Feb 3, 2019 - Energy & Environment

Corporations' bankruptcy dodge

Illustration of a dollar bill as a flag being lowered and then raised as a white flag of surrender.

Illustration: Aïda Amer/Axios

If you're an executive who doesn't feel like making tough decisions about corporate priorities — like PG&E's potential climate liabilities or Citgo's Venezuela ties — there's always an alternative: file for bankruptcy.

My thought bubble: These problems are not what America's bankruptcy regime was designed to solve. Bankruptcy is messy and expensive; what's more, judges don't tend to make great corporate executives. But it's easy to see why an executive holding a hot potato might be tempted to pass it on to someone — anyone — else.


  • PG&E, the solvent California utility, filed for Chapter 11 protection this week, citing assets of $71.4 billion and liabilities of $51.7 billion. PG&E no longer needs to pay out money to the victims of the devastating Camp fire; instead, it gets to punt all decisions about how much those individuals will receive to the bankruptcy judge.
  • Citgo, the oil refiner owned by Venezuela, is also reportedly considering bankruptcy, even though it is so valuable that it is the crown jewel of Venezuela's foreign assets. (Citgo denies the report.) Filing for bankruptcy would stop the refiner's executives from having to choose which Venezuelan president they are loyal to. A judge, instead, would need to make all ownership determinations.

Go deeper: PG&E employees are bracing for bankruptcy fallout

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