A Matter of Priority
All Camp Fire victims lawsuits are reclassified in PG&E’s bankruptcy court. Property loss claims and lawsuits against the company have been grouped together and classified as past debt. Fire victims with claims against the company are in competition with lenders and investors to reclaim their losses. Victims advocates and legal experts warn that when PG&E restructures they will prioritize their investors over victims and customers.
A Check Against Moneyed Interests
To help safeguard against this a coalition of victims lawyers and utility watchdog members on “The Debtors’ Committee of Tort Claimants” have filed an Objection Docket against those banks and financial institutions listed as “Debtors In Possession”. The lenders; banks and mutual fund managers, have provided PG&E with $5 billion in credit during the bankruptcy, and also own a significant portion of PG&E stock. The lenders are seeking provisions that give them the unilateral right to foreclose on utility assets and control the terms of reorganization.
Big Players Will Tip The Scales of Justice
The Committee’s objection docket against these provisions states “DIP Lenders should not be able to procure a seat at the table in these Cases in any meaningful respect where the collateral for the proposed DIP Loans is worth many times the amount of the loans” The provisions bear no relation to the actual risk to the DIP Lenders. Eight of nine DIP Lenders also hold unsecured claims against both the utility. Any control over the Debtors restructuring will give the lenders an unfair advantage in negotiations over other claimants.