Another group of creditors at PG&E Corp. may throw its support behind efforts to end the bankrupt utility’s exclusive right to craft a recovery plan.
The official committee of unsecured creditors is expected to endorse a pending motion that would terminate PG&E’s privilege before its scheduled Sept. 26 expiration, and allow others to present alternatives, according to people with knowledge of the matter.
An ad hoc group of creditors, led by Pacific Investment Management Co., Elliott Management Corp. and Davidson Kempner Capital Management, presented a motion last month to end exclusivity immediately so they can offer a competing $47.5 billion restructuring plan that could get PG&E out of bankruptcy by year-end or shortly after.
They’re seeking to replace PG&E’s proposed $31 billion reorganization plan, which would see it emerge from bankruptcy in March with help from tax-exempt bonds that the state would have to agree to issue. California Governor Gavin Newsom said in an interview on Thursday that he doesn’t support PG&E’s proposal to issue tax-exempt bonds at this point.
A hearing on the motion is scheduled for July 24.
Representatives for the creditor groups declined to comment. In an emailed statement, the company said the court previously had extended its exclusivity to provide “additional time needed to formulate and negotiate a plan of reorganization that is in the best interests of all stakeholders, and PG&E has made substantial progress.”
In Chapter 11 cases, companies typically get an exclusive period to devise a reorganization plan. While it’s unusual for a court to cut it short, this happened when PG&E’s utility — Pacific Gas & Electric Co. — went through bankruptcy in the early 2000s.
That case was overseen by U.S. Bankruptcy Judge Dennis Montali, who is also overseeing the current case. In May, Montali said he ended the exclusivity in PG&E’s previous reorganization after a viable, competing proposal surfaced.
The ad hoc committee has asked him to consider approving their request in late July.
Earlier this week, the Utility Reform Network, a consumer advocacy group, threw its support behind the effort of PG&E’s ad hoc unsecured noteholders to end the exclusivity period.