PG&E Slapped With Shareholder Lawsuit
PG&E has already suffered significant legal troubles in the wake of the 2010 San Bruno pipeline explosion -- the utility company was sued by blast survivors and is expected to pay nearly $600 million in damages. But now, the company's shareholders are suing, too.
A new lawsuit, filed on behalf of Hind Bou-Salman, a San Mateo County resident who has held shares in PG&E for 23 years, alleges that the company's reckless decisions led its shareholders to lose out on profits. The filing is a "shareholder derivative lawsuit," meaning that other shareholders are represented even though Bou-Salman is the main plaintiff.
The suit aims to hold PG&E executives accountable for decisions made prior to the explosion. It alleges that funding which should have been spent on safety was instead mismanaged and that safety expenses were generally avoided. It also alleges that PG&E employees were compensated financially in exchange for not reporting leaks and other safety hazards.
Bou-Salman's attorney in the lawsuit, Mark C. Molumphy, stated, "PG&E and its shareholders are bearing the financial brunt of decisions made by the company's executives. The complaint today alleges that PG&E's executives, not its shareholders, should be held responsible for fostering a corporate culture that minimized the need to address safety and saddled the company with a bill that could exceed $1 billion dollars."
The suit seeks the return of executive bonuses that were issued at a time when PG&E was simultaneously cutting safety budgets. "If nothing else," Molumphy said, "the lawsuit seeks to change the corporate culture at PG&E to make sure this doesn't happen again to another California community."
Read the full lawsuit: