The latest attempt of PG&E Corp.’s at fleeing the California policy that imposed the power giant with billions of dollars in wildfire inheritances, pushed it into bankruptcy and moved to the ousting of its chief executive officer has failed. U.S Bankruptcy Judge Dennis Montali on Wednesday sided with wildfire victims, who said PG&E is subject to a legal theory that is known as a converse reproach. That holds utilities strictly responsible for covering the costs of blazes connected to their equipment, unobservant of whether they were negligent. PG&E had discussed that it should not be subject to the rule because investors, not taxpayers, own it. PG&E accused converse reproach of its downfall. California’s utility filed for Chapter 11 while dealing with an estimated $30 billion in liabilities tied to wildfires that its power lines got accused of flaring up in 2017 and 2018. In the world, the state is one of the few places that holds its power companies bound in this way.
The policy has been mentioned as one reason Warren Buffett’s Berkshire Hathaway Energy and other potent PG&E buyers are not making bids. PG&E’s previous CEO, Geisha Williams, past months fighting the theory to no avail and was finally ejected, just weeks before the company submitted for bankruptcy. In deciding PG&E is subject to reverse reproach, Montali destined that the theory is not limited to public agencies and said the California Supreme Court would reach the same perfection. The shares of the company fell 1.3% to $7.45 in after-market trading on Wednesday.
At stake is the swamp for the second-most baleful fire in California history, the 2017 Tubbs fire, which killed more than 20 people and blasted a minimum of 5,600 buildings. Claims could top $10 billion even though CalFire destined that PG&E implements did not flare up the blaze. PG&E had said that reverse reproach was initially improved with government-run agencies in mind. That is a means for them to increase rates or taxes and spread around the costs of an inversion caused by the failure of the water line.