For Wildfire Victims Suing PG&E, A Company Bankruptcy Could Impact Their Compensation

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Survivors of California's recent wildfires are bracing for the possibility that the utility Pacific Gas and Electric may go into bankruptcy protection by the end of this month. Investigators are looking into whether the company's equipment started the Camp Fire. For victims suing PG&E, a company bankruptcy could impact their compensation. From member station KQED in San Francisco, Lily Jamali has more.

LILY JAMALI, BYLINE: For the last several weeks, California's Butte County has been inundated with TV ads like these.

(SOUNDBITE OF TV AD MONTAGE)

UNIDENTIFIED PERSON #1: This is for victims of the Paradise, Calif., Camp Fire. You may have a claim for damages against PG&E.

UNIDENTIFIED PERSON #2: You need an advocate who's been down this path before, someone who can make sure you're represented fairly and get you the best return for your loss.

JAMALI: Many local lawyers have partnered with the deep-pocketed attorneys from elsewhere, some from thousands of miles away, in a race to recruit fire survivors. The more victims, the more leverage against PG&E whose equipment may have sparked November's Camp Fire. That fire killed at least 86 people and destroyed almost 14,000 homes.

SHIRLEEN DEREZENDES: It's a very intimate and personal process when they work with...

JAMALI: At this community meeting in Chico, Shirleen DeRezendes pitches survivors on how her firm can help them.

DEREZENDES: I don't know another group that has a bigger heart than we do. And I'm...

JAMALI: She tells them the 2017 fires north of San Francisco destroyed the homes of countless friends and family. That prompted her to start working for the group, which includes a firm based in Washington, D.C., and another in Texas. They just opened an office here in Chico.

DEREZENDES: I consider the people that I work directly with from start to finish - they're like family

(CROSSTALK)

JAMALI: Amy Meyer, who lost her home in Paradise, is in the audience with her 9-year-old daughter and 15-month-old son. Afterwards, she tells me she's still considering her options, but suing PG&E makes sense.

AMY MEYER: Because so many of the plans that were in place were destroyed by the fire - you know, rebuilding and having to relocate for jobs and, you know, not having as many work hours as I continue on in this process. So yes.

JAMALI: Lawyers expect to receive a standard retainer of about a third of whatever they win in suits against PG&E. But if the utility ends up in bankruptcy protection, that would throw a wrench into those plans. Bruce Markell teaches bankruptcy law at Northwestern University.

BRUCE MARKELL: Under bankruptcy law, all actions against a company are halted by something called the automatic stay, and no new actions can be brought.

JAMALI: Thousands of victims from the Camp Fire and thousands more from the 2017 fires elsewhere in Northern California would see their suits against PG&E placed on hold.

AMANDA RIDDLE: It's not game over, but it definitely changes the game.

JAMALI: Attorney Amanda Riddle represents more than 800 Camp Fire survivors and counting. She says the bankruptcy threat has added to the rush to sign on more victims.

RIDDLE: The fact of the matter is there are a lot of people out there who need our help. And we are not at the place where we are going to change our strategy because of this bankruptcy talk. We're going to continue helping them unless and until a bankruptcy court tells us it's time to stop.

JAMALI: But not all lawyers are expected to stick around. If PG&E does file for bankruptcy for the second time in as many decades, it would be one of the largest ever for a utility. It could take years before victims and their attorneys learn whether they'll get the payouts they seek or end up with pennies on the dollar. For NPR News, I'm Lily Jamali in San Francisco.

(SOUNDBITE OF FREDDIE JOACHIM'S "SHOULDER KISS") Transcript provided by NPR, Copyright NPR.