$105M for PG&E fire victims aid too little, say attorneys

A bankruptcy judge approved Pacific Gas & Electric Corp.'s plan for a $105 million assistance program for wildfire victims over objections it is significantly underfunded.

The program is far short of the $250 million the committee representing wildfire plaintiffs requested, but U.S. Bankruptcy Judge Dennis Montali said he does not have the power to make the utility pay more.

Montali is taking a "very measured and reasoned view of what powers he has" because there is no provision in the bankruptcy code that clearly gives him the authority to force the utility to increase its voluntary contribution to the fund, said USC School of Law Professor Robert Rasmussen.

"Everyone's' sympathies [are] with the victims, but he's saying, 'I can't make rulings that will cause problems later in the case given the procedural requirements,'" Rasmussen added.

Montali has been justifiably focused on "speed and moving things along," Rasmussen said.

"The faster we can get this process moving, the better," the judge said at the Wednesday hearing.

Robert A. Julian, an attorney for the wildfire victims, argued the program falls far short of the amount necessary to cover immediate living accommodations for those who say they lost their homes in wildfires caused by PG&E over the past two years. Determining distribution of the money as it stands would create chaos and force former neighbors to fight for limited funds, the Baker & Hostetler partner continued.

There are 15,384 households eligible to receive assistance, according to court filings.

Money put into the fund will be deducted from wildfire plaintiffs' claims against the utility.

"If money is paid to a victim, there has to be some credit for it on account of a claim that that victim has," Montali said.

The judge also agreed to extend PG&E's deadline to propose a reorganization plan by four months instead of the six months it requested. The utility said it is necessary because state lawmakers could pass laws, including some that concern inverse condemnation, that would affect future liability.

Attorneys for Gov. Gavin Newsom urged Montali to limit the extension to 75 days because anything longer would "send the wrong message" that PG&E is continuing with a "business-as-usual approach."

Rasmussen said extensions are typically routinely granted and Montali showed he was "listening to all sides" by splitting the difference.

The Department of Forestry and Fire Protection found last week that PG&E equipment caused last year's historically destructive Camp Fire.