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PG&E Corp., the biggest U.S. power utility, said today that it is preparing to file for chapter 11 protection for all of its businesses as it faces potentially crushing liabilities linked to catastrophic wildfires in 2017 and 2018, Reuters reported. PG&E faces widespread litigation, government investigations and liabilities that could potentially reach $30 billion, according to the company, accounting for damage from fires last year and in 2017. PG&E said that it planned to file for bankruptcy protection around Jan. 29, and was giving employees a 15-day notice to employees to comply with California law. PG&E said yesterday that its chief executive officer was leaving and being replaced by General Counsel John Simon on an interim basis. The utility holding company said it did not see any impact to electric or natural gas services for its customers as a result of a bankruptcy.

The Archdiocese of Agana (Guam) is expected to file for chapter 11 reorganization on Wednesday, Jan. 16, the Pacific Daily News reported. The archdiocese has been listed as a defendant in about 200 sex abuse lawsuits in local and federal court. Last year it announced it would file chapter 11 bankruptcy. That allows the archdiocese to reorganize and pay clergy sex abuse claims using existing assets and insurance money, while still maintaining the operations of its parishes, schools and soup kitchen. The plaintiffs on Guam demand at least $1 billion in combined damages, not including cases that call for damages to be determined at trial. The archdiocese's assets are nowhere near that amount even if it succeeds in selling 41 assets that include the former Accion Hotel in Yona and the Chancery. Those assets for sale do not include Catholic schools and parishes. Officials have said that the bankruptcy plan will combine mediation, independent counseling for victims, and not challenging the validity of each of the sex abuse claims.

Fyre Festival was canceled shortly after concertgoers arrived at the failed music festival. Now, lawyers working on behalf of creditors want to scrutinize money festival organizers paid for performances and appearances that never occurred, WSJ Pro Bankruptcy reported. Bankruptcy Judge Martin Glenn of the U.S. Bankruptcy Court in New York has, according to a Jan. 3 order, given lawyers permission to serve subpoenas on talent agencies that attorneys believe were paid more than $1.4 million to get models and artists to promote, perform or show up at the much-hyped 2017 event in the Bahamas. The attempt to gain insight into these payments was made by a court-appointed bankruptcy trustee who is tasked with examining the company used to promote the event, Fyre Festival LLC. Creditors forced the company into bankruptcy in hopes that a court proceeding would reveal where their money went. Planned over two weekend and promoted as “the cultural experience of the decade,” concertgoers were instead greeted by a logistical fiasco that was abruptly canceled after photos of the unfinished event space, bad food and frustrated concertgoers went viral on social media.

As concerns about PG&E Corp.’s financial health spiral, California Governor Gavin Newsom (D) signaled that he’ll deal with the troubles plaguing the state’s largest utility as one of his first tasks in office, Bloomberg News reported. In his only public comments on the company since his inauguration, Newsom said that he’s working on PG&E matters “in real time” and is in talks with state energy regulators, members of the previous administration and incoming staff “to address the solvency” of the utility. PG&E investors are looking for any signs that state leaders are working to prevent a bankruptcy of the utility in the face of massive costs from deadly wildfires. The San Francisco-based company’s shares have plunged 28 percent in the past two days and its bonds dropped to all-time lows as concerns about its outlook deepen. The turmoil extended into Tuesday after S&P Global Ratings slashed the company’s credit grade to junk status, citing its limited options for managing its liabilities.

USA Gymnastics is asking a U.S. Bankruptcy Court to approve $88,000 in holiday bonuses to its employees, including national teams manager Amy White, the Orange County (Calif.) Register reported. White, who allegedly acting on the orders of then USA Gymnastics chief executive Steve Penny removed from the Karolyi Ranch documents relevant to law enforcement investigations of former U.S. Olympic and national team physician Larry Nassar, is one of 40 employees USA Gymnastics wants to pay annual bonuses to. USA Gymnastics, facing dozens of civil suits filed by more than 220 survivors of Nassar’s sexual abuse as well as decertification by the U.S. Olympic Committee, filed for chapter 11 protection with the U.S. Bankruptcy Court’s Southern District of Indiana on Dec. 5.

Toyota is recalling 1.7 million vehicles in North America to replace potentially deadly Takata front passenger air bag inflators, Bloomberg News reported. The move announced yesterday includes 1.3 million vehicles in the U.S. and is part of the largest series of automotive recalls in the nation's history. Takata inflators can explode with too much force and hurl shrapnel into drivers and passengers. At least 23 people have been killed worldwide and hundreds have been injured. The recall covers Toyota models including the 2010 through 2016 4Runner, the 2010 through 2013 Corolla and Matrix, and the 2011 through 2014 Sienna. Also covered are Lexus models including the 2010 through 2012 ES 350, the 2010 through 2017 GX 460, the 2010 through 2015 IS 250C and 350C, the 2010 through 2013 IS 250 and 350 and the 2010 through 2014 IS-F. The 2010 through 2015 Scion XB also is included. Toyota's recall is part of a phased-in replacement of Takata inflators. Automakers are scheduled to replace 10 million starting this month. Ford and Honda have already announced recalls. The recalls forced Takata of Japan to seek bankruptcy protection and sell most of its assets to pay for the fixes.

Fiat Chrysler Automobiles has agreed to pay nearly $650 million to settle lawsuits over its use of illegal engine-control software on diesel vehicles that produced false results on emissions tests, the New York Times reported. The Justice Department sued the company in 2017 over the Environmental Protection Agency’s finding that it had used illegal software that turned off pollution controls under certain driving conditions. The EPA contended that the software enabled the vehicles to pass emissions tests while allowing them to release higher levels of pollutants in normal driving. The settlement, which is expected to be announced on today, includes no admission of guilt by Fiat Chrysler or an EPA finding of wrongdoing. The company will pay $305 million in penalties to the federal government and to the State of California, which also brought suit. As part of the agreement, Fiat Chrysler will recall about 104,000 diesel-powered Ram 1500 trucks and Jeep Grand Cherokee sport utility vehicles from the 2014, 2015 and 2016 model years.

Detroit could have been on the hook for millions of dollars in a lawsuit alleging police abuse. Lawyers, however, are closing the case after eight years, acknowledging that the claims of possibly 200,000 people are practically worthless due to Detroit’s 2013 bankruptcy, the Associated Press reported. The 2010 lawsuit, which described poor conditions in holding cells and excessive detentions, was in progress when Detroit became the largest U.S. city to seek protection from creditors. The city eventually emerged with a clean balance sheet, a robust downtown and a national buzz among millennials. But a new, flush Detroit doesn’t mean a windfall for people who won the class-action case. Instead, they would need to get in line like other creditors because the lawsuit was pending during the bankruptcy. Attorneys worked on a settlement with the city but concluded it wasn’t practical: A $1,000 recovery per person could be worth as little as $40 — and paid over many years.

The Archdiocese of Portland was the first to do it. Three months later the Roman Catholic Diocese in Tucson, Ariz., followed suit and three months after that the diocese in Spokane, Wash., did it, too. They all filed for bankruptcy and since then more than 15 other Catholic dioceses and religious orders have filed for bankruptcy to seek protection from lawsuits by sexual-assault victims, resulting in about 4,000 claims seeking compensation for past wrongdoing, the Wall Street Journal reported. This year, three more Catholic dioceses announced intentions to file. Now the legal strategy is being adopted beyond religious groups. This month, USA Gymnastics filed for bankruptcy protection and the Boy Scouts of America hired bankruptcy lawyers to explore the option. Both groups are grappling with the legal and financial fallout of sexual-abuse claims. “There is an expectation in the restructuring community that we will see more of these types of chapter 11 filings,” said Adam Paul, a lawyer with Kirkland & Ellis LLP who specializes in mass tort bankruptcies. Pioneered by the Catholic Church, the legal strategy uses the law that protects companies from creditors to help preserve its mission and shield assets from claims made by victims of sexual abuse. Filing for chapter 11 freezes lawsuits and provides breathing room to work out a plan to compensate abuse victims. Victims get a collective voice and a guaranteed seat at the negotiating table, and at the end of a bankruptcy a diocese gets a fresh start, free from liabilities tied to past abuse. A federal judge oversees the proceeding and must sign off on the final payment plan.

A judge yesterday allowed the criminal case against Harvey Weinstein to continue, clearing the way for the disgraced filmmaker to face a trial in Manhattan, the Wall Street Journal reported. Weinstein is charged with sex crimes, including rape, in state Supreme Court in Manhattan. The case, brought by the Manhattan district attorney’s office, consists of five counts related to alleged incidents with two different women in 2006 and 2013. Weinstein has pleaded not guilty and repeatedly denied all allegations of nonconsensual sex. In October, Justice James Burke tossed one count, related to an alleged 2004 incident with then-aspiring actress Lucia Evans, after prosecutors disclosed a conflicting witness account. This left five counts remaining in the case. Weinstein’s lawyers had asked the judge to toss the rest of the case, claiming that the grand jury didn’t hear certain evidence and that a detective involved in the case didn’t disclose some information to prosecutors. In a written ruling yesterday, the judge said the grand jury proceedings were properly conducted. Judge Burke scheduled a hearing on March 7 to discuss pretrial matters.