16 May 2023 |
Adventist Health settled with the PG&E Fire Victim Trust for $200 million regarding the loss of its Paradise hospital during the 2018 Camp Fire. This settlement represents a significant reduction from the original $1 billion claim Adventist Health had proposed. The Fire Victim Trust was established as part of PG&E’s bankruptcy to compensate victims of utility-caused wildfires, including the 2018 Camp Fire. However, the trust’s structure has led to financial difficulties for many fire victims who are still waiting for full compensation.
According to the article in The Press Democrat, the burden of the settlement weighs heavily on Paradise, a community with a large population of older and low-income residents. Adventist Health has stated that it will not reopen the Feather River Hospital in Paradise but will invest $2 million to expand a health clinic instead. While this investment is seen as positive, some community members feel it is insufficient.
Adventist Health received a $90 million initial payment from the Fire Victim Trust, representing 45% of the $200 million settlement. In total, Adventist Health has received 60% of its payout. However, despite these funds, the organization operated at a loss in 2022.
The Paradise community anticipates the return of the hospital, which was a critical healthcare provider and the largest employer in Paradise. However, Adventist Health has been criticized for delaying decisions about rebuilding the hospital and misleading the community about its plans. Fire victim lawyers argue that Adventist Health maneuvered to maximize its settlement in bankruptcy court, potentially impacting the compensation available for other fire survivors. It has also received significant amounts from insurance claims, totaling at least $138 million so far.
The Fire Victim Trust has made progress in paying out more than $9 billion to victims, but the total amount of claims awarded exceeds the fund’s maximum value by over $3 billion. Negotiations continue between the trust and other corporate entities with large settlement claims.
Fire victims and advocates have been pushing for legislation to exempt all fire victim compensation from taxation, but a federal bill proposing such exemption has yet to move forward. It remains unclear what federal tax liability Adventist Health will face on its settlement.
Adventist Health has not fulfilled its commitment to hold a town hall to explain its plans for Paradise to residents, prompting town leaders to explore other healthcare companies to provide emergency services in the area.