Wildfire Survivors' Committee Urges Halt to Voting on PG&E Settlement

The committee representing Northern California wildfire survivors wants participants to postpone voting on a $13.5 billion compensation deal with PG&E until May 1 — a hurdle that could jeopardize the utility's ability to exit bankruptcy in the coming months.

In a brief filed Monday in a federal bankruptcy court in San Francisco, the group — known as the Tort Claimants Committee (TCC), which represents victims of recent wildfires caused by PG&E's equipment — accused the massive utility of changing the terms of the plan that the two parties had brokered in December.

Half of the settlement is set to be paid into a victims' compensation trust as PG&E stock. The utility's shares — volatile even before the coronavirus pandemic rocked U.S. markets — have now lost roughly half their value since mid-February.

The committee said PG&E has refused to guarantee that the $6.75 billion in stock issued to the trust will actually retain its value, even as the company has recently raised its debt load by $3.7 billion more than what the settlement called for — a factor that could decrease stock value.

"The coronavirus worldwide tragedy is devaluing the [claimants'] share of PG&E’s equity at an amount lower than the $6.75 billion value," Elizabeth Green, an attorney with the firm BakerHostetler, wrote on behalf of the committee.

The impasse between PG&E and the survivors' committee comes just days after fire victims began voting on the deal.

A speedy resolution of the agreement with wildfire survivors is a prerequisite of PG&E's exit from Chapter 11 bankruptcy protection, a benchmark it must meet by June 30 in order to tap a state wildfire insurance fund.

Three fire survivors who sat on the TCC resigned over the last two weeks, saying they had been prevented from freely voicing their opposition to the settlement. And now, the remaining committee members are seeking the court's approval to send survivors a letter explaining their own concerns.

The information provided in the proposed letter may have a material impact on how and when fire victim claimants vote," Green wrote. "The proposed letter is necessary to provide the fire victim claimants with adequate information regarding the plan."

"I think it's a sign that PG&E has finally pushed people too far," said Helen Sedwick, who lost her home in the 2017 Nuns Fire. "The impact of this settlement affects tens of thousands of Californians."

But tort attorneys representing tens of thousands of wildfire survivors say the committee members should have raised their concerns sooner — well before voting began on April 1 — and are not representing the interests of a majority of fire victims.

"We appreciate the efforts of the [committee] to firm up the deal and get fire victims every penny for which we bargained," said attorney Amanda Riddle, who represents 6,500 wildfire survivors. She recommended, however, that "our clients continue to vote in favor of the plan, as it is the best plan to get them paid quickly and fairly."

PG&E also pushed back on the committee's critique.

In a written statement, the company said the committee's filing is "an attempt to change the settlement it agreed to, despite the fact that the agreement has the broad support of the parties and the Governor's Office and is the best and fastest path to getting victims paid."

The company added, "The risk of the stock price fluctuating was well understood by all parties and was clearly and overly included in the [committee's] own statements to fire victims."

Gov. Gavin Newsom's office didn't immediately respond to a request for comment on the issues raised by the committee.