On October 31, 2022, the Fire Victim’s Trust announced an additional sale of 35 million shares in PG&E stock at $15.25 per share to provide compensation for victims of the 2015 Butte, 2017 North Bay, and 2018 Camp Fire. This news comes shortly after the Fire Victim’s Trust sold 35 million shares at $13.65 per share in early October.
The Fire Victims Trust, which reviews and values victims’ claims, was established in July 2020 after PG&E went through Chapter 11 bankruptcy. For the fire victims, the bankruptcy had the unfortunate effect of delaying claims, though the delay could have been much longer without the establishment of the Fire Victims Trust. The Trust was set up to ensure the fire victims were paid the largest amount of their damages possible.
To fund payments to the fire victims, the Trust continues to sell portions of the approximately 480 million shares of PG&E stock that were deposited with the Trust as part of the bankruptcy. To date, the Trust has cashed out about 170 million shares. The Trust Agreement does not allow the Trust to issue shares to claimants. It must pay all awards in cash. Therefore, the Trust must eventually sell all the stock it is holding.
As of October 28th, 2022, the Trust has issued determination notices (a statement of the amount to be paid) to 86% of the claimants. The Trust hopes to have issued determination notices to 95% or more of the claimants by the end of the year. After a claimant accepts the determination notice, the Trust pays 45% of the amount of the determination as an initial pro rata payment. To date the Trust has paid out about $5.36 billion to fire victims.
Many fire victims who have already received their initial pro rata payment have asked about when they can expect to receive further pro rata payments. Unfortunately, the Trust has not yet announced when it will make additional payments to the victims following the initial pro rata payment. However, as the Trust issues determination notices to more and more claimants, the Trust should have more clarity as to the total amount to be paid on the victims’ claims. Additionally, as it sells more stock, it will also have a better idea of how much money will be available to pay those claims. As a result, we anticipate that the Trust should be in a position to make further payments to the victims in early 2023. We cannot guarantee that the Trust will make additional payments then, but we believe they should be able to. We will inform all of our clients once it becomes clear when an additional payment will occur.