Published: Mon, January 14, 2019
Money | By Ralph Mccoy

PG&E Bankruptcy Filing Looming

PG&E Bankruptcy Filing Looming

PG&E is the subject of enormous litigation and liabilities estimated which could reach as high as $30 billion, analysts who studied the 2018 California wildfires say.

PG&E shares quickly fell $8.20, to $9.39, in early morning New York Stock Exchange trading.

The company, which has 20,000 employees, has assured its customers it expects to continue supplying power "without disruption". It needs to use the bankruptcy process, which will allow it to shed some of its debt, to pay for damages and stay in business to provide gas and electric service to its customers.

Support for PG&E's management eroded even further in December when state regulators accused the utility of falsifying records related to locating and marking underground gas lines from 2012 through 2017 _ years in which the company was trying to convince the public that it had cleaned up its act after a 2010 pipeline blast that killed eight in San Bruno, California.

The Camp Fire, the most deadly and destructive fire in state history, has yet to be assigned an official cause, but PG&E reporting having an equipment malfunction near the spot around the same time the fire ignited.

"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", said interim CEO John R. Simon in a prepared statement.

According to Reuters, PG&E is already talking to banks about a multibillion-dollar financing package to help navigate bankruptcy proceedings.

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PG&E said Monday that it has only about $1.5 billion in cash and cash equivalents on hand.

The company's board made a decision to oust CEO Geisha Williams and undergo a restructuring at a board meeting this weekend in San Francisco, according to a source familiar with the matter. Shares were trading at almost $50 before the company disclosed that a faulty transmission tower may have caused the Camp Fire.

The company said Sunday night that CEO Geisha Williams has stepped down.

Richard Kelly, chairman of PG&E Corp., said a Chapter 11 filing "represents the only viable option to address to the company's responsibilities to its stakeholders". PG&E remains committed to assisting the communities affected by wildfires in Northern California, and its restoration and rebuilding efforts will continue.

Advisers said they expect it may take up to two years for the company to emerge from bankruptcy. The PG&E (PCG) board said it would look to hire a new chief executive with "extensive operational and safety expertise".

Williams was CEO for less than two years, but she had been with PG&E since 2007.

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