PG&E Files for Bankruptcy for Second time in 18 Years
PG&E filed for bankruptcy for the second time in 18 years this week (1/29). The company’s filing came on the heels of the devastating wildfires that ravaged the utility’s service territory in 2017 and 2018 and which they are now accused of causing. With over $30 billion in potential liabilities mounting, the crushing financial exposure left the company with very few alternatives and the Board of Directors voted on January 28 to go ahead with a Chapter 11 bankruptcy filing in federal court.
Statement of PG&E Interim CEO John R. Simon: “Our most important responsibility is and must be safe and that remains our focus. Throughout this process, we are fully committed to enhancing our wildfire safety efforts, as well as helping restoration and rebuilding efforts across the communities impacted by the devastating Northern California wildfires. We also intend to work together with our customers, employees and other stakeholders to create a more sustainable foundation for the delivery of safe, reliable and affordable service in the years ahead. To be clear, we have heard the calls for change and we are determined to take action throughout this process to build the energy system our customers want and deserve.”
Statement by Governor Gavin Newsom: “PG&E today filed for reorganization in federal bankruptcy court. That was PG&E’s choice but it does not change my focus, which remains protecting the best interests of the people of California. My administration will continue working to ensure that Californians have access to safe, reliable and affordable service, that victims and employees are treated fairly, and that California continues to make forward progress on our climate change goals.”
- PG&E estimated its liabilities at about $51 billion and its assets at more than $71 billion.
- PG&E reported that they expect to emerge from bankruptcy in 2 Years, but analysts’ predictions are that the process could take many more years, and result in a company that may look much different.
- PG&E appointed longtime turnaround specialist James Mesterharm as its chief restructuring officer to help the company navigate bankruptcy proceedings. Mesterharm, a managing director at turn-around and consulting firm AlixPartners, previously served as restructuring chief at Eastman Kodak during its bankruptcy proceedings. Other companies he has advised on restructurings include mall owner General Growth Properties and Zenith Electronics.