PG&E Corp. scored a victory on Friday as a judge ruled against hedge funds that said California’s largest utility had unfairly shut them out of a lucrative stock deal on its way out of bankruptcy, WSJ Pro Bankruptcy reported. New York hedge fund Elliott Management Corp., a big investor in PG&E’s debt, led a group of bondholders in the failed effort to collect $250 million in damages from the utility for allegedly failing to honor its agreement with them. Big investors that helped PG&E raise money in the stock market were rewarded with fees and shares in the company. Elliott and other bondholders said that they didn’t get a chance to participate, even though PG&E had promised it would use best efforts to get them a piece of the stock sale action. PG&E pointed to releases in its chapter 11 plan that it said had cut off the bondholders’ right to sue. Bankruptcy Judge Dennis Montali ruled that bondholders lost their right to complain when PG&E’s chapter 11 plan took effect, and broad releases shielded the company. PG&E exited bankruptcy in time to meet a June deadline to participate in California’s new statewide wildfire protection fund for utilities.
