Wildfire victims support bid to wrest control of PG&E ahead of Tubbs trial

Oct. 8--Wildfire victims have stepped into the fray of one of the largest corporate bankruptcy cases in U.S. history, backing a competing proposal by a group of PG&E bondholders to wrest control of the company from its majority shareholders and set aside more money for individuals, businesses and others who suffered from catastrophic wildfires sparked by electrical equipment in 2017 and 2018.

Billions of dollars in financial payouts will be provided to wildfire victims who file simple claims in bankruptcy court, and the argument before U.S. Bankruptcy Judge Dennis Montali is over who gets to decide how much.

The new proposal would set a cap on victim payouts months before a California jury will have the chance, in a trial slated to start January, to decide whether and how much PG&E is liable for damages caused by the 2017 Tubbs fire, settling the controversy over how that fire started and whether the utility shares fault for the destruction.

Monday, Montali repeatedly voiced sharp skepticism about the bondholders' plan, urging lawyers to explain why a potentially protracted legal battle over management of the investor-owned utility would benefit wildfire victims.

"To be blunt, my fear is that having a competing plan was designed as a battle over corporate control between two different money interests and has nothing to do with paying victims," said Montali, who is expected to issue a written ruling on the request later this week.

Two years ago, the fires that erupted in the North Bay and Sierra Nevada foothills led to record-breaking devastation, killing 44 people and destroying more than 6,400 homes. In Sonoma County, the flames took more than 5,300 homes and 24 lives.

Most of the fires were started by PG&E equipment and power lines, undermining the financial stability of the state's largest power company even before a worse outbreak of wildfire in Butte County last year, when a live wire broke free from a 100-year-old transmission tower and started the Camp fire. It destroyed about 14,000 homes and killed 85 people.

The start of 2019 continued on a momentous path. Cal Fire announced the Tubbs fire was likely sparked by private power equipment outside of Calistoga and not PG&E's lines, a determination that upended widely held beliefs in Sonoma and Napa counties about how the inferno began and who was responsible for the damage.

The region, its residents, businesses and local governments were plunged into uncertainty over whether they would receive financial compensation for massive and in many cases unmanageable losses.

Five days after Cal Fire's announcement, PG&E said it was seeking bankruptcy protection under the pressure of more than $30 billion in wildfire liabilities from 2017 and 2018. The move halted all lawsuits by wildfire victims seeking compensation from the utility.

So while the court fights stalled, the recovery efforts in Sonoma County and beyond marked progress. While thousands of fire-scarred lots still remain vacant, just as many now either have new homes or some signs of building activity.

Few fire survivors say they have staked their futures on compensation from the wildfire cases against PG&E, given the long timeline and the daunting prospects of an unfamiliar legal process.

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