The U.S. Bankruptcy Court in San Francisco on Tuesday approved the Pacific Gas and Electric Co. (PG&E) revised reorganization plan and left unchanged the $13.5 billion settlement signed late last year.
The San Francisco-based combination utility indicated the action was an important step in its efforts to clear Chapter 11 before the June 30 deadline. It is awaiting a court ruling on a motion Monday from the Official Committee of Tort Claimants (TCC) that could block exit plans because of concerns of wildfire victims about the settlement.
During a conference call hearing conducted by Judge Dennis Montali in San Francisco Tuesday, lawyers argued the merits of sending a letter to the wildfire victims on the potential unraveling of the settlement because of the current wide variations in the value of PG&E’s stock, which is slated to be used in paying fire victims.
PG&E spokesperson Ari Vanrenen said the TCC’s effort to recut the deal puts at risk their clients’ ability to be paid quickly. “PG&E’s plan is the best method for victims to receive compensation.” The TCC is attempting to change the settlement, “despite the fact that it has broad support of the parties and the California governor’s office,” making it the fastest and best means to get victims paid. The settlement calls for cash and stock payment funded by a trust.
The settlement already has been approved by the bankruptcy court, including a formula for valuing the PG&E stock used. “The plan is now out for a vote, and it’s our understanding many attorneys who support the deal are actively advocating for approval of PG&E’s plan of reorganization,” he said.
The stock price fluctuations were “well understood” by all the parties and the extreme price changes now in the midst of the pandemic are not reflective of the long-term value, said Vanrenen.
Since filing for Chapter 11 early last year, PG&E’s main focus has been to “get victims paid fairly and timely,” he said. The second focus is getting the reorganization plan approved before the deadline set by the state wildfire relief law, Assembly Bill 1054.