SAN FRANCISCO (KPIX) — A multi-billion-dollar liability due to devastating wildfires plunged utility giant Pacific Gas and Electric into bankruptcy. Today, the battle for the company’s future isn’t being fought in actual flames but with internet burns pitting shareholders against bondholders.
“This is an unprecedented level of fighting between different groups that are looking to own this company when it leaves bankruptcy,” said UC Hastings bankruptcy law professor Jared Ellias.
A tweet from a public relations firm representing shareholders Thursday morning suggested the bondholders were going to raid the company’s value, leaving customers with the lights out and PG&E employees out of work.
Ellias says that argument is absurd.
“The idea that you could somehow run the company into the ground and suck all of the value out of it is kind of like fantasy.” He says, unlike the banks, the utility is actually too big to fail.
“If Goldman Sachs were to fail tomorrow, I’d still be able to access my checking account. If PG&E were to fail, I wouldn’t have the power to go on the computer to access my checking account.”
San Jose mayor Sam Liccardo discussed more about a plan being kicked around by various municipalities to buy PG&E’s grid and run it themselves.
“We are also here to announce that 114 elected leaders — mayors, supervisors, council members throughout northern and central California — have signed on supporting this customer-owned utility,” Liccardo said in a press availability Thursday.
Ellias says it’s all sound bites at this point because the plan — a third option — hasn’t been brought before the bankruptcy judge in PG&E’s case.
“They have yet to present that concept to Judge Montalli. Something that I would warn them is this train is leaving the station. Your fight right now is between the bondholders and the shareholders, who have put ideas on the table to get this company out of bankruptcy. If you want to have a third idea, you really have to get into the mix.”