Trustee, consumer group blast PG&E bankruptcy lawyer fees
Court records: $140 million billed to utility includes questionable expenses
PG& E’s bankruptcy-related attorney fees have reached the $140 million mark — and are expected to grow — prompting a trustee in the case and a consumer group to question why lawyers have harvested a rising number of billable hours when the utility has yet to
compensate many wildfire victims.
“An estimated $140 million in professional fees have already been billed,” Andrew Vara, the U. S. trustee appointed to administer PG& E’s Chapter 11 bankruptcy proceeding, said in court records. The PG&E Chapter 11 matter, Vara added, is “likely to rank eventually among the most expensive bankruptcy cases ever filed.”
In addition to the billings by PG& E attorneys, the trustee cited fees billed by attorneys who represent other parties to the intricate bankruptcy proceeding.
Among the questionable expenses that attorneys for PG& E and others are seeking to recoup: Fees for meetings attended by 22 attorneys at the same time, fees from recent law school graduates who charged at the same rate as the most experienced attorneys, expenses for nonworking meals and air travel, and billings from one law firm for 100 consecutive 12-hour days.
The questions about how much PG&E is paying a fleet of lawyers emerged in connection with the company’s $51.69 billion bankruptcy case, which continues to wend its way through federal court.
“While customers are left waiting in tents and trailers, and PG&E claims it is unable to find tree-trimmers, its lawyers are jumping on the bankruptcy gravy,” said Mark Toney, executive director with consumer group The Utility Reform Network, or TURN.
Some estimates have placed PG& E’s wildfire-linked liabilities, primarily claims by wildfire victims, at $15 billion to $20 billion. In September, PG&E filed a $17.9 billion bankruptcy exit plan that caps payments to wildfire victims.
“PG& E at best wants to pay 50 cents on the dollar to wildfire victims,” Gerald Singleton, an attorney who represents about 5,500 wildfire victims, said at the time the reorganization plan surfaced.
TURN raised the forbidding prospect that PG& E customers may wind up holding the bag to help compensate PG& E’s legal team.
“Based on past experience, TURN expects PG&E to seek to recover these fees and costs from ratepayers,” TURN said in a filing with the U.S. Bankruptcy Court handling the case.
In comments emailed to this news organization about the attorneys fees, PG&E spokeswoman Kristi Jourdan said, “PG& E has retained expert advisors to help guide us through the complex Chapter 11 process — and help shape the business for the future.”
The utility believes the f locks of attorneys are needed so it can focus on serving customers, enhancing wildfire safety efforts and delivering improved services, PG&E said.
Court records show that the U. S. Trustee’s Office uncovered an array of unusual fees that attorneys sought to extract from PG&E, including “implausibly high numbers of billable hours recorded by individual timekeepers in a single day, including at least one instance in which a timekeeper billed for 24 hours in one day.”
In some instances, the court filings state, attorneys billed PG&E for work done before the bankruptcy case was even filed on Jan. 29.
PG& E filed for bankruptcy after its finances buckled under the weight of increasing debts and a mountain of wildfire-related claims.
The company’s equipment has been found responsible for several lethal wildfires in recent years, including a blaze in Amador and Calaveras counties in 2015 known as the Butte Fire, several lethal infernos that scorched the North Bay Wine Country and nearby regions in 2017, and a deadly wildfire that roared through Butte County in 2018 dubbed the Camp Fire.
PG&E also is a convicted felon for crimes it committed before and after a fatal explosion in San Bruno that killed eight in 2010.
“Even for PG& E, this is completely over the top,” Toney said.