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In PG&E Bankruptcy, Another Judge May Play Key Role - ABI

Now that PG&E Corp. has filed for protection from its creditors because of California wildfire liabilities, all eyes are on the bankruptcy court. But another federal judge may wind up playing a prominent role in the case, WSJ Pro Bankruptcy reported. Judge William Alsup of the U.S. District Court for the Northern District of California oversees a criminal case involving PG&E, which is on federal probation after being found guilty of violating the Pipeline Safety Act in connection with a natural gas pipeline explosion that killed eight people in San Bruno, Calif., in 2010. Judge Alsup is set to hear whether the utility violated its probation in that case — and whether he should impose tougher safety restrictions on the company — after the state found its electrical equipment sparked more than a dozen California wildfires in recent years. Judge Alsup has the authority to intervene in the chapter 11 bankruptcy case, which is being overseen by U.S. Bankruptcy Court Judge Dennis Montali. Some observers believe he will do just that. “They could sell tickets for that,” said one former PG&E executive, who noted that Judge Alsup has shown intense interest in protecting the public from PG&E safety lapses. While it would be unusual for a U.S. district court judge to take an active role in a bankruptcy case, it isn’t without precedent. U.S. district judges have the power to issue a “withdrawal of reference” and take back cases, in whole or in part, from bankruptcy courts at any time.

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