Pacific Gas and Electric's top finance official was questioned Monday by wildfire victims and creditors at a bankruptcy court hearing, during which the power company revealed that it had been considering a bankruptcy filing for months before starting the proceeding.
The meeting in San Francisco of wildfire victims and creditors affected by PG&E's bankruptcy case raised questions about precisely how and when the embattled and disgraced utility intends to compensate victims of the fires in the North Bay Wine County and nearby regions in October 2017 and Butte County in November 2018.
"I don't trust a word PG&E says about this," Kirk Trostle, a former Paradise resident who is now living in the Shasta County community of Happy Valley south of Redding, said in an interview after the meeting of creditors. "I'm very concerned about whether PG&E is going to pay the wildfire victims. We lost everything."
Last fall's Camp Fire essentially destroyed the town of Paradise. PG&E reported Feb. 28 that it is "probable" that investigators will determine that its equipment ignited the most deadly and destructive wildfire in California history.
The concerns of fire victims and creditors arose despite repeated assurances from PG&E Chief Financial Officer Jason Wells that the company intended to compensate fire victims and other creditors.
"We intend to fairly, equitably and expeditiously address claims" through the bankruptcy proceeding, Wells said.
Listing $51.69 billion in debts, PG&E filed for bankruptcy Jan. 29, seeking to ward off creditors while it attempts to reorganize its finances. PG&E claims that it buckled beneath a mountain of wildfire liabilities that could reach $30 billion or more, and other debts.
"I'm very concerned about whether there will be just compensation for fire victims," Gerald Singleton, an attorney representing 3,500 victims of the PG&E-linked fires of 2017 and 2018, said after the hearing.
Wells, who was the lead PG&E representative for the bankruptcy hearing conducted by Assistant U.S. Trustee Timothy Laffredi, chose his words carefully throughout the proceeding.
Some questions by Gary Agajanian, president of Agajanian Vineyards & Wine in the Napa Valley, produced a tense exchange involving Wells and PG&E's bankruptcy attorney for the hearing.
Agajanian asked Wells whether any factors were preventing PG&E from conducting a thorough vegetation and tree management program as a way of reducing wildfire dangers.
"That is not the subject of today's hearing," PG&E attorney Stephen Karotkin said, forestalling a reponse from Wells. When pressed for an answer by Agajanian, Karotkin said: "I am directing him (Wells) not to answer the question."
Eventually the trustee, Laffredi, noted PG&E's actions, stating that "the debtor refuses to answer the question."
Attorney Steven Campora, whose clients include victims of a PG&E-caused Butte Fire of 2015 that scorched parts of Amador County and Calaveras County, asked PG&E about the timing of a $2.5 million severance package for former PG&E CEO Geisha Williams. Williams left PG&E in January after a tenure that included PG&E's involvement in the lethal fires of 2017 and 2018. Campora also questioned PG&E about bonuses, golden parachutes and other payments.
"There is a real problem when PG&E says it can't pay the settlements from the already resolved Butte Fire claims, but it's able to pay Geisha Williams $2.5 million in severance," Campora said.
William Daniels, an attorney who represents some wildfire victims, questioned PG&E regarding some of the possible motivations for the bankruptcy filing.
In 2016, PG&E was convicted in a federal criminal case for felonies it committed before and after a fatal explosion in 2010 that killed eight people and leveled a San Bruno neighborhood. PG&E faces the prospect of a court finding that it violated its probation in that explosion, a determination that could impose tough new requirements for preventing future wildfires.
The utility, whose equipment has been linked to several fires in 2017 and 2018, also could become a defendant in criminal cases arising from those fires.
"There was no motivation to file for bankruptcy based on any current or potential criminal proceedings," Wells said.
Wells said at the hearing that PG&E's bankruptcy filing had been in the works for months before the it was made in late January.
"The planning for a potential bankruptcy escalated after the Camp Fire" of November 2018, he said. In January, PG&E determined that it couldn't employ a mechanism to finance wildfire payments. Then on Jan. 14, Wells said, "We decided that bankruptcy would be a likely path."
