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PG&E stock rallied 21% on Tuesday, even as wildfires continued to burn throughout California. The gains came as the judge overseeing the utilitys bankruptcy appointed an official to mediate negotiations between two groups of investors vying for control of the company.

Judge Dennis Montali of the Northern District of California appointed retired judge Randall Newsome to facilitate negotiations between the bankruptcys competing factions in an order published late Monday.

PG&E has proposed a reorganization plan that would retain some value for the companys shareholders, and reached an $11 billion settlement agreement with investors and insurers who own insurance claims covering wildfire losses. A coalition of bondholders and wildfire victims have proposed an alternate restructuring plan, which would render the current shares more or less worthless.

Montali also ordered the principal parties to make a good-faith effort to mediate whatever issues can be identified with the help of...[an] experienced mediator. His court is based in San Francisco.

Elsewhere in the state, wildfires continued to spread. Northern Californias Kincade Fire was 15% contained on Tuesday morning, according to the states fire agency.

PG&E warned residents that it plans to turn off power to nearly 600,000 customers starting Tuesday in an attempt to prevent wildfires. The utility shut down power to 970,000 customers over the weekend. It filed an incident report last week highlighting an issue with a transmission line near the ignition point of the Kincade Fire, which is still burning.

The fire has grown to 75,415 acres but the reported damage has been relatively light thus far; Cal Fire counts two injuries. The agency says 124 buildings were destroyed and 23 more were damaged, but the Sacramento Bee reports that 90,000 buildings are threatened by the fire. About 180,000 Californians faced evacuation orders over the weekend because of the Kincade Fire.

Even with Tuesdays gains, the stock is still down about 40% over the past two weeks.

Write to Alexandra Scaggs at alexandra.scaggs@barrons.com

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PG&E Stock Is Rallying After Mediator Appointed to Bankruptcy Negotiations - Barron's