San Francisco Also Drops $5B PG&E Lawsuit

Legacy litigation from Pacific Gas & Electric’s 2001 bankruptcy was terminated last week. The City and County of San Francisco dropped its filing against PG&E and its parent company that attempted to recover about $5 billion in financial gains from dividends and stock repurchases the municipality alleged the utility transferred to its parent organization before declaring bankruptcy. A similar lawsuit was dismissed March 10 filed by the State Attorney General against the utility for sending $5 billion of utility profits to the parent corporation. The state and San Francisco lawsuits worked in tandem. The attorney general alleged that PG&E’s upstreaming of funds and subsequent refusal to bail out the utility during the 2000-01 crisis constituted unfair or fraudulent business acts in violation of Section 17200 of the state Business and Professions Code and conditions established by the California Public Utilities Commission. According to a PG&E Securities & Exchange Commission filing, the parties “jointly requested that the complaint be dismissed.” According to bankruptcy experts, if the lawsuits had prevailed, refunding money to the state and the municipality would have been a new burden on ratepayers’ pocketbooks. The $5 billion vanished into accounting during the 2000-01 energy crisis.

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San Francisco Also Drops $5B PG&E Lawsuit

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