EDITORS: Please do not use
"Pacific Gas and Electric" or "PG&E" when
referring to PG&E Corporation or its National Energy Group.
The PG&E National Energy Group is not the same company as Pacific
Gas and Electric Company, the utility, and is not regulated by the
California Public Utilities Commission. Customers of Pacific Gas
and Electric Company do not have to buy products or services from
the National Energy Group in order to continue to receive quality
regulated services from Pacific Gas and Electric Company.
UPDATE: PG&E SEEKS COURT AUTHORIZATION TO SETTLE PRE-PETITION CLAIMS
SAN FRANCISCO - Pacific
Gas and Electric Company has filed a motion in U.S. Bankruptcy Court
asking for permission to proceed with the investigation, negotiation
and settlement of certain pre-petition claims, including all of
those under $100,000.
Approximately 12,800 claims
have been filed, with about 80 percent of them for less than $100,000
and the remaining 20 percent for amounts in excess of $100,000.
In the filing, the utility asks for approval to resolve the following
categories of claims without seeking review and approval for settlements
reached from either the Official Creditors' Committee or the Bankruptcy
Any claim where the
allowed amount settled on is $100,000 or less.
Any claim where the
proposed allowed amount exceeds $100,000, but is no more than
$5 million, and is the lesser of (a) 110 percent of the amount
of such claim as scheduled by PG&E in the Amended and Restated
Schedules, and (b) $500,000 more than the amount of such claim
as set forth on the Schedules. (For example, where the Scheduled
Amount of a claim is $4 million, and the creditor has filed
a proof of claim for $5 million, if the parties reach a settlement
whereby the claim would be allowed at $4.4 million, no Court
or Committee review would be required.)
Settled claims would
be paid pursuant to the plan of reorganization. Where PG&E and the
claimant cannot reach a mutually agreeable settlement, the claim
will be resolved by the Court. Since the company expects that settlement
can be reached on most claims, the procedures proposed will facilitate
the efficient resolution of the vast majority of the claims in this
case. The utility has obtained concurrence from the Creditors' Committee
for the proposed settlement authority.
In a separate filing with
the Court, the utility asked for permission to make grouped objections
to claims on the basis that they are, for example, duplicative,
already satisfied or otherwise resolved, without waiving its right
to assert subsequent claim-specific objections to the same claims
Upon a preliminary analysis,
the company found that billions of dollars of claims filed were
duplicative and unsubstantiated. For example:
- Over $1 billion worth of claims are exact duplicates. As a
result, such claims are redundant.
Claims - The California Independent System Operator (CAISO)
and the California Power Exchange (PX) have filed billions of
dollars in claims for all of the electricity allegedly provided
to PG&E pre- and post-petition through the markets they operated.
However, the electricity generators have also, in most cases,
protected their interest by filing claims for the same electricity
allegedly provided to PG&E through the CAISO and PX markets.
Such duplication is approximately $4 billion.
Asserting Duplicative Identical Claims in Separate Proofs of
Claim - Multiple proofs of claim have been filed by multiple
claimants in respect of the same claim.
Amended or superseded
claims - Certain claims are amendments to previously filed
claims, which are apparently intended to supersede the proof
claims, but the original and amended claims both appear on the
same claims register. Such redundancy is over $1 billion.
- Indenture trustees under various indentures for holders of
pollution control bonds, mortgage bonds, and medium term notes,
among others, have filed billions of dollars in claims on behalf
of the holders under such indentures. However, the individual
bondholders and mortgage holders have, in many cases, also filed
claims based on the same financial instruments. Such redundancy
is over $3 billion.
By asking the court
for this approval, the utility believes it can resolve a very large
number of disputed claims with a minimum of judicial time and estate
The Bankruptcy Court is
scheduled to hear both motions on December 27, 2001.