We’re a group of Fire Survivors who are also Claimants in the PG&E Bankruptcy. Our goal is to provide information about the proposed PG&E Settlement Terms and ongoing Vote.

Fire Victim Claimants are being bombarded by confusing messages from many self-serving sources including Wall Street Hedge Funds, PG&E, even some of our Attorneys. This website is intended to cut thru the misinformation and help the Fire Victim Claimants make more informed decisions.

Why I’m Voting NO to this Flawed and Risky Plan

Op-Ed by James Finn

I want the best settlement possible within the prescribed time limits.  The plan we fire victims have been offered does not achieve this goal.

1.  This is not the best deal that’s realistically obtainable from the hedge funds that control PG&E.  We deserve better, and they can do better, but they need incentive.  We can help provide that incentive – by voting NO.

2.  Confidential court mediation is still ongoing to improve this deal.

3.  If the collective vote is NO on May 15 – this is not the final word.  PG&E and the hedge funds can improve the deal and subsequently seek approval from those who voted NO.  Judge Montali’s ruling to confirm the plan or not (now scheduled for May 27) is the final word.

4.  PG&E will not automatically enter Chapter 7 if the proposed plan is voted down.  The hedge funds stand to lose up to $ 20 Billion if this occurs – they will be strongly motivated to offer a better deal (and legally they still could).

5.  Voting the plan down may allow other plans (such as the Customer Owned Utility model, which proposes to pay victims $ 13.5 Billion in cash) to be considered.  This plan has been prevented from being considered (so far) by bankruptcy procedures.

6.  $ 13.5 Billion is the legally ‘agreed’ estimation for our losses – yes, the ‘real’ cost is much higher – but this is what’s realistically obtainable.  Yet, we may not even get this discounted amount with this current plan.

7.  PG&E & hedge funds want to fund our fire victim trust 40% in cash ‘up front’ ($ 5.4 B), 10% in deferred cash ($ 1.35 B), and 50% in the ‘new PG&E’ stock.

8.  The 40% ($ 5.4 B) cash is planned to be funded by Aug 29 – but possibly could be delayed till Dec 31 – well into fire season.  It could potentially not get funded at all if PG&E has to declare bankruptcy again.  This can be improved by making Aug 29 a hard deadline to fund.

9.  The 10% ($ 1.35 B) in deferred cash (without interest) - $ 650 M in Jan 2021, and $ 700 M in Jan 2022 – is not set aside, and is not fully secured.  It potentially may not be paid at all.  This can be rectified by including this deferred amount in the initial cash funding, thus providing $ 6.75 B by a hard deadline of Aug 29.

10.  The 50% ($ 6.75 B) in ‘new PG&E’ stock is really only worth $ 4.85 B at time of funding (per Lowrey declaration).  And the stock may not get funded until much later in this fire season.  PG&E stock fell about 91% after the 2017/2018 fires – you can do the math.  There are multiple ways this could be improved, including substituting cash for stock.    

11.  The vaunted AB 1054 wildfire fund, intended to pay victims of future utility wildfires (and the reason for the June 30 settlement deadline), is not a surefire guarantee to protect PG&E.  If ‘serious doubt’ is raised by any party as to ‘reasonableness of the electrical corporation’s conduct’, the fund might not pay the costs and expenses incurred by a utility from a wildfire.  The utility could be forced to declare bankruptcy.

There is much more information, and other excellent summaries, on our FB pages and this website.

Why I Voted to Reject the PG&E Plan of Reorganization

Op-Ed by Helen Sedwick

When I sat down to list the reasons to vote for or against the Plan, I realized the only reason to vote for the Plan was the often-repeated threat that if we didn’t accept this proposed Plan, we would get nothing or next to nothing years from now. I took a closer look at this threat and came to the conclusion that I do not believe it.

Why?

First, let’s look at the “no more juice to squeeze from the turnip" argument. PG&E isn’t a turnip; it’s a cash-cow. There is plenty of cash, but it’s going to the wrong players.

You need to take a step back, beyond the PG&E façade, and look at who controls this bankruptcy process -- Wall Street. They have structured this Plan so that hedge funds and investors will make hundreds of millions, if not billions. They will be profiting by

• pulling out $11B in cash as subrogation rights holders;

• being issued stock at 30% to 50% less than what the Fire Victims Trust is paying;

• converting unsecured debt to secured debt; and

• dumping their shares before the Fire Victims Trust may sell its shares.

Those same players have the power to tweak this Plan to create a more equitable allocation of cash and stock. There is time to make those changes and still get a confirmed Plan by the June 30, 2020 deadline under AB 1054. The investors have to give up some of their easy profit and send it into the Fire Victims Trust to make up for our losses.

Second, how real is this Chapter 7 threat? I don’t believe it’s real at all. One thing investors hate more than making less profit is losing real money. They would lose billions if PG&E goes into Chapter 7. They won’t let it happen no matter what we vote. I believe they would rather tweak the Plan than make less money.

Third, we are being told there are no other “Plans.” Those who resigned from the TCC have more information than we do, and they say there are other groups out there that want to put together Plans. They have been blocked by PG&E, PG&E’s investors, and the bankruptcy process. Competition could lead to a better Plan for fire victims and California. We can’t know the options as long as this proposed Plan ties the hands of the TCC and our attorneys.

Why do I not like this Plan?

