As reported by Business Insurance, excess liability insurers and reinsurers from the United States, London and Bermuda markets are among those named in a standard court motion to maintain insurance lodged by Pacific Gas & Electric Co. as part of its filing for bankruptcy protection Tuesday.
An application to maintain insurance coverage is standard in a bankruptcy filing and “one of the critical motions that have to be teed up for hearing because the debtor needs to continue his normal business operations immediately and needs approval from the bankruptcy court to do that,” according to Dennis Nolan, a shareholder in the New York office of Anderson Kill P.C. and co-chair of the firm’s bankruptcy group.
“You could have a situation where a catastrophic event occurs that could cripple the company’s ability to reorganize,” said Mr. Nolan. “If something like that happens to PG&E, the financial consequences if they didn’t have insurance that could respond would be catastrophic.”
Read More: Broad swath of excess insurers, reinsurers named in PG&E bankruptcy filing