SAN FRANCISCO (Reuters) - The committee for wildfire victims in the bankruptcy of PG&E Corp said in a court filing on Thursday it was prepared to present a $24 billion reorganization plan for the power provider.
The committee, joined by a group of unsecured noteholders, said in the filing in U.S. Bankruptcy Court in San Francisco that the plan would provide for a “comprehensive settlement” of all claims against PG&E stemming from massive California wildfires in recent years that have been blamed on the company’s equipment and that pushed it to seek Chapter 11 bankruptcy protection in January.
San Francisco-based PG&E earlier this month filed an outline of a reorganization plan that would pay $17.9 billion for claims stemming from wildfires, including up to $8.4 billion for individual wildfire victims.
When PG&E filed for bankruptcy, it anticipated wildfire liabilities topping $30 billion.
“Our plan of reorganization sets forth a framework to meet PG&E’s legal obligations in full while prioritizing victims and customers,” the company said responding to the committee’s filing.
According to the filing, the committee’s reorganization plan would create a trust to pay wildfire claims that would be funded with $12 billion in cash and $12 billion in shares in a reorganized PG&E.
Investors including bondholders Apollo Capital Management and Elliott Management Corp among others would commit more than $28 billion in new money to PG&E, leaving them with nearly 59% of shares and new debt in the reorganized company, the filing said.
The trust for wildfire claims would control roughly 40% of shares in a reorganized PG&E, the filing added.
Apollo, Elliott and other PG&E bondholders in June proposed a reorganization plan putting up to $31 billion into PG&E, including up to $18 billion to pay pre-bankruptcy wildfire claims.
That plan would have left the bondholders with 85% to 95% of shares in a reorganized PG&E in exchange for a cash contribution of $19 billion to $20 billion. They would also have exchanged unsecured debt for secured debt.
PG&E and several of its large shareholders, including Abrams Capital Management and Anchorage Capital Group among others, opposed the bondholders’ initial plan.
Thursday’s filing also said the committee’s plan - the third proposed overall - would cover payments for so-called subrogation claims by insurers.
PG&E recently unveiled an $11 billion settlement with insurance companies over payments they made to individuals and businesses with coverage for wildfire damage to property. The insurers had initially pegged their claims at $20 billion.
Reporting by Jim Christie; Editing by Peter Cooney and Christopher Cushing