California's largest utility, Pacific Gas & Electric (PG&E)
PG&E filed for bankruptcy as it became clear that they would be held responsible for several deadly fires in 2017 and 2018, including the Camp Fire. The company has since pled guilty to 84 counts of involuntary manslaughter. Fees associated with these charges and other debts owed by the company each threaten the funds left over to compensate the victims of the fires.
As a part of the utility's bankruptcy negotiations with victims and the state of California, PG&E has set aside a $13.5 billion fund to go to victims and families of those lost in the fires. The fund has been the target of several fees, the most recent of which is $19 million to be put towards administrative costs associated with the fund. PG&E will pay an additional $2.5 million in preliminary trust expenses.
The $21.8 million budget for administering the fund was agreed upon by PG&E and a committee representing the victims. The deal was also approved by U.S. Bankruptcy Judge Dennis Montali. Roughly half will go to the firm handling the claims, BrownGreer. Brown Greer will, in turn, be monitored by the fund's trustee, John Trotter, as well as the fund's claims administrator, Cathy Yanni. Trotter is expected to receive around $1 million for his oversight while Yanni is in line to receive $1.54 million.
PG&E needs to exit bankruptcy by August 29 with a plan approved by June 30 to qualify for certain insurance assistance; however, if they miss that date, even more administrative fees could be drawn out of the victims' fund. The upheaval surrounding the coronavirus pandemic makes it even more difficult for PG&E to exit bankruptcy in time. The company will need tens of billions of dollars to finance its proposed bankruptcy plan.
Because of this uncertainty, PG&E drew up a contingency plan that would put the plan into effect on Dec. 30. If this pan comes into effect, fire victims will have to wait until next year to see any compensation. In that case, another $21.2 million could be taken out of the fund.
Last month, PG&E was found guilty of 84 counts of involuntary manslaughter for which they have agreed to pay $4 million in fines. Originally, the utility tried to pull the money for the fines for their crimes from the fund meant to compensate the victims of those crimes. The suggestion was met with indignant backlash across the board.
However, fees and fines aren't the only threat to the victims' fund. Roughly $6.75 billion of the fund is made up of PG&E stock. The entire stock market is in chaos under the pandemic, and PG&E is no exception. That chunk of stock may now be worth only $4.85 billion, according to Market Watch.
