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California Governor Gavin Newsom (D) on Friday rejected a bankruptcy reorganization plan submitted by PG&E Corp., the state’s largest investor-owned utility, saying its proposal fails to meet the requirements of a recently enacted wildfire law, Reuters reported. The decision by Newsom, sent to PG&E in a letter, complicates the company’s push to exit bankruptcy and provide billions of dollars to victims of devastating wildfires in 2017 and 2018 sparked by the utility’s power lines. The embattled utility now has until Tuesday to further amend its plan to Newsom’s satisfaction, but his criticism of the reorganization package as it was presented by PG&E a day earlier was sweeping. Newsom said that the plan lacks “major changes in governance” and tougher safety enforcement mechanisms mandated under the state wildfire statute, known as Assembly Bill 1054, which was enacted in July. The governor also said PG&E’s plan, including a proposed $13.5 billion settlement with victims of wildfires blamed on its power lines, would leave the company with a weakened capital structure and “limited ability to withstand future financial and operational headwinds.”

Insurers of Philadelphia Energy Solutions (PES) have indicated they will make a second payment of $15 million from its property policy in connection to the June fire and subsequent shutdown of the plant, court documents showed, Reuters reported. The payout will be distributed among debtors who were insured under the company's commercial property coverage policy, according to the documents. Earlier this year, the insurers made an initial $50 million payment to the refiner, which is currently navigating chapter 11 protection. PES entered bankruptcy a month after a June 21 fire and series of blasts destroyed an alkylation unit at its massive refinery complex. Shortly after the blaze, the company requested an advance payment on $1.25 billion in property damage and business interruption insurance coverage, but it was denied. The plant, which was the largest refinery on the U.S. East Coast, shut its last crude distillation unit in late July. The plant, which was the largest refinery on the U.S. East Coast, shut its last crude distillation unit in late July. The refinery has since been put up for sale and has attracted interest from parties ranging from biofuels producers to real estate developers. The company’s bankruptcy case hinges on receiving insurance proceeds for up to $1 billion for property damage and as much as $250 million for loss of business after the fire, according to earlier filings with the U.S. bankruptcy court for the District of Delaware. Without the payouts, PES could be forced into chapter 7 liquidation.

When the coal operator Blackjewel shuttered the gates of two mines in the Powder River Basin this summer, the insolvent company had already withheld wages and other benefits from its miners, a state office claims, the Casper (Wyo.) Star Tribune reported. Even as Eagle Butte and Belle Ayr coal mines have reopened under new ownership, a vast majority of former Blackjewel workers have yet to receive the full compensation they were promised, according to recent investigations by Wyoming’s Labor Standards Office. When it filed for bankruptcy, Blackjewel owed 506 workers hundreds of thousands of dollars in unpaid wages and benefits. But nearly six months later, only 33 workers have filed a claim for compensation with the state. The Wyoming Department of Workforce Services has finished investigating 31 of those claims and concluded Blackjewel failed to pay the 31 workers nearly $164,000 of owed wages and benefits. Blackjewel has provided the state with proof of paying workers just $56,800 of the amount owed. The company withheld payments from employees’ health savings and retirement accounts over the course of five pay periods prior to the bankruptcy, according to the investigations. And before filing for chapter 11, Blackjewel also withdrew employee retirement contributions from workers’ paychecks without transferring the funds to their retirement accounts.

Victims of the collapse of a 174-foot pedestrian bridge near Florida International University’s Sweetwater campus in March 2018 are on course to receive a $103 million settlement after U.S. Bankruptcy Judge A. Jay Cristol approved a reorganization plan for general contractor Magnum Construction Management on Friday, Law.com reported. Formerly known as Munilla Construction Management, the company filed for chapter 11 protection in March. The reorganization plan includes the settlement, which will be distributed in January, provided it survives as anticipated during an appeal window ending Dec. 28. Six people died and and 10 were injured when 950 tons of concrete and metal collapsed onto a state road, Southwest Eighth Street. It resulted in litigation over alleged design flaws and other errors, which will be resolved under the reorganization plan. The plan follows an earlier settlement between MCM and its insurer, which agreed to pay $42 million to victims and their families.

A contractor’s bankruptcy filing has stalled construction of an already-delayed $250 million luxury apartment complex in St. George, Staten Island, the New York Post reported. Hollister Construction Services of Parsippany, N.J., filed for chapter 11 protection on Sept. 11, though its website states that it will “continue to conduct business.” However, the developer behind the Lighthouse Point project, Triangle Equities, told the Staten Island Advance that it is “close” to hiring a new contractor for the project, which was supposed to see residents move in next year. The exact timetable won’t be known until a new contractor is on board. The project also has a partial stop-work order issued by the city Buildings Department for “inadequate guardrails” and housekeeping at the site, according to the Advance. Lighthouse Point, next door to the Staten Island Ferry terminal, and opposite the new Empire Outlets mall, includes a 116-unit apartment building, 20 percent of which will be earmarked for affordable housing, along with 65,000-square-feet of retail, including an upscale grocery store, and office space.

A federal judge has dismissed an involuntary bankruptcy petition filed by small creditors of a Florida company that purchased the massive Railway Exchange building downtown with plans for a major redevelopment, the St. Louis Post-Dispatch reported. U.S. District Judge Charles Rendlen III noted that over 90 percent of the creditors of the building’s owner, HH St. Louis Railway LP, an entity connected to Florida-based Hudson Holdings, supported dismissing the involuntary petition. The petition was filed last month by local consulting firms Development Strategies and Lafser & Associates and security firm Hudson Services for what they said were unpaid services worth collectively about $115,000. They weren’t secured creditors, unlike Hudson’s lender on the building purchase and some contractors. It was the latest sign of trouble for the daunting redevelopment project that envisioned hundreds of apartments and office space in the giant, 1.2 million-square-foot historic building that was once the flagship Famous-Barr department store and headquarters for its parent, May Department Stores. This year, an architect on the project sued in St. Louis Circuit Court, and the lender for the building purchase joined that action. But even they said that the bankruptcy petition was unnecessary and threatened any chance of success the project might have.

California power producer PG&E Corp. said yesterday that it has filed for an amended reorganization plan, adding that it remains on track to getting the plan confirmed before a June 2020 deadline to exit bankruptcy, Reuters reported. The development comes less than a week after the company said it reached a $13.5 billion settlement with victims of some of the most devastating wildfires in California’s modern history. PG&E has settled all major wildfire claims and resolved disputed release provisions between insurance companies and wildfire victims, it said yesterday. The company also said that its plan can be fully funded through its capital structure, including the $12 billion equity backstop commitments that PG&E received last week. Read more. 

In related news, Elliott Management Corp. is digging in against a PG&E Corp. shareholder strategy for ending the utility’s bankruptcy, saying key demands of California officials wouldn’t be satisfied under the proposal, WSJ Pro Bankruptcy reported. The hedge-fund manager, part of a group of bondholders seeking to take over PG&E, said yesterday that a restructuring strategy developed by shareholders, management and victims of PG&E-linked wildfires would jeopardize “both the immediate-term and long-term health of the company and its critical infrastructure.” The bondholders are fighting to keep their chapter 11 takeover proposal viable after wildfire victims that had previously backed it reached a $13.5 billion settlement with PG&E and switched to supporting the rival shareholder-backed strategy. By settling with fire victims, PG&E built critical creditor support for its proposal, which would protect the ownership stakes of large shareholders such as Knighthead Capital Management LLC and Abrams Capital Management LP. Read more.

A lawyer for one of the women who brought lawsuits accusing Harvey Weinstein of sexual misconduct said yesterday that a proposed $25 million settlement for most of the Hollywood producer’s alleged victims was unfair and designed to pressure her into accepting it, Reuters reported. Thomas Giuffra, who represents actress Alexandra Canosa, said after a hearing in Manhattan federal court that the accord set aside just $500,000 for his client, and that the money could be used to pay for Weinstein’s legal defense if she did not accept it. Weinstein has been accused of sexual misconduct dating back decades by more than 70 women, which helped spark the #MeToo movement. He has said any sexual encounters were consensual.

Destination Maternity Corp. won court approval to liquidate its remaining stores after a judge rejected claims by a federal bankruptcy watchdog that a sale process, which might have saved part of the chain was “tainted” by conflicts, Bloomberg News reported. Bankruptcy Judge Brendan Linehan Shannon acknowledged that the structure of the deal he approved was unusual, but said he disagreed that there was an actual conflict of interest. Two retail liquidation specialists worked for Destination Maternity before teaming up on the winning bid to conduct going-out-of business sales for the chain. One of the liquidators also has ties to a key Destination Maternity lender. “There is at least an optical concern about a party wearing a number of hats,” Judge Shannon said. “But I don’t believe there is a meaningful conflict.” Under the deal, licensing company Marquee Brands LLC will get Destination’s name, website and other operating assets for about $50 million, while Hilco Merchant Resources and Gordon Brothers Retail Partners will run store-closing sales at its remaining 235 locations, with thousands of jobs likely to disappear, court papers show. The structure made it difficult for a rival to make a competing offer to buy the entire company as a going concern or to outbid Marquee for the intellectual property without first getting permission from Hilco and Gordon Brothers, according to Destination’s main financial adviser, Neil A. Augustine, with Greenhill & Co. The U.S. Trustee argued that Hilco and Gordon Brothers had an advantage in bidding on the right to wind down the chain because they had more access to information about Destination Maternity than other potential bidders.