3. A CEO blows the whistle
On 8 July 2020, a putative class action was brought by a Evergreen Capital against BNY and PCEC alleging the existence of a scheme by PCEC to use improper accounting to starve the Trust of distributions.​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​
On 22 January 2022, Evergreen filed a second amended complaint, which included testimony from PCEC's recently-ousted CEO, who had fallen out with his former colleagues. The ex-CEO alleged that his colleagues had indeed orchestrated a scheme to expropriate Trust assets using improper ARO accounting:
Discovery in the Evergreen class action produced what the former CEO alleged was a "second set of books" used by PCEC to show its lenders an estimate of ARO expense that was lower than the estimates represented in the Trust's SEC filings. Indeed, the document produced appears to show that PCEC budgeted for only $2-$3M per year of ARO expense, far below the level that would necessitate stopping all distributions to the Trust (the Trust had earned $13M in the 12 months through June 2019).
Also produced in discovery was an email from a buyer offering to pay $6M for a property (West Pico) that PCEC alleged was worth less than the ARO associated with it. According to PCEC's ex-CEO, PCEC rebuffed offers (including from the ex-CEO himself) because they wanted to retain the liabilities associated with West Pico long enough to force the Trust into dissolution:​​​​​​​​​​​​​​​​​​​​​​​​​​​​
