Victims of the 2016 Ghost Ship warehouse fire and their families can pursue their civil case against Pacific Gas and Electric Co. in state court, the judge overseeing the company’s bankruptcy case decided Tuesday.
But any money they recover from PG&E, either through a trial or a mediated settlement, must be tied to the company’s insurance proceeds, U.S. Bankruptcy Judge Dennis Montali said at a hearing in San Francisco.
PG&E had previously announced that Ghost Ship claims would be resolved as part of a settlement deal it reached with attorneys for fire victims involved in the bankruptcy case. Montali was set to consider that $13.5 billion deal later Tuesday, but Ghost Ship victims’ attorneys clarified at the hearing that they want to collect from PG&E’s insurance. The clarification satisfied Montali.
The judge said he wanted to allow “what would have happened if there hadn’t been a bankruptcy.”
“We can’t unwrite history, but one thing we can do is put the Ghost Ship fire victims back where they were before the bankruptcy occurred and let them have their day in court and either mediate to a proper result or not,” Montali said.
The judge’s decision frees Ghost Ship plaintiffs to seek payout from a what plaintiffs’ attorneys say is a $900 million pot of insurance money, but disqualifies them from a cut of the $13.5 billion settlement that will be shared with wildfire victims.
PG&E had opposed allowing the Ghost Ship victims to have relief from a rule that suspends lawsuits against companies while they are in Chapter 11 bankruptcy protection. The company said it may have to spend a lot of money preparing for trial.
The Ghost Ship plaintiffs’ civil case against PG&E contends that the blaze that killed 36 people in an Oakland warehouse on Dec. 2, 2016, was caused by an electrical malfunction. Officials never determined a cause for the inferno, but a lead investigator testified during criminal proceedings that she believed it was sparked by an electrical failure.
PG&E is one of several defendants listed Ghost Ship’s civil lawsuit, which filed on behalf of families from 33 of the 36 people who died, as well as several others who were injured.
Plaintiffs’ attorneys argued that their case against PG&E should be tried at the same time as the other defendants, which include the city of Oakland and warehouse landlord Chor Ng and her family.
The trial is scheduled to begin May 26 in Alameda County Superior Court.
A separate criminal retrial against the warehouse’s master tenant, Derick Almena, is slated for late March. After months of testimony in the initial trial, a jury in September hung on its verdict for Almena, who was accused of 36 counts of involuntary manslaughter. The jury acquitted Almena’s co-defendant Max Harris of the same charges.
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