PG&E shares plunge 27% after judge allows Tubbs Fire trial
PG&E Corp. stock tanked more than 27% Monday as investors appeared to grapple with an unfavorable court ruling that could make the company's bankruptcy case much more expensive.
Shares were trading at $10.38, down 27.31%, late Monday morning on Wall Street. The plunge came three days after U.S. Bankruptcy Judge Dennis Montali said a state court trial can decide whether PG&E is responsible for the 2017 Tubbs Fire, the second most destructive wildfire in California history.
The state previously said the fire was caused by privately owned electric equipment. If a jury finds PG&E did cause the fire, it will make the company's bankruptcy billions of dollars costlier than it would be otherwise.
"The operative word here is uncertainty," said Paul Patterson, a utilities analyst for Glenrock Associates, of Montali's decision. "It's not a positive event, but what it actually means financially — I don't know if that can be ascertained at this point. It's clearly what the company wanted to avoid."
This story will be updated.
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