PG&E noteholders, indenture trustee say support deal undermines order

By Caroline Salls

Pittsburgh, Oct. 17 – PG&E Corp.’s informal committee of senior unsecured noteholders and indenture trustee BOKF, NA objected to the company’s motion to enter into a restructuring support agreement with its consenting subrogation claimholders, according to Wednesday filings with the U.S. Bankruptcy Court for the Northern District of California.

The noteholder committee said in its objection that “a settlement of the subrogation claims would be a positive development that would allow all plan proponents to focus on resolving other significant plan-related issues.”

As a result, the committee said it does not oppose the settlement by the PG&E estates of the subrogation claims by allowance of an $11 billion claim.

However, the noteholder group said the court is instead being asked to approve a restructuring support agreement with the subrogation claimants, “which contains numerous provisions that are entirely unreasonable, anticompetitive and not in the best interests of the estates.”

The committee said the proposed restructuring support agreement will only serve PG&E and its equityholders’ interests and undermine the court’s order regarding termination of the company’s plan exclusivity.

In its objection, BOKF made a similar argument.

“By their motion, the debtors seek approval of a contract for de facto exclusivity of their plan cloaked in the vernacular of a settlement agreement,” the indenture trustee said. “The settlement, if approved as is, will disrupt the dual-plan process and undermine the decision of this court in terminating exclusivity.”

Specifically, BOKF said the proposed agreement would stifle negotiations, restrict and dictate which constituencies may engage in discussions and obstruct creditors from considering other options before disclosure statements have been approved.

A hearing is scheduled for Oct. 23.

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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