Shares of embattled California utility Pacific Gas & Electric (PCG) - Get Report plunged on Monday after a judge ruled that a jury should determine whether it should pay as much as $18 billion in damages to victims of the 2017 devasting "Tubbs" wildfire.
Shares of PG&E slumped nearly 28% to $10.29 on Monday after U.S. Bankruptcy Judge Dennis Montali on Friday lifted a freeze on lawsuits tied to the 2017 Tubbs fire, which killed 22 people and destroyed more than 5,600 structures in Sonoma and Napa counties. The move opens the door for victims pursuing claims against PG&E to start preparing for a trial.
In a separate ruling, Montali sided with the utility and rejected requests from two groups of creditors who wanted to propose their own ways to restructure the company. Montali said opening up the bankruptcy to competing plans at this point would have led to "expensive, lengthy and uncertain disputes" that wouldn't benefit the fire victims.
PG&E has outlined its plan to exit the biggest utility bankruptcy in U.S. history, promising to largely protect the value of its shares. The company said it plans to file the proposal by Sept. 9. Fire officials have ruled the utility did not cause the 2017 Tubbs fire, concluding it was sparked by a private electrical system outside a home near Calistoga. However, attorneys for a group of victims and insurance companies that paid damages have disputed the state's findings in bankruptcy court papers.
California fire investigators in May did determine that the 2018 so-called Camp Fire, which killed 85 people and destroyed Paradise, Calif., was caused by equipment from PG&E.
PG&E last week reported a wider second-quarter net loss, even as adjusted results beat analysts' estimates. The San Francisco company reported a loss of $4.83 a share, wider than a year-earlier loss of $1.91. Adjusted earnings were $1.10 a share vs. $1.16.