Houston — PG&E Corp. will be allowed to submit its bankruptcy exit plan by September 9 as a federal bankruptcy judge denied two motions to terminate its exclusivity period on Friday.

Judge Denis Montali of the US Bankruptcy Court for the Northern District of California said in an order that PG&E Corp.'s August 12 filing saying it could have a reorganization plan ready to submit to the court by September 9 convinced him to deny the request to terminate PG&E's exclusivity period, which runs through September 26.

An exclusivity period is granted to bankrupt entities to allow them to prepare a reorganization plan that their creditors will have a chance to accept before outside investors are allowed to submit competitive plans.

The Ad Hoc Committee of Senior Unsecured Noteholders filed a motion on June 25 saying it had a $30 billion bankruptcy exit plan it was ready to present to PG&E Corp. creditors, and asked the court to terminate PG&E's exclusivity period so it could submit the plan to creditors.

The Ad Hoc Group of Subrogation Claim Holders filed a motion for termination of exclusivity on July 23. Members of the group hold more than $20 billion in unsecured claims against PG&E that stem from billions of dollars of insurance claims paid to California wildfire victims.

The motions by the two groups were heard by Montali on August 13. On reflection, he said in his Friday ruling, "not only because of the exigencies of these cases but because of the statutory presumption in favor of [the] debtors' exclusivity (at least for a time), coupled with the prospective timetable now laid out in [the] debtors' supplement statement, persuades the court that the best choice is to leave the debtors' exclusivity in place for them to proceed with their proposed resolution."

$35 BILLION TO $40 BILLION MIGHT BE AVAILABLE

PG&E Corp. has told the bankruptcy court it can have a Chapter 11 exit plan ready to file by September 9 and said that a number of financial institutions have assured the company that $35 billion to $40 billion of both debt and equity can be raised to satisfy wildfire claims and to refinance indebtedness.

In a filing with the court, PG&E Corp. said it had been "deeply involved" in the process of refining a Chapter 11 plan that it said will "fully address all of the recent legislative enactments" and ensure it emerges from bankruptcy by the June 30, 2020 deadline set by the state's legislature.

PG&E Corp. said it submitted a "supplemental statement" on its plan of reorganization timeline "in opposition to the motion submitted by the Ad Hoc Committee."

PG&E Corp.'s exclusivity period runs through to September 29. It has until November 29 to win support for the plan from its creditors.

PG&E Corp., which entered bankruptcy January 29, said in its filing it has been engaged in "ongoing dialogue" with the law firm Jones Day, on behalf of Knighthead Capital Management and Abrams Capital Management, with respect to securing equity emergence financing.

It said under its plan Knighthead Capital would manage a $15 billion rights offering at the time of the reorganization.

In the filing, PG&E Corp. also said that it has received commitments "from more than 20 financial institutions for billions in equity capital" to fund its plan's equity commitment.

Lawyers for PG&E Corp. said the equity commitments "aggregate approximately $10.25 billion" and the bankrupt utility holding company, the largest in California, expects that this total will increase "significantly over the next several days based on discussions with a number of large capital providers."

Several of the financial institutions "have expressed high levels of confidence in their abilities to raise at least between $35 [billion] and $40 billion of both debt and equity capital to satisfy claims, refinance indebtedness, and address other bankruptcy related and post emergence uses, as needed."

PG&E CORP.'S STOCK PRICE DROPS

Also on Friday, Montali said a jury trial could be held to determine if PG&E Corp. and its utility subsidiary Pacific Gas and Electric should be held liable for the Tubbs fire, which killed 22 people in Sonoma and Napa counties in 2017.

With the prospect of additional wildfire claims, PG&E Corp.'s stock value had fallen roughly $3.35/share from its 4 pm EDT close on Friday of $14.30/share by 2:54 pm EDT Monday.

-- Jeffrey Ryser, jeffrey.ryser@spglobal.com

-- Edited by Keiron Greenhalgh, newsdesk@spglobal.com