Posted on

Fire Victim Trust changes direction following criticism

By Christian Kallen

The Fire Victim Trust, created in 2020 after PG& E was assigned legal culpability for several fires that devastated the lives of thousands of Californians, made two important announcements in a “letter to Fire Victims” on June 21. One is a welcome increase in the pro rata (proportional) pay schedule to claimants, from 30 percent to 45 percent of the claim value; the other is the resignation of its only chief to this point, Judge John Trotter, after two years in the role.

Trotter’s resignation comes at the end of the four-page statement posted on the Trust’s website, The Trust and Trotter’s management have been criticized by victims of the conflagrations, who objected to the lengthy wait for payout from the Trust and the handling of the Trust’s resources.

To resolve the costs of a legal judgment of $13.5 billon against PG& E, whose equipment caused the destructive Butte Fire, Wine Country fires, and Camp Fire, the company declared bankruptcy in 2019, and the Trust was created to oversee payments to claimants. Half of the Trust’s creation was backed by cash and the other half by the trading value of PG& E stock.

That mutable stock price created a shortfall of approximately $2.4 billion, and though the value of the shares has risen to as high as $12, it listed at $9.78 as of June 17, according to the statement.

The June 21 press release reviewed the Trust’s purpose and financial status, including an increase in payments that can be made to victims. “Since we now know more about the potential value of outstanding claims, our economists’ expectations have allowed us to increase the pro rata percentage to 45%, which means that we have now authorized payments to victims totaling $4.5 billion.”

Trotter also revealed that the Trust’s lawyers had negotiated an arrangement with the Internal Revenue Service (IRS) “that effectively removed all capital gain tax issues,” thereby enhancing the Trust’s assets by over $100 million.

The news of Trotter’s retirement is at least as interesting in that the June 21 announcement follows many complaints about the Trust’s transparency, and Trotter’s. A May 24 letter from the Butte County Board of Supervisors was sent to Trotter as head of the Trust. It was written “in advocacy for our constituents,” victims of the deadly Camp Fire (2019), who were not being “made whole” by the Trust. The letter also complained about over $93 million in administrative costs, which it described as “unacceptable.”

“Many survivors of the Camp Fire find themselves unable to move on with their lives until they receive their settlements,” states the letter, signed by Bill Connelly, chair of the board. “Thousands of our residents continue to live in temporary conditions; many are living in RVs, some have long worn out their welcome at their friends’ or [on] families’ couches, and unfortunately, some have ended up unhoused and on the streets.”

According to a press report from the Redding-based KCRC, Trotter responded to the letter only with a voice message, transcribed in part to read, “I’m calling in response to that offensive, uninformed po-