Confirmation Hearing Begins On PG&E's Plan For Exiting Bankruptcy
SAN FRANCISCO (CBS SF) -- A multi-day confirmation hearing on PG&E's financial plan for emerging from its Chapter 11 bankruptcy began in federal bankruptcy court in San Francisco Wednesday.
U.S. Bankruptcy Judge Dennis Montali will conduct the hearing by videoconference.
PG&E is seeking to have its plan approved by both Montali and the California Public Utilities Commission by June 30 so that it can be eligible for a new state wildfire insurance fund intended to cushion utilities from financial liability for future blazes. The CPUC will hold a separate meeting Thursday to vote on the plan.
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PG&E's $58 billion plan includes $25.5 billion to fund wildfire claims, $22 billion to pay pre-bankruptcy debts and payments for other costs. Much of the funding would come from new financing and new debt.
The utility's first witness on Wednesday will be Christina Pullo, who will testify about the solicitation and tabulation of votes on the plan by people who are owed money, including fire victims.
PG&E told the judge on Friday that 88 percent of the fire victims who voted approved the plan.
"Fire victims have spoken, and they have spoken loudly and resoundingly in favor of the plan. The time has come to confirm the plan and enable prompt distributions to holders of fire claims," PG&E attorneys wrote in a brief submitted to Montali.
The claimants are people who lost family members, homes or businesses in wildfires in the North Bay in 2017 and Butte County in 2018 that were sparked by failures in PG&E's electrical lines and equipment.
Some claimants have filed objections to the plan with Montali, alleging that a proposed $13.5 billion trust to pay fire victims may be diminished because a planned $6.75 billion in PG&E stock that would make up half the trust may now have reduced value. Other claimants have charged they didn't receive their voting packets before a May 15 deadline.
The utility's proposed $25.5 billion to pay wildfire claims includes the $13.5 billion trust fund for victims not compensated by insurance, $11 billion for insurance companies that paid claims and $1 billion for local governments.
San Francisco-based PG&E filed for Chapter 11 bankruptcy protection in January 2019, citing billions of dollars' worth of wildfire claims. Chapter 11 allows a company to freeze its debts and continue operating while developing a financial reorganization plan.
