PG&E Fire Victims Blame Lawyers for Skewing Bankruptcy Exit Vote

(Bloomberg) -- Victims of California wildfires said some law firms are making it more difficult for them to reject PG&E Corp.’s plan to exit bankruptcy than to accept it, creating a “chilling effect” for those who want to vote against the proposal.

Nearly 80,000 people who lost homes, businesses or loved ones in blazes blamed on the utility’s equipment face a May 15 deadline to vote on a proposal that provides them with $13.5 billion in compensation. PG&E needs the support from two-thirds of wildfire victims who cast a ballot.

The bias created by the law firms “erodes confidence in the outcome of the vote,” according to a court filing Monday by the victims. Lawyers claiming to represent about 1,000 fire victims asked a judge assessing their damages for a “correction of those irregularities for the remainder of the voting period.”

One law firm said on its social media platform that it intended to cast “yes” votes for clients and for victims to contact the firm if they disagree, according to the filing.

James Frantz, a lawyer at the Frantz Group, one of the firms identified in the filing, said arguments that victims are being influenced to vote in favor of the plan are “inaccurate.”

“We’re not hamstringing them from voting one way or the other,” he said. “We haven’t been deceptive with our client base at all.” Frantz added that his firm made strong efforts to educate its clients, including in town-hall style meetings.

PG&E has struggled for months to devise a reorganization plan that would satisfy both state officials and creditors after filing for Chapter 11 protection last year facing $30 billion in damages from wildfires blamed on its power lines. After striking a series of settlements with major stakeholders including fire victims, the company is now racing to gain approval of its turnaround plan by June 30 to qualify for a state fire insurance fund.

“We encourage everyone to vote,” PG&E said in an email. “We continue to work diligently to obtain approval for our plan of reorganization by the bankruptcy court as soon as possible, so victims will be paid fairly and quickly.”

©2020 Bloomberg L.P.

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