Todd A. Feinsmith, a partner and co-chair of Pepper Hamilton’s Corporate Restructuring and Bankruptcy Practice Group, was quoted in the January 14, 2019 Los Angeles Times article, "PG&E to File for Bankruptcy as Wildfire Costs Hit $30 Billion. Its Stock Plunges 52 Percent."
Todd Feinsmith, co-chair of the bankruptcy practice at the law firm Pepper Hamilton, said the fires' victims probably would be unsecured creditors and thus in lower standing than secured creditors, such as banks, that have loans to PG&E that are secured, or backed by the utility's collateral, and certain bondholders.
As a result, it's possible that "a special fund would be set up with the goal of compensating the victims," he said.
PG&E might well do that and otherwise reorganize on its own, but there's also the possibility that an outside suitor will try to buy the utility. "It would not be surprising at all if the company is sold to a third party in the bankruptcy proceedings," Feinsmith said.
One reason: Under bankruptcy law, a buyer often can buy the bankrupt company's assets without having to assume its debts, he said.
If a sale happens, "there would be cash proceeds from the sale and those proceeds would become distributable to the creditors, including the fire victims," Feinsmith said.