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A judge overseeing PG&E's bankruptcy is tentatively rejecting the utility's efforts to use a trust set up for Northern California fire victims to pay off its criminal fines, KQED.com reported. The controversial approach is slated to be taken up at a bankruptcy hearing today, but U.S. Bankruptcy Judge Dennis Montali indicated his thinking in an interim order issued on Saturday. "Some things not only have to be right, but they have to look right," Montali wrote. "Telling fire victims that their money will be used to pay criminal fines and penalties does not look right even if digging through the [settlement agreement or bankruptcy] plan would lead to that literal result." Judge Montali said. "This not only looks wrong, it is wrong." A PG&E spokesperson said that the utility intends to provide the necessary context in a discussion with the judge at today's hearing.

The judge overseeing PG&E Corp.’s bankruptcy has rejected efforts to slow down voting on a proposed $13.5 billion settlement for wildfire victims as negotiations over certain terms continue, WSJ Pro Bankruptcy reported. Bankruptcy Judge Dennis Montali of the U.S. Bankruptcy Court in San Francisco said that he won’t order the dissemination of a supplemental disclosure that urges wildfire victims to withhold votes until at least the end of the month on PG&E’s chapter 11 exit proposal. The ruling marks a setback for an official committee of wildfire victims that has been trying to stop the exit proposal from accumulating support among the roughly 70,000 individuals and businesses who filed claims against PG&E over wildfires linked to its equipment. If fewer than two-thirds of those creditors vote to back the proposal, it would create a serious hurdle for the company in its bid to exit chapter 11 by a state-imposed June 30 deadline. PG&E would have to either reopen negotiations with wildfire victims or ask Judge Montali to approve the proposal without their support, which he has signaled that he is unlikely to do.

Despite a federal judge’s approval of Art Van Furniture LLC’s plans to liquidate 44 Levin and Wolf furniture stores in addition to nearly 150 Art Van stores dotting the Midwest, previous owner Robert Levin is still interested in reacquiring the furniture and home furnishing chain that bears his family name. But he acknowledged Wednesday that the process has now become more complicated and a resolution even more uncertain, the Pittsburgh Post-Gazette. Art Van officials on Tuesday said that they had converted the Michigan-based company’s original chapter 11 bankruptcy restructuring filing to a chapter 7 liquidation for the 189 furniture stores “due to the unforeseeable and significant negative impact of the current public health crisis.” The company, they said, does not have enough cash to cover its obligations under a chapter 11 liquidation. That is not good news for Levin customers who have put down deposits or paid for furniture that has not been delivered. The company, according to a posting on the Levin Furniture website, “is unable to fill any customer orders at this time” and a final decision on those matters will be decided by the chapter 7 trustee appointed by the court. Nor will extended warranties be honored, the company said.

Pioneer Energy Services Corp. bondholders want to renegotiate a debt-for-equity swap they agreed to weeks before the precipitous decline in U.S. oil prices and major economic disruption caused by the coronavirus, WSJ Pro Bankruptcy reported. A group holding Pioneer bond debt said in a court filing that the market downturn would have a negative impact on the Texas oilfield-service company for years to come. The proposed chapter 11 plan they agreed to in February needs a second look to determine “whether the contemplated restructuring can, or should, be consummated as planned,” the court filing said. The assumptions underpinning the restructuring transaction were based on market conditions in “the old world that we used to live in,” Damian Schaible, a lawyer representing the bondholder group, said during a court hearing held over the telephone yesterday. The San Antonio-based company’s proposed chapter 11 restructuring is the latest energy deal to face trouble in recent weeks because of the coronavirus and plunging U.S. oil prices. Bankruptcy exit financing for shale driller EP Energy Corp. collapsed late last month, Sanchez Energy Corp. has warned it won’t be able to repay a chapter 11 loan, and Tri-Point Oil & Gas Production Systems LLC is liquidating after a possible rescue deal fell through. West Texas Intermediate futures, the primary gauge of U.S. crude, was at around $26 a barrel yesterday.

