Financial tug-of-war emerges over fire victims' settlement

Financial tug-of-war emerges over fire victims' settlement

SeattlePI.com

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SAN FRANCISCO (AP) — A financial tug-of-war is emerging over the $13.5 billion that the nation's largest utility has agreed to pay to victims of recent California wildfires, as government agencies jockey for more than half the money to cover the costs of their response to the catastrophes.

Pacific Gas & Electric declared bankruptcy nearly a year ago as it faced about $36 billion in claims from people who lost family members, homes and businesses in devastating wildfires in 2017 and 2018. The utility acknowledged its power lines ignited some of the fires.

Those claims were settled as part of the $13.5 billion deal that PG&E reached last month with lawyers representing uninsured and underinsured victims.

Meanwhile, insurers had been threatening to try to recover roughly $20 billion in policyholder claims that they believe they will end up paying for losses from those fires. PG&E settled with the insurers for $11 billion.

PG&E must keep working on its broader bankruptcy exit plan to meet the approval of state regulators and a bankruptcy judge by June, as planned.

In the meantime, the $13.5 billion settlement leaves open just how much would be used to compensate victims, their lawyers and federal and state agencies for the money they spent on rescue and recovery operations.

California state agencies said they're owed about $3.3 billion, and federal agencies including FEMA filed claims totaling $4.3 billion. The claims are not related to the $1 billion PG&E agreed in June to pay to 14 local governments to cover damages from wildfires caused by its equipment.

U.S. attorneys and the California attorney general's office raised concerns in separate court filings last month about “potential unequal treatment of claims” and asked U.S. Bankruptcy Judge...

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