Corporations have been facing legal prosecution since as far as American history goes, but rarely do companies end up facing manslaughter charges. While mostly seen in individual cases, Pacific Gas & Electric (NYSE: PCG) made history as one of the few companies to end up pleading guilty to not just one manslaughter charge, but over 80.
While this is a pretty big deal from a legal perspective given the seriousness of the charges leveled against the company, it wasn’t surprising that PG&E chose to plead guilty. The case involves over 1,500 Californian fires that were caused by neglect and mismanagement on the part of the company’s power lines. These fires, one of which being among the biggest in the state’s history, seem to have been the result of the company’s desire to maximize profits ahead of prioritizing potential safety concerns regarding its equipment. After getting hit by over $13.5 billion in fines last November, PG&E ended up filing for bankruptcy earlier this year.
On Tuesday, PG&E officially pleaded guilty to 84 separate counts of manslaughter for its involvement in sparking the deadliest wildfire in the state’s history. CEO Bill Johnson, who was present at the court case, personally pleaded guilty to every single count. The chief executive had joined the company last year and is now stepping down from his role.
“No words from me can ever reduce the magnitude of that devastation or do anything to repair the damage, but I sincerely hope that the actions we’re taking today will help bring some measure of peace,” said Johnson to the court in a statement.
The last big question for the state of the company is whether or not its previously proposed bankruptcy/reorganization plan gets approved by official lawmakers. As it turned out, however, the U.S. Bankruptcy Court in San Francisco ended up doing exactly that, approving the $59 billion or so bankruptcy plan. The goal of this reorganization would involve PG&E taking on a considerable about of new debt in order to pay off the liability claims related to the thousands of wildfires its responsible for causing. Formal approval could take a few more days, however, as the documents still need to be finalized by the judge.
Overall, it’s expected that PG&E will officially enter bankruptcy later this year. However, the various speculators that had predicted the judicial approval of this reorganization plan are now set to make a tidy profit as the markets likely will shoot up a little in response to the news. The long-term prognosis for the company, however, remains entirely negative. In after-hours trading, shares of PG&E are up 1.4%, and it wouldn’t be surprising if shares shoot up even more following this news.
PG&E Company Profile
PG&E is a holding company whose main subsidiary is Pacific Gas and Electric, a regulated utility operating in Central and Northern California that serves 5.3 million electricity customers and 4.4 million gas customers in 47 of the state’s 58 counties. PG&E is operating under bankruptcy court supervision as of January 2019. In 2004, PG&E sold its unregulated assets as part of its postbankruptcy reorganization. – Warrior Trading News
