California judge rules on complex business litigation

Many California residents and business owners suffered substantial economic damages due to the wildfire sparked by a campfire last November. The fire was one of the most destructive and deadliest ever to occur in the modern world. The tragedy has apparently prompted contentious business litigation as well, and a judge recently ruled that the Federal Energy Regulatory Commission has overstepped its boundaries.

Pacific Gas & Electric Corporation filed for Chapter 11 bankruptcy in the aftermath of the wildfires. PG&E estimated its liabilities in excess of $30 billion. In doing so, approximately 30 power contracts would be rejected. A company who has financial interests in at least eight of those contracts claimed that PG&E cannot reject its power contracts without approval from the Federal Energy Regulatory Commission.

The company opposing PG&E actions also stated that legal disputes over the agreements are subject to  nonbankruptcy federal laws that regulate interstate commerce. However, a U.S. Bankruptcy Court judge in California ruled that the FERC has no jurisdiction over this matter. The judge further ruled that FERC officials are not authorized to interpret bankruptcy law nor to decide whether PG&E can reject its power contracts.

Complex business litigation issues like these can take months, even years to resolve. The best way to protect one's business interests is to rely on experienced advocacy from a California business law attorney. Any business owner or private citizen currently facing contract-related problems may request a consultation to obtain legal guidance and support.


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