This week, Pacific Gas & Electric (“PG&E”), the state’s largest utility, filed for Chapter 11 bankruptcy protection in the Northern District of California. PG&E claims over $50 billion in assets and $50 billion in liabilities, but has not yet filed the disclosures that identify its contract counterparties, creditors and other business partners who have an interest in its bankruptcy case.
Briefly, in a filing under Chapter 11, the bankrupt, or “debtor,” attempts to work out a court-approved plan with its creditors to enable the debtor to continue operating or to liquidate over time in an orderly manner. As a “debtor in possession,” PG&E will maintain possession and control of its assets while undergoing its reorganization under Chapter 11. Significantly, creditors and other parties with interests in a Chapter 11 case must often move quickly to protect their interests.
PG&E’s bankruptcy will potentially impact members of, among others, the following categories:
- Companies who contract with PG&E to sell and deliver materials, equipment, specially fabricated repair and replacement parts, supplies and other goods and/or services in the ordinary course of business
- Commercial landlords and tenants in unexpired leases of real property with PG&E
- Municipalities and other governmental entities holding damage, environmental and/or tax claims against PG&E
- Entities in pending litigation with PG&E, and/or those holding claims for indemnity
- Energy service providers
- Employees of PG&E who hold claims for unpaid wages
- Those who made unsecured or secured loans or advances to PG&E