SACRAMENTO, Calif. — With frustration building over delayed payments and a lack of transparency for tens of thousands of wildfire victims, a formal motion filed Thursday seeks to have PG&E’s federal bankruptcy judge to step down.
“A reasonable person with knowledge of the facts would question Judge [Dennis] Montali’s impartiality within this case,” 2017 Tubbs Fire survivor Will Abrams wrote in court documents, calling for the judge to be replaced “as soon as practicable.”
Victims of multiple PG&E wildfires have been harmed by delayed payment under the bankruptcy deal Montali approved two years ago, which he still supervises today.
“It’s devastating. I’m tired of being here. I’m tired,” said Eula Yetter, who’s spent the last seven years living in a trailer where her house once stood. “I think if a person went to prison, they'd live better than this.”
Thousands of survivors have received little or nothing from the Fire Victim Trust, an entity created by the bankruptcy deal to assume the liability damages PG&E owed.
As of its most recent report, nearly 17,000 out of 68,000 fire victims had yet to receive any money from the Fire Victim Trust.
More than 8,000 victims haven’t even been told the size of their settlements.
JUDGE’S RELATIONSHIPS SCRUTINIZED
“It's important to understand financial incentives or disincentives that are affecting victims,” said Abrams, who is not a lawyer but drafted the formal motion asking for Montali's recusal from the case.
Abrams has taken an activist role in the bankruptcy, trying to improve the safety of PG&E in earlier proceedings and more recently to open up details about the trust and the financial interests of the people involved with it.
Frustrated by the lack of information Montali has made available, he says he felt little choice but to call for the bankruptcy judge to step aside.
“All of those motions to create more transparency within the case have been denied,” Abrams said.
Abrams’ formal motion accuses Judge Montali of failing to disclose a longtime relationship with a pair of fire victims to whom he gave special rights in the bankruptcy.
Out of nearly 70,000 PG&E fire victims, Montali awarded only five the right to “reject” the trust’s settlement offers.
Two of them had a history with Judge Montali, having both hosted him in 2005 for “a delightful evening of wine tasting” during a Bay Area networking event for bankruptcy professionals.
Asked to comment, Judge Montali’s staff told ABC10 that he “is not permitted to comment on a pending case before him.”
PG&E specifically sought out Montali to supervise the case, pointing out in a 2019 motion that he served as the judge for PG&E’s first bankruptcy after the early 2000s energy crisis.
“All judges must be free of even an appearance of impropriety,” said former CPUC president Loretta Lynch, who was not involved in crafting Abrams’ motion.
“Mr. Abram's information makes it clear that Judge Montali should recuse himself from any oversight or involvement in the PG&E bankruptcy bailout over which he presided,” she added.
“I am very concerned about how victims have been treated within this case,” Abrams said. “And the amount of critical information that has been kept away from them, so that other parties can advance their own financial interests.”
‘UNJUST… AND INEFFICIENT’
Eula Yetter’s home burned down in the 2015 Butte Fire. Arson investigators found a tree fell onto PG&E’s lines because the company and its contractors failed to properly maintain nearby trees as required by law.
The company’s bankruptcy protection forced survivors to wait longer to reach a settlement. They didn’t expect payments to take years longer once the bankruptcy was done.
“I mean, how much more can you [expletive] screw us over? My God,” added Eula’s daughter Renee Ray, who lives in a trailer next to her mom.
A lack of detail about what’s behind the delays is part of the reason for the motion asking Montali to step aside.
Some of that delay can be attributed to the operation of the trust, but some are also caused by the way the trust was funded in the deal approved by Montali and the state government.
Unlike other PG&E creditors, fire victims were not paid cash in full when PG&E exited bankruptcy protection.
The Fire Victim Trust was funded in a blend of cash and shares of PG&E stock shares, which have struggled to attain value and which require careful timing to liquidate into cash for victims’ payouts.
This has bound the victims’ fortunes to the success of the company that burned them out.
The Butte Fire is the earliest of several that were rolled into a global settlement in PG&E’s bankruptcy.
The Fire Victim Trust also holds the debt to victims of multiple fires sparked by PG&E across Northern California in 2017, along with the 2018 Camp Fire that destroyed the town of Paradise and led to 84 felony manslaughter convictions against PG&E.
“This outcome was unjust, that is clear. And inefficient, as well, said Stanford business professor Anat Admati in a recent panel event. “That is not good governance.”
PG&E’s settlement payouts are taking so long, multiple victims have died without seeing a penny.
“They should have paid for my mom while she was still here,” said Steve Bradley, whose mother died while awaiting her settlement for PG&E’s reckless arson that destroyed her home in Paradise.
She was also owed wrongful death money for the death of Steve’s grandmother, one of the company’s 84 manslaughter victims.
VICTIMS WANT PG&E TO FIX IT
On paper, PG&E no longer owes anything to the victims of the bankruptcy. It discharged these fire damages to the Fire Victim Trust.
The trust has spent tens of millions of dollars of the victims’ money to hire hundreds of professionals to process claims from fires in 2015, 2017, and 2018.
Its top leaders, former judge John Trotter and his colleague Cathy Yanni, have both taken six-figure monthly salaries to run the FVT.
But the victims still see it as PG&E’s mess to clean up.
In our interview, Renee Ray extended an invitation for CEO Patti Poppe to spend the night in her camping trailer to see firsthand how messy the bankruptcy deal has been.
“You are more than welcome,” Ray said. “Come here, Patti.”
“My daughter's been wanting to have a baby,” said her mom Eula. “How can she even think about having a baby living this way?”
Poppe’s public relations staff has declined multiple interview requests from ABC10 during our reporting on the plight of victims.
Poppe has only ever offered to speak with ABC10 off the record. We declined because of her company’s criminal history and her position of power over a state-sanctioned monopoly in which 16 million Californians live.
“I just want PG&E to pay us our money. I want to get on with my life. I'm 65. I want to move on,” she added.
PG&E has said repeatedly that it’s “making it safe and making it right.”
Still, the fact is that PG&E started back up paying dividends to its preferred shareholders this year.
The monopoly also resumed donating millions of corporate dollars to California politicians from both parties.
Meantime, the worst-off victims of PG&E’s fires live hand to mouth.
And they’ve watched the company spark more big fires year after year.
It’s not the reason Judge Montali is being asked to step down from the bankruptcy case, but it’s the ground he’s standing on because of the deal he’s overseen.
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