Judge confirms PG&E bankruptcy exit plan including $25.5B for wildfire losses
SAN FRANCISCO - A U.S. bankruptcy judge in San Francisco gave final approval Saturday to PG&E's $58 billion plan for exiting its Chapter 11 bankruptcy.
The confirmation order signed by U.S. Bankruptcy Judge Dennis Montali ends the utility's 17 months in the Chapter 11 bankruptcy, which temporarily suspended PG&E debts that included billions of dollars in claims stemming from wildfires caused by breaks in its electrical lines and equipment.
PG&E Chief Executive Officer Bill Johnson said the order "is a critical milestone that brings us one step closer to compensating wildfire victims fairly and quickly and sets the course for PG&E's future."
Montali previously announced in a ruling Wednesday that he had decided to approve the plan after finalizing the wording following a hearing on Friday.
(FILES) In this file photo taken on November 10, 2018 CalFire firefighter Scott Wit surveys burnt out vehicles near a fallen power line on the side of the road after the Camp fire tore through the area in Paradise, California. Obsolete installations,
The financial reorganization plan provides $25.5 billion for wildfire losses, including a $13.5 billion trust for wildfire victims, $11 billion for insurance companies that paid claims and $1 billion for state and local government agencies.
More than 100 people died in the fires, which included a series of blazes in the North Bay in 2017, the Camp Fire in Butte County in 2018 and the 2015 Butte Fire in Amador and Calaveras counties.
The trust for victims who lost loved ones, homes and businesses will have $6.75 billion in cash and up to $6.75 billion in stock.
The confirmation enables PG&E to begin obtaining financing and to meet a June 30 deadline for being eligible for a future wildfire insurance fund established by the state Legislature last year.
SANTA ROSA, CA -OCTOBER 14: Pacific Gas and Electric Company crews work to restore power near fire-damaged Cardinal Newman High School on October 14, 2017 in Santa Rosa, California. At least 32 people are confirmed dead with hundreds still missing. O
Half of the wildfire fund of up to $21 billion will be paid by shareholders and the other half by customers of PG&E and the state's other two largest investor-owned utilities.
The plan approval came in the same week that PG&E pleaded guilty in Butte County Superior Court on Tuesday and was sentenced on Thursday to the maximum $4 million penalty for 84 counts of the involuntary manslaughter of people who were burned to death in the Camp Fire.
PG&E also pleaded guilty to an additional count of illegally causing a fire that resulted in great bodily injury.
The Camp Fire began in the Sierra foothills in eastern Butte County when a worn suspension hook on a transmission tower that was at least 97 years old broke and caused a high-voltage line to hit the metal tower and send pieces of molten metal to dry brush below.
Pushed by strong winds and fueled by drought-dried vegetation, the fire swept southwest through Butte County, burning 153,336 acres and destroying nearly all of the town of Paradise.
Butte County District Attorney Mike Ramsey charged during the sentencing that deficient equipment monitoring and maintenance by PG&E amounted to "criminally reckless and grossly negligent behavior for the purpose of elevating profits above safety that led to the deaths of these 84 people."
The sentencing followed a day and one-half of victim impact statements by survivors who lost family members.
In his statement Saturday, Johnson said, "We heard every word and we will never forget their pain and loss. With respect and humility, we came before the court, the victims and the community to be held accountable and accept responsibility for our role in the Camp Fire.
WASHINGTON, DC - DECEMBER 19: CEO and President of Pacific Gas and Electric Company Bill Johnson testifies during a hearing before Senate Energy and Natural Resources Committee December 19, 2019 on Capitol in Washington, DC. The committee held a hear
"All 23,000 PG&E employees are committed to making sure our equipment never again causes another catastrophe," Johnson said.
Montali's confirmation order incorporated the decision he issued on Wednesday, in which he said the approval is an "important step toward facilitating the process of paying those victims and creditors."
Rejecting the plan would have meant leaving PG&E in bankruptcy without any immediate prospect of resolution, Montali wrote.
"Leaving tens of thousands of fire survivors, contract parties, lenders, general creditors, allegedly defrauded investors, equity owners and countless others with no other options on the horizon is not an acceptable alternative," the judge wrote.
TOPSHOT - Firefighters set a back fire along a hillside near PG&E power lines during firefighting operations to battle the Kincade Fire in Healdsburg, California on October 26, 2019. - US officials on October 26 ordered about 50,000 people to eva
The plan also includes the selection of a new board of directors and changes in the utility's management and operations.
SAN FRANCISCO, CALIFORNIA - AUGUST 05: A message is displayed on a wall inside the Pacific Gas and Electric (PG&E) Wildfire Safety Operations Center on August 05, 2019 in San Francisco, California. PG&E opened up its Wildfire Safety Operation