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