$117 Million Settlement With Former PG&E Officers and Directors Over California Wildfires

Between 2015 and 2018, a string of wildfires linked to Pacific Gas and Electric equipment tore through Northern California. The 2015 Butte Fire, the 2017 North Bay Fires, and the 2018 Camp Fire ranked among the most destructive in state history. The Camp Fire alone leveled most of the town of Paradise.

The human toll was severe. The North Bay and Camp fires killed 129 people, and the Camp Fire remains the deadliest wildfire California has recorded. Tens of thousands of residents lost homes, businesses, and entire neighborhoods. Investigators tied the ignitions to aging power lines and equipment that PG&E had failed to inspect and maintain.

The fires pushed PG&E into bankruptcy in 2019. As part of the company's Chapter 11 reorganization, a Fire Victim Trust was created in 2020 to compensate survivors. Under that plan, PG&E assigned to the Trust the right to pursue certain claims the company itself held, including claims against its own former directors and officers for the economic harm their decisions caused the utility.

The Trust sued roughly 20 former PG&E executives and board members. The complaint alleged they breached their fiduciary duties by failing to oversee the inspection and maintenance of high-risk equipment and by disregarding known wildfire danger. A team of plaintiff firms handled the litigation. Walkup, Melodia, Kelly and Schoenberger shareholder Michael A. Kelly served on the plaintiffs' leadership group, working alongside co-counsel from several other California firms.

The case moved toward trial in San Francisco. After more than a year of negotiations, the parties reached a settlement in principle in May 2022, finalized it in July, and announced it that September. The former directors and officers agreed to pay $117 million. The entire amount came from PG&E's directors and officers liability insurance, not from the company or the individuals personally.

Frank M. Pitre, lead counsel for the Trust, said the recovery would "be used to satisfy the vast majority of outstanding fire victim claims held by certain federal agencies that assisted in battling the fires and providing assistance to victims." Because the case settled before a verdict, the $117 million figure was not subject to appeal or reduction.