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PG&E Bankruptcy Plan Gets Court Approval

PG&E Corporation (NYSE: PCG) announced that its Chapter 11 reorganization plan stands approved by a court in California, clea

Benzinga · -

PG&E Corporation (NYSE:PCG) announced that its Chapter 11 reorganization plan stands approved by a court in California, clearing the way for the utility to emerge from bankruptcy.

What Happened

The reorganization plan cleared by the court on Saturday, in the Northern District of California, has already been approved by the California Public Utilities Commission in May.

Bill Johnson, CEO of PG&E, said, “Today’s ruling in the Chapter 11 proceeding concludes the process of approving PG&E’s Plan of Reorganization and is a critical milestone that brings us one step closer to compensating wildfire victims fairly and quickly and sets the course for PG&E’s future.”

Last week, PG&E had pleaded guilty to the 2018 Camp Fire that took the lives of 84 people and destroyed thousands of homes and businesses.

Johnson expressed regret at the losses suffered by the 2018 campfire and vowed, “All 23,000 PG&E employees are committed to making sure our equipment never again causes another catastrophe.”

Why It Matters

According to PG&E, it expects to emerge from bankruptcy in July, the company would then be able to payout all the wildfire-related settlements, including funding a fire victim trust. 

The 2018 fire is considered to be the most destructive wildfire in Californian history; it caused severe damage to the town of Paradise.

The guilty plea, made in a deal with prosecutors in Butte County, will end all criminal proceedings against PG&E.

PG&E announced a $5.75 billion share offering of common stock to partially fund emergence from bankruptcy in June.

The utility is also relocating its headquarters from San Francisco after nearly 100 years and will raise $11 billion from debt markets to cover a part of $25.5 billion in reimbursements to victims of fires.

Price Action

PG&E shares traded 1.66% higher at $10.39 in the after-hours session on Friday. The shares had closed the regular session 5.55% lower at $10.22.