PG&E Plans to File Bankruptcy Amid Mounting Liability Costs

Pacific Gas and Electric Corp. announced last week plans to file for Chapter 11 bankruptcy protection as the company faces liability claims in excess of $30 billion as a result of the deadly California fires, the Los Angeles Times reports. Although the company has stated that it does not believe the filing would affect the 16 million customers served, California Gov. Gavin Newsom has formed a task force to evaluate steps the state can take to help Californians amid the potential bankruptcy. Customers experienced added costs with the company’s previous bankruptcy filing in 2001. The article notes that Senate Bill 901 which took effect Jan. 1 allows the California Public Utilities Commission to oversee future fire-related bond issues by the utilities. Depending on how the bankruptcy plays out, an intervention may be necessary in order to prioritize the claims of the fire victims since they would likely be classified as unsecured creditors.  

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