We are signing on to a one-sided contract. If we vote to approve this Plan, they we are stuck with it. But PG&E still has the option to not perform. Yes, PG&E could end up paying us nothing. They might not have a choice if they cause another major fire or the economy keeps crashing. What happens then? PG&E is put up for sale anyway but with more liabilities and in a worse economic climate. Could this happen? Of course. PG&E has already caused us to live through the unimaginable. We should be prepared for more of the same.

The allocation of risk is backwards. Every owner of PG&E stock is taking on the risk of future fires. That risk should be allocated to the parties who are compensated to take risk, often quite handsomely -- insurance companies and investors. Fire victims are not being compensated to take risk. Even on a purely financial level, we are taking losses. And on a personal level, the loss is immeasurable.

Finally, PG&E and its investors have the power to win me back. If we vote down this Plan, they can make some of the tweaks I mentioned, make this a more equitable Plan, and ask us to change our no votes to yes. I am open to being convinced. But the current Plan, and the empty threats, do not convince me. I have voted NO.

Our Related Facebook Pages:

'Survivors of the PG&E Fires' and 'Wildfire Victims Settlement Discussion Group’

Kincade fire victims – Since your loss occurred after the bankruptcy was filed, your claims won’t be subject to the bankruptcy plan. You should talk to an attorney about making a claim outside of this bankruptcy. We are happy to recommend attorneys we think are good, if you ask us.

Time to Vote

Around April 1, 2020, all fire victims who submitted Proofs of Claims, either directly or through their attorneys, will receive Solicitation Materials and Ballots for approving or rejecting PG&E proposed Plan of Reorganization (which we often refer to as the Plan or the Bankruptcy Plan). The Solicitation Materials will include a Disclosure Statement, at least one Supplement to the Disclosure Statement, the Plan, and copies of court orders and hearing notices.

You will receive the Solicitation Materials via email or mail or both. The materials will also be available for download on Prime Clerk. We will post a link as soon as we get it.

For the purposes of voting only, each Claim will be valued at $1. If you are a family of five, you will have five votes, assuming you listed all five names on your Proof of Claim or filed five separate Proofs of Claim. The Plan needs to be approved by at least 2/3’s of the votes to be considered accepted by Fire Victims as a class.

You have until 4 PM, California time, on May 15, 2020 to submit your ballots. Under bankruptcy law, each of us is entitled to have reasonable and sufficient time to make an informed decision to accept or reject the Plan. Take the time to do your research and ask questions. This is a big decision that will affect you and tens of thousands of other fire victims.

You may submit your vote directly by mail, by overnight service such as Express Mail, or online at the Prime Clerk site. We will post the online portal when we get it. And there will be more details in the Solicitation Materials.

Many law firms will be collecting votes from their clients and submitting them to Prime Clerk on a Master Ballot. To use this procedure, a law firm must obtain your informed consent to the vote. Please make sure you feel adequately informed even if your attorney is submitting your vote for you.

Some firms are going so far as obtaining powers of attorney to decide how to vote for its clients. We strongly recommend against giving that power of attorney to a firm. This is your vote, your money, your future. You should maintain control of this decision.

You may change or withdraw your vote so long as you do so before the May 15th deadline. The right to change or withdraw your vote applies even if your attorney has submitted your vote for you. We will post more information about changing votes at a later date.

Some attorneys are requesting that their clients submit their vote to the attorneys via text. We think it’s crazy to vote or agree to any legal agreement via text message or an app. Too insecure. Too unreliable. Lack of documentation. Stick with mail or email. Plus, by law, no attorney should be asking for votes before we receive the Disclosure Statement and other materials. We urge you not to give your vote away.

The Big Picture

PG&E voluntarily filed for bankruptcy protection on January 29, 2019 to deal with the liabilities arising from the wildfires of 2015, 2017, and 2018 that destroyed nearly 20,000 homes and killed at least 130 people. Estimates of total fire claim damages range from $30 billion to $54 billion. The bankruptcy process allows PG&E to settle all fire cases at once, instead of dealing with thousands of lawsuits.

Over the last few months, PG&E has come to tentative settlements with its largest claimants and creditors in the bankruptcy – fire victims, subrogation rights holders (insurance company claims), bondholders, and some governmental entities (such as cities and counties). Those settlements are part of PG&E’s proposed a Bankruptcy/Restructuring Plan. You can find the Plan and Disclosure Statement at Prime Clerk as document 6353  (go to ‘Docket’ under the ‘Case Navigation’ section on the left, click ‘advanced’ next to search box at top and type in 6353 in ‘Docket number(s)’ box). There is also a Supplement to the Disclosure Statement as document 6483.

PG&E is under pressure to have its Bankruptcy Plan confirmed no later than June 30, 2020. That is the deadline for participating in California’s new Go-Forward Wildfire Fund. A new law, commonly referred to as AB 1054, has created a $21 billion dollar fund which investor-owned utilities like PG&E may draw from to cover liabilities from FUTURE fires (not the ones covered by this bankruptcy), subject to a list of conditions including safety upgrades and  multi-billion dollar contributions to the Fund by those utilities. A summary of AB 1054 is HERE.

There is debate among Fire Victim Claimants (and their attorneys) as to whether the current Plan contains the best terms the Fire Victims can get, and whether the Plan should be approved or rejected on this particular vote. You can find a summary of the issues on the tab Why are Victims Protesting.

We’ve used some terminology on this site. We’ve included a Glossary page that explains this terminology.