PG&E Announces Intent To File Chapter 11 Bankruptcy

January 14, 2019 14:00 pm · 28 comments

San Francisco-based PG&E Co. announced it’s filing for Chapter 11 bankruptcy just one day after its CEO resigned, according to company officials.

The Monday announcement is a 15-day advance notice that the company intends to file for bankruptcy reorganization around Jan. 29, utility officials said. The company does not expect any impact to electric or natural gas customers, and reiterated its commitment to rebuilding communities affected by massive wildfires in 2017 and 2018.

“Chapter 11 will best enable PG&E to resolve its potential liabilities in an orderly, fair and expeditious fashion,” PG&E interim CEO John Simon said.

On Sunday, the company’s CEO Geisha Williams, the chief executive officer of PG&E since March 2017, resigned, and Simon, who was the corporation’s Executive Vice President and General Counsel, was named as her
interim replacement.

“Our goal will be to work collaboratively to fairly balance the interests of our many constituents – including wildfire victims, customers, employees, creditors, shareholders, the financial community and business
partners – while creating a sustainable foundation for the delivery of safe service to our customers in the years ahead,” said Richard Kelly, Chair of the PG&E Board of Directors.

The bankruptcy announcement and Williams’ departure comes as PG&E is facing a financial crisis. Its market value has plunged since November’s Camp Fire, which devastated the town of Paradise and surrounding areas in
Butte County.

Damage from that blaze, the state’s deadliest ever, and from 2017’s Tubbs fire that caused major damage in Santa Rosa and other parts of Sonoma, Napa and Lake counties, could lead to the company being liable for up to $30 billion.

PG&E has started the search for a permanent CEO, but Richard C. Kelly, board chairman of PG&E, on Sunday said Simon is the man for the moment.

“We believe John is the right interim leader for the company while we work to identify a new CEO,” Kelly said in a statement. “Our search is focused on extensive operational and safety expertise, and the Board is committed to further change at PG&E.”

Simon has served as PG&E’s executive vice president and general counsel since 2017, and has been with the company since 2007, serving in several management roles.

Williams had also been with PG&E since 2007. In 2017, she made $991,667 in base pay and $7,600,410 in total compensation.

She has resigned from the boards of both PG&E and its holding company.

Cellophane January 14, 2019 at 2:32 PM

Gosh, I think this has happened before.

PG&E gets protection from debts, Sr. Management gets millions in bonuses, rates go up like a rocket.

Perhaps PG&E will get the contract to collect the tax on the air we breathe.

WC January 14, 2019 at 2:37 PM

All their getting Sacramento and the PUC to let them skate on things has finally caught up to them. About time. Too bad it took some tragedies.

RunnerDope January 14, 2019 at 3:09 PM

>> In 2017, she made $991,667 in base pay and $7,600,410 in total compensation.

What do you expect for a measly $7.6M?

Lights out January 14, 2019 at 3:28 PM

BOOM BOOM BOOM, TURN OUT THE LIGHTS!!!

Dorothy January 14, 2019 at 3:41 PM

All executive officers should have resigned. All of the board should have resigned. The company should be at least 2 separate companies, one of gas and one for electricity. Maybe a 3rd for renewable s. And the stockholders should be told no dividends until further notice.

PG&E used to be one of the kinds of companies that were used for “widows and orphans” investments. I did once own some shares until the explosion of the gas line a few years back and realized this was no longer the kind of company I want.

S January 14, 2019 at 4:33 PM

they stopped dividends at least 2 quarters back… if you have stock know; unless you can really benefit from the loss write off, hold on to your shares…. worst case is you still take a loss that you already have… but remember, last bankruptcy the stocks later split and small fortunes were made. still better odds than keno at the casino… Just food for thought.

The Fractionator January 14, 2019 at 5:17 PM

Another dodge to avoid paying future law suites due to the poor people who lost everything during the fires. They’ll expect another bail out from Calif. Tax Payers and or Calif. State Government which is the same as getting bailed out by tax payers.

Randy January 14, 2019 at 5:24 PM

Their insurance will make them whole. It shouldn’t be a windfall to get rich quick.

The Grant January 15, 2019 at 10:41 AM

PG&E only has an $800mm limit for its insurance.

Estimated liabilities for 2017 and 2018 total $30bn.

Cash on hand of $1.5bn and they are missing an interest payment today of $22mm on their 2040 bonds.

Ven Xeter January 14, 2019 at 5:53 PM

The estimates I’ve seen are $30 billion to cover liabilities from the wildfires. Of course if PG&E doesn’t pay this, the California tax payer will. Low and behold our state politicians have a once in a lifetime opportunity to get the Feds to bail this out. If the California Democratic congressman and senators unite with an offer of $30 billion in fed bailout money in return for their votes for border security, it allows both sides to save face and actually do some good. Considering the alternatives, I think even the most America hating progressive would go for this deal.

