The settlement costs more than PG&E initially anticipated, so the utility took a charge of $4.9 billion. The deal still needs approval from Gov. Newsom and the court.
with the victims of wildfires ignited by its power lines — a major step toward resolving the biggest utility bankruptcy in U.S. history.
But it’s still a major victory for PG&E, which has spent months trying to negotiate a viable restructuring plan to emerge from bankruptcy by the middle of next year. California Gov. Gavin Newsom has threatened a state takeover if the utility fails to come up with a plan soon, and the judge overseeing the company’s reorganization had ordered parties into mediation.
Compensating victims of wildfires had emerged as the largest challenge to restructuring PG&E, which declared bankruptcy in January after its equipment was blamed for starting catastrophic blazes in 2017 and 2018. The fires buried the utility giant in an estimated $30 billion worth of liabilities.PG&E initially offered victims $8.4 billion, a fraction of what they said they were owed. A group of creditors led by Pacific Investment Management Co.
PG&E amended its restructuring support agreement to include an added pretax charge for victim claims of $4.9 billion for the quarter ended Dec. 31, according to Monday’s filing. And it extended the deadline for obtaining bankruptcy court approval for the agreement with insurers to Wednesday from Friday.
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