The judge overseeing the bankruptcy of PG&E Corp. yesterday issued an order opening the door to a group of noteholders and wildfire victims to file their own reorganization plan for the California power provider, Reuters reported. Bankruptcy Judge Dennis Montali said in his order that he favored allowing the noteholders to file their plan because it has the support of the committee representing victims of the massive California wildfires in 2017 and 2018 that pushed PG&E to seek chapter 11 protection in January. Allowing the noteholders, which include Apollo Capital Management and Elliott Management Corp among others, to file while PG&E advances its own plan may help force the sides to negotiate a settlement of the case, Judge Montali added. The rival plan offers more money to wildfire victims and would give debt holders control of PG&E after it emerges from bankruptcy. Noteholders propose putting $29.2 billion in new money into the San Francisco-based power provider in exchange for new debt and a controlling equity stake. PG&E’s plan, backed by current major shareholders, would use $34 billion in new debt and $14 billion in equity commitments to reorganize. Judge Montali said that he wants the noteholders to file their plan by Oct. 17. The wildfire victims committee backs the noteholders’ plan because it expects the proposal to provide more than the $8.4 billion in compensation PG&E has proposed for the victims.
