Estimating PG&E's wildfire liability at Distressed Investing 2019

In the history of insolvency, there are few companies more distressed than California’s largest utility, Pacific Gas & Electric (PCG:NYSE).

PG&E’s previous bankruptcy in 2001 is still the 11th largest corporate bankruptcy by assets in American history. But it will move down at least one notch as its second bankruptcy displaces Enron for the sixth spot with over $68 billion in assets.

Uncertainty abound as shareholders compete with bondholders over the terms of the restructuring, and new wildfires have prompted a public call to bring the company under government control. As the ground continues to shift, one of the biggest variables for how to value PG&E is how much money it will have to pay for property damage, injuries and deaths from wildfires caused by its equipment.

Pacific Gas & Electric recently reached a settlement with insurance companies worth $11 billion for its liability in 2018 wildfires that killed 85 people and destroyed thousands of homes. That provides something of a roadmap for the pending litigation to settle, but there is still enough uncertainty for there to be a spread between current prices and the real value of the company’s securities.

At the 26th Annual Distressed Investing Conference, four veterans from litigation finance, financial advisory, credit rating and bankruptcy law will present their methodologies in estimating PG&E’s wildfire liabilities.

Emily Slater of Burford Capital has assessed thousands of cases and underwritten hundreds of millions in legal finance investments across a broad range of practice areas.

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Philip W. Smyth is a Senior Managing Director at Fitch Ratings, responsible for credit analysis and ratings for U.S. electric utilities. 

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Arik Van Zandt of Alvarez & Marsal specializes in the valuation of businesses for purposes of litigation support, acquisitions and more, and performs economic analysis for personal injury claims, wrongful termination and wrongful death actions.

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The panel will be moderated by Edward S. Weisfelner, a partner in Brown Rudnick’s Bankruptcy and Corporate Restructuring practice with 35 years of experience including representing plaintiffs in litigation against General Motors for its ignition switch defect during its 2009 bankruptcy.

These experts will provide an outline for you to value not only the securities of PG&E, but other distressed companies facing complex legal liabilities.

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