question: How can a utility like PG & E that functions as a monopoly declare bankruptcy? How will their liabilities for the wildfires be paid out?
comment: They file bankruptcy like any other business. Their liabilities exceed their ability to pay so they're bankrupt, and they file the necessary paperwork and through the court work out with the people they owe money to how to resolve the debt. It's important to understand Chapter 11 bankruptcy doesn't mean your debts just disappear.
passages: Facing potential liabilities of $30 billion from the wildfire, the electrical utility that was responsible for the transmission line suspected of sparking the wildfire, Pacific Gas and Electric (PG&E), on January 14, 2019, began the process of filing for bankruptcy with a 15-day notice of intention to file for bankruptcy protection. Because fire survivors are unsecured creditors with the same priority as bondholders, they will only be paid in proportion to their claim size if anything is left after secured and priority claims are paid; it nearly ensures that they will not get paid. On January 29, 2019 PG&E Corporation, the parent corporation of PG&E, filed for bankruptcy protection.
   On January 14, 2019 PG&E announced that it was filing for Chapter 11 bankruptcy in response to the financial challenges associated with the catastrophic wildfires that occurred in Northern California in 2017 and 2018.
  
  On January 15, 2019 PG&E does not intend to make the interest payment of $21.6 million with respect to its outstanding 5.40% Senior Notes due January 15, 2040 which is worth $800 million. Under the indenture the company has a 30-day grace period (expired on February 14, 2019) to make the interest payment before triggering an event of default.
   The volume of insurance claims overwhelmed Merced Property and Casualty Company, a small insurer founded in 1906, to the point of insolvency (policyholders' surplus $25 million). In response to a notice given by the company, the California Department of Insurance reviewed and then placed it into liquidation. This allows the California Insurance Guarantee Association, a state guaranty association, to cover claims. The Department of Insurance will continue with a review of all insurers with a domicile in California so to determine the exposure of each to Camp Fire losses. An estimate by the "Los Angeles Times" of Merced Property and Casualty Company's assets and reinsurance shows that they would only be able to cover 150 homes out of the 14,000 homes destroyed in a region where they were one of the only companies that still provided fire insurance policies despite the region being categorized as a high fire-hazard severity zone by the California Department of Forestry and Fire Protection. This is the only known instance of an insurance company becoming insolvent from a single event.
   The crisis cost PG&E and the state somewhere between $40 and $45 billion. There is some evidence that this crisis played an important part in the eventual recall of California Governor Gray Davis.
  
  PG&E Company, the utility, emerged from bankruptcy in April 2004, after paying $10.2 billion to its hundreds of creditors. As part of the reorganization, PG&E's 5.1 million electricity customers will have to pay above-market prices for several years to cancel the debt.
  
  Section::::History.:2019 bankruptcy.
   A filing by PG&E to the judge overseeing PG&E's probation for the 2010 San Bruno fire said that the Tubbs Fire may have started with privately owned equipment on private property for which PG&E was not responsible.
  
  Section::::Fires.:Nuns Fire.
   Following the fire, multiple fire victims sued PG&E and its parent company in San Francisco County Superior Court before a definite cause had been determined, accusing PG&E of failure to properly maintain its infrastructure and equipment. In mid-May 2019, California state investigators announced that PG&E was responsible for the fire. The Cal Fire report was sent to the Butte County District Attorney Mike Ramsey.
  
  Section::::Response.
  
  Section::::Response.:First responders.
   According to Cbonds, the company has 32 bond issues overall and their outstanding amount is approximately equal to 17.469 billion US dollars. PG&E expects procedures to take two years. In April as the bondholders crafted a plan to bring the company out of bankruptcy, Governor Gavin Newsom expressed his concern that a new board members would have little knowledge of California and lack expertise in how to run a utility safely.
  
  In April 2019, PG&E announced a new CEO and management team that would be in charge of the company as it went through bankruptcy. 
  
