Case Update: PG&E Bankruptcy, A Non-Standard Recovery Effort

Mike Lange, Esq.
November 16, 2022

PG&E Bankruptcy recovery efforts continues to drag through the bankruptcy court. Since our last update, debtors started making settlement offers earlier this year. To date, 1,400 offers were made, and 1,020 claimants settled.

 

The Debtors Have Requested More Time for the Securities Claims Procedures
On October 25, 2022, the debtors filed a motion asking the bankruptcy court to further extend the deadline for them to object to claims and for related relief. The current deadline is December 22, 2022. They are asking for an extension to September 15, 2023. If the court gives the debtors more time, we expect further claim resolution efforts to be pushed out to later next year.

 

The Debtors’ Reported Progress in Resolving Securities Claims
Regarding the debtors’ progress in resolving Securities Claims, in their motion they say they have used the Securities Claims Procedures to make “significant progress” including expunging (through objection or withdrawal), reducing, or otherwise consensually resolving through settlement more than 3,000 claims representing $1B in face amount (i.e., the value listed on the claim forms).

More than two thirds of the ‘resolved’ Securities Claims resolved were expunged, reduced, or withdrawn. None of the claims filed by FRT have been the subject of the 21 Omnibus Objections to Securities Claims.

On September 29, 2022, the debtors moved for court approval of their dispute with the D&O insurance carriers (the D&O Insurance Settlement) which, if approved, they say will provide “certainty regarding the availability of insurance proceeds to cover at least a meaningful portion of a potential settlement of those [Securities Claims].”

 

Conclusion
PG&E continues to showcase the challenges of non-standard matters. For FRT clients, we continue to work to resolve any remaining data questions by the debtors, monitoring the bankruptcy court docket, and maintaining communication with key stakeholders.

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