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Law360 Quotes Kevin Maclay: PG&E Fire Liability Has California Considering Chapter 11 Alternative

August 17, 2018, Law360

As wildfires again ravage swaths of California forests in what has become a deadly summer ritual, the threat of a Pacific Gas and Electric Co. bankruptcy looms over state lawmakers who are hastily debating how to apportion liability for billions of dollars' worth of damage stemming from last year's infernos.

. . .

Entering into Chapter 11 is also not a "magic bullet" that would absolve PG&E of its liabilities to wildfire victims, said Kevin Maclay, a bankruptcy member at Caplin & Drysdale, Chtd. While it can be useful under certain circumstances for a corporation to postpone a resolution of its debts, it is less likely that a large and profitable company like PG&E could eliminate damage payments in bankruptcy, he said.

Maclay recognizes that regulators may feel troubled by the prospect of a bankruptcy court gaining substantial control over a large utility like PG&E, but in the end the company may be the most concerned party because "a lot of the losses caused by the bankruptcy would be borne by its shareholders," he said.

For the full article, please visit Law360’s website (subscription required).

Excerpt taken from the article “PG&E Fire Liability Has California Considering Chapter 11 Alternative” by Alex Wolf for Law360.


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