Additional settlement money headed to wildfire victims as PG&E’s stock jumps

Victims of several Northern California fires who reached a settlement with PG&E Co. will get an increased distribution payout later this month, according to the retired state appellate justice who is in charge of the trust.

Fire victims who previously received a distribution from the trust will receive a supplemental payment, and pro rata payments - which had been 30% of the value of approved claims - will be increased to 45%, retired Justice John K. " Jack" Trotter wrote in an announcement released Wednesday.

One boost to the Fire Victim Trust's finances has been the first sale of the trust's 477 million shares of PG&E that were included as the bulk of the settlement.

The good news for wildfire victims is that PG&E shares, which bottomed out at $8.24 last summer have rallied sharply during the past six months, rising 36% to close Wednesday at $12.25.

The trust sold 40 million shares, Trotter reported, at what appears to be $12 per share, boosting the trust's cash position by approximately $480 million. Its cash coffers also got another $592 million after PG&E paid the final installment on a deferred payment agreement.

"We continue to focus our Trust administration efforts on doing all that we can do to ease the suffering of the fire victims," Trotter wrote in a statement. "With this increase in distribution payments, we further our goal to get funds out of the Trust and into fire victims' hands as quickly as possible."

As trustee, Trotter spent months last year working out an agreement with the utility, then negotiating with the Internal Revenue Service and the state so the trust could sell its 477 million shares without the beneficiaries incurring capital gains taxes. But by last summer, PG&E stock had fallen below the $9 break-even amount, so there were no capital gains to take.

The rally of PG&E shares since then is good news for property owners who sued the company, and they will be better off if the utility's stock keeps rising.

Trotter was unavailable for comment Wednesday.

In an interview last summer, the retired 4th District Court of Appeal justice acknowledged that he was at the mercy of the stock market as well as events that would affect PG&E's stock price - such as more wildfires.

"Those are the things that keep you up at night," Trotter told the Daily Journal then.

The trust represents victims of the 2015 Butte Fire, 2017 North Bay Fires and 2018 Camp Fire. After the increased payment later this month, the total disbursement to 35,000 victims whose claims have been approved will rise to approximately $2.5 billion, trust officials reported.

The settlement was negotiated by PG&E with plaintiffs' attorneys and approved by U.S. Bankruptcy Judge Dennis Montali of San Francisco. It was supposed to be worth $13.5 billion, although that amount depends on the utility's stock price.

State legislators wrote a letter to Attorney General Rob Bonta complaining about the slow pace of getting money to victims. Trotter responded by saying he and trust officials are getting cash to them as quickly as possible under difficult circumstances.

"We recognize that because of PG&E's bankruptcy, the fire victims have been waiting a long time for compensation," Trotter wrote in Wednesday's statement. "We will continue to move diligently on behalf of the fire victims to attain the highest level of compensation permitted under the Bankruptcy Court orders and the governing Trust documents."