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Hoping and waiting on payouts from Fire Victims Trust

2017 wildfire survivors reflect on interactions with the PG& E-funded trust

By Tracy Salcedo

Recovery

When the Nuns Fire blew out of the Mayacamas range in October 2017, the lives of people living in Glen Ellen, Kenwood, and Oakmont were forever altered. Loss was everywhere: loss of home, loss of business, loss of property, loss of peace of mind, loss of life. Recovery began in the fires’ immediate aftermath and continues to this day, as locals rebuild their homes, livelihoods, and emotional resiliency. For some, the recovery process has included filing a claim through the Fire Victims Trust. The trust is charged with distributing $13.5 billion to survivors of fires caused by failures of PG& E’s infrastructure, and the amount was determined in 2019 as part of the company’s bankruptcy. Half of the trust was funded with cash; the other half will be funded through the sale of PG& E stock. About 70,000 survivors of the 2015 Butte Fire, which destroyed nearly 1,000 homes in the Sierra foothills, the 2017 Wine Country fires, which destroyed more than 5,000 homes and claimed 44 lives, and the 2018 Camp Fire, which decimated the town of Paradise, have filed claims through the trust. On May 20, KQED, San Francisco’s National Public Media affiliate, published a report outlining the financial output of the Fire Victims Trust to date. Those numbers, according to the article, were skewed heavily toward overhead, including salaries for the trustee, retired appeals court judge John K. Trotter, who makes $1,500 per hour, and Claims Administrator Cathy Yanni, who makes $1,250 per hour. Other overhead for the trust, including start-up costs and claims processor fees and expenses, totaled $51.5 million, while payouts totaled $7.2 million over the same time frame. The full report is online at www.npr. org/2021/05/20/998637543/as-pg-e-fire-victim-trustracks- up-51-million-in-fees-survivors-wait-for-help.

Questions and answers

To get a sense of how local fire survivors have interacted with the trust so far, the Kenwood Press reached out to local families that have filed a claim. Ten responded, representing families from Glen Ellen, Oakmont, and Bennett Ridge, and approximately 30 individuals. Respondents were offered anonymity, in recognition that discussing claims might include disclosure of personal information. Not every respondent answered every question. Full disclosure: The experiences of this author and Melissa Dowling, publisher of the Kenwood Press, with the trust process are included in this story.

Payouts and settlements

To date, two of the ten families have received payments from the trust, but only one has a settlement agreement. That claimant, who lost her home and all its contents, reports she is “very happy” with the settlement and payout, which has consisted of five separate payments to four individuals thus far. “Two more payments [are] owed,” she explained, “but the stock is low right now, so no one would benefit from a payment right now.” She was told some payments might not happen, so she is “happy that something came through.”

The second claimant, who suffered property damage, business loss, and emotional distress, has received a single payout for one of three survivors, and no word on settlement totals. When she asked trust representatives whether a preliminary payment could be expedited for the others, since all claims were submitted at the same time, the answer was no; claims are processed on “a rolling basis,” she was told.

Nothing yet

The other eight families have yet to receive settlement agreements or payouts. Seven suffered total losses; two filed claims for property damage not covered by insurance and emotional distress.

“We lost our house, all the contents, three vehicles, two trailers and eight kayaks. We also lost 19 trees. One was an heritage oak,” said one survivor. “The interaction with the Fire Victims Fund has been through a law firm. It is a very slow process. We won’t be able to tell you our final feelings until we receive the payout.”

“I filed a claim for $10,000—my insurance deductible,” said another. “My total loss was about $60,000— retaining wall, melted windows, landscaping, nine hundred-year-old olive trees, fences, stairs, etc. I’m getting email updates on the status, so I’d imagine my claim is still active. I haven’t received anything about possible payment or amounts.”

“We lost everything—our home, all our belongings, our birds and some of our fish, and one car,” explained a third survivor. “We haven’t really had any interaction with the Fire Victims Fund. It is definitely slow, but we also understand the scope of the work, with the thousands of people that were affected and have filed claims. Their diligence would be a pro; cons would be any fraudulent claims. These claims will slow down the process even more, and if paid, they take away monies from the real victims.”

This survivor also noted he’s cautious about potential tax consequences of a settlement payout. “We want to make sure that we are always aware of these, especially when we get the settlement amount letter.”

First District Supervisor Susan Gorin’s situation exemplifies the complication of settling claims for those still rebuilding and dealing with insurance companies. Her home in Oakmont was destroyed in the 2017 conflagration.

“As we are in the final countdown toward rebuilding, we are still sending bills for reimbursement to our insurance company,” she wrote in an email. “The lawsuit does not duplicate those insurance company payouts. Any payment from the lawsuit would compensate for the many items claimed as a loss to our insurance company—primarily contents—which were significantly depreciated by the insurance company. We were significantly underinsured in the structure as well. The insurance commissioner was helpful in unlocking additional coverage.”

