Embattled PG&E To File For Chapter 11 Bankruptcy

Ann Santiago
January 15, 2019

PG&E Corp, owner of the biggest US power utility by customers, said on Monday it is preparing to file for Chapter 11 bankruptcy protection as soon as this month amid pressure from potentially crushing liabilities linked to California's catastrophic wildfires in 2017 and 2018.

"While PG&E announced its intent to file bankruptcy today, the company should continue to honor promises made to energy suppliers and to our community".

"We believe a court-supervised process under Chapter 11 will best enable PG&E to resolve its potential liabilities in an orderly, fair and expeditious fashion", interim CEO John Simon, the company's general counsel, said in a statement.

Its bonds maturing in March 2034 are trading at 81.314, down from 87.989 on Friday.

The company does not expect bankruptcy to interfere with providing its customers with power and other services, the company said in a statement Monday.

"The company today provided the 15-day advance notice required by recently enacted California law that it and its wholly owned subsidiary Pacific Gas and Electric Company now intend to file petitions to reorganize under Chapter 11 of the US Bankruptcy Code on or about January 29", a statement said.

The company may alert employees as soon as Monday about its preparations for a potential bankruptcy filing in compliance with a state law about providing notice at least 15 days before such an event, one of the people said.

The company, in a public filing, cited at least $7 billion in claims from the Camp Fire.

Electric and natural gas service are expected to continue without interruption during the bankruptcy process.

This includes California's deadliest fire on record which killed 86 people and destroyed around 14,000 homes.

The PG&E board of directors is pushing Williams out as CEO over fallout from the company's liability in sparking deadly wildfires across California.

Despite preparing for bankruptcy, PG&E said it expects no impact to its electric and natural gas customers. State investigators found PG&E; lines were responsible for igniting 18 wildfires in October 2017, and are still probing whether the utility's equipment caused the devastating Camp Fire past year. Shares of PG&E were already down 63% since the start of the Camp Fire.

PG&E reported an equipment malfunction at the time and location where the Camp Fire started on November 8.

Shares of PG&E (PCG) plunged 48% when the market opened Monday. And its stock has plummeted, down 88 percent from late 2017.

The daughter of Cuban political refugees, Williams became the nation's first Latina CEO of a Fortune 500 company when she took over PG&E.

That's a fairly concise statement of the enormous challenge PG&E and the state of California will face in the months and years of bankruptcy reorganization to come.

Pacific Gas and Electric said last month it determined weather conditions were no longer unsafe enough to warrant a massive power shut off on November 8 - a decision that came as a massive fire was tearing through a Northern California town.

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