Judge in PG&E bankruptcy case says 'time has come' to confirm an exit plan

Houston — The federal judge overseeing the PG&E Corp. bankruptcy case has said that January 29 will be the end-date of a "confirmation status conference" that is set to begin Tuesday and lead to a final confirmation of either PG&E or a bondholder group's plan for the company's exit from bankruptcy proceedings.

The judge, Dennis Montali of the US Bankruptcy Court for the Northern District of California, said in a directive filed with the court Thursday that the two groups are expected to resolve a make-whole payment issue by January 29, which, he noted, is also the one-year anniversary of PG&E Corp. and its utility subsidiary Pacific Gas and Electric's Chapter 11 bankruptcy filings.

"That date also reminds us that A.B. 1054's June 30, 2020 deadline will then only be five months and a couple of days away," Montali said, referencing a law passed by the state legislature in June 2019.

"For that reason alone, the court is unwilling to continue the confirmation status conference beyond January 29, 2020, even if the parties and their counsel need further time to deal with the possible resolution of the make-whole issue or other contested matters."

Montali said that in a November 15 memorandum he directed "principal counsel" to begin discussing "the contours of an anticipated disclosure statement."

"The time has come to transition those discussions into action and scheduling items," he said in the directive.

Therefore, at the confirmation status conference, "whether on January 21 or January 29, the court will discuss with counsel a timetable for updating PG&E's December 12, 2019 Joint Chapter 11 Plan of Reorganization and for updating the Joint Chapter 11 Plan of Reorganization of Official Committee of Tort Claimants and Ad Hoc Committee of Senior Unsecured Noteholders," which is the alternate plan submitted to the court by the group of bondholders.

The make-whole payment issue concerns a $5 billion bond payment PG&E Corp. has been discussing with the bondholder group that some financial and legal observers have said could lead the bondholders to withdraw their alternative exit plan.

Whichever plan is determined to be the winning plan, however, a date must be set for a hearing on the approval of a disclosure statement, the judge said.

"Specific information must be incorporated in any disclosure statement outlining the details of how two trusts will be implemented under a confirmed plan," his directive said.

"More specifically, fire survivors and state and federal agencies and subrogation claimants who will be beneficiaries of those trusts need to understand adequately how claims will be liquidated and paid."