Wildfire victims approve PG&E restructuring, company says

Wildfire victims overwhelmingly approved a plan by Pacific Gas & Electric Co. to emerge from bankruptcy, the company announced Monday.

The utility might start to compensate claimants as early as August if its reorganization proposal passes, according to court filings.

"PG&E believes that it remains on track for plan confirmation," a company statement read.

The company must meet a June 30 deadline to participate in a $20 billion state wildfire mitigation fund aimed at covering the cost of future blazes. The vote is among the last steps to complete PG&E's restructuring.

Roughly 70,000 wildfire victims filed claims. For it to pass, at least two-thirds had to approve the reorganization plan, which includes a $13.5 billion settlement for blazes caused by its equipment. Voting ended Friday.

There are no voting totals yet. A company spokesperson said final results would be certified by PrimeClerk and filed before U.S. Bankruptcy Judge Dennis Montali by Friday.

San Diego attorney Gerald Singleton said more than 98% of his 7,000 clients voted in favor of the plan. Texas attorney Mikal Watts, who represents over a fifth of all wildfire victims, also said 98% of those he represents voted for approval.

Roughly 90% of all claimants supported PG&E's plan, Singleton estimated.

In recent weeks, some wildfire victims have campaigned against the $13.5 billion settlement. They argue that the deal unfairly provides half of the compensation in cash and the other half in equity, which has fluctuated as a result of coronavirus concerns, and that the voting process was rigged in favor of approval.

The objectors want to renegotiate the settlement to ensure all the payments are provided in cash. In re: PG&E Corp. bankruptcy, 19-30088 (N.D. Cal., filed Jan. 29, 2019).

The committee representing wildfire claimants in bankruptcy court and plaintiffs' attorneys have maintained they agreed to accept equity to increase the deal's total value. Insurers and local governments resolved their claims with PG&E in all- cash settlements.

The integrity of the voting process has split wildfire victims and their attorneys. An objector urged Montali last week to invalidate thousands of votes approving PG&E's reorganization because of an alleged conflict of interest by Watts. The dispute concerned a $100 million loan to his firm, which was bought by financial companies holding PG&E equity and debt.

Montali denied the request last Friday. He is set to consider whether to approve PG&E's proposal to emerge from bankruptcy Wednesday.

Singleton said the only detail that remains to be worked out is funding confirmation. While there are no indications any of the financial entities have backed out, "another explosion of the coronavirus" could delay funding commitments, he said.

"I don't think we'd be realistic if we said we're done and started popping the champagne given the funding isn't done," he said.

Responding to concerns from wildfire victims the settlement will be underfunded since it's dependent on the value of PG&E's stock, Singleton emphasized attorneys secured the best deal possible under unfavorable conditions.

"Once PG&E filed for bankruptcy, the landscape of what was possible changed," he said. "The bankruptcy process is not set up to handle a mass tort like this."

In addition to Montali, PG&E must still secure approval for its bankruptcy plan from the California Public Utilities Commission.