PCG PG&E Corporation

By Patrick Thomas 

PG&E Corp. said on Monday that it has formalized an $11 billion settlement with insurance companies over wildfire claims and denounced an alternative bankruptcy plan made last week by bondholders.

The deal covers insurance carriers and hedge funds that were seeking compensation from PG&E for payouts insurers made to homeowners and businesses in connection with fires sparked by the utility's equipment. PG&E announced the settlement agreement in principle earlier this month.

Last week, bondholders, including Elliott Management Corp. and the official committee representing fire victims asked to put a chapter 11 plan on the table that would compete with the company's own restructuring framework. Bondholders must get court permission to formally file a competing chapter 11 plan.

On Monday, the California utility company said the Elliott proposal would cost all PG&E customers billions of dollars in additional interest payments over 15 years and provide an "unfair windfall" for noteholders and plaintiffs' attorneys.

"That plan proposal is a blatant attempt to unjustly enrich the noteholders who proposed it," PG&E said in a press release.

PG&E's chapter 11 plan that would cap the amount owed to wildfire victims at about $8.4 billion, and pay insurers and the people who invested in insurance claims stemming from the fires $11 billion. The settlement was negotiated with carriers that hold roughly 85% of insurance subrogation claims against the company.

Bondholders said last week that they can offer $28.4 billion in new money for about 59% of the reorganized PG&E. The rest of the equity in the postbankruptcy company would be put into the trust that would absorb wildfire claims.

PG&E's plan is the second major agreement the company has reached with claimants. In June, PG&E agreed to pay $1 billion to local governments and state agencies to settle claims from fires in 2017 and 2018.

Write to Patrick Thomas at Patrick.Thomas@wsj.com

(END) Dow Jones Newswires

September 23, 2019 07:46 ET (11:46 GMT)

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