What happened Shares of PG&E (NYSE: PCG) traded higher on Wednesday after a federal judge approved two settlements key to the utility's plan to emerge from bankruptcy protection next year. Shares appear likely to retain some value post-bankruptcy if the court backs PG&E's plan over one submitted by creditors, and the approvals are a key step toward that goal. The stock was up 11% at the start of trading, before settling to a 6.5% gain as of 1:48 p.m. EST today. So what It's been a tumultuous few days for PG&E shareholders, with the stock rallying last week after the utility reached a deal on compensation for wildfire victims, but falling back on Monday after Gov. Gavin Newsom of California objected to elements of the plan. PG&E and Newsom both appear open to compromise, and the utility is proceeding with its reorganization plan while talks continue. Image source: Getty Images. PG&E took a major step toward emergence from bankruptcy at a hearing Tuesday when the judge overseeing the case approved two settlements totaling $24.5 billion to compensate homeowners, businesses, and insurers for Northern California wildfires that were blamed on aging PG&E equipment. The judge also rejected efforts by creditors to advance their competing plan that would likely wipe out equity holders. The outcome of the case is far from certain, but PG&E appears to have momentum (and the support of victims) on its side to help ensure it retains control of the process. Now what There are still a number of boxes that PG&E needs to check before emerging from bankruptcy. The utility will eventually need to make peace with Newsom or risk missing out on eligibility to participate in a wildfire fund that California intends to set up to try to protect companies and their ratepayers from future wildfire liabilities. According to The San Francisco Chronicle, Nancy Mitchell, a government lawyer present at Tuesday's hearing, told the judge that PG&E has "been tremendous on getting the plan closer" to meeting the governor's conditions, but "we are not there yet." If all goes to perfection for PG&E, I estimate shares could be worth at least $18 upon emergence, a nice premium over current values. But given the number of competing claims against PG&E, and the risk that the company will ultimately have to make concessions to win Newsom's approval, that valuation is far from a given. And the risk of it all falling apart, or creditors gaining control, remains. Even with the good news coming out of San Francisco, there isn't a reason for a long-term investor to buy into this utility stock right now. 10 stocks we like better than PG&EWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and PG&E wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of December 1, 2019 Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source