The judge presiding over the massive PG&E Corp. bankruptcy on Tuesday declined to sanction an attempt to halt wildfire victims’ voting on the company’s restructuring plan, a setback for a group of lawyers that has tried to force changes to a crucial $13.5 billion settlement deal, the San Francisco Chronicle reported. Bankruptcy Judge Dennis Montali said in a written order that he would not approve a letter from a creditor committee of fire victims that would ask tens of thousands of people to delay casting a vote on PG&E’s plan to resolve the case. His decision came one day after attorneys for the committee asked for permission to send the letter, which was intended to get PG&E to provide stronger assurances about how fire victims will be paid for their losses. “Hundreds, if not thousands” of victims have voted already, Judge Montali wrote. “The (committee) apparently does not want to upset those votes, but it is beyond doubt that confusion will reign if the court permits the proposed letter to go out, leaving countless fire victims confused even more than they might be now.” About 80,000 victims are able to vote for or against PG&E’s plan until May 15. The committee wanted them to wait a few weeks in large part because the economic turmoil caused by the coronavirus pandemic prompted concern that PG&E may not actually be able to provide the full $13.5 billion after the case concludes.

Alaska’s North Slope Borough government has moved to seize the assets of RavnAir Group after it declared bankruptcy due to the coronavirus, aiming to protect its region’s air service but also setting up a potential legal battle with the airline’s lender, Reuters reported. Ravn, Alaska’s largest regional carrier, filed for chapter 11 protection and halted operations on Sunday after running out of cash due to the plunge in travel caused by the pandemic, threatening service to remote regions like the North Slope Borough that do not have outside road access. In a seizure order on Sunday, North Slope Borough Mayor Harry Brower said his government, which serves a mostly Inupiat population, “must, in this time of disaster, ensure that its residents have food, medical supplies, and medical transport.” The area is roughly the size of Minnesota and has close to 10,000 residents. Assistant Alaska attorney general Rob Schmidt told Reuters that while the order was motivated by legitimate concerns, it was illegal and counterproductive because it has put in doubt the $12 million in bankruptcy financing that Ravn’s lender, BNP Paribas, had been prepared to give the company, with those assets as collateral.

Mallinckrodt PLC said yesterday that an agreement to refinance a large chunk of its $5.4 billion debt load has fallen apart, and the drugmaker has instead struck a deal for a more limited bond exchange, WSJ Pro Bankruptcy reported. Mallinckrodt said yesterday that the previous deal, which would have refinanced over $1.2 billion of its near-maturing debt, has been terminated. The pact was premised upon the pharmaceutical giant being able to raise a new term loan, but the deterioration of financial markets as a result of the coronavirus pandemic made it difficult for Mallinckrodt to obtain the new financing. Instead, the company has entered into a new exchange agreement with bondholders Aurelius Capital Master Ltd., Franklin Advisers Inc., Capital Research and Management Co. and Columbus Hill Capital Management LP to exchange $495 million of bonds maturing on April 15 for a new first lien senior secured note due 2025, Mallinckrodt said Tuesday. The remaining $120 million balance on the bonds due next week will presumably be paid out from cash from the company’s balance sheet.

A group of attorneys for victims of wildfires caused by PG&E Corp. have indicated they won’t support its plan to exit bankruptcy anymore unless the company can guarantee that it will actually fund the full $13.5 billion it has promised to pay their clients, the San Francisco Chronicle reported. The lawyers want their clients to hold off on voting for PG&E’s bankruptcy plan until next month, by which point they hope to have secured a better deal with the company. Fire victims and their lawyers have been increasingly vocal about their dissatisfaction with a $13.5 billion settlement that would pay their claims because they no longer trust that PG&E will provide the full dollar amount. So the creditor committee of victims in the company’s bankruptcy case is trying to get PG&E to improve the arrangement by April 28. The committee yesterday asked U.S. Bankruptcy Judge Dennis Montali to let the group send a letter to victims urging them not to vote on the exit plan until after they send a follow-up report on May 1 detailing whether the company improved the settlement deal. All creditors have until May 15 to vote on the plan.