PG&E stock seems like pretty curious compensation for 84 counts of involuntary manslaughter, but victims do seem in favor of the deal so they can finally get some renumeration.
We won’t depress you with every single incident of neglected PG&E equipment causing wildfires over the last five years, as any Californian realizes this has been something of a pattern. The constantly troubled utility company did reach a $13.5 billion settlement with roughly 70,000 victims of the 2015 Butte Fire, the 2017 Nuns and Tubbs fires, and the 2018 Camp Fire primarily, but two-thirds of the 70,000 victims had to accept the deal. And PG&E needed that acceptance so they could restructure debt in their ongoing bankruptcy proceedings, a situation that needs to be tidied up by June 30 in order for PG&E to — and I cannot believe I am saying this — qualify for another $21 billion bailout deal intended for utilities whose faulty equipment causes wildfires and kills people.
PG&E attorneys say preliminary voting results show "overwhelming acceptance" by wildfire victims for its reorganization plan pic.twitter.com/Jt1vNQqq9L— Winston Cho (@winstonscho) May 18, 2020
But everything is coming up roses in that plan, according to PG&E at least, as the New York Times reports that wildfire victims have OK’d the deal. PG&E words it pretty carefully in their press release announcement, saying that “preliminary voting results indicate overwhelming acceptance” of the offer. The Chronicle looked into that independently and it appears to be true at first glance, speaking to one lawyer who represents more than 6,000 victims, and reporting that “95 percent of them said yes.”
“Most of the clients had reservations about it, because the plan is badly flawed,” that same attorney Mike Danko told the Chronicle. “However, they also understood quite clearly that there was no alternative,” adding that rejection of the deal would have been a "thermonuclear meltdown.”
He doesn’t speak for everyone. One San Diego attorney told the Times that the voting process was “horrendous” and “extremely tainted” with ballots arriving late, or at the last minute.
Curiously, half of the compensation is in PG&E stock and not cash. But some of these victims have been waiting years for an offer, so they’re ready to settle for anything. Certainly investors think this is a fine deal, as PG&E stock is up about 8 percent today since the announcement (though the value of that stock is about half what it was last June.)
And there may be more Wall Street shenanigans at work here. About two weeks ago, the Chronicle profiled what sure look like conflicts of interest for attorney Mikal Watts, who represents 16,000 victims, but also has a $100 million line of credit funded in part by PG&E stocks and bonds.
PG&E has the additional unpleasant matter of 84 felony counts on involuntary manslaughter for which they are charged in the Camp Fire, to which they’ve already agreed to plead guilty. Their sentencing was slated to start a week from today, but because of COVID-19 has been moved out to June 16.
Only in America can you plead guilty to 84 felony counts of manslaughter as part of a bankruptcy plan that makes you eligible for part of a $21 billion jackpot of government funding. But the scheme may still not work, as the California Public Utilities Commission votes Thursday on whether to approve that bankruptcy plan, and they may still shoot it down.
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