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PG&E CEO resigns as company faces billions in liability

17 January 2019

"But victims' interests won't be served by pushing utilities into bankruptcy, converting wildfire sufferers into one more class of frustrated creditors pursuing inadequate funds".

PG&E also negotiated a US$350-million loan last April with Royal Bank of Canada and two Japanese financial institutions that is "payable immediately" in the event of a bankruptcy or insolvency, according to securities filings. He promised in December to charge PG&E if an investigation revealed that "reckless" behavior contributed to the Camp Fire. "PG&E is the state's largest investor in energy efficiency and electric vehicle infrastructure, alone, with annual commitments well in excess of $1 billion", he said.

Veteran New York bankruptcy lawyer H. Jeffrey Schwartz said Chapter 11 will allow the company to operate without being burdened by its liabilities. PG&E estimates that it could be held liable for more than $30 billion, according to the SEC filing, not including potential punitive damages, fines or damages tied to future claims.

Gov. Gavin Newsom reiterated that point, reassuring Californians that PG&E's bankruptcy won't lead to any gas or power outages - unlike the utility's last bankruptcy 18 years ago.

Bussewitz reported from NY. "This is 2019. We have an abundance of energy, and our customers should not be concerned about turning on their lights".

Newsom said he's bringing in experts in bankruptcy law and finance to help the state navigate the legal process.

How much and what the state can do remains to be seen. Shares of PG&E were already down 63% since the start of the Camp Fire.

This comes one day after the chief executive of the company stepped down. "This a sign of things to come".

PG&E also filed for Chapter 11 in 2001 amid rising electricity prices during California's energy crisis.

PG&E delivers gas and electricity to 16 million residents in Northern and Central California.

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"You can only imagine that kind of effort will only be back-burnered, or may be eliminated entirely", Brown said.

Such legislation would also let utilities shift some future fire-related costs to consumers so long as regulators find no negligence on the companies' part.

As the utility company's financial status became more transparently dire, protesters have flooded into California Public Utilities Commission hearings requesting that they not create a safety net for the company; which would end up falling on consumers paying higher fees to bail them out. "Today, the problem isn't so much cash flow; the problem is it has huge potential liabilities".

The bankruptcy filing will not make the lawsuits disappear, but it will result in all of the wildfire claims being consolidated into a single proceeding before a bankruptcy judge, not a jury.

During this time, those who have filed lawsuits against PG&E will have to wait.

Potter represents about 70 Camp Fire victims.

PG&E, which is the nation's largest utility by revenue and is based in San Francisco, said it is giving the required 15 days' notice that it plans to file for bankruptcy protection. But they're not yet sure how - or if - they can act to ensure that outcome.

"We're not sure what our tools are, what we're capable of", Rendon says.

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PG&E CEO resigns as company faces billions in liability