Fri, Jul 30, 2021

Restructuring Administration Case Study PG&E Corporation

Download Case Study

In January 2019, PG&E Corporation commenced Chapter 11 cases resulting from the catastrophic wildfires that occurred in Northern California in 2015, 2017, and 2018. Faced with a multitude of claims and lawsuits and the demand of meeting the service needs of the company’s 16 million customers, the company filed for bankruptcy in the Northern District of California. The unique nature of PG&E’s cases, such as the number of potential claimants and the destruction of structures to which bankruptcy notices would customarily be sent, created unprecedented challenges. Together with PG&E and its professionals, Kroll’s Restructuring Administration team (formerly Prime Clerk) developed a customized plan. Leveraging our specialized experience in large complex Chapter 11 cases and our leading Notice Media and solicitation expertise, allowed us to navigate the complexities of the case to utilize the best cost-saving options available.

Bar Date Notices & Returned Mail Procedures

One of the critical milestones in every Chapter 11 case is the bar date. Here, providing notice of the bar date involved not only serving over 6.5 million known parties (including parties with differing types of potential claims against the estates), but also creating procedures to inform unknown and/or displaced potential creditors, including wildfire claimants, of the bar date. Kroll’s notice methods saved approximately $10 million when compared to a traditional bar date notice.

Due to destruction of homes and displacement of certain known and unknown fire claimants, the company was particularly concerned with returned and undeliverable mail. Through Kroll’s processes for handling this mail, we forwarded approximately 69% of returned mail to an alternative address.

In addition, Kroll established six claim centers where members of affected communities could go to ask questions about the claim process, obtain forms, and hand deliver proof of claim forms. Nearly 4,000 people visited our centers, and we received over 19,000 proofs of claim filed in-person at these centers. As a result of our extensive notice procedures, including our notice media plan (described below), over 85,000 claims were filed before the bar date, significantly higher than the number of claims filed in most high-profile bankruptcies, including other cases involving mass tort.

Case Websites & Digital Media Campaign

To further disseminate case information, we maintained two case websites – a main website and a website specifically tailored to holders of fire claims. These websites gave parties the opportunity to register an email address and request electronic notice for the duration of the Chapter 11 cases. Our case websites collectively received over 780,000 page views.

To supplement the above described notice plan, Kroll developed an unprecedented digital media campaign that was broad, multi-faceted, and designed to reach the greatest possible number of creditors and parties in interest, including those that may have relocated as a result of the Northern California fires. Together with the company and its professionals, we actively managed the media campaign to minimize waste and increase audience visibility and engagement. The campaign not only exceeded our estimated and projected results but exceeded combined reach and frequency levels of the largest, most recent campaigns in history, delivering more than 730 million impressions. The robust and comprehensive outreach efforts employed by Kroll were unmatched in any prior Chapter 11 case.

Chapter 11 plan solicitation presented another complexity. Given the 82,000 fire victim claims, a one size fits all solicitation process was neither advisable nor realistic. Instead, Kroll worked closely with the debtors, the representatives of the tort claimants committee, and the attorneys representing a significant number of fire victim claimants to develop methods and procedures for soliciting the votes of fire victim claimants. These specialized methods expedited and streamlined the transmission of information to the fire victim clients and increasing voter participation.

Restructuring Administration

End-to-end restructuring administration services provided by unrivaled experts and technology.