Court leaves PG&E with sole right to submit bankruptcy plan
A PG&E employee works in Paradise, California, on Jan. 22, 2019. PG&E Co., California’s biggest utility owner, faces $30 billion in potential wildfire liabilities, and its bankruptcy plan has reverberated across the power industry. The states big utilities have seen their shares plunge since November’s deadly Camp Fire, and PG&E’s debt rating has been cut to junk status. Photographer: David Paul Morris/Bloomberg via Getty Images
Bloomberg | Bloomberg | Getty Images
A federal judge on Friday allowed PG&E Corp to retain the sole rights to propose a plan to exit bankruptcy, as he rejected efforts by investors to put forward competing plans, according to court documents.
Judge Dennis Montali of the U.S. Bankruptcy Court in San Francisco turned down requests from two groups of creditors wanting to propose a Chapter 11 exit plan for PG&E, which is facing huge liabilities from California wildfires.
Montali said he believed allowing PG&E to retain the right to lead the process would be a speedier resolution for victims of fires that were caused by equipment belonging to the California utility, according to the court documents.
PG&E earlier this week said that it would file its plan by Sept. 9.
The company sought Chapter 11 bankruptcy protection earlier this year after severe wildfires in 2017 and 2018 resulted in more than $30 billion in liabilities.
In May, state fire investigators determined that PG&E transmission lines caused the deadliest and most destructive wildfire on record in California, a blaze that killed 85 people last year.
Hedge funds Knighthead Capital Management and Abrams Capital Management, which are shareholders in PG&E, made a public proposal earlier this month to raise $15 billion in equity to fund a planned reorganization and pledged to purchase a portion of the offered equity if shares are left unsold.
PG&E bondholders have proposed plans to inject money to help the company emerge from Chapter 11, saying it has been too slow to file its own plan.
PG&E was not immediately available for a comment.