For the past 15 years, PG&E has plotted a round trip from one bankruptcy to another, according to a Wall Street Journal commentary. In between, it navigated the aftermath of a catastrophic natural-gas pipeline explosion and a series of increasingly demanding green-energy mandates from state regulators. Managing that push and pull would have challenged any company. It proved to be especially challenging for a plodding utility undergoing management upheaval, heavily regulated and saddled with aging, neglected equipment. Executives were so focused on the past and the future that the present sneaked up on them. PG&E’s electric lines, after years of deferred maintenance, were threatening drought-parched California. When the Camp Fire started to burn in late 2018, eventually killing 85 people, it was the first of four fires that PG&E reported it sparked that day. It was its 408th of 2018, and the 1,961st since record-keeping started in mid-2014.
PG&E Corp.’s creditors have sweetened their offer to California wildfire victims, saying they are now prepared to pay $13.5 billion in cash upfront, according to a letter sent on Friday to state governor Gavin Newsom (D), Reuters reported. Current terms of the settlement deal, approved by a U.S. bankruptcy judge on Tuesday, call for half of the settlement to be financed with stock in a newly reorganized PG&E. In the letter, the bondholders led by Elliott Management said their latest proposals will make sure individual victims “are prioritized, as they should be” and will address demands Newsom had raised earlier. Newsom said on Dec. 13 that the settlement had lacked major changes in governance and tougher safety enforcement mechanisms mandated under the state wildfire statute. It would also leave the company with a weakened capital structure and “limited ability to withstand future financial and operational headwinds.” The new plan calls for no debt at the reorganized holding company and a new board with residents from California forming the majority of directors. It also allows for a takeover of PG&E by the state if the company is found to have caused any single future wildfire that destroys more than 5,000 structures. Read more.
Pacific Gas & Electric Co., the utility arm of PG&E Corp., has reached an agreement with several customer advocacy, labor and safety groups that calls for state regulators to allow the company to pass on to consumers some rate increases to fund safety improvements and other wildfire-prevention efforts, the Wall Street Journal reported. Friday’s agreement backs an increase in the average monthly bill of a PG&E residential customer by $5.69 a month, representing a 3.4 percent bump. The proposed rate change would take effect in 2020. PG&E will still need the approval of assigned administrative judges and the California Public Utilities Commission before enacting any changes. Read more. (Subscription required.)
WMI Liquidating Trust, formed pursuant to the confirmed seventh amended joint plan of affiliated debtors under chapter 11 of Washington Mutual, Inc., on Friday announced that the U.S. Bankruptcy Court for the District of Delaware has approved an order authorizing the closing of the debtors' chapter 11 cases, according to a press release. In connection with the court's approval, the trust expects to initiate a final cash distribution of approximately $35 million and $40 million to beneficiaries of the trust in accordance with the provisions of the plan on or about January 10, 2020. Following the distribution, the trust will begin the process of terminating its operations and initiating the winding-up and dissolution of the entity in accordance with Delaware law. No additional distributions of cash or equity will be made by the trust following the final distribution. Current members of the trust's management team are expected to manage the winding-up and dissolution of the trust.
Purdue Pharma LP’s billionaire owners went on the offensive against what they call unfair press treatment that’s based on the false assumption they helped trigger the U.S. opioid epidemic, Bloomberg News reported. The Sackler family, whose bankrupt company developed the OxyContin painkiller, asked Bankruptcy Judge Robert Drain in New York on Friday to let it make public a 580-page presentation, outlining its factual and legal defenses, that was shown to Purdue’s creditors on Dec. 6. The Sacklers have been accused of causing a national epidemic that’s led to more than 400,000 deaths, in part by overseeing a deceptive marketing campaign that pushed doctors to overprescribe OxyContin and downplay its highly addictive nature. Purdue’s proposed grand settlement of 2,700 lawsuits, valued at $10 billion, is being undermined by the false narrative about the Sacklers, the family said in its filing. The family has committed to contributing at least $3 billion and to handing over ownership of Purdue to a trust for the public benefit, a commitment it now says is being interpreted unjustly as a sign of guilt.
With his coal mining business low on cash and days from bankruptcy, Blackjewel LLC founder and former Chief Executive Jeff Hoops Sr. flew his private plane to Wyoming to deliver hundreds of cashiers checks to workers there after a bank halted payroll, WSJ Pro Bankruptcy reported. Months later, as Blackjewel was being liquidated, Hoops’s lawyer sent the court a $16,500 invoice for the flight. The bill is part of at least $29 million that Hoops and companies connected to his family are seeking from Blackjewel as the former coal producer winds down its affairs in West Virginia bankruptcy court, according to claims filed by his lawyer during the case. Blackjewel has sold most of its mines and other assets but remains in significant debt, owing tens of millions of dollars in federal coal royalties, taxes and other obligations. The amounts Hoops and his other companies have sought from Blackjewel includes millions of dollars in pre-bankruptcy loans from him and Clearwater Investment Holdings LLC, which is owned by a Hoops family trust, as well as about $15 million in coal royalties owed to other companies he’s linked to.
