What happened

Shares of PG&E (PCG -7.52%) lost 54.2% of their value in 2019, according to data provided by S&P Global Market Intelligence, vastly underperforming the S&P 500. Considering that the California-based utility filed for bankruptcy early in the year, investors are fortunate the stock didn't fall further.

PCG vs. S&P 500 data by YCharts.

So what

PG&E filed for bankruptcy in January to deal with an estimated $30 billion in liabilities stemming from the 2018 Camp Fire in Northern California. In many cases, that's the end of the story for equity holders, with shares often wiped out as part of the reorganization process. However, from the beginning, PG&E built its reorganization plan around the common shares retaining some value upon emergence.

Image source: Getty Images.

There have been a lot of ups and downs along the way. The judge overseeing the case in October ruled that creditors could file a rival plan of reorganization, one that would not be so friendly to shareholders. That caused PG&E to scramble to win backing from some key creditor groups, including wildfire victims.

In December, California Governor Gavin Newsom voiced his own concerns related to governance and accountability, calling into question whether PG&E would be able to eventually access a state-managed fund being set up to help utilities handle future wildfire claims.

Now what

PG&E remains in bankruptcy protection. The company appears on track to reorganize using its own shareholder-friendly plan, but creditor groups remain opposed, and further twists are possible.

If things go according to plan, there's at least the possibility that the shares have some room to run prior to the company's emergence. But as we saw in 2019, things seldom go as planned during bankruptcy. And PG&E management might decide in the months to come to give creditors a bigger piece of the equity pie or take other actions that would eat into the value of individual shares in order to ensure a smooth exit from bankruptcy.

Long-term shareholders are not likely to be made whole regardless of what happens, with PG&E shares down more than 80% over the past three years. We're finally moving toward the closing chapters of the PG&E bankruptcy saga, but investors should probably avoid the stock until the reorganization is complete.