What happened
S Shares of PG&E (NYSE:PCG) traded up more than 15% at 1:15 p.m. EST Wednesday on talk that the bankrupt utility is nearing a deal to compensate wildfire victims. If a deal is reached, it would improve the chances that PG&E will retain control of its reorganization, which in turn would make it more likely that current equity holders won't be wiped out in the process.
So what
PG&E filed for bankruptcy protection in January, attempting to manage an estimated $30 billion in liabilities stemming from the 2018 Camp fire in Northern California. Although equity holders are often wiped out in a bankruptcy reorganization, shares of PG&E have continued to trade on the hope that the company will preserve some value for shareholders as part of its reorganization plan.
That assumption has come under pressure in recent months, following complaints from wildfire victims and creditors that they were not being adequately compensated. In October, the court allowed creditors to file competing reorganization plans, a move that could cost PG&E control of how it exits bankruptcy.
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