PG&E Corp's plan to cap payments to victims of California wildfires blamed ...
- PG&E Corp’s plan to cap payments to victims of California wildfires blamed on the power producer is “totally unacceptable,” a lawyer representing victims in the utility’s bankruptcy case said on Tuesday.
The plan forces fire victims and government entities to seek compensation from the same fund, which will dilute payouts for everyone, said Cecily Dumas, a BakerHostetler lawyer who represents the official committee of tort claimants in PG&E’s bankruptcy. At the same time, PG&E said it intends to pay other unsecured creditors such as noteholders in full in cash when its plan goes into effect next year. “That’s unfair,” said Dumas.The company also said it planned to cap payments at $8.5 billion for reimbursing insurers that had paid victims and at $1 billion for local governments.
Dumas said the plan also violates the so-called absolute priority rule, a bedrock principle of bankruptcy that requires that creditors get paid in full before shareholders receive anything.
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