PG&E in Stock Deal With Fire Victims as Bankruptcy Nears End

(Bloomberg) -- PG&E Corp. reached an agreement with the committee representing fire victims in its bankruptcy regarding company stock that will fund half of a $13.5 billion trust to pay damage claims.

The deal resolves the last major dispute in the California power giant’s Chapter 11 case, largely clearing the way for a judge to approve its reorganization ahead of a June 30 deadline to qualify for a state wildfire insurance fund.

The fire-victims trust will own 22.19% of outstanding shares in the reorganized utility after it emerges from bankruptcy, according to a regulatory filing Friday. Under a so-called registration rights agreement, the trust will have to hold its shares for 90 days if PG&E is able to sell its stock in a public market offering.

A lawyer for the committee representing victims told a bankruptcy judge last week that the trust had faced the possibility of having to hold PG&E shares for as long as six years, exposing it to the potential risk of another catastrophic utility-linked fire. PG&E filed for bankruptcy in January 2019 after its equipment was blamed for causing deadly blazes in 2017 and 2018.

“Committee members were finally able to enforce their settlement and obtain a reasonable registration rights agreement for the victims trust,” Robert Julian, the committee attorney, said by phone Friday.

©2020 Bloomberg L.P.