On June 30, 2020, Governor Newsom signed Senate Bill 350 (“SB 350”), which is intended to serve as a backstop for customers as Pacific Gas and Electric Company (“PG&E”) completes its restructuring process and begins implementing the reorganization plan recently confirmed by the United States Bankruptcy Court.

On November 27, 2019, U.S. Bankruptcy Judge Dennis Montali issued a Memorandum Decision on Inverse Condemnation (“Memorandum Decision”) in PG&E Corporation and Pacific Gas & Electric’s (together, “PG&E”) Chapter 11 Bankruptcy proceeding in the U.S. Bankruptcy Court for the Northern District of California (Case No. 19-30088).

Pursuant to 11 U.S.C. § 365, a debtor or bankruptcy trustee has the option, subject to court approval, of electing one of the following three alternatives with respect to an executory contract: (a) assuming the contract, (b) assuming and assigning the contract to a third party, or (c) rejecting the contract. Assumption of the contract, or assumption and assignment results in the agreement remaining in effect post-bankruptcy.

In a February 4, 2015 opinion, the bankruptcy judge presiding over Stockton, California's Chapter 9 municipal bankruptcy case approved Stockton's bankruptcy plan of adjustment. 

The rate of bankruptcies among construction industry participants is higher than some think.  The bankruptcy of a developer creates an “automatic stay” under federal law preventing almost all collection activities, including actions to perfect a lien.