Report: Bankruptcy legal costs reach $84 million for PG&E

Photo Credit: David Tran Photo/Shutterstock.com as originally reported by The Recorder.

Photo Credit: David Tran Photo/Shutterstock.com as originally reported by The Recorder.

Legal costs associated with Northern California wildfires and a natural gas explosion total $84 million, based on a January bankruptcy filing, according to court filings reviewed by The Recorder.

“Four outside law firms have billed Pacific Gas and Electric Co. at least $84 million for legal services related to the company’s January bankruptcy filing,” the April 2 article at law.com reports. “The utility company disclosed its legal spend in a series of court filings last month, as it sought approval from U.S. Bankruptcy Judge Dennis Montali to continue employing the law firms.”

PG&E listed more than $50 billion in estimated liabilities, the article notes.

“PG&E has hired Chicago-based Jenner & Block as special corporate defense counsel for state and federal regulatory matters during the Chapter 11 proceedings,” The Recorder reports. “Jenner & Block is also handling a criminal case involving PG&E, connected to a natural gas explosion that occurred in the city of San Bruno, California, in September 2010. According to the March 15 court filing, PG&E has paid the firm $3.57 million during the year leading up to the Chapter 11 filing. San Francisco based Keller & Benvenutti is also representing PG&E in bankruptcy court. Since May 2018, the firm has advised PG&E on legal and financial matters regarding potential liabilities resulting from 2017 and 2018 Northern California wildfires.”

Georgia-Pacific affiliate files for bankruptcy amid asbestos claims

Georgia-Pacific Tower in Atlanta. Photo Credit: Connor.carey  from Wikimedia Commons

Georgia-Pacific Tower in Atlanta. Photo Credit: Connor.carey from Wikimedia Commons

An affiliate of Georgia-Pacific LLC, Bestwall LLC, has announced that it filed a voluntary petition for Chapter 11 bankruptcy relief in the Western District of North Carolina.

In a summary, Reuters reported, “Bestwall LLC’s parent company is firing back at allegations that the joint compound maker’s Chapter 11 bankruptcy is a bad-faith sham aimed at avoiding asbestos claims, instead arguing the case is ‘entirely consistent with both the spirit and the letter of the bankruptcy process.’”

Last year the company announced, “Bestwall intends to seek court authority to establish a trust under Section 524(g) of the U.S. Bankruptcy Code to ensure that all individuals with current and future asbestos claims are treated fairly.”

Georgia-Pacific states it will continue to operate as usual.

“Today’s filing by Bestwall has no impact on Georgia-Pacific’s business operations, nor does it affect our 35,000 employees and 25,000 vendors who serve more than 15,000 customers globally,” said Tyler Woolson, senior vice president and chief financial officer of Georgia-Pacific.

Georgia-Pacific produces tissue, pulp, paper, packaging and building products.

Pensions Next Target For Cutbacks?

Courthouse workers and other public employees should take notice of a Detroit judge’s ruling that public employee pensions are just contracts, not really guarantees at all. If that ruling is upheld on appeal, it means that funds like the California Public Employee Pension System are not as protected as many thought. In effect, the judge is saying that federal laws trump state assurances.
 
The Press-Democrat newspaper in Sonoma County is among those offering analysis of the decision, writing in an editorial that “… to cover soaring retirement costs, which in some places are approaching 50 cents on every payroll dollar, cities and counties in California and across the country have laid off workers and slashed spending on parks, street maintenance and other public services. A handful have filed under Chapter 9 of the federal bankruptcy code; others are weighing the possibility”
 
You already see pensions at issue in the high-profile San Bernardino bankruptcy debate. You also hear whispers that, should public employee pensions be questioned, the issue could be real leverage in the next round of budget negotiations. Read the Press-Democrat editorial, which outlines the issue pretty well, here.