PG&E emerges from Chapter 11

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PG&E Corp. and Pacific Gas and Electric Co. announced Wednesday that PG&E has emerged from Chapter 11, successfully completing its restructuring process and implementing PG&E’s Plan of Reorganization that was confirmed by the United States Bankruptcy Court on June 20.

“Today’s announcement is significant for PG&E and for the many wildfire victims who are now one step closer to getting paid. Compensating these victims fairly and quickly has been our primary goal throughout these proceedings, and I am glad to say that today we funded the Fire Victim Trust for their benefit,” said Bill Smith, interim chief executive officer, PG&E Corp. “This is an important milestone, but our work is far from over. Our emergence from Chapter 11 marks just the beginning of PG&E’s next era – as a fundamentally improved company and the safe, reliable utility that our customers, communities and California deserve.”

Pursuant to the plan – which was confirmed by the bankruptcy court, approved by the California Public Utilities Commission, and accepted by more than 85 percent of fire victims who cast votes on it – all negotiated settlements of wildfire claims have been implemented as provided in the plan.

In accordance with the plan, PG&E has now funded the Fire Victim Trust established to satisfy the claims of individual wildfire victims and others.

The Fire Victim Trust funding schedule is as follows: $5.4 billion in cash on the plan effective date, which was July 1; an additional $1.35 billion in cash in two installments in 2021 and 2022; PG&E Corp. common stock on the plan effective date representing 22.19 percent of the outstanding common stock as of such date (subject to potential adjustments); plus certain other rights. A $700 million payment scheduled for 2022 will be accelerated if the CPUC approves the rate-neutral securitization application PG&E filed on April 30.

The Fire Victim Trust will be administered by the fire victim trustee and claims administrator, both of whom have been approved by the bankruptcy court. Neither the trustee, the Hon. John K. Trotter (Ret.), nor the claims administrator, Cathy Yanni, is associated with PG&E Corp. or the utility.

In addition to funding the Fire Victim Trust, PG&E has also now funded two additional wildfire settlements, paying approximately $1 billion to satisfy the wildfire claims of certain cities, counties, and other public entities, and paying an $11 billion settlement to insurance companies and other entities that paid claims by individuals and businesses related to wildfires in recent years.

As announced last month, PG&E Corp.’s newly appointed board of directors is now officially in place along with the corporation’s new Interim CEO, Bill Smith, who officially took over from outgoing CEO, Bill Johnson, effective July 1.

The new board consists of 14 members, 11 of whom are new. The board members bring substantial expertise in key areas including utility operations and management, safety and environment, risk management, customer engagement, innovation and technology, regulatory affairs (state and federal), audit and finance, corporate governance, nuclear operations and decommissioning, and human capital and executive compensation.

In addition, six of the 11 new directors are from California and have made their careers in the state, gaining extensive knowledge of the communities PG&E serves and the political, social, and physical environment in which PG&E operates.