Bankrupt California utility PG&E (NYSE:PCG) has agreed to plead guilty to 84 counts of involuntary manslaughter and one count of unlawfully causing a fire related to the 2018 Camp Fire, clearing a key hurdle in the company's effort to emerge from bankruptcy court protection this year.
PG&E filed for bankruptcy in January 2019 to deal with an estimated $30 billion in liabilities stemming from the Camp Fire, among the deadliest in California history. While in many cases a bankruptcy filing is game over for equity holders, the utility's plan of reorganization envisions common shares retaining some of their value upon emergence.
Over the last year, the company has worked out deals with a number of key creditor groups, and hopes to emerge from bankruptcy protection midyear. Resolving these charges will clear one of the remaining lingering issues related to the Camp Fire.
"The action we took today is an important step in taking responsibility for the past and working to create a better future for all concerned," PG&E CEO Bill Johnson said in a statement. "We want wildfire victims, our customers, our regulators and leaders to know that the lessons we learned from the Camp Fire remain a driving force for us to transform this company."
As part of the agreement, PG&E must pay the maximum $3.5 million fine in addition to $500,000 to the Butte County District Attorney Environmental and Consumer Protection Trust Fund to cover costs related to the investigation of the fire. The deal is subject to approval by the Butte County Superior Court, as well as the federal bankruptcy court overseeing PG&E's case.
PG&E previously reached settlements with all groups of victims from wildfires in 2015, 2017, and 2018, totaling approximately $25.5 billion.
Shares of PG&E traded up 10% on Monday following the announcement. The shares lost more than half of their value in 2019.