EXHIBIT D

Case: 19-30088 Doc# 4631-4 Filed: 11/08/19 Entered: 11/08/19 15:49:35 Page 1

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11/7/2019 Klarman’s Baupost Poised to Cash In On PG&E Insurance Bet - WSJ

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Seth Klarman’s hedge fund Baupost Group LLC is poised to rake in profits from the bankruptcy

of PG&E Corp. under an $11 billion insurance settlement, the endgame of an investment

strategy launched months in advance of the California utility’s bankruptcy.

Public records reviewed by The Wall Street Journal indicate Baupost stands to make hundreds

of millions of dollars from its investment in insurance claims tied to the wildfires that pushed

PG&E into chapter 11. Under a proposed settlement unveiled Friday, those insurance claims will

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https://www.wsj.com/articles/klarmans-baupost-poised-to-cash-in-on-pg-e-insurance-bet-11568387840

PRO BANKRUPTCY INVESTORS

Klarman’s Baupost Poised to Cash In On

PG&E Insurance Bet

Seeking to build support for chapter 11 strategy, PG&E settles with insurance claims holders including

Baupost Group

Seth Klarman’s Baupost Group bought California wildʇire claims for as little as 30 cents on the dollar as insurers sought to shift

losses oʂ their books. PHOTO: JEENAH MOON`BLOOMBERG NEWS

Sept. 13, 2019 1117 am ET

By Peg Brickley

Case: 19-30088 Doc# 4631-4 Filed: 11/08/19 Entered: 11/08/19 15:49:35 Page 2

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11/7/2019 Klarman’s Baupost Poised to Cash In On PG&E Insurance Bet - WSJ

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be paid back at roughly 59 cents on the dollar, roughly twice what Baupost paid for some of

them, records show.

A Baupost spokesperson declined to comment.

PG&E filed for chapter 11 protection at the end of January, struggling under the weight of $30

billion or more in damage claims from wildfires in 2017 and 2018 that were later linked to its

equipment. Court records show that between $18.6 billion and $20 billion of PG&E’s total

wildfire bill stem from the insurance proceeds paid out to cover wildfire-related property

damage.

Those insurers, in turn, are some of the largest claimants to be paid off as a prerequisite to

PG&E’s exit from bankruptcy.

Uncertainty about PG&E’s future has sparked active trading in the company’s stocks and bonds

as Wall Street traders staked out bets on how much the company could pay. But Baupost also

spotted an opportunity in the relatively obscure corner of insurance claims, according to

records maintained by California insurance regulators.

The exact amount Baupost stands to make couldn’t be learned. As of March it owned $2.5

billion in insurance claims, according to court documents. It bought the claims at steep

discounts as early as last year from insurers anxious to shift the wildfire losses off their books,

the records show.

Regulatory records from one major insurer, CSAA Insurance Exchange, say Baupost paid 30

cents on the dollar to 35 cents on the dollar for a significant number of California wildfire claims

in late 2018 and early 2019, as it rolled up a stake in PG&E insurance claims.

On Friday, PG&E announced a settlement that puts the recovery for insurers at closer to 60

cents on the dollar, an improvement for those claims relative to the utility’s initial offer and a

potential windfall for Baupost if the restructuring proposal is confirmed in court.

Under the placeholder chapter 11 plan PG&E filed earlier this week, insurers who paid off some

of PG&E’s fire damages were being offered $8.5 billion. A PG&E spokesperson said the new deal

was an “agreement in principle” and the company would announce additional details when a

full written settlement is reached.

Baupost has demonstrated a knack for finding unusual ways to make money from corporate

collapses. When nuclear plant builder Westinghouse Electric Co. went bankrupt in 2017,

Baupost negotiated a deal to buy claims against the company from its parent Toshiba Corp. ,

eventually walking away with $400 million or more in profits.

Write to Peg Brickley at peg.brickley@wsj.com

Case: 19-30088 Doc# 4631-4 Filed: 11/08/19 Entered: 11/08/19 15:49:35 Page 3

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11/7/2019 Klarman’s Baupost Poised to Cash In On PG&E Insurance Bet - WSJ

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Copyright © 2019 Dow Jones & Company, Inc. All Rights Reserved

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Case: 19-30088 Doc# 4631-4 Filed: 11/08/19 Entered: 11/08/19 15:49:35 Page 4

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