U.S. Bankruptcy Judge Dennis Montali heard directly from wildfire survivors, ratepayers and shareholders who are being affected by Pacific Gas & Electric's prolonged bankruptcy in a series of letters filed to the court docket on Oct. 24.

Montali, who is overseeing PG&E's Chapter 11 reorganization process, has made some consequential decisions in the case since the utility filed for bankruptcy in January. On Oct. 11, for instance, he issued an order terminating PG&E's "exclusivity period"—during which it held the sole right to file a plan of reorganization—and allowing a group of the company's bondholders to move forward with their own competing plan for PG&E, which the utility has dubbed a "hostile takeover" (see CEM No. 1560). Montali also selected Oct. 21 as the deadline by which victims of the 2017 and 2018 wildfires must file claims against PG&E.

In an Oct. 8 letter to the judge, Will Abrams, a resident of Santa Rosa and survivor of the 2017 wildfires, described some of the obstacles that wildfire victims are facing in the proceeding. Victims are concerned that claiming funds for themselves would take away from the available resources for wildfire mitigation work, as well as potential future wildfire victims, he said—an attitude that is reinforced by PG&E's "lack of commitment" toward effective wildfire mitigation strategies.

"PG&E has substituted a wildfire mitigation strategy to keep them out of future bankruptcies with a financial risk avoidance strategy on the backs of residents across the state of California," Abrams said.

Abrams noted that the utility's wildfire mitigation plan, submitted to the California Public Utilities Commission in February, lacks detailed data on whether its strategies will actually reduce wildfire risk. He urged the judge to delay the Oct. 21 claims deadline by two months, allowing the utility an opportunity to formulate these metrics. If PG&E is unable to, he said, the judge should consider the alternate proposal filed by the bondholders—a plan that has been endorsed by the tort claimants committee, which represents wildfire victims.

The letters were written days before the tort claimants committee filed an Oct. 18 motion with the court asking for the claims deadline to be extended to Jan. 31. The committee had previously raised concerns that misconceptions about the process had prevented potentially thousands of victims from filing claims against the utility (see CEM No. 1561). In their motion, the attorneys argued that many victims had also not been able to file claims due to physical and mental trauma caused by the fires.

"For some of these victims, the trauma of their situation means that all of their energy is spent getting out of bed in the morning," the committee said in an accompanying filing.

As an alternative to the January deadline, they suggested extending the bar date to Dec. 5 as well as appointing an expert to investigate the various issues that might be preventing the victims from filing their claims (see related story).

Loren Freeman, another wildfire victim, also wrote an Oct. 11 letter to the judge asking for the deadline to be extended.

"Presently, the fire victims, majority, are not prepared to file their complete claims," Freeman wrote.

Freeman said that attorneys had not fully briefed the victims on the process, and many did not yet have complete information on exactly how the fires and smoke had impacted their health. While some attorneys have said victims can file additional claims after the Oct. 21 deadline, others have said that would not be possible, according to Freeman.

Mark Stahler, a PG&E customer, submitted a handwritten letter to the court on Oct. 15, criticizing Montali's decision not to allow ratepayers formal committee representation in the bankruptcy proceeding. Despite requests from ratepayer advocates, Montali said in a May 28 order that PG&E's customers "do not have a claim for which separate representation by a committee is necessary." Stahler noted that Montali made the same decision during PG&E's 2001 bankruptcy, leading ratepayers to shoulder around $8 billion in costs after the utility emerged from Chapter 11. Without ratepayer representation, Wall Street bankers would be making decisions purely to keep PG&E profitable, he said.

"PG&E has one goal in these matters, which is to stick their customers with billions of dollars in bailouts that are the direct result of criminal acts by PG&E," Stahler added.

Meanwhile, Edmond R. Shinn, a Philadelphia-based PG&E shareholder, filed a letter with the court on Oct. 21 criticizing Montali's decision to allow a competing reorganization plan, which would wipe out existing shareholders' investments.

"Much of my retirement savings is tied up in PG&E. The news that a competing plan was allowed by the court was deflating," he said.

Montali held a hearing on Oct. 23 to discuss scheduling matters for the reorganization plans as well as PG&E's $11-billion settlement with a group of insurance companies that hold most of the subrogation claims filed against the utility. At the hearing, attorneys for PG&E and the bondholder group continued to lay out arguments for their respective plans.

"The ad hoc bondholders, your honor, are not a group of altruistic investors willing to put up money on favorable terms," PG&E attorney Stephen Karotkin said.

Montali did not, however, issue a decision at the hearing.

Kavya Balaraman covers the California Public Utilities Commission and PG&E Corp. for California Energy Markets. She has reported on climate policy and science in Washington, D.C. and graduated from Columbia University's Graduate School of Journalism.