Six of the families filed their claims using attorneys, and uniformly report those attorneys have been helpful and communicative. The remaining four families filed as individuals, known as pro se. Law students from the University of California, Berkeley, are available to help with pro se claims, and the firm acting as claims processor for the trust, BrownGreer, has been responsive to questions from pro se claimants. One survivor reported that while she’d received “no real communication to speak of ” since filing her pro se claim, “the one time I called, I got a live person who was very helpful.” Another survivor said the law students have helped ensure she meets the requirements of the trust for processing of her claim. Documenting damages not covered by insurance, and her emotional distress, has been both difficult and “overwhelming” at times.

The Kenwood Press also reached out to Helen Sedwick, an attorney who lost her home and business on Bennett Ridge in the 2017 fires. Sedwick made a presentation at a Glen Ellen Forum meeting held at Dunbar Elementary School in 2018, advising attendees, most of whom were eligible to make claims, that doing so would ensure PG& E’s reparation funds would go where they were intended—to helping those most directly affected.

“The Fire Victims Trust could have and should have done a better job of communicating with fire victims about the process, and their progress starting a year ago,” Sedwick wrote in an email. “They were largely silent until the KQED article. By that point, ugly rumors had taken hold of people’s imaginations. That is what happens when there is an information void—people come up with their own theories.”

Sedwick believes the PG& E bankruptcy process was “hijacked by hedge funds and attorneys. Hedge funds structured the bankruptcy plan to reward themselves billions in profits while leaving fire victims with stock in an overleveraged, poorly managed company. Attorneys saw the bankruptcy and the trust processes as a way to make hundreds of millions. Unfortunately, that is how the bankruptcy process works.”

Sedwick also objects to how the trust is equating fire victims to corporate creditors or investors. “The fire victims were involuntary creditors,” she said. “I think it is flat out wrong for attorneys, the trustee, and the trust administrator to be charging their full fees against fire victims. We are not corporate or investment companies who accepted the risk and the cost. We were forced into it. They will all be getting very rich from the fires.”

That said, Sedwick is “not surprised that there are a lot of expenses in the first months of the trust. There was a lot of setup and analysis to do. Hopefully, the expenses will decrease and the payouts increase very soon.”

Sedwick is also concerned about the influence of contingency attorneys on the Trust Oversight Committee. “Most of them are interested in one thing—making money for themselves,” she wrote. “The committee has been hiring (its own) members to perform additional legal work for the Trust, so they are pulling out more than their contingency fees. Talk about undisclosed conflicts of interest!! I feel like we left the foxes in charge of the hen house. I also suspect that’s why it has taken so long for the Trust to generate Determination Notices and payments—there are too many hands in the pot trying to get what’s best for them.”

Sedwick posited solutions to transparency issues and potential conflicts of interest. “The committee should have been more balanced, with representatives of fire victims as well,” she said. “I also think its minutes or summaries of meetings should be disclosed to all fire victims … There should be complete transparency of their discussions and decisions. I found it shocking that transparency was not part of the trust agreement.”

She cites an example of where transparency should be imposed. Determination notices (settlement offers), she explained, are given in a “lump sum amount—no breakdown between property losses, personal injury damages, etc. I consider that bad faith. The breakdown exists; the Trust could not generate a Determination Notice without looking at each component separately.”

Without that information, Sedwick continued, “How can a fire victim evaluate an offer … How can an attorney advise a client on whether to accept the offer without that information? I can think of no reason why the Committee pushed for this other than bad reasons—like they didn’t want clients to ask for a review (more time and work for the attorney) or they wanted to hide the amount of the award that already went to the attorney.”

The complexity and opacity of the process, and the unknown resolutions, have been compounded by the revelations of the KQED report. Gorin voices what several other survivors feel.

“Perhaps the settlement would in some way compensate for the sheer exhaustion of the journey of recovery,” she wrote. “Loss of wages, cleaning of the lot … hours spent in itemizing losses, negotiations with insurance company, decisions about rebuilding something affordable and yet fire-safe, accounting for building and code upgrades, decisions about rebuilding. … Even with the completion of the rebuild, I will forever remember the trauma of the loss and rebuilding.”

“My only advice to fire victims is to keep hanging in there,” said Sedwick. “We have gone through hell. We are on our way back. The road is a lot longer and bumpier than we expected. but we will get there.”

If you’d like to share your experiences with the Fire Victims Fund as the process proceeds, feel free to send your comments to the Kenwood Press, either via email at [email protected], or via USPS mail to P.O. Box 277, Kenwood, CA 95452. If you’d prefer to remain anonymous as we follow this story, please let us know in your response.

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