A bondholder group’s bid to take control of PG&E Corp. by paying off massive wildfire damage claims threatens to derail the company’s plan for the mega-billion-dollar bankruptcy case as the battle over California utility intensifies, the Wall Street Journal reported. PG&E has a chapter 11 exit plan and backing from major shareholders. Meanwhile, bondholders led by Paul Singer’s Elliott Management Corp. have an exit plan of their own, which is backed by victims of the fires that put the company into bankruptcy. The bondholder plan would damage the company’s shareholders. But the alliance with fire victims in a case that was filed to tackle $30 billion or more in wildfire damages is a political and strategic coup for the bondholders. Bondholders, a group comprising hedge funds, buyout firms and institutional investors, have been in talks for months attempting to rally wide-ranging public support. In early October, Judge Dennis Montali will decide whether to leave PG&E in charge of the proceeding, or open up the field to competition. Read more.(Subscription required.)
In related news, PG&E Corp. said that it is cutting power to about 21,000 customers in Northern California to keep electrical equipment from sparking a blaze amid dry and windy weather, Bloomberg News reported. Power started being shut off in three counties yesterday, the San Francisco-based company said in a statement. Earlier PG&E said the outage could impact as many as 124,000 customers in nine counties, which would have made it the company’s largest preemptive power shutoff to date. PG&E and other California utilities have been taking more aggressive measures to keep equipment from sparking blazes after fallen power lines ignited a series of catastrophic blazes across the state in 2017 and 2018. One of PG&E’s lines started the deadliest fire in California history in 2018, forcing the company to file for chapter 11. PG&E said the shutoff impacts Butte, Nevada, Yuba counties in the foothills of the Sierra Nevada Mountains. The utility said it’s monitoring conditions in nine counties for today, where it could conduct additional shutoffs. Read more.
