Publications
Publications
- December 2020
- HBS Case Collection
PG&E and the First Climate Change Bankruptcy
By: Stuart C. Gilson and Sarah L. Abbott
Abstract
In early 2020, the California-based utility PG&E filed a second amended plan of reorganization. PG&E had filed for Chapter 11 bankruptcy in the face of more than $30 billion of legal claims brought against it for its alleged role in causing California wildfires. The plan had the support of key creditors and shareholders and a court-appointed committee representing the wildfire victims. However, it faced strong opposition from California’s governor, Gavin Newsom, who was concerned that PG&E’s plan would leave it too highly leveraged, and unable to make necessary investments. Were Newsom’s concerns valid ones? Did the plan as currently envisioned leave the reorganized PG&E with too much debt to meet its obligations to the wildfire victims while still making the necessary investments to update its equipment? And was PG&E prepared for the new reality of climate change?
Keywords
Chapter 11; Utilities; Liabilities; Restructuring; Insolvency And Bankruptcy; Debt Securities; Legal Liability; Climate Change; Utilities Industry; United States
Citation
Gilson, Stuart C., and Sarah L. Abbott. "PG&E and the First Climate Change Bankruptcy." Harvard Business School Case 221-057, December 2020.
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