  Section::::Generation portfolio.
   Before they declared bankruptcy, Pacific Gas & Electric Company (PG&E) purchased surety bonds from Travelers, an insurance company. The bonds obliged Travelers to settle debts PG&E couldn't repay. When PG&E filed a voluntary Chapter 11 bankruptcy petition on April 6, 2001 as a result of the California electricity crisis, Travelers hired attorneys to protect its interests. California law mandated that PG&E cover all attorney fees incurred by Travelers during state court proceedings. The litigation later moved to federal court, where PG&E refused to pay for Travelers' federal court expenses, claiming they were only responsible for fees incurred during state court proceedings.
   On January 14, 2019, PG&E announced that it was filing for Chapter 11 bankruptcy in response to the financial challenges associated with the catastrophic wildfires that occurred in Northern California in 2017 and 2018.
  
  Section::::History.
  
  Section::::History.:Early history.
  
  Section::::History.:Early history.:San Francisco Gas.
  
  In the 1850s, manufactured gas was introduced in the United States as a means of lighting. Gasworks were built in the larger eastern American cities, but there was no gas industry in the West, however. In San Francisco, street lighting was available only on Merchant Street, in the form of oil lamps.
   Following a July 29, 2008 "Final Order" from the US Bankruptcy Judge Richard Schmidt, the way cleared for MRC to take control of the once storied, then vilified, and, finally, bankrupt Pacific Lumber Company in Humboldt County, California from Maxxam Inc. of Texas. The final dispensation of the bankruptcy, which had been ongoing since January 2007, began the transfer of PALCO's buildings, mill, and of Humboldt forest to MRC. The company town of Scotia and other properties were transferred to Marathon Structured Finance.
  
  Section::::Humboldt.
   The order of liquidation triggered the established statutory provisions of various state insurance guaranty funds, who took over the handling of many of the claims against the company's policies. Whether a state's guaranty association will assume responsibility for a given claim depends on several factors, notably whether the insurance company was licensed to do business in the state and whether there exists other insurance for the loss. The amount of assets of the policyholder, the date the claim is reported, and other variables also play a role in determining whether a guaranty fund will accept the claim. Claims payments made by a guaranty association are assessed against insurers licensed to do business in the state, who will ultimately pass along the cost to their policyholders. By almost any measurement, Reliance was the largest insurance liquidation in history:
   BULLET::::- Ceres Environmental Services (aka Environmental & Demolition Services Group), Sarasota, FL: Remove debris from areas outside the town of Paradise ($263 million).
  
  BULLET::::- Tetra Tech, Pasadena, CA: Test soils for contamination ($250 million). Note that parent company Tetra Tech EC faked soil tests in Bayview–Hunters Point, San Francisco; two company supervisors were sentenced to prison.
  
  BULLET::::- Offhaul contracts went to several local sites which avoided the need for rail offhaul to out of state sites:
  
  BULLET::::- Waste Management; Anderson, CA: Contaminated demolition, such as ash, debris, and soil.
   In 2017, PG&E settled a shareholder class action lawsuit alleging "gross mismanagement" by agreeing to have its insurance company pay PG&E $90 million, and to budget $32 million for safety and governance improvements.
  
  Section::::Media coverage.
   PG&E Company (the utility, not the holding company) entered bankruptcy under Chapter 11 on April 6, 2001. The state of California tried to bail out the utility and provide power to PG&E's 5.1 million customers under the same rules that required the state to buy electricity at market rate high cost to meet demand and sell it at lower fixed price, and as a result, the state also lost significant amounts of money.
   The California Department of Forestry and Fire Protection and state utility regulators investigated Pacific Gas and Electric Company (PG&E) to determine if they complied with state laws in the areas burned in the fire. The "Associated Press" noted the fire started near a property where PG&E detected sparks on the day before its outbreak. PG&E is a convicted felon due to a gas pipeline explosion in 2010 and is on probation which means penalties for subsequent crimes are enhanced. PG&E also reported damage to the Caribou-Palermo transmission line 15 minutes before flames were first reported under the wires; the same line was previously damaged in a windstorm in December 2012.
   In September 2013, PG&E settled the claims of 347 victims.  PG&E had previously settled with 152 victims; the additional settlements brought the total payment to $565 million for 499 victims. Two victims' lawsuits remained after the settlement, but newspapers later reported the $565 million figure as the final settlement for all victim claims. PG&E stated in its 2015 annual report that it had paid $558 million in third-party claims, and $92 million in legal costs, and received $515 million from insurance.
  
  Section::::Litigation.:State of California.
   Soon after Chain's death, it was revealed that the California Department of Forestry & Fire Protection had charged Pacific Lumber with at least 250 violations of the California Forest Practice Act between 1995 and 1997. These violations continued to accumulate in 1998, and in November of that year, Pacific Lumber became the first company ever to lose its logging license in California.
   On December 12, 2015, Industrial Assets Corp. and Maynards Industries held a public auction sale on behalf of the Chapter 7 Bankruptcy Estate at the Distribution Centre in Riverside, CA 
  
  Section::::Environmental goals.
   In February 2017, Mississippi Attorney General Jim Hood announced he had filed civil cases for damages and punitive damages against 11 corporations and individuals who had engaged in contracts with the MDOC and Epps. He said that state law required the companies and consultants to pay back the value of their contracts.
  
  Section::::Personal.:Legal issues.
   Combined, the conditions formed a recipe for a firestorm, a Cal Fire report noted, "When the fire reached the town of Paradise, an urban firestorm began to spread from building to building, independent of vegetation." It was compared to the July 27, 1943, Royal Air Force bombing that caused a firestorm that consumed Hamburg, Germany, and killed an estimated 42,600 people, wounding 37,000 more."
  
  Section::::Timeline.
  
  Pacific Gas and Electric Company (PG&E) notified customers for two days before Nov. 8 that it might shut down power due to a forecast of high winds and low humidity. However, ultimately, PG&E did not.
   Section::::Litigation.:Settlement.
  
  A trial began in Guam Superior Court on February 13, 2012. After six years of litigation on Guam, a settlement was reached on May 11. The GEDCA Board of Directors approved Laing's offer of $350,000 in place of paying back the original $800,000 guarantee. The agreement stipulated that Laing would make a payment of $250,000 on June 30, with the remainder paid by September 30.
   Pursuant to a confirmed plan of reorganization, Rincon continues to operate the state leases, subject to the continuing jurisdiction of the Bankruptcy Court. Compass Bank, the principal creditor of RILP, held a first priority lien on the assets of RILP, the stock of RILP's managing general partner, Windsor, and the partner's equity interest in RILP.
   By January 13, a Kanawha County judge had granted a temporary restraining order against Freedom Industries, and the number of lawsuits filed in the Kanawha County Circuit Court had risen to 19. On January 17, 2014, Freedom Industries filed for Chapter 11 bankruptcy, requiring a court–appointed trustee to run the company.
   Despite years of fuel reduction funded by special fees, numerous wildfires ravaged wildland-urban communities. Investigations found that PG&E powerline failures during high winds caused many of the fires. Utilities have the power to disable power lines, and PG&E shut off power following the 2017 North Bay fires. A policy it adopted subsequent to the North Bay fires precluded shutting off lines carrying more than 115kV due to the number of customers who would be negatively impacted by such a shutdown.
  
  Section::::Background.:Infrastructure oversight inspection.
   More than 10,000 firefighters battled the blaze, using more than 1000 fire engines and other equipment, with crews arriving from as far away as Canada and Australia.
  
  Pacific Gas and Electric Company (PG&E) reported mobilizing 4,300 workers to restore power. It also said that more than 350,000 customers had lost electric service and 42,000 customers gas service since the wildfires began on October 8. By October 14, PG&E had restored electricity to 92% and gas service to 16,800 of the customers affected.
  
presuppositions: PG&E can't declare bankruptcy because they have liabilities.  A utility company declares bankruptcy through a unique process different from other companies.
corrections: Bankruptcy doesn't make your liabilities go awy.  A utility companies declares bankruptcy just as any other company does.
raw_presuppositions: PG&E can't declare bankruptcy because they have liabilities.  A utility company declares bankruptcy through a unique process different from other companies.
raw_corrections: Bankruptcy doesn't make your liabilities go awy.  A utility companies declares bankruptcy just as any other company does.