PG&E Won’t Make Victims of Deadly Fire Pay Its Criminal Fine

By Joel Rosenblatt | March 31, 2020

PG&E Corp. won’t tap a fund for wildfire victims to pay $4 million in fines and expenses for involuntary manslaughter, avoiding a possible hurdle to its exit from bankruptcy.

Insurers with claims against PG&E in bankruptcy agreed to wait 15 days to be paid, letting the fund generate enough interest to cover the fine, according to a lawyer for the fire victims.

“This takes care of our concerns that paying the fine would reduce the amount available for the victims,” Mike Danko, the lawyer for the victims, said in an email. “We’re satisfied with this result.”

PG&E said initially it would pay the fine as part of a guilty plea to 84 counts of involuntary manslaughter, admitting its equipment ignited California’s deadliest wildfire in 2018. The company said the payment would come out of a $13.5 billion settlement fund for victims of the fire.

After that announcment, Danko said PG&E’s fire victims might withhold votes critical to getting PG&E’s bankruptcy plan approved unless it came up with an alternative.

By delaying the payment, the fines “will not reduce the amount of funds available to satisfy wildfire victim claims,” PG&E said in an emailed statement.

The utility reiterated that its bankruptcy plan must be approved by the California Public Utilities Commission. A bankruptcy court hearing on the plan is scheduled for May 27.

The plea deal with Butte County District Attorney Mike Ramsey resolves all state charges stemming from the Camp Fire, which pushed PG&E into Chapter 11 last year. The announcement followed PG&E’s accord with California Governor Gavin Newsom over its restructuring plan, clearing a crucial hurdle in its bankruptcy case.

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