PG&E Faces Fears of $18 Billion in Damages
Many circumstances can factor into the need for a bankruptcy filing, and they frequently include potential liabilities that threaten the continued existence of a business enterprise. This threat looms large for PG&E, as it is facing claims for billions of dollars in damages in connection with multiple wildfires in California in 2017 and 2018.
U.S. Bankruptcy Judge Dennis Montali recently ruled that a court trial can determine PG&E’s responsibility for the 2017 Tubbs fire that killed 22 people and went on to destroy over 5,600 buildings. Per Judge Montali, a jury can make the decision as to whether the company should pay up to $18 billion in damages to California wildfire victims.
After this ruling, the California supplier of gas and electricity’s stock fell to $10.05 (about 30%) on the week’s first day of trading back in August, before paring one-day losses to about 25%. The latest plunge showcased its worst day on Wall Street since PG&E first announced plans to file for bankruptcy back in January.
The California Tubbs Fire was the second most destructive wildfire in the state’s history. It preceded the 2018 Camp Fire, which ultimately became California’s worst. PG&E is also facing responsibility for that event.
For its part, PG&E does not claim responsibility for the 2017 Tubbs fire. In a statement, the utility provider stated that “[r]egardless of the next legal steps, Cal Fire has already determined that the cause of the 2017 Tubbs Fire was not related to PG&E equipment.” The company went on to say it has “made significant progress in further refining a viable, fair, and comprehensive plan of reorganization that will compensate wildfire victims, protect customer rates, and put PG&E on a path to be the energy company our customers need and deserve.”
Judge Montali’s decision marks a critical development for PG&E. Earlier this year, the company was thought to have been absolved of any responsibility for the Tubbs Fire after California investigators concluded that the cause of the blaze was a private electrical system. Nevertheless, and despite Judge Montali’s ruling, PG&E managed to keep control over its multibillion-dollar bankruptcy plan of reorganization, which it filed on September 9, 2019.
Houston Bankruptcy Attorneys
Okin Adams is a Texas law firm assisting businesses of all sizes with their legal, financial, and strategic challenges. We have represented creditors, debtors, committees, and trustees in a variety of bankruptcy- and litigation-related matters and understand the unique issues and procedures that can impact a bankruptcy case.
We bring an effective and efficient blend of big-law bankruptcy and commercial litigation experience to the table but handle matters with the personal touch and adaptability of a boutique. We also embrace legal technologies that allow us to scale our representations as needed and handle large volumes of data and other client materials. We employ complementary technologies in the courtroom, with the ability to navigate and display evidence in a digital presentation that maintains pace and effectiveness with witness examinations and oral arguments. Put simply, our goal in each case is to outmatch our opponent and obtain the best result possible for the client.