What Does PG&E Filing For Bankruptcy Mean For Its 16 Million Customers And Camp Fire Victims?
SACRAMENTO (CBS13) — While utility giant PG&E is off the hook when it comes to the deadly Tubbs fire in wine country, lawsuits stemming from the deadly Camp Fire are mounting. Experts say those lawsuits are the reason the utility filed for Chapter 11 bankruptcy Tuesday morning.
PG&E, which is worth $71 billion, is trying to protect itself from as much as $60 billion in lawsuits from the Nov. 8 Camp Fire in Butte County which killed 86 people and destroyed nearly 15,000 homes.
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Investigators are investigating whether a PG&E transmission line sparked the blaze in the Camp Fire.
Bankruptcy attorney Gary Fraley explained the Chapter 11 process.
"What's going to go on over the next two years is determining their debts and liabilities what type of plan can be proposed," Fraley said.
As part of the filing, PG&E will have access to $5.5 billion in loans from several banks and their legal liabilities will be limited.
"All of these massive lawsuits will be consolidated in one place, very much like a class action. In fact, this could be a class action," Fraley said.
It's not just victims of the Camp Fire who could be burned by PG&E. Stockholders and bondholders within major institutions could face billions in losses because PG&E stock has dropped in value. The stock was once considered a "safe" stock option.
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"This will reverberate to retirements that will not be completely funded," Fraley said.
The utility promised that its 16 million customers and 24,000 employees will not be impacted. But what happens once the company emerges from the bankruptcy filings that will leave will leave a lot unknown.
The interim CEO of PGE said, "Throughout this process, we are fully committed to enhancing our wildfire safety efforts as well as helping restoration efforts across communities impacted by the Northern California wildfires."
This Chapter 11 filing also cuts down on cost for attorneys which could be passed along to customers. It would mean instead of 12 attorneys in 12 courtrooms, one consolidated lawsuit would require just one attorney.
Fraley said PG&E could drop out of this chapter 11 proceeding at any time. He thought that would be likely to happen if PGE is not held responsible.
