PG&E Corp. won court approval of a settlement with bondholders that had threatened to derail its bankruptcy strategy, WSJ Pro Bankruptcy reported. The ruling yesterday from Judge Dennis Montali keeps the California utility on course to exit bankruptcy by the end of June, in time to qualify for a statewide fund designed to cushion utilities against the rising risk of wildfires. PG&E has reached settlements totaling $25.5 billion of damage claims stemming from wildfires that swept the state in 2017 and 2018 that were linked to its equipment. The settlement approved yesterday in the U.S. Bankruptcy Court in San Francisco concerns PG&E’s bond debt, which is in the hands of large investors including Elliott Management Corp. and Pacific Investment Management Co. Bondholders agreed to drop their competing chapter 11 plan, which would have slashed the value of existing shares of PG&E’s stock, and support PG&E’s plan, in return for improved treatment and the company’s agreement to pay $99 million worth of underwriting and professional fees. Shareholders will be able to hold on to their stock under PG&E’s chapter 11 plan, which still must survive rounds of voting and a review by the California Public Utilities Commission. California Gov. Gavin Newsom has asked PG&E for corporate governance changes that would improve its focus on safety and allow for enhanced state controls if dangerous conditions arise. PG&E has offered some concessions in its plan, including appointing new board members and strengthening its roster of safety executives.
