PG&E wildfire victims’ fund sues former executives to pay claims from California disasters
The trust paying claims to PG&E Corp. wildfire victims sued nearly two-dozen of the utility’s former executives and directors Wednesday, blaming them for the 2017 wine country fires and the 2018 Camp Fire.
Among those being sued by the Fire Victim Trust: former PG&E Chief Executive Geisha Williams, who ran the company until shortly after the Camp Fire plunged the utility into Chapter 11 bankruptcy.
Frank Pitre, a lawyer for the trust, said the lawsuit could generate as much as $400 million for the tens of thousands of fire victims awaiting payment.
The lawsuit, filed in San Francisco Superior Court, comes a month after the fund’s trustee told victims that the fund is about $1 billion short of the $13.5 billion needed to pay claims. The trust is funded in part with shares of PG&E stock, and a drop in the stock’s value in recent months has depleted the trust’s overall value.
Pitre said he believes the share price will eventually recover and there will be enough money to pay all the claims.
Nonetheless, “we need to maximize every dollar,” he said.
The lawsuit says the 22 former officers and directors were responsible for not implementing a “power shutoff system” that could have prevented the 2017 fires, which killed more than 40 people in the wine country. They also are being blamed for not properly maintaining the faulty transmission tower that caused the Camp Fire, which killed 85 people and destroyed most of the town of Paradise.
“They had the facts, they had the information and they buried their heads in the sand,” Pitre said.
PG&E pleaded guilty to manslaughter charges last June in the Camp Fire, the deadliest wildfire in California history.
As part of its exit from bankruptcy last summer, PG&E agreed to fund a $13.5 billion trust — half in cash, half in PG&E stock — to pay victims’ claims. The trust was also handed the rights, normally reserved for public shareholders, to sue former officers and directors.
If Wednesday’s lawsuit succeeds, the trust would get paid by the company that insures PG&E’s officers and directors, according to Pitre.