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PG&E proposes restructuring plan with $17.9 bln for wildfire claims

Credit: REUTERS/Elijah Nouvelage

California power provider PG&E Corp on Monday unveiled the outlines of a reorganization plan that will pay $17.9 billion for claims stemming from the wildfires that pushed it to seek bankruptcy protection.

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SAN FRANCISCO, Sept 9 (Reuters) - California power provider PG&E Corp on Monday unveiled the outlines of a reorganization plan that will pay $17.9 billion for claims stemming from the wildfires that pushed it to seek bankruptcy protection.

The plan filed in U.S. Bankruptcy Court in San Francisco includes payments capped at $8.4 billion for wildfire victims, payments capped at $8.5 billion for reimbursing insurers that had paid victims and a $1 billion settlement with local governments.

San Francisco-based PG&E sought Chapter 11 bankruptcy protection in January. At the time, the company expected more than $30 billion in liabilities from wildfires in California in 2017 and 2018, including November's Camp Fire, the deadliest and most destructive wildfire of the state's modern history.

PG&E must file a detailed reorganization plan by Sept. 29, the day its so-called exclusive period for filing a Chapter 11 plan expires.

If PG&E resolves its bankruptcy by the end of June 2020, it will be able to participate in a recently enacted, $21 billion state fund to help California's investor-owned utilities pay for future wildfires liabilities.

The utilities would help support the fund with contributions. PG&E has said in court papers that taking part in the fund will enhance its finances over the long term.

According to the outline of its reorganization plan, PG&E will make a required $4.8 billion initial contribution to the fund.

Corporate reorganization plans generally need widespread support of creditors, and debtors can spend months getting the necessary backing.

PG&E will ultimately need to win approval for a reorganization plan from U.S. Bankruptcy Judge Dennis Montali.

(Reporting by Jim Christie Editing by Chris Reese and Sonya Hepinstall)

((jim.christie@thomsonreuters.com; Tel: +1-415-677-2539; Reuters Messaging: jim.christie.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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