PG&E: Committees eye $24 billion trust deal to resolve fire claims

By Caroline Salls

Pittsburgh, Sept. 19 – Pacific Gas and Electric Co.’s official committee of tort claimants and informal committee of senior unsecured noteholders announced an agreement Thursday that would provide $24 billion to resolve all claims against PG&E Corp. related to pre-bankruptcy fires, according to a news release.

Under the agreement, a newly created fire claims trust would be funded using $12 billion of cash and $12 billion of equity in the reorganized PG&E Corp.

The release said this split would give the trust ownership of about 40% of new PG&E upon its emergence from bankruptcy.

Tort claimants committee counsel Robert Julian said in the release that “the proposal presents a path forward that recognizes the victims’ losses and puts their interests ahead of shareholders.”

In addition, the committee said the agreement clears the way for the PG&E bankruptcy to be resolved in advance of the June 2020 deadline it must meet to qualify for California’s new go-forward wildfire fund.

To facilitate PG&E’s emergence from bankruptcy, the establishment of the trust, and the timely payment of victims’ claims, the committee said they are asking the U.S. Bankruptcy Court for the Northern District of California to terminate PG&E’s exclusive right to file and solicit acceptances of a plan of reorganization.

Termination of the exclusive periods would allow the committees to file a plan of reorganization for PG&E’s case that memorializes the agreement and outlines the creation of the trust.

The electric and natural-gas utility is based in San Francisco. The company filed bankruptcy on Jan. 29, 2019 under Chapter 11 case number 19-30088.

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