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Lawyers for more than half the wildfire victims who negotiated a $13.5 billion settlement with PG&E Corp. say their clients plan to vote overwhelmingly in favor of the bankrupt utility’s reorganization plan, Bloomberg News reported. The attorneys represent about 40,300 of the estimated 70,000 who lost homes, businesses and other property in blazes blamed on PG&E equipment. Members of the largest group, represented by the firm Watts Guerra LLP, have voted nearly unanimously in favor of the deal, with more than half of 18,000 total votes already cast. The vast majority of the second largest group, represented by the Singleton Law Firm, also solidly back the plan, although most haven’t voted yet, a senior partner said. “So far, the response has been overwhelming,” said the partner, Gerald Singleton, whose firm represents roughly 7,000 victims. The preliminary tallies come as attorneys for a committee representing fire victims in the bankruptcy have asked a federal judge to modify the settlement because half of the payout will be funded with stock that’s been battered by the coronavirus fallout. PG&E’s chapter 11 plan must win support from two thirds of wildfire victims who cast a ballot. Voting began this week and concludes May 15.

Lawyers for victims of California wildfires sparked by PG&E Corp. are demanding modifications to their $13.5 billion settlement with the company because of concerns that the deal may no longer deliver the expected amount, the Wall Street Journal reported. Attorneys for the fire victims said in a court filing yesterday that the value of the settlement, which is supposed to pay victims in equal parts cash and company shares, was no longer guaranteed because the shares could now be worth less than anticipated owing to the selloff in stock markets triggered by the coronavirus pandemic. They also criticized the giant California utility for making last-minute changes to its bankruptcy restructuring plan that could further affect the value of the equity. As a result, they argued, PG&E was now in breach of the settlement terms and needed to adjust some of them to ensure that fire victims received $13.5 billion.

Victims of wildfires caused by PG&E Corp. are seeking to upend its deal to exit bankruptcy, the Wall Street Journal reported. Two members of the claimants’ committee that represents fire victims in the giant California utility’s chapter 11 case resigned late last month and said they would campaign to defeat the exit plan. They cited concerns that it pays victims half a $13.5 billion settlement in PG&E shares, exposing them to greater risks than other creditors. At least two-thirds of the roughly 70,000 people and businesses who filed claims against PG&E have to approve the exit plan. If the dissenters are able to influence enough of them, it could create a serious roadblock for the company, which cleared a major hurdle on its path to get out of bankruptcy last month by securing the support of California Gov. Gavin Newsom (D). If fire victims reject their settlement, PG&E would have to reopen negotiations with them or ask U.S. Bankruptcy Judge Dennis Montali to approve the plan without their backing as the fairest possible compensation for fire victims. Judge Montali has signaled that he would be disinclined to approve the plan without fire victims’ support.

California power regulators are weighing a recommendation to back off plans to fine Pacific Gas and Electric an additional $462 million over a series of deadly Northern California wildfires rather than risk that the harsher punishment might scuttle the utility's plan to get out of bankruptcy, the Associated Press reported. The state's Public Utilities Commission is mulling whether to pare the penalties faced by PG&E as the result of a proposed revision floated by one of the agency's five commissioners, Clifford Rechtschaffen. A document detailing the proposal was made public on Monday. In another development, PG&E announced that it took steps to ensure it will not have to tap into a $13.5 billion fund set up for wildfire victims to pay a separate $4 million fine that will be imposed for the company's guilty plea to 84 felony counts of involuntary manslaughter stemming from a 2018 inferno triggered by its outdated electrical grid. Last week, PG&E disclosed its bankruptcy plan required that financial penalties for the crimes would come from the victims' fund.

A Delaware bankruptcy judge has granted a request by the Boy Scouts of America to halt lawsuits against local Scout councils as the BSA works on its bankruptcy plan to set up a compensation fund for thousands of men who were molested as boys by Scout leaders, the Associated Press reported. The judge yesterday approved a proposed consent order that had been agreed to by the BSA and official bankruptcy committees representing abuse survivors and other unsecured creditors. In doing so, the judge overruled a lone objection by attorneys for one abuse survivor who wanted to pursue their lawsuit against the Greater Niagara Frontier Council in New York and former scout master Douglas Nail. Nail, who was sentenced to 10 years in prison after pleading guilty to possession of child pornography in 2004, is accused of molesting a former Boy Scout over a period of several years in the 1980s. Judge Laurie Selber Silverstein’s ruling puts the lawsuit against the Greater Niagara council on hold while allowing litigation to proceed against Nail. The Boy Scouts initially sought to halt all litigation against local councils for six months from the date of its Feb. 18 bankruptcy filing. The agreement forged with the creditors committees calls for the lawsuits to be put on hold through May 18, with the possibility of an extension.

General Motors Co. agreed to a $120 million settlement over faulty ignition switches that allegedly caused cars to stall and air bags to deploy, in some cases triggering fatal accidents, Bloomberg News reported. The deal, which must be approved by a judge, would resolve hundreds of lawsuits filed before the automaker sought bankruptcy protection in 2009.Under the settlement, which was filed on Friday in federal court in Manhattan, GM will contribute as much as $70 million to drivers and in some cases their survivors. A trust formed in connection with its bankruptcy will contribute $50 million, according to the settlement. GM also agreed to pay as much as $34.5 million to the lawyers who represented drivers in the court case. GM denies any wrongdoing.

Turnaround manager Lynn Tilton has walked away from a collection of troubled businesses she has managed for years after being ordered to sell them to pay off Zohar funds, lenders that have sued her, WSJ Pro Bankruptcy reported. The move leaves the future of companies Tilton manages, such as aerospace manufacturer MD Helicopters Inc., up in the air as the coronavirus epidemic ravages the economy. MD Helicopters and other struggling businesses have been managed by Tilton for years and have defaulted on their loans from the Zohar funds, which owe investors $1.7 billion. The Zohar funds at a hearing sought a court order easing a transition of control from Tilton to the funds, which have been pressuring her to sell the businesses. Tilton resigned less than 24 hours after losing a fight over a schedule for selling the businesses. Under court orders to help with a sale effort, Tilton could simply refuse to engage, destabilizing the situation, said Christopher Shore, lawyer for the Zohar CLO funds. A spokesperson for Tilton denied the funds’ contention that the turnaround manager abandoned the companies.