Jun 20, 2020 - Economy

PG&E gains court approval for bankruptcy exit

Orion Rummler

Electric wires and telephone poles on the side of a mountain — Power lines during a PG&E public safety power shutoff in November 2019 in Santa Rosa, California. Photo: Justin Sullivan/Getty Images

Pacific Gas & Electric gained a financial shield on Saturday against roughly $30 billion in liabilities over its involvement in deadly wildfires across California, the New York Times reports.

Why it matters: PG&E's plan to exit bankruptcy, which is now approved by a federal judge, qualifies the company for a wildfire insurance fund that will help cover future claims from fires caused by its equipment.

PG&E pled guilty to 84 counts of involuntary manslaughter for those California residents killed in the California Camp Fire.

Catch up quick: PG&E filed for Chapter 11 bankruptcy last January after facing the estimated billions of dollars in claims. The company agreed to a $13.5 billion settlement with California wildfire victims last December.

What's next: Judge Dennis Montali's approval of PG&E's bankruptcy exit authorizes $13.5 billion in compensation for roughly 70,000 businesses and homeowners affected by fires sparked by PG&E equipment, per the Times.

The company still faces "daunting challenges," per the Times, as PG&E operations "stretch across a 70,000-square-mile service area that appears increasingly vulnerable to wildfires because of climate change. And it is not clear whether the company, which has been repeatedly cited for negligence, is up to the enormous task of making its transmission system safer."

Go deeper: California to open investigation into PG&E for power shutoffs

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PG&E gains court approval for bankruptcy exit

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