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PG&E Corp. wildfire victims have filed a new lawsuit arguing they must be fully repaid for the losses of their homes and businesses before fire insurers are as part of the utility’s bankruptcy.

The case takes aim at an $11 billion settlement agreement between bankrupt PG&E and fire insurers, who are allied with the utility and shareholders against wildfire victims and PG&E noteholders in the Chapter 11 case.

An official committee appointed to represent fire victims is asking the judge overseeing PG&E’s bankruptcy to rule that under California law, the victims must be “made whole” before the insurers can be paid. Such a finding may upend the deal between PG&E and a panel representing nearly all insurers in the bankruptcy.

After declaring bankruptcy in January, PG&E and its shareholders have battled fire victims and noteholders for control of the company.

Under a noteholder reorganization plan, shareholders would be nearly wiped out and ownership handed to creditors. The plan backed by PG&E, its shareholders and fire insurers would pay fire victims and noteholders less.

The bankruptcy case is PG&E Corp. 19-bk-30088, U.S. Bankruptcy Court Northern District of California (San Francisco)

Related:

• This Wildfire Metric Threatens to Upend PG&E’s Restructuring Plan
• Food Spoils, Businesses Close as California Power Outages Imposed
• Millions in Northern, Central California Lose Electricity to Mitigate Wildfire Risks

Topics Lawsuits Catastrophe Natural Disasters California Carriers Wildfire