PG&E Corp. has come to terms with federal and state first responders, who have agreed they won’t take money set aside for victims of the wildfires that drove California’s largest utility into bankruptcy, WSJ Pro Bankruptcy reported. Announced at a hearing yesterday in U.S. Bankruptcy Court in San Francisco, the utility’s agreements with the U.S. Federal Emergency Management Agency and state agencies clear up a major trouble spot for PG&E, which is racing to meet a June 30 deadline to emerge from bankruptcy. PG&E filed for chapter 11 bankruptcy protection in January 2019 and is proposing a $59 billion bankruptcy exit plan, which earmarks $25.5 billion for insurance companies, cities and people with damages stemming from fires linked to PG&E equipment. As Judge Dennis Montali weighed the company’s bid for approval to start the voting process on the plan, lawyers announced the agreements with FEMA and California agencies. Due to the agreements, people who lost loved ones, homes and businesses to the blazes of 2017 and 2018 will no longer have to worry that they will be forced to share with government emergency services the $13.5 billion earmarked for fire victims under PG&E’s proposed chapter 11 plan. California is dropping its claims to recoup about $300 million it spent on firefighting and emergency services, while FEMA has agreed to chop its claim from $3.9 billion to $1 billion. Additionally, FEMA has agreed it will only attempt to collect after all individual victims are paid in full from the $13.5 billion.
