That's ridiculous. Broadly, there's nothing preventing California from seizing PG&E's assets as partial compensation for the company's past behavior. Thus the state of California could run PG&E as public utility pretty quickly if it wished and then charge whatever rates it felt appropriate, making up costs with taxes or not.
The main thing that would happen is PG&E shareholders and possibly bondholders lose their investment, high paid private executives and consultants are fired and the savings to the state.
Nothing besides the fact that the state has no interest in running a power company? They could have nationalized it long ago if they wanted to.
Bankruptcy will indeed prevent that.
Bankruptcy sets a legally-defined priority of creditors, and prevents execution of judgements (it doesn't stop them being found liable and establishing a debt, but it does prevent execution of the judgement, i.e., by seizing assets to satisfy the debt.)
> you have to liquidate (almost) all of you assets.
Sure, California could bid on the assets.
Their negligence will be our problem either way. The only solution that effects justice is to confiscate the company from shareholders entirely.
And I'm not saying this from a "privatized profit/socialized loss" argument standpoint. I'm saying it from a "nearly everyone is some electric utility's customer, so when you find the utility liable, the customers (i.e. everyone) ends up paying for it somehow".
If the state assumed stewardship of the grid, the liability would still go to customers through either rates or taxes. So at that point, what we're really discussing, is how you feel about/how does fully public ownership of an electric utility fare relative to a regulated private entity replete with executive compensation and capitalistic motivations?
Once you hit up the utility for all the money you can get, either you ditch the grid altogether, or everyone using the grid is going to end up paying for most of it in one way or another. Who knows, maybe California will decide to try some grand gridless experiment. But the options are limited.