Bob January 15, 2019 at 1:34 AM

Clearly you dont understand progressives.

mtzman January 15, 2019 at 7:45 AM

So now we’re looking at $35.7 billion up front for the wall, not counting the actual cost of the wall. Yeah, that should work …

THE ANIMAL January 14, 2019 at 5:54 PM

My stocks (2500 shares) that I inherited sure have tanked since I got them in 2013………………………………

Mailma January 14, 2019 at 7:20 PM

Your not alone

Barney R January 14, 2019 at 8:45 PM

Ouch, losing 100k in 5 years hurts. But it’s only on paper, maybe it’l recover before you need the money. Damn it went 50% in the toilet just today.
We lost 800k+ on paper just in October, but it’s all back now so don’t despair too much. The market will always go back up.

Barney R January 14, 2019 at 7:00 PM

I really feel sorry for the dumbo’s that still held their pge stock.

Paradise January 14, 2019 at 11:09 PM

Please remember all of the Paradise people that lost their lives and those that lost their homes and personal property.

The Fearless Spectator January 14, 2019 at 7:09 PM

Blackrock, T. Rowe Price, and Vanguard own a combined 107 Million shares of PG & E stock. If you own mutual funds or have a 401K, there is a reasonable chance you have some exposure to this stock.
If a mutual fund manager sells this stock, it will likely trigger capital gains tax and a simultaneous loss on the stock for assets held outside of retirement accounts. It’s probably a good time to research the individual holdings of mutual funds you own.

Original G January 14, 2019 at 8:16 PM

For profit companies are expected by politicians to PAY campaign contributions.

Pacific Gas & Electric
Contributions to politicians $8,337,232 since 1998.
Money spent on Lobbying $147,140,000 since 1998.
https://www.opensecrets.org/orgs/summary.php?id=D000000290&cycle=A

DVC Student January 15, 2019 at 11:31 AM

BUY STOCK

When PG&AE claimed bankruptcy in 2001, their stock was at $7.70 and within 3 years it was back up to $30, then in 2017 it was at $70.

Buy now when it’s cheap. It’ll go back up!

Original G January 15, 2019 at 1:16 PM

Guessing you are under 25 which Is a good thing, means will have ample time to recover from bad investment choices.
Please educate yourself, there are many online resources available.

One thing to keep in mind, “The first $100,000 is the hardest.”

The Fearless Spectator January 15, 2019 at 6:20 PM

It’s great anytime young people take an interest in investing.

DVC Student January 15, 2019 at 8:27 PM

Original G:

How about explain it to me with specifics of what not to do or what to look out for?

Original G January 15, 2019 at 10:08 PM

IF you are still in your twenties or younger, start by meeting with at least three fee based financial planners, as to your goals and at what age you’d like to retire and how much money you will need to save monthly to achieve your goal.

Pick a few stocks that interest you then track them, find using EXCEL program useful. Is easy to create formulas to calculate long and short term tax liability as well as percent gain. For each stock you pick figure number of shares a fictional $10,000 would buy then track what the stock does and what happens to the fictional money. Write down your reasons for buying then why and when you’d sell an see how you do.

A couple of stocks I follow as of today’s close are up 76.4% and 75.5% so far this year after having done nothing for better than a year. Not about to get into specifics as that might be viewed as investment advice and that gets into legal issues.

Thing about retirement is ya kinda shouldn’t screw it up OR your golden years could be spent under a couple of golden arches asking

“would you like to super size those fries?”

DVC Student January 16, 2019 at 12:35 AM

THANK YOU SO MUCH!

Can you list the names of reputable fee-based financial planning firms?
Maybe list 5, please?

Also, is it good or bad to buy PG&E stock when it’s so low right now? Don’t you think they’ll be saved & the stock will go back up?

Thank you again for those details.

The Fearless Spectator January 16, 2019 at 10:55 AM

There are more than 200 financial advisors in Walnut Creek alone. Some are fee based, some commission, and some give you a choice. Talk to older friends who have invested well; they will be happy to refer you to their advisor for an intro. Once you make a few friends, consider interning for an advisor or broker/dealer firm, that will really accelerate your learning curve.

Anon January 15, 2019 at 12:28 PM

The Chapter 11 is so that suppliers continue to do business with PG&E. How Sad to see the rats jumping ship.

Interesting how Insurance companies require earthquake shut off devices for peoples gas lines (not a pge part), and then you had Kidde and First Alert get laws passed to require Carbon Monoxide detectors in all dwellings.

PG&E responds to 1,000s of calls per month for people who have dead batteries in carbon monoxide detectors or they somehow bumped into their gas earthquake device, maybe they can send a bill to those companies? You do the math.

Whoe Jim January 15, 2019 at 9:33 PM

Wow! What a conundrum P.G.&E is in at this point, they have elected to file chapter 11 to protect their money which should be obviously paid to the people of our state which have suffered from the many fires and devastation caused by their inadequate safety measures. Their lawyers have directed them to cease and desist. Greedy cowards they are…. Let me guess…
The PUC, and other government agencies will give them another free pass to allow them to continue on… Another shocker, our bills will go up again……

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