What Happens Next

The proposed Bankruptcy Plan must be approved, in a formal vote, by at least 50% in number AND 2/3’s in total dollar amount of each class of impaired creditors. (An impaired creditor is one which will not be getting paid in full. Fire victims are impaired creditors.)  All fire victims who made claims against PG&E, either directly or through their attorneys, have the right to vote to approve or disapprove the Plan.

In mid-March, fire victims will receive a Disclosure Statement and a Summary of the Bankruptcy Plan. You may vote directly or have your attorney submit your vote, or you may authorize your attorney to vote on your behalf by assigning them a power of attorney. All votes must be submitted by May 15, 2020.

Some attorneys are sending text messages to clients asking for authority to submit votes for them. 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.

If the Plan is not approved by any class of impaired creditors (such as the fire victims), the Bankruptcy Judge still has the authority to confirm the Plan under U.S. Bankruptcy Rules. However, bankruptcy Judge Montali has publicly stated that he does NOT expect to confirm the Plan if fire victims do not vote to approve it.

The Plan must also get approvals from Governor Gavin Newsom and the California Public Utility Commission (CPUC) in order for PG&E to qualify for the Go-Forward Wildfire Fund under AB 1054. So far, Governor Newsom has rejected PG&E’s proposed Plan because it will leave PG&E too encumbered with debt, and because it does not provide for the board governance (with safety-oriented directors) that he seeks.

Make-Whole Releases of Insurance Companies

If the Bankruptcy Plan is confirmed and assuming the Effective Date occurs, fire victim claimants will be required to release all claims against PG&E arising from the fires occurring before January 29, 2019. If you originally signed up for a class action suit, that lawsuit disappears. Instead of a claim against PG&E, you will have a claim for compensation from the Fire Victims Trust.

As a condition to receiving any payments from the Fire Victim Trust, you will also be required to release your claims against your insurance company under the ‘Make Whole Doctrine’. In short, the Make Whole Doctrine entitles you, the insured, to recover all your uninsured losses (including personal injury, emotional distress, lost wages, etc.) BEFORE your insurance company receives a dime. However, under the proposed Bankruptcy Plan, no fire victim will be made whole. All of us will receive less than our full claim. Yet, our insurance companies and the hedge funds that bought subrogation rights from our insurance companies will be getting a total of $11 billion in cash. We think this is outrageous.

This release will not affect your contractual right to recover under your insurance policies, nor release any claims you have against your insurer for underpayments, underinsurance, errors, misrepresentations, or violations of law.