[Updated to include voting results.]

Proceedings to conclude the sixth-largest bankruptcy in U.S. history will likely happen via video starting Wednesday, the judge overseeing PG&E Corp.’s Chapter 11 reorganization said last week.

Judge Dennis Montali, with the U.S. Bankruptcy Court in San Francisco, conducted a virtual hearing using Zoom on May 19 in which he spoke from his home with a dozen lawyers in New York, California and elsewhere. The remainder of hearings in the PG&E bankruptcy case will probably also be held via video because of the COVID-19 crisis, he said.

The purpose of the May 19  hearing was to establish the schedule for proceedings to approve or reject PG&E’s $60 billion reorganization plan, including the $13.5 billion it has promised to some 80,000 victims of wildfires sparked by its equipment in recent years.

Fire victims and other creditors, about 250,000 in all, had to cast their ballots on the plan by May 15. A two-thirds vote is required for approval.

Late Friday, Prime Clerk and PG&E filed lengthy documents with the court detailing the voting results. Wildfire victims voted by an 85% majority to approve PG&E’s Chapter 11 plan, and the other creditors overwhelmingly supported it, too.

“Fire victims have spoken, and they have spoken loudly and resoundingly in favor of the plan. The time has come to confirm the plan,” PG&E said in its filing.

Trial Starts Wednesday

The “confirmation” trial of PG&E’s plan is scheduled to start Wednesday. After hearing from attorneys for all major parties, Montali will have to decide whether to approve PG&E’s reorganization proposal.

PG&E is trying to exit bankruptcy by June 30 to meet the requirements of Assembly Bill 1054, a measure pushed through the State Legislature by Gov. Gavin Newsom last July that creates a $21 billion fund to insure utilities against future wildfires. California law holds utilities strictly liable for wildfires sparked by their equipment.

May 15 also was the deadline for parties to file objections to the plan. Dozens did so, including the state and federal governments, the U.S. Trustee in the bankruptcy case, and the city and county of San Francisco. They questioned provisions in the plan that they say could exculpate PG&E, its fiduciaries and associates for actions they take after the bankruptcy case has ended.

The Tort Claimants Committee (TCC), which represents fire victims, objected to the plan based on a lack of assurances that the $6.75 billion in PG&E stock, intended to fund half of the victims’ trust as part of a negotiated settlement agreement, will hold its value amid the coronavirus pandemic and potential wildfires this summer and fall.

“The plan … fails to provide fire victims with the treatment and value that was agreed to in the settlement,” the TCC wrote. “Instead, the plan has whittled away various aspects of the settlement and could harm fire victims in amounts that are in the billions of dollars.”

PG&E lawyers told the judge May 19 that negotiations and mediation are underway that could resolve the objections before Wednesday’s confirmation hearing.

CPUC to Vote Thursday

The California Public Utilities Commission is scheduled to vote on PG&E’s reorganization plan Thursday, wrapping up an investigation that began in September. The vote was delayed a week after a party to the proceeding sent an improper ex parte email, the CPUC said. (See related story, Improper Email Delays CPUC Vote on PG&E Plan.) AB 1054 tasked the commission with ensuring PG&E’s plan is in the public interest, including “the electrical corporation’s resulting governance structure … in light of [its] safety history, criminal probation, recent financial condition and other factors deemed relevant.”

A proposed decision by a CPUC administrative law judge recommended approving the plan as long as PG&E agrees to enhanced oversight and enforcement by the commission. The utility has said it will accept the changes, and it agreed earlier this month to pay a record $1.9 billion in penalties levied by the CPUC. (See CPUC, PG&E Agree to Record $1.9B in Penalties.)

Sentencing Ahead

The utility has said it intends to plead guilty to 84 counts of involuntary manslaughter and one count of starting an illegal fire stemming from the Camp Fire in November 2018. State investigators determined a PG&E transmission tower ignited that blaze, the deadliest and most destructive wildfire in state history, which destroyed much of the town of Paradise.

The Butte County District Attorney has said that PG&E’s sentencing hearing will be held on June 16 and streamed live on the Butte County Superior Court’s YouTube channel.

PG&E remains on criminal probation for six felonies related to the San Bruno gas pipeline explosion in September 2010.