Some of the biggest players in distressed debt are proposing a $35 billion plan that would allow California utility giant PG&E Corp. to emerge from bankruptcy within a year, according to people familiar with the matter.
Pacific Investment Management Co., Elliott Management Corp. and Davidson Kempner Capital Management have been meeting with California lawmakers and other stakeholders to discuss the proposal, the people said, asking not to be identified because the discussions are private. The plan would establish a $14 billion cash trust to pay for claims tied to the deadly 2017 and 2018 wildfires that forced the utility to declare bankruptcy, according to the proposal seen by Bloomberg News.
Since making a Chapter 11 filing in January, PG&E has become the target of investors wrestling for control over the company's incoming board and CEO. The company is facing liabilities that may exceed $30 billion from wildfires its equipment may have caused. Its bankruptcy case, the biggest for a utility in U.S. history, is expected to be contentious and complex as creditors, shareholders, wildfire victims and state officials weigh in on the remake of the power giant.
PIMCO didn't immediately respond to multiple requests for comment left after business hours. Davidson Kempner also couldn't immediately be reached for comment. Elliott and PG&E declined to comment.
The plan that PIMCO, Elliott and Davidson Kempner are pitching on behalf of an ad hoc committee of PG&E's senior unsecured noteholders would also establish a statewide wildfire fund of at least $13 billion that would be financed by PG&E, other California utilities, statewide bonds and other state funding sources, according to the people.