HomeNewsPG&E's creditors reject CPUC plan

PG&E’s creditors reject CPUC plan

Sept. 10, 2002 — Pacific Gas and Electric Co.’s plan of reorganization has received approval from nine of the ten voting classes of its creditors and equity holders.

The utility issued the following statement after the independent voting agent, Innisfree M & A, submitted the results of the creditor vote to the U.S. Bankruptcy Court.

The final tabulation showed that PG&E’s reorganization plan received approval from nine of the ten voting classes:

“We are gratified that our plan of reorganization received overwhelming support from equity holders and creditors, including the large financial institutions, capital market participants and other key organizations.

“Our plan received approval from nine of the ten voting classes. This outcome is an important vote of confidence that our plan will resolve creditor claims, in a financially feasible manner, without seeking a bailout from customers. The only class voting against our plan was Class 7, Energy Service Providers, a class dominated by claims of Enron Corporation; this class voted against both plans and their negative vote will not prevent the confirmation of our Plan.

“Despite a recommendation from the Official Creditors’ Committee (OCC) urging creditors to vote affirmatively for both plans, the CPUC’s alternative plan was rejected by seven of the eight voting classes, including the unsecured creditors in Class 5. This group, consisting of sophisticated financial institutions and capital market participants, clearly did not believe that the CPUC’s plan is credible, even though it purports to pay all creditor claims.

“This vote is a rejection by creditors of the recommendation of the Official Creditors’ Committee. In a cover letter sent to all creditors, the OCC urged them to vote affirmatively for both plans.

“After the voting period ended, the CPUC amended its alternative plan, based on an agreement with the Official Creditors’ Committee, and is seeking to resolicit the votes of certain creditors. PG&E will respond to that motion on September 17th.

“However, the CPUC and OCC have declared that their amended plan is, in the words of their counsel, ‘not a new plan, it involves relatively minor modifications to our existing plan.’ In that case, the overwhelming creditor vote against the CPUC plan would be unlikely to change.