Wildfire victims may become low priority in PG&E bankruptcy case - Insurance News | InsuranceNewsNet

InsuranceNewsNet — Your Industry. One Source.™

Sign in
  • Subscribe
  • About
  • Advertise
  • Contact
Home Now reading Newswires
Topics
    • Advisor News
    • Annuity Index
    • Annuity News
    • Companies
    • Earnings
    • Fiduciary
    • From the Field: Expert Insights
    • Health/Employee Benefits
    • Insurance & Financial Fraud
    • INN Magazine
    • Insiders Only
    • Life Insurance News
    • Newswires
    • Property and Casualty
    • Regulation News
    • Sponsored Articles
    • Washington Wire
    • Videos
    • ———
    • About
    • Meet our Editorial Staff
    • Advertise
    • Contact
    • Newsletters
  • Exclusives
  • NewsWires
  • Magazine
  • Newsletters
Sign in or register to be an INNsider.
  • AdvisorNews
  • Annuity News
  • Companies
  • Earnings
  • Fiduciary
  • Health/Employee Benefits
  • Insurance & Financial Fraud
  • INN Exclusives
  • INN Magazine
  • Insurtech
  • Life Insurance News
  • Newswires
  • Property and Casualty
  • Regulation News
  • Sponsored Articles
  • Video
  • Washington Wire
  • Life Insurance
  • Annuities
  • Advisor
  • Health/Benefits
  • Property & Casualty
  • Insurtech
  • About
  • Advertise
  • Contact
  • Editorial Staff

Get Social

  • Facebook
  • X
  • LinkedIn
Newswires
Newswires RSS Get our newsletter
Order Prints
February 20, 2019 Newswires
Share
Share
Post
Email

Wildfire victims may become low priority in PG&E bankruptcy case

San Jose Mercury News (CA)

Feb. 20-- Feb. 20--A group of Butte County wildfire victims have filed a class action complaint against PG&E as part of the embattled utility's bankruptcy case, but a 50-year-old court ruling could place wildfire victims near the bottom of the stack of priorities in PG&E's insolvency proceeding, according to a market researcher and a Bay Area bankruptcy expert.

A 1968 U.S. Supreme Court ruling in connection with a fire that burned down an industrial building, if applied to the PG&E bankruptcy case, potentially would place the claims of the victims of the infernos of recent years at a lower priority than victims of any PG&E-caused wildfires that began after the company's bankruptcy filing this year.

"Any wildfire victims whose claims arise -- meaning, their property catches on fire -- from the date of PG&E's bankruptcy onward will have first priority in the bankruptcy case," said Jared Ellias, a bankruptcy expert and law professor with the UC Hastings College of the Law. This news organization asked Professor Ellias to assess whether that 1968 Supreme Court decision could come into play in the PG&E bankruptcy case which is being supervised by U.S. Bankruptcy Court Judge Dennis Montali.

That would produce an inferior status for the claims of victims of fires that occurred in 2017, such as the infernos that scorched the North Bay Wine Country and nearby regions; and the 2018 wildfire that roared through Butte County and essentially destroyed the town of Paradise, he said.

"The 2017 and 2018 wildfire victims as well as any other pre-bankruptcy creditor, including the bondholders," would be treated as unsecured claims with a status well behind fires that might occur in 2019, 2020 or 2021, during the course of the bankruptcy case, according to Ellias.

PG&E listed $51.69 billion in debts and $71.39 billion in assets in its Jan. 29 bankruptcy filing, seeking to reorganize its shattered finances that have been overshadowed by a mountain of potential liabilities arising from the lethal infernos of the last two years.

"To the extent that 2019 is a bad wildfire season, the 2019 victims could end up draining PG&E of a lot of value" that might otherwise have gone to the victims of 2017 and 2018, Ellias said.

This sort of outcome could generate plenty of controversy, according to a Wyco Researcher assessment posted on the Seeking Alpha investment site this week.

"From a political standpoint, there is going to be public outrage that 2019 (and as long as PG&E is in Ch.11) wildfire victims must be paid in full, but victims from 2017 and 2018 may get less than full recovery under a reorganization plan because they are in a lower priority class of unsecured claims," stated Wyco Researcher, an investment research firm.

The forbidding outlook for those harmed by previous infernos has emerged at the same time that victims of the November 2018 Camp Fire in Butte County have lodged a class action complaint against PG&E. The class action was filed with the bankruptcy court on Feb. 13.

The litigation claims that PG&E failed to properly maintain its aging electricity and power transmission system and didn't take preventative measures such as de-energizing power lines during hazardous conditions.

"PG&E's dereliction of these duties resulted in the deadliest and most destructive wildfire in California history," according to the class action complaint that was made part of the PG&E bankruptcy case.

The class action claimed that PG&E was negligent, caused a private and public nuisance, violated state laws, and violated health and safety codes. The litigation also seeks to apply a California doctrine called inverse condemnation, whereby PG&E and other major power companies in the state could be strictly liable if their equipment was a substantial cause of a fire, even if the utility followed established inspection and safety rules.

David Herndon, Julia Herndon, Gabriell Herndon, Jedidiah Herndon and Estafania Miranda, all Butte County residents, were listed as the principal plaintiffs in the class action arising from the Camp Fire, bankruptcy court records show.

"This catastrophe was preventable," the class action claimed, the court papers show.

___

(c)2019 the San Jose Mercury News (San Jose, Calif.)

Visit the San Jose Mercury News (San Jose, Calif.) at www.mercurynews.com

Distributed by Tribune Content Agency, LLC.

Older

The curious case of Lyme’s sunken sailboat unfolds

Newer

UnityPoint Health is now in-network for Humana and Molina

Advisor News

  • After the midterms: Addressing your clients’ tax concerns
  • Berkeley arts tax heads toward passage while public bank measure looks likely to fail
  • Americans’ sense of overall prosperity still ticks upward
  • Turning expanded eligibility into a better coverage plan for federal clients
  • Election 2026: Which of Berkeley's 7 ballot measures will pass?
More Advisor News

Annuity News

  • AM Best Affirms Credit Ratings of Knighthead Annuity & Life Assurance Company and Merit Life Insurance Co.
  • Jackson reports record annuity sales, increases share repurchase authorization
  • Why the market doesn’t need more carriers
  • Equitable, Corebridge steam toward merger with strong Q3 annuity sales
  • Jackson Announces New Annuity Offering for AARP Members
More Annuity News

Health/Employee Benefits News

  • Boeing retirees ‘shocked’ by 400% jump in health insurance premiums
  • MEDICAID PAYMENT TRANSPARENCY RULES: STATE REPORTING REQUIREMENTS AND LIMITATIONS
  • Medicare open enrollment continues through Dec. 7
  • Pike County facing year-end employee healthcare lapse
  • Investigators at University of Pennsylvania Report New Data on Managed Care (In-hospital Medicaid enrollment facilitates follow-up care for emergency general surgery patients): Managed Care
More Health/Employee Benefits News

Life Insurance News

  • AM Best Affirms Credit Ratings of Central States Indemnity Co. of Omaha and Its Subsidiary
  • National Life Group Approves $23 Million Dividends for 2027
  • Milliman’s proposed $15.5 million settlement puts life insurance underwriting data in focus
  • Brighthouse Financial Announces Third Quarter 2026 Results
  • Prudential earnings dip as Japan sales suspension offsets U.S. growth
More Life Insurance News

NEWS INSIDE

  • Companies
  • Earnings
  • Economic News
  • INN Magazine
  • Insurtech News
  • Newswires Feed
  • Regulation News
  • Washington Wire
  • Videos

FEATURED OFFERS

Press Releases

  • Insurvoice Lets Independent Insurance Agency Owners Analyze Every Customer Call in ChatGPT or Claude
  • Spectrum Weather & Specialty Insurance Celebrates 15 Years and Welcomes the Next Generation
  • Royal Neighbors of America® Increases Service Capacity
  • Benefits Studio Launches to Fill the Missing Middle of Benefits Navigation at $49/mo
  • Lauren Sinnott Named to Ragan’s Top Women in Marketing Awards, Class of 2026 
More Press Releases > Add Your Press Release >

How to Write For InsuranceNewsNet

Find out how you can submit content for publishing on our website.
View Guidelines

Topics

  • Advisor News
  • Annuity Index
  • Annuity News
  • Companies
  • Earnings
  • Fiduciary
  • From the Field: Expert Insights
  • Health/Employee Benefits
  • Insurance & Financial Fraud
  • INN Magazine
  • Insiders Only
  • Life Insurance News
  • Newswires
  • Property and Casualty
  • Regulation News
  • Sponsored Articles
  • Washington Wire
  • Videos
  • ———
  • About
  • Meet our Editorial Staff
  • Advertise
  • Contact
  • Newsletters

Top Sections

  • AdvisorNews
  • Annuity News
  • Health/Employee Benefits News
  • InsuranceNewsNet Magazine
  • Life Insurance News
  • Property and Casualty News
  • Washington Wire

Our Company

  • About
  • Advertise
  • Contact
  • Meet our Editorial Staff
  • Magazine Subscription
  • Write for INN

Sign up for our FREE e-Newsletter!

Get breaking news, exclusive stories, and money- making insights straight into your inbox.

select Newsletter Options
Facebook Linkedin Twitter
© 2026 InsuranceNewsNet.com, Inc. All rights reserved.
  • Terms & Conditions
  • Privacy Policy
  • InsuranceNewsNet Magazine

Sign in with your Insider Pro Account

Not registered? Become an Insider Pro.