PG&E made an announcement that the company will be filing Chapter 11 bankruptcy protection.
Concerns have risen up in the wake of this statement of PG&E regarding how the company will operate.
PG&E’s Filing for Chapter 11 Bankruptcy Protection
This is not the first time when PG&E has filed for bankruptcy. The recent announcement of bankruptcy filing by PG&E is regarding the liabilities of Northern California wildfires in the year 2017 as well as 2018.
PG&E is facing liabilities of $30 billion in lawsuits because of the involvement in the wildfires. This is the 2nd time when PG&E has filed for protection under Chapter 11 in 18 years.
There is still assurance to the customers that PG&E will continue to provide its services of natural gas as well electric services, uninterrupted.
Announcements by PG&E
In the announcement of bankruptcy, PG&E stated that the company does not expect its services of natural gas and electric services will get affected in any way because of the process of Chapter 11.
Because of the filing of Chapter 11 protection against bankruptcy in no way means that PG&E will go out of business. This only means that PG&E is doing restructuring to be able to handle the debt of the company in a better manner.
This restructuring is also for the lawsuit which is impending and will be coming down the pipeline.
PG&E has also made statements that because of the filing for bankruptcy protection, the company does not expect that there will be any effects on the pay of the employees.
Concerns of insolvency of PG&E
As the Chapter 11 protection permits the continuation of the protection therefore there is no such concern that PG&E will shut down during the Chapter 11 process.
After the filing of the Chapter 11 bankruptcy there is uncertainty as to whether PG&E will have to hike its rates. This is in order to avoid insolvency by emerging from bankruptcy of PG&E.
According to the report of Mercury News, after the filing of the Chapter 11 protection there has been a wait and watch approach. This approach is based on the level of the debt in order to see that whether PG&E will emerge from bankruptcy or not.
If the issues of debt could be resolved by PG&E then the company will have to resort to increasing its rates for the customers. This hike in rate by PG&E will have to be approved by Public Utilities Commission of California.
Effects on the Employees of PG&E
In the wake of the filing of Chapter 11, there could be lay-offs done by PG&E. The employees of PG&E will therefore have to be prepared as well watchful regarding this.
There will also be cuts and declines in the unnecessary costs. This might result in the decrease in the pension plans and other benefits which are provided to the employees by PG&E.
