In Final Days of PG&E Fire Settlement Vote, Hundreds of Survivors Still Had No Ballots

On the Friday before Memorial Day weekend, PG&E released results of a vote crucial to its exit from bankruptcy.

Fire survivors with wildfire-related claims against PG&E had overwhelmingly approved a multi-billion dollar compensation deal with the utility "by in excess of 85 percent," PG&E reported.

But a KQED investigation found a larger subset of fire survivors than previously reported got their ballots weeks after the dates by which PG&E said they were mailed out, raising continued questions about the integrity of the voting process.

PG&E is racing to have its bankruptcy plan confirmed by June 30 so that it can tap a state wildfire insurance fund in time for the peak of this year's fire season. For that to happen, two-thirds of the fire survivors who voted on the settlement deal had to approve it.

Nearly 45,000 of the 51,000 fire claimants who voted supported the deal, according to Prime Clerk – the company PG&E hired to manage the process – but approximately 36,000 others either did not vote or had their ballots discarded.

What remains unclear is how many of those 36,000 fire survivors were impacted by issues with the voting process – a margin large enough to potentially sway the vote's outcome.

Late Ballots for Hundreds of Fire Survivors

While PG&E maintains that all voting materials were sent out by April 8, more than 200 fire survivors interviewed by KQED said they didn't receive their packets until May. A substantial portion got their packets less than a week before May 15, the deadline they were due to be received by Prime Clerk to be counted. Some got their ballots after that deadline had passed.

Fire survivors were supposed to have six weeks to read through the complex materials, a timeframe agreed on by PG&E and several other parties, including the official committee for fire survivors – and approved by U.S. Judge Dennis Montali, who is presiding over PG&E's bankruptcy trial.

The interviews were conducted with a cross-section of fire victims, holding claims of various sizes from various fires, and expressing a range of opinions on the settlement. Claimants had the option to vote by phone, email or by mail.

Camp Fire survivor Amy Byrd received her packet on May 18 – three days after the deadline. That left her scrambling to figure out how to make her vote count.

"I did it online and tried to find a way to put in a comment letting them know I had just received the ballot, but they would not let me do that," Byrd told KQED in a phone interview. In a recent court filing, Prime Clerk included Byrd's name on a list of about 1,000 votes discarded because they arrived after the deadline.

"I think they dropped the ball," Byrd said of PG&E, despite her position in support of the settlement deal.

Tom Hess, another Camp Fire survivor, agreed. He got his voting packet on May 15, the day it was due back to Prime Clerk.

"I just assumed that my vote did count and they would recognize my issue," said Hess, who noted the problem on his ballot, which he mailed to Prime Clerk in New York. Like many fire survivors, Hess learned that his vote had been discarded during his interview with KQED.

"I don't have a ton of confidence in the whole system," Hess said.

Court Weighs Integrity of Voting Process

The integrity of the voting process has emerged as a central theme in PG&E's bankruptcy confirmation trial, which began last week.

Prime Clerk has documented 10,000 holders of fire claims who were not included in the final voting tally for reasons including late receipt, lack of signature or no vote indicated. Some opponents of the deal are calling for an independent examiner to be appointed to audit the vote.

That request will be the subject of a hearing Thursday.

In recent testimony, Prime Clerk Vice President of Global Corporate Actions Christina Pullo, who supervised the voting process, acknowledged she knew some fire survivors had gotten the mailing days after the vote had ended.

"We received inquiries from people stating that they had just received voting packages," Pullo told Camp Fire victim Mary Kim Wallace, who cross-examined her during the trial on Friday.

Pullo estimated that "a handful" of people had complained. All voting materials were served by first-class mail, but envelopes were not postmarked.

"I can only say we sent out materials," Pullo testified. "I can't speculate as to why they did not receive them."

Pullo also stated that Prime Clerk emailed claimants on April 3. Wallace, who received her packet on the day after the deadline, explained that she lives without reliable internet access or cell service, as do other survivors living in the footprint of the Camp Fire.

Pullo and Prime Clerk's CEO, Shai Waisman, did not reply to phone calls and emails requesting comment.

PG&E has declined to acknowledge that delays took place despite several inquiries since early May, when KQED first reported the problem.

"We very much want to do right by the people and communities who have suffered so much as a result of wildfires in recent years," said PG&E spokesperson Andrew Castagnola in a statement. "Our Chapter 11 process is intended to get them paid fairly and quickly, and we are in the final stages of being able to do that.”

PG&E needed support from two-thirds of fire claimants who vote. But the company failed to secure enough of a margin of "Accept" votes to decisively dismiss questions about the role that mailing delays may have played in the vote's outcome.

Pullo wrote in a court filing Tuesday that the outcome was unlikely to change because only one in six claims received late were from opponents of the plan.

Jared Ellias, who teaches bankruptcy law at UC Hastings College of the Law, told KQED he's not sure if the result would change if all survivors had received their voting materials on time.

"The goal of the voting process was to bring everybody in, and it seems like they have fallen a little bit short," Ellias said. "People voting in bankruptcy processes are often sophisticated hedge funds, and I think what we're seeing is that we may need a different paradigm when you have large numbers of disaster or tort victims."

On Wednesday, Camp Fire survivor Theresa McDonald wrote the court to register her support for an examiner of voting irregularities.

In explaining why it matters to fire victims, she wrote: "It is a necessary piece of the puzzle I am trying to put together to understand the entire Camp Fire event. And make no mistake; these proceedings are part of the event."