August 16, 2019 / 10:18 PM / 4 months ago

Court leaves PG&E with sole right to submit bankruptcy plan

FILE PHOTO: PG&E crew work to repair damage caused by the Camp Fire in Paradise, California, U.S. November 21, 2018. REUTERS/Elijah Nouvelage/File Photo

(Reuters) - A federal judge on Friday allowed PG&E Corp to retain the sole rights to propose a plan to exit bankruptcy, as he rejected efforts by investors to put forward competing plans, according to court documents.

Judge Dennis Montali of the U.S. Bankruptcy Court in San Francisco turned down requests from two groups of creditors wanting to propose a Chapter 11 exit plan for PG&E, which is facing huge liabilities from California wildfires.

PG&E, a holding company whose main subsidiary is the California utility Pacific Gas and Electric Company, sought Chapter 11 bankruptcy protection earlier this year after severe wildfires in 2017 and 2018 resulted in more than $30 billion in liabilities.

Montali said he believed allowing PG&E to retain the right to lead the process would be a speedier resolution for victims of fires that were caused by equipment belonging to the California utility, according to the court documents.

In its response, PG&E said it planned to file its plan of reorganization by Sept. 9.

“PG&E has made significant progress in further refining a viable, fair, and comprehensive plan of reorganization,” the company said in a statement.

“We can assure our customers and communities that we are looking at all options in working with the Governor, the CPUC and all stakeholders.”

Hedge funds Knighthead Capital Management and Abrams Capital Management, which are shareholders in PG&E, made a public proposal earlier this month to raise $15 billion in equity to fund a planned reorganization and pledged to purchase a portion of the offered equity if shares are left unsold.

PG&E bondholders have proposed plans to inject money to help the company emerge from Chapter 11, saying it has been too slow to file its own plan.

Reporting by Nivedita Balu in Bengaluru; Additional reporting by Shubham Kalia; Editing by Leslie Adler & Simon Cameron-Moore

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