The U.S. Bankruptcy Court for the Northern District of California late last week approved the California Public Utilities Commission's (PUC) disclosure statement, which describes the Commission's plan for reorganizing PG&E, California's largest utility. The Court's order permits the Commission's plan to be mailed to creditors for a vote along with the rival plan proposed by PG&E. Entry of the Court's order is only the latest evidence of the momentum building for the Commission's plan.
In another significant development, the Official Committee of Unsecured Creditors in PG&E's bankruptcy case has amended the agreement in which it had pledged to support PG&E's plan, so that it is now free to support the Commission's plan and to encourage creditors to prefer the Commission's plan over PG&E's plan. Creditors and equity interest holders will have an opportunity to vote on each plan and to express a preference for one.
"We welcome the fact that the Creditors' Committee has now placed the Commission's plan on a level playing field with PG&E's, and expect that creditors will prefer our plan because it pays them 100 percent in cash, is simpler and does not have the serious legal obstacles that make PG&E's plan unconfirmable," said Gary Cohen, General Counsel for the PUC.
The parties anticipate mailing solicitation packages and ballots to creditors and equity interest holders on June 17, 2002.