PG&E Corp. has reached an accord with bondholders that smooths its path out of bankruptcy, but it has yet to win over California Gov. Gavin Newsom, who has threatened a state takeover of the embattled utility, WSJ Pro Bankruptcy reported. Hours before PG&E announced a settlement with investors owning most of its $17 billion bond debt, Newsom lashed out in a court filing that warned the utility it won’t get out of bankruptcy without major improvements to its turnaround plan. Years of deadly wildfires linked to its equipment drove PG&E into chapter 11 protection last year. Bankruptcy shielded PG&E from continued lawsuits seeking damages from the blazes, but the barrage of criticism from Mr. Newsom and others has continued. PG&E paid out billions of dollars in shareholder dividends while skimping on safety investments, critics say. Newsom, who is playing a key role in PG&E’s bankruptcy effort, wants the utility to agree to new leadership and has asked the company to incorporate a mechanism that will allow the state special powers if the utility starts slipping up on safety again.
