releases in bankruptcy plans has received increased attention with the Supreme Court review of Purdue Pharma's multibillion-dollar settlement that would shield members of the Sackler family who owned the company.

Despite outstanding questions and concerns, the news of additional compensation to fire victims marks a welcome and significant milestone in the trust's goal to wind down operations this year, which it said it is still on track to do.

Separately, fire victims are still waiting on news from Congress about legislation that would exempt them from paying federal income taxes on their settlement money.

The latest iteration of the bill cleared a major hurdle when it passed the U.S. House of Representatives as part of a bipartisan tax deal in January, but the Senate has yet to take action, making it increasingly unlikely that any relief would come in time for this year's tax filing deadline.

"In Your Corner" is a column that puts watchdog reporting to work for the community. If you have a concern, a tip, or a hunch, you can reach "In Your Corner" Columnist Marisa Endicott at 707-521-5470 or [email protected]. On X (formerly Twitter) @InYourCornerTPD and Facebook @InYourCornerTPD.

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