PG&E executes definite agreement to resolve wildfire insurance claims
The agreement will resolve all insurance subrogation claims arising from the 2017 Northern California wildfires and 2018 Camp Fire.
PG&E Corporation and Pacific Gas and Electric Company (together, “PG&E”) have executed a definitive agreement to resolve all insurance subrogation claims arising from the 2017 Northern California wildfires and 2018 Camp Fire.
In a statement, PG&E said that this agreement was reached with entities representing approximately 85% of insurance subrogation claims and formalized the $11 billion agreement in principle announced the other week with those same entities.
The claims were based on payments made by insurance companies following the fires in order to help covered individuals and businesses recover and rebuild.
“We continue to make progress on doing what’s right for the communities, businesses, and individuals affected by the devastating wildfires,” said Bill Johnson, the chief executive officer and president of PG&E Corporation. “PG&E remains committed to working with the individual victims to fairly and reasonably resolve their claims and will continue to work to do so while we remain focused on safely and reliably delivering energy to our customers, improving our systems and infrastructure, and continuing to support California’s clean energy goals.”
The settlement is subject to approval of the bankruptcy court overseeing PG&E’s Chapter 11 case, will be implemented pursuant to PG&E’s Joint Chapter 11 Plan of Reorganization, and is subject to confirmation of the plan by the bankruptcy court.
The executed agreement is PG&E’s second major settlement of wildfire claims. On June 19, 2019, PG&E and 18 local public entities (cities, counties, districts, and public agencies) announced that they had reached agreements to settle their claims relating to the 2015, 2017, and 2018 wildfires for a total of $1 billion, to be implemented as part of the plan.
Proceedings regarding the third and final major group of wildfire claims are currently pending in both federal district court and state court.
PG&E will file an amended plan with the bankruptcy court to reflect the finalized settlement reached with the insurance claimants as well as the updated backstop financing commitments.
The amended plan will provide that all wildfire claims will be satisfied in full — in the amount either reached through settlement or estimated by the court, PG&E said.
PG&E said that it had received aggregate equity commitments in excess of its $14 billion target amount from investors including current shareholders, bondholders, and parties not currently invested in the company’s equity or debt securities.
PG&E added that it expected that its plan would continue to be updated as developments required, including to reflect any additional settlements or the outcome of the ongoing wildfire claims proceedings.
PG&E also said that it remains on track to have its plan confirmed in advance of a June 30, 2020 statutory deadline and to emerge from Chapter 11 as a financially sound utility.
This piece originally published on Law.com.
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