On April 7, U.S. Bankruptcy Judge Dennis Montali rejected an attempt by wildfire victims’ attorneys to notify clients that their $13.5 billion settlement with PG&E could be devalued by a stock market impacted by COVID-19.
Montali issued his order just hours after hearing from PG&E and victim attorneys on the issue, ultimately siding with PG&E and maintaining its momentum toward an exit from Chapter 11 protection. Montali characterized the victim attorneys’ effort as “not appropriate,” citing how their protests on financial issues were already known when a wider notice was approved and distributed to victims last month. Montali further stated that sending a second letter would confuse victims, echoing an earlier argument made by PG&E.
Victim attorneys are still allowed to tell clients to vote for, or against, PG&E’s bankruptcy exit plan, Montali said. However, he continued, that communication isn’t the same as the letter being used as an attempt to delay that vote, especially given pressures of the coronavirus pandemic and the state’s June 30 deadline for PG&E to close its Chapter 11 case.
The next milestones in PG&E’s bankruptcy case are an April 14 hearing on the company’s plea deal with Butte County over the 2018 Camp Fire, and a May 27 hearing on PG&E’s overall Chapter 11 plan. The California Public Utilities Commission (CPUC) is also expected to issue a proposed decision this month on whether to approve the plan.
The actions of the court this week further clear the path toward PG&E’s bankruptcy exit by June 30, 2020. As previously reported, key members of the legislature have expressed that there is no appetite to slowdown PG&Es exiting from bankruptcy. With Governor Newsom also removing his opposition, it seems very likely that the CPUC will support the utility’s plan as it stands today.