PG&E equipment has been linked to the most destructive fire in California’s history, the 2018 Camp Fire, as well as other fires which caused at least 151 deaths. According to BBC, PG&E has already settled with insurers and local authorities.

The Sacramento Bee reports that the Californian utility company PG&E Corp. (PG&E) has settled with the Federal Emergency Management Agency (FEMA) over their actions which contributed to more than a dozen of the deadly wildfires in California. PG&E settled for $1 billion.

Several parties are fighting over the terms of the PG&E bankruptcy plan, including California Governor Gavin Newsom who has been fighting to push the utility company to “radically restructure” and has said the updated plan doesn’t meet all of his objections to the original. In order to qualify for insurance that covers utility liabilities, PG&E must exit bankruptcy by June 30.

FEMA originally demanded $3.9 billion but reduced that number when it became clear that it would come directly out of fire victims’ pockets. Roughly 80,000 people suffered losses from the fire, and each of those victims gets to vote on whether or not to accept the PG&E bankruptcy plan. Allocating billions to pay off the government would likely have caused victims to reject the plan.

PG&E has established a $13.5 billion fund for fire victims, and FEMA’s payment was originally meant to come from that fund. Instead, FEMA now says they will wait to receive their settlement until victims have been fully compensated. Before the settlement was reached, PG&E tried to get out of paying FEMA aby saying they couldn’t be held responsible for the fire because it wasn’t started deliberately.

PG&E Bankruptcy

According to the Los Angeles Times (LA Times) quoting the filing, PG&E filed for Chapter 11 bankruptcy in Jan. 2019 in order to “make sure that we have sufficient liquidity to serve our customers and support our operations and obligations.” Lawmakers saw this as a way to pay less to victims and other debt-holders.

The PG&E bankruptcy is “extremely disappointing and underscores the need for change at PG&E in both its leadership and corporate culture,” State Sen. Bill Dodd (D-Napa) told the LA Times.

When the company filed for bankruptcy, they reported $71.4 billion in assets and $51.7 billion in debts. It received approval from a judge to continue paying workers but was denied its request to pay 2018 bonuses. Now, executives are once again asking for bonuses, this time looking to splash out $454 million.

This request comes days after PG&E asked a different judge not to require the company to hire more tree-trimmers for 2020 claiming they didn’t have the funds. The PG&E bankruptcy has reportedly left tens of thousands of victims wondering if they will ever see relief for the damage done to their homes and families while executives at the company receive millions of dollars in salary and bonuses.

PG&E investors also disapproved of the company’s decision to file for bankruptcy. According to the LA Times, a hedge fund called BlueMountain Capital Management which holds more than 11 million shares of the utility, could see all of those shares wiped out.

“Instead of rolling up their sleeves and getting to work, current board members are poised to concede defeat and pass the buck to a bankruptcy judge. There is no imminent financial crisis — there is a leadership crisis,” BlueMountain said in an open letter to other shareholders.

This article is not legal advice. It is presented
for informational purposes only.