Motion filed to remove PG&E bankruptcy judge

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Amid frustration over slow payments to fire victims and a lack of information, backlash is mounting against the federal judge who led two PG&E bankruptcies.

SACRAMENTO, Calif. — As frustration mounts over late payments and a lack of transparency for tens of thousands of wildfire victims, a formal motion filed Thursday seeks to have the federal bankruptcy judge resign from PG&E .

“A reasonable person knowing the facts would question the judge [Dennis] Montali’s impartiality in this case,” wrote Will Abrams, survivor of the 2017 Tubbs fire, in court documents, calling for the judge to be replaced “as soon as possible.”

Victims of several PG&E wildfires have been harmed by late payments under the bankruptcy settlement approved by Montali two years ago, which he still oversees today.

“It’s devastating. I’m tired of being here. I’m tired,” said Eula Yetter, who has spent the past seven years living in a trailer where her home once stood. “I think if a person went to jail, they would live better than that.”

Thousands of survivors have received little or nothing from the Fire Victim Trust, an entity created by the bankruptcy agreement to assume the damages owed by PG&E.

According to its latest report, nearly 17,000 of the 68,000 fire victims had yet to receive money from the Fire Victim Trust.

Over 8,000 victims were not even told the size of their settlements.

THE JUDGE’S RELATIONSHIPS EXAMINED

“It’s important to understand the financial incentives or disincentives that affect victims,” ​​said Abrams, who is not a lawyer but wrote the formal motion seeking Montali’s disqualification from the case.

Abrams played an activist role in the bankruptcy, trying to improve PG&E’s security in earlier proceedings and, more recently, opening up details about the trust and financial interests of those involved.

Frustrated with the lack of information Montali has made available, he says he had no choice but to ask the bankruptcy judge to step aside.

“All of these requests to create more transparency in the case have been denied,” Abrams said.

Abrams’ official petition accuses Judge Montali of failing to disclose a longtime relationship with a pair of fire victims whom he granted special rights in the bankruptcy.

Of nearly 70,000 PG&E fire victims, Montali granted only five the right to “reject” the trust’s settlement offers.

Two of them had a history with Judge Montali, having both hosted him in 2005 for “a delicious evening of wine tastingat a Bay Area networking event for bankruptcy professionals.

Asked to comment, Judge Montali’s staff told ABC10 that he “is not authorized to comment on any pending case before him.”

PG&E specifically asked Montali to oversee the case, pointing out in a 2019 motion that he served as a judge for PG&E’s first bankruptcy after the energy crisis of the early 2000s.

“All judges must be free from even the appearance of impropriety,” said former CPUC chairwoman Loretta Lynch, who was not involved in crafting Abrams’ motion.

“Mr. Abram’s information makes it clear that Judge Montali should recuse himself from any oversight or involvement in the PG&E bankruptcy bailout he presided over,” she added.

“I am very concerned about how the victims were treated in this case,” Abrams said. “And the amount of critical information that has been withheld from them, so that other parties can advance their own financial interests.”

“UNFAIR… AND INEFFECTIVE”

Eula Yetter’s home burned down in the 2015 Butte fire. Arson investigators found a tree fell on PG&E lines because the company and its contractors didn’t had not properly maintained nearby trees as required by law.

The company’s bankruptcy protection forced survivors to wait longer to reach a settlement. They didn’t expect the payments to take years longer once the bankruptcy is over.

“I mean, how much more can you [expletive] fuck us up? My God,” added Eula’s daughter, Renee Ray, who lives in a trailer next to her mother.

A lack of details about what’s behind the delays is part of the reason for the motion asking Montali to step down.

Some of this delay can be attributed to the operation of the trust, but some is also caused by how the trust was funded in the agreement approved by Montali and the state government.

Unlike other PG&E creditors, the fire victims were not paid in full in cash when PG&E exited bankruptcy protection.

The Fire Victim Trust was funded by a mix of cash and PG&E stock, which has struggled to reach value and requires careful timing to liquidate into cash for victim payouts.

This tied the fortunes of the victims to the success of the business that burned them.

The Butte Fire is the first of several that have been incorporated into a comprehensive PG&E bankruptcy settlement.

The Fire Victim Trust also holds debt to victims of multiple fires started by PG&E in Northern California in 2017, as well as the 2018 Camp Fire that destroyed the town of Paradise and led to 84 manslaughter convictions. against PG&E.

“This result was unfair, that’s clear. And inefficient too, said Anat Admati, professor of commerce at Stanford, during a recent panel. “This is not good governance.

PG&E settlement payments are taking so long that several victims have died without seeing a penny.

“They should have paid for my mom while she was still here,” said Steve Bradley, whose mother died awaiting settlement for the reckless PG&E arson that destroyed his Paradise home.

She also owed wrongful death money for the death of Steve’s grandmother, one of the company’s 84 manslaughter victims.

VICTIMS WANT PG&E TO FIX IT

On paper, PG&E owes nothing to the victims of the bankruptcy. He paid for this fire damage to the Fire Victim Trust.

The trust spent tens of millions of victims’ money to hire hundreds of professionals to handle claims from the 2015, 2017 and 2018 fires.

Its top leaders, former judge John Trotter and his colleague Cathy Yanni, both took six-figure monthly salaries to run the FVT.

But victims still see it as PG&E’s mess to clean up.

In our interview, Renee Ray invited CEO Patti Poppe to spend the night in her camping trailer to see firsthand just how messy the bankruptcy deal got.

“You are more than welcome,” Ray said. “Come here, Patti.”

“My daughter wanted to have a baby,” her mother Eula said. “How can she even think of having a live baby like this?”

Poppe’s PR staff turned down several ABC10 interview requests during our reports on the fate of the victims.

Poppe never offered to speak to ABC10 except officially. We declined because of his company’s criminal history and position of power over a state-sanctioned monopoly in which 16 million Californians live.

“I just want PG&E to pay us our money. I want to continue my life. I am 65 years old. I want to move on,” she added.

PG&E has repeatedly said that it “makes it safe and makes it ok”.

Yet the fact is that PG&E started paying dividends to its preferred shareholders again this year.

Monopoly also resumed giving millions of corporate dollars to California politicians of both parties.

Meanwhile, the worst off victims of the PG&E fires are living hand to mouth.

And they’ve seen the company start other big fires year after year.

This is not the reason Judge Montali is being asked to step aside from the bankruptcy case, but it is the ground he stands on due to the deal he oversaw.

RELATED: FIRE – POWER – MONEY

For more than three years, ABC10’s award-winning Fire – Power – Money team has been at the forefront of coverage of the California wildfire crisis, the danger of PG&E power lines and how the company avoids accountability.

CLICK HERE to watch all episodes of ABC10’s Fire – Power – Money series.

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