PG&E Corp. is nearing a settlement with victims of the wildfires that pushed the utility into bankruptcy, while clashing with California Gov. Gavin Newsom (D) about the best path out of chapter 11, the Wall Street Journal reported. Nancy Mitchell, the lawyer representing the governor, said Gov. Newsom wants assurances that PG&E will come out of bankruptcy financially stable, with cash to invest in new technology and improved safety practices. Tensions between PG&E and Gov. Newsom surfaced at a hearing yesterday in the U.S. Bankruptcy Court in San Francisco, as Mitchell spoke out against an $11 billion pact that would bind one of PG&E’s most powerful groups of creditors to supporting the company’s chapter 11 exit plan. The group, which includes insurance companies and big investors, would be pledged to oppose a rival restructuring strategy backed by bondholders and wildfire victims. In the coming weeks, Gov. Newsom is likely to make clear which plan he favors, according to Michael Stamer, lawyer for the bondholders. He spoke in court yesterday, after Mitchell said that California’s top executive has concerns about whether the company’s version of the plan will pass muster. PG&E, fire victims and major investors have been engaged in talks about a revamped chapter 11 plan. PG&E and fire victims are working to settle their differences, with an improved $13.5 billion payout for victims.
