PG&E Judge Denies Local Governments Special Status
LCG, Dec. 10, 2001--U.S. Bankruptcy Judge Dennis Montali on Friday ruled against a group of California cities and counties that had asked court approval to set up an official committee of government creditors in the Pacific Gas & Electric Co. bankruptcy case.Montali denied a motion by the cities of San Francisco, Berkeley, and San Jose and four California counties to form a separate creditors committee that would have given them more leverage not only in pursuing money they say is owed them but in pressing political issues unrelated to money.The local governments had complained that the existing creditors committee was dominated by energy businesses whose claims are of a different sort than those of the cities and counties.Roger Crane, a lawyer for the cities and counties, said local governments "have special interests that need to be preserved," citing taxes, franchise fees, funds set aside for utility projects, and government investments in utility debt.In response to Montali's ruling, PG&E noted that one of the utility's first actions in bankruptcy court was a request for permission to pay the pre-petition portion of property taxes owed to local governments. On May 16, the court approved the request and the company promptly paid $41.2 million in taxes to the 49 counties in which it operates.The company said "As creditors, the City and County of San Francisco and other local governments have the ability to participate in the case, and many of them have already chosen to do so. We have met with and will continue to meet and confer with many of the cities, counties, and their associations to answer questions they may have about our plan of reorganization. Those questions will also be addressed through the normal confirmation process."
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