PG&E files amended Chapter 11 plan to reflect wildfire claims deals

By Caroline Salls

Pittsburgh, Dec. 13 – PG&E Corp. and Pacific Gas and Electric Co. filed an amended plan of reorganization Thursday with the U.S. Bankruptcy Court for the Northern District of California to reflect settlements with all major groups of wildfire claimants, according to a company news release.

PG&E said the amended plan keeps it on track to achieve regulatory approval and confirmation of the plan in advance of the June 30, 2020, statutory deadline for participation in California’s new wildfire fund.

The company said the amended plan satisfies the requirements of AB 1054, compensates wildfire victims and some limited public entities from a trust funded for their benefit in the amount of $13.5 billion and compensates insurance subrogation claimants from a trust funded for their benefit in the amount of $11 billion.

The plan also pays out $1 billion in full settlement of the wildfire-related claims of public entities like cities and counties and pays in full with interest all pre-bankruptcy funded debt obligations, all pre-bankruptcy trade claims and all pre-bankruptcy employee-related claims.

All power purchase agreements and community choice aggregation servicing agreements will be assumed, as will all pension obligations, other employee obligations and collective bargaining agreements.

PG&E said the amended plan is fully financeable throughout the capital structure, including more than $12 billion of equity backstop commitments that the company received last week to support its plan.

“Today’s filing brings us one step closer to successfully concluding PG&E’s Chapter 11 cases so that the wildfire victims can be compensated as quickly as possible,” chief executive officer and president Bill Johnson said in the release.

“We believe our plan is the best solution for all constituencies, and we look forward to bringing these complex proceedings to their conclusion. In the meantime, we continue to make meaningful changes and additional investments throughout the company to reduce the risk of wildfire and help us continue to deliver safe, reliable energy to our customers.”

PG&E said the plan prioritizes getting wildfire victims paid soonest by resolving outstanding litigation and eliminating the need for a Tubbs Fire trial and a costly and uncertain estimation process. The company said it also assumes its obligations to its employees and creditors without impairments.

In addition, PG&E said a competing plan put forward by an informal group of bondholders “is a last-ditch effort to derail the wildfire victims’ settlements and force costly, uncertain and protracted litigation.”

“That plan would enrich those firms backing it by charging interest rates on debt that are both above market rate and higher than required by law,” the company said in the release.

The company said its plan has the support of the official committee of tort claimants and firms representing roughly 70% of wildfire victims.

The company said it resolved disputes with wildfire victims and insurance companies regarding release provisions on Thursday, satisfying a condition to the settlement with the wildfire victims.

The plan is subject to confirmation by the bankruptcy court.

The electric and natural-gas utility is based in San Francisco. The company filed bankruptcy on Jan. 29, 2019 under Chapter 11 case number 19-30088.

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