PG&E says most fire victims back its plan; its shares surge in value

PG&E Corp. says preliminary results indicate that victims of wildfires blamed on its equipment have voted overwhelmingly in favor of the California power giant’s bankruptcy reorganization plan. The utility’s shares have since surged.

PG&E needs support from two-thirds of those who cast a ballot. Official results will be posted by May 22, according to a statement Monday.

“PG&E believes that it remains on track for plan confirmation by June 30,” the company said. Its shares rose as much as 8.6%.

The vote by wildfire victims is one of the last milestones in PG&E’s effort to exit the largest utility bankruptcy in U.S. history. Bankruptcy Judge Dennis Montali will take the results into consideration when he decides whether to approve its plan.

Some fire victims have opposed the settlement, because it will be funded in part by PG&E shares rather than fully paid in cash. They’ve also claimed a lawyer representing the largest group of fire victims has a potential conflict of interest that has tainted the voting process. Last week, the judge denied a motion to throw out votes based on the alleged conflict.

PG&E filed for Chapter 11 in January 2019 with an estimated $30 billion in liabilities tied to fires in 2017 and 2018. The company has agreed to settle claims for $25.5 billion with individual victims, insurers and public agencies. It also settled with a group of bondholders who tried unsuccessfully last year to take control of the company.