PG&E Corp. and a group of insurers urged a judge to reject a competing reorganization plan for the bankrupt utility because the proposal would pay fire victims who lost their homes ahead of insurance companies and “unjustly enrich” bondholders including Elliott Management Corp. Under bankruptcy law, insurance companies and the victims of wildfires blamed on PG&E should be treated equally, which means they would be paid at the same time and in the same percentage, according to a statement by PG&E and a court filing by the insurers.
The company and the insurers are fighting to protect their $11 billion reorganization deal that would bring PG&E out of bankruptcy while preserving value for current shareholders. The competing proposal by bondholders and a committee of fire victims suing PG&E would split ownership of the company between them and wipe out current shareholders.
