Infrastructure
Bankruptcy Judge OKs PG&E Settlements With Victims, Insurers
Published:
Last Updated:
Federal Bankruptcy Court Judge Dennis Montali on Tuesday approved two settlements related to the PG&E Corp. (NYSE: PCG) bankruptcy filing. The judge has approved the company’s $13.5 billion settlement with wildfire victims and an $11 billion deal to settle claims with insurers and other investors.
Montali called the $13.5 billion settlement with victims of the 2017 and 2018 wildfires caused by downed PG&E power lines “a reasonable compromise between the [PG&E’s] current estimate of accrued liabilities on account of uninsured and underinsured fire claims of $8.4 billion and the [victim]’s asserted $36 billion of such claims.”
The court’s ruling essentially clears the way for PG&E’s bankruptcy to be settled in favor of victims and shareholders rather than victims and bondholders. The victims agreed to withdraw their support for the proposal put forward by the ad hoc group of bondholders and “cease to be a co-proponent” of the group’s alternative settlement plan, which would have settled the victims’ claims for an equal amount but would have wiped out shareholders.
PG&E eliminated on Monday the authority the company granted California Governor Gavin Newsom to automatically terminate the restructuring agreement after Newsom exercised that authority on Friday.
The company did say that it would continue to address the concerns Newsom raised last week. According to a report from Bloomberg News, Newsom will not oppose the terms of PG&E’s settlement with victims but said that he still opposes the overall restructuring plan. The state’s public utility commission, which was appointed by the governor, will have to sign off on the restructuring agreement.
Montali’s ruling may help PG&E avoid what is certain to be a lengthy trial scheduled to begin next year that would almost certainly derail the company’s efforts to exit from bankruptcy by June 30 in order to be eligible to participate in the state’s recently enacted Wildfire Fund. The fund was established by the legislature to cap liabilities in the event of future wildfires.
PG&E stock had added about 6.3% by Wednesday afternoon, trading at $11.60 in a 52-week range of $3.55 to $25.19.
Get Ready To Retire (Sponsored)
Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Get started right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
