Wildfire lawyers at the law firm of Baum Hedlund Aristei & Goldman have joined a motion filed by a California wildfire survivor in support of seeking more transparency around the management of the Fire Victim Trust.
The Fire Victim Trust was established to compensate victims of the Butte, North Bay, and Camp fires, which were caused by PG&E’s negligently maintained electrical equipment. The Trust was established out of PG&E’s bankruptcy as a means to compensate people affected by the wildfires. With a promised value of $13.5 billion, the present value of the Trust is far lower because the bankruptcy settlement included 50% of the $13.5 billion as PG&E stock, which has dropped significantly.
Will Abrams, who survived the 2017 Tubbs Fire (considered one of the North Bay wildfires), filed motions (formal requests) for discovery asking the Court to order the Trust to provide more information about its administrative functions and costs. Abrams is seeking more detailed financial disclosures than what the Trust provides wildfire survivors in its annual report.
Earlier this month, a federal bankruptcy judge overseeing the matter agreed in part with Mr. Abrams and ordered the Fire Victim Trust to be more transparent about spending, hiring, and other practices. The order came amid reporting from the Santa Rosa Press Democrat that highlighted significant administrative expenses and slow payments to victims.
According to the report, the Fire Victim Trust’s expenses, which included legal fees, a public relations firm, and even a lobbyist pushing for a $1.5 billion loan, reached over $132 million by the end of 2021. The legal fees included a $125,000 month salary for the Trust’s administrator, Retired Justice John Trotter, who has since resigned.
The Trust is currently paying fire claims at 45% of their value, which has many thousands of wildfire survivors worried how much of their claims they will ever see—and when.
Baum Hedlund attorney Matthew P. French says the discrepancy between the claim payouts and Trotter’s bloated salary is “vulgar.” The attorney told the Press Democrat in an interview that the Fire Victim Trust, “is not set up in a way that inspires confidence.”
“When you have $13.5 billion and thousands of people’s lives (on the line) why on earth would you set it up in a way that would leave those beneficiaries of the trust doubting and questioning and worrying about what’s going on?”
Wildfire Attorneys Say Recent Reports Warrant Further Discovery
French and his colleagues at Baum Hedlund are supporting Mr. Abrams’ call for more transparency to ensure that the fund is being managed appropriately and in the best interests of fire victims. Along with veteran attorney Ronald L. M. Goldman, French represents hundreds of victims of the 2018 Camp Fire. The firm’s lawyers also represented victims of the Woolsey, Thomas and Bobcat fires.
Last week, the attorneys filed a joinder in support of Mr. Abrams’ motions for discovery and hearings, specifically regarding the relationships between the Trust and JAMS, a private alternative dispute resolution (ADR) company with deep ties to the Trust.
The Los Angeles Times recently published an investigative report on largescale fraud involving defamed and disbarred lawyer Tom Girardi, in previous large settlement funds overseen by John Trotter, who helped grow JAMS into one of the largest private mediation companies in the world, and who oversaw the Trust in its formation and first two years. The Times reported that, “Retired judges, including Trotter, played prominent roles in administering large settlements from which Girardi is accused of stealing money.”
“The recent reporting from the Times makes it pretty clear the Trust should no longer get the benefit of the doubt,” French says. “The implications are serious and substantial enough to warrant further discovery of these JAMS relationships with the Trust, especially since most of the people in critical positions are connected in some way to JAMS.”
The Fire Victim Trust’s current Trustee is Cathy Yanni, who has worked as a JAMS mediator since 1998.
In response to Mr. Abrams’ motions for discovery, the Trust has thus far provided heavily redacted attorney retention agreements and other documentation. According to French, while the judge’s order and response from the Trust has so far been narrower than what the motion had sought, these are very welcome steps towards greater transparency, and if necessary, accountability, although the extent of the redactions may well blunt any meaningful gains.
“I really hope that by shining a light on the Trust we will discover that it’s fabulously managed because anything less would further victimize the fire victims,” French says.