A group of insurance companies and hedge fund Baupost Group LLC have formed a creditor group to attempt recouping the billions of dollars in insurance payouts from PG&E Corp. stemming from damage caused by California wildfires, court documents show, the Wall Street Journal reported. The insurers, including Allstate Insurance Co., the Chubb Group and others, are looking to recoup payments from PG&E for damage to property and for other injuries, court filings show. Insurers believe they may have a right to recover payments they already made to insured parties if it is determined that PG&E is responsible for the California wildfires. Baupost, the $27 billion hedge fund managed by Seth Klarman, has bought up the claims of certain insurance companies, who chose to be repaid at some discount to the full value of their claims rather than pursue them in PG&E’s bankruptcy. California’s largest utility, PG&E filed for chapter 11 bankruptcy protection at the end of January, in a bid to resolve an estimated $30 billion worth of damage claims from earlier fires. Altogether the insurance companies and Baupost reported a total of over $3.6 billion in so-called subrogation claims against PG&E Corp., according to bankruptcy filings. Total insurance claims in the case are likely to be higher than that figure, according to some investors.
