Anat R. Admati reviews Unjust Debts: How Our Bankruptcy System Makes America More Unequal (2024) by Melissa B. Jacoby.
My local utility, Pacific Gas and Electric (PG&E), filed for Chapter 11 bankruptcy in early 2019 to preempt lawsuits related to multiple wildfires involving its aged equipment. Shortly after it emerged from bankruptcy in July 2020, a victim of a 2017 fire who had previously sued PG&E for damages and became an “unsecured creditor” in the bankruptcy told me about the opaque court process and the outcomes it produced. I was flabbergasted. Tens of thousands of victims seeking to recover from the devastation of the fires ended up with claims against a trust that owned 25% of PG&E shares, inefficiently bearing…