Good Assurance

The latest business news for the Property & Casualty insurance industry

PG & E shares dive 30% on possible bankruptcy reports • Good Assurance

Hours after NPR reported PG & E, a struggling California company, suspected the sale of its natural gas division could pay fines of up to billions of dollars if its equipment caused the deadly and destructive fires in southern and northern California to end of last year and in 2017, Reuters followed by a report that the company was weighing up a (further) bankruptcy for all or part of its business in order to protect itself from what could be billions of dollars in fines.

The report sent public service shares plummeting 27% into late-day trading, bringing them back to their lowest level in 15 years reached in November.

While the bankruptcy filing – which would be the second for the company after a similar sequence of events left the company that filed the Chapter 11 filing in 2011 – is far from secure, it is one of many measures under study because the company is preparing for fines that can far exceed its insurance coverage, as well as dozens of lawsuits from victims affected by fires. California lawmakers could still bail out this service, which could pass legislation allowing it to pass fire costs on to its customers.

PGE

The company is considering the move as a reserve, in part because it will soon assume a significant financial expense for the fourth quarter of 2018 related to fire liabilities.

A bankruptcy filing is not certain, sources said. The company could receive financial assistance through legislation allowing it to pass on to customers the costs of liability in the event of a fire, the sources said. But as this is only a possibility, they said, preparations for bankruptcy are underway.

In another sign that bankruptcy would not be his first choice, Reuters said that on Friday the company had decided to no longer arrange a DIP loan – a measure usually taken before the bankruptcy filing. However, the mere fact of considering such an option should be enough to scare off what remains of very few stock investors, PG & E.

The news is the latest shock to PG & E's shareholders after the company announced in November that it expected its fourth-quarter profits to weigh heavily on the profits generated by the related legal fires. Camp and Woolsey fires, which killed at least 86 people and destroyed 18,500 homes. and cremated most of the city of Paradise, located at the foot of the Sierra.

The company said in November that it could face "significant liability" beyond its insurance coverage if its investigators decided that its equipment was actually causing the fires.

Meanwhile, in addition to PG & E's shareholders, the other biggest losers are Californian citizens, whose utility costs are now virtually assured – either through a mandatory pre-funding reserve of PCG, or by any monopoly of public services. go up the bill because the guests have no other alternative.

PG & E shares dive 30% on possible bankruptcy reports • Good Assurance

Hours after NPR reported PG & E, a struggling California company, suspected the sale of its natural gas division could pay fines of up to billions of dollars if its equipment caused the deadly and destructive fires in southern and northern California to end of last year and in 2017, Reuters followed by a report that the company was weighing up a (further) bankruptcy for all or part of its business in order to protect itself from what could be billions of dollars in fines.

The report sent public service shares plummeting 27% into late-day trading, bringing them back to their lowest level in 15 years reached in November.

While the bankruptcy filing – which would be the second for the company after a similar sequence of events left the company that filed the Chapter 11 filing in 2011 – is far from secure, it is one of many measures under study because the company is preparing for fines that can far exceed its insurance coverage, as well as dozens of lawsuits from victims affected by fires. California lawmakers could still bail out this service, which could pass legislation allowing it to pass fire costs on to its customers.

PGE

The company is considering the move as a reserve, in part because it will soon assume a significant financial expense for the fourth quarter of 2018 related to fire liabilities.

A bankruptcy filing is not certain, sources said. The company could receive financial assistance through legislation allowing it to pass on to customers the costs of liability in the event of a fire, the sources said. But as this is only a possibility, they said, preparations for bankruptcy are underway.

In another sign that bankruptcy would not be his first choice, Reuters said that on Friday the company had decided to no longer arrange a DIP loan – a measure usually taken before the bankruptcy filing. However, the mere fact of considering such an option should be enough to scare off what remains of very few stock investors, PG & E.

The news is the latest shock to PG & E's shareholders after the company announced in November that it expected its fourth-quarter profits to weigh heavily on the profits generated by the related legal fires. Camp and Woolsey fires, which killed at least 86 people and destroyed 18,500 homes. and cremated most of the city of Paradise, located at the foot of the Sierra.

The company said in November that it could face "significant liability" beyond its insurance coverage if its investigators decided that its equipment was actually causing the fires.

Meanwhile, in addition to PG & E's shareholders, the other biggest losers are Californian citizens, whose utility costs are now virtually assured – either through a mandatory pre-funding reserve of PCG, or by any monopoly of public services. go up the bill because the guests have no other alternative.

© 2019 Good Assurance — Powered by WordPress

Theme by Anders NorenUp ↑