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PG&E $11 Billion Insurance Pact Sets Up Clash With Fire Victims

  • Settlement is key move for California utility’s bankruptcy
  • Agreement comes days after the company filed recovery plan

Photographer: David Paul Morris/Bloomberg

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Bankrupt California utility giant PG&E Corp. resolved a key battle by agreeing to pay $11 billion to settle insurance claims from wildfires blamed on its equipment. An even bigger struggle looms.

The settlement with insurance carriers and investors puts to rest a dispute with a group holding about 85% of insurance claims PG&E faces from deadly blazes in 2017 and 2018. The coalition, which includes Seth Klarman’s Baupost Group LLC, had sought to wrest control of PG&E’s bankruptcy by presenting its own reorganization plan.