The deal covers insurance carriers and hedge funds that were seeking compensation from PG&E for payouts insurers made to homeowners and businesses in connection with fires sparked by the utility’s equipment. PG&E announced the settlement agreement in principle earlier this month.
Last week, bondholders, including Elliott Management Corp. and the official committee representing fire victims asked to put a chapter 11 plan on the table that would compete with the company’s own restructuring framework. Bondholders must get court permission to formally file a competing chapter 11 plan.
On Monday, the California utility company said the Elliott proposal would cost all PG&E customers billions of dollars in additional interest payments over 15 years and provide an “unfair windfall” for noteholders and plaintiffs’ attorneys.
“That plan proposal is a blatant attempt to unjustly enrich the noteholders who proposed it,” PG&E said in a press release.
PG&E’s chapter 11 plan that would cap the amount owed to wildfire victims at about $8.4 billion, and pay insurers and the people who invested in insurance claims stemming from the fires $11 billion. The settlement was negotiated with carriers that hold roughly 85% of insurance subrogation claims against the company.
Bondholders said last week that they can offer $28.4 billion in new money for about 59% of the reorganized PG&E. The rest of the equity in the postbankruptcy company would be put into the trust that would absorb wildfire claims.
PG&E’s plan is the second major agreement the company has reached with claimants. In June, PG&E agreed to pay $1 billion to local governments and state agencies to settle claims from fires in 2017 and 2018.