Los Angeles Times - 21.09.2019

C2 LATIMES.COM/BUSINESS

BUSINESS BEAT

PG&E Corp. bondhold-
ers and wildfire victims have
teamed up to offer a compet-
ing bankruptcy recovery
plan for the California utility
that would all but wipe out
its stockholders.
If a judge lets the coali-
tion’s plan go forward,
PG&E could lose control of
the bankruptcy and its own
reorganization plan, which
envisions letting stockhold-
ers keep a significant stake.
PG&E shares slid 4.9%
on Friday. Earlier in the day
they were down more than
10%.
The bondholders — in-
cluding Elliott Management
Corp. and Pacific Invest-
ment Management Co. —
and the committee repre-
senting fire victims said
their new proposal includes
a $24-billion settlement to
pay all claims from fires
blamed on PG&E’s equip-
ment. That’s billions of dol-
lars more than PG&E, which

is the parent of Pacific Gas &

Electric, has offered to those

who lost loved ones and

homes in some of the most

destructive fires in Califor-

nia history.

The proposal, filed

Thursday, adds new com-

plexity to the biggest utility

bankruptcy in U.S. history.

The creditors and wildfire

victims are seeking to end

the San Francisco-based

company’s exclusive right to

come up with a plan so they

can put forth their own.

It’s unusual for a com-

pany in bankruptcy to lose

that priority, and Judge

Dennis Montali rejected an

earlier effort to supplant

PG&E. But this time the co-

alition “likely has a good

shot at ending the utility’s

control,” said Negisa Bal-

