Bankruptcy Judge Dennis Montali said on Wednesday that PG&E Corp. needs to explain how it will keep a promise to pay fire victims $13.5 billion in the face of a demand from the Federal Emergency Management Agency for a cut of that money, Bloomberg News reported. Judge Montali is wading into a potential fight for cash between government agencies demanding compensation for their fire recovery efforts, and California residents who say PG&E caused the fires that killed their loved ones and burned their homes. “It should not go unnoticed that January 29, 2020 will mark exactly one year since these chapter 11 cases were filed,” Montali wrote in his memorandum. It’s a reminder, he said, that a crucial June 30 deadline is less than six months away. If a settlement and the company’s reorganization plan aren’t in place by then, PG&E won’t be eligible for a state insurance fund that would shield it from future catastrophic wildfire losses. The committee representing wildfire victims has pledged to back PG&E’s bankruptcy-exit proposal in return for $13.5 billion in cash and stock. But federal and state agencies including FEMA have filed billions of dollars worth of claims that may compete for that sum. Judge Montali ordered PG&E to detail the inner workings of two proposed trust funds designed to compensate victims. Those people need to understand how the company will honor its commitments to them while fulfilling two multibillion-dollar bankruptcy deals with creditors, and still comply with state law, Judge Montali said in a court filing.
