In a statement on June 18, the County of Sonoma, together with eight other counties and cities, including Santa Rosa, announced that they and PG&E have accepted a mediator’s proposal of $415 million to resolve the collective cities’ and counties’ wildfire claims. The mediator’s proposal is exclusive of and does not affect the claims of any residents, individuals or businesses. The collective amount of $415 million will be allocated among each of the nine public entities in an allocation process yet to take place.
The payment is to be incorporated into a proposed plan of reorganization to be filed by PG&E in its pending Chapter 11 case. The entire plan of reorganization is subject to confirmation by the bankruptcy court. The settlement announced on June 18 is part of a total settlement of $1 billion proposed to be paid to local government entities in connection with recent wildfires.
Mediator Judge Jay Gandhi (Ret.) presided over several days of in-person mediation sessions held in San Francisco, California. Participants in the various phases of the mediation included 14 public entities with various claims from the 2015 Butte Fire, the 2017 Sonoma Complex Fires and the 2018 Camp Fire. Judge Gandhi’s proposal included a total payment of $1 billion to be made pursuant to PG&E’s proposed plan of reorganization. PG&E and all 14 public entities accepted the proposals. The proposal is intended to compensate public entities for damages not covered by insurance or governmental assistance programs.
In January, PG&E filed for bankruptcy. A bankruptcy judge will decide how PG&E’s obligations and liabilities, including wildfire claims, will be resolved through a reorganization plan. There is no guarantee of funding until the bankruptcy proceedings are complete, which is not anticipated until mid-2020.
Baron & Budd Attorney John Fiske is representing the public entities in the litigation.