When Davey’s client Pacific Gas and Electric Company (PG&E), declared bankruptcy in January of last year, we immediately began to implement a strategy to preserve our partnership with them, as well as manage our financial risk. This included legal action to protect our creditor status, appointment to the Unsecured Creditors Committee, (which we eventually co-chaired), lobbying efforts, and reducing our outstanding accounts receivable.
I am happy to tell you that PG&E announced that it has emerged from Chapter 11 as of July 1. The PG&E Chapter 11 plan included key objectives of our strategy:
- The settlement and resolution of all wildfire claims against PG&E.
- An agreement that all creditors, including Davey, will receive all our past due credits in full with interest. Davey’s piece of this amounted to approximately $15 million.
- A court order modifying Plan language for stronger protection against potential future liability for vendors, including Davey.
- PG&E confirmed as a participant in the California Wildfire Fund (Assembly Bill 1054), which created a $21 billion fund for fires caused by utility equipment.
As part of this agreement, we also successfully negotiated for all our key contracts to be explicitly assumed by PG&E. In the past year, we also negotiated a contract that has lower liability caps and includes stronger cross- indemnification and holds harmless language.
In short, we emerged from this situation in a stronger, healthier position than we began. I’d like to thank our Surgery operational team, financial team, and legal team for their hard work over these last 19 months.
Patrick M. Covey
Chairman, President and Chief Executive Officer
Posted July 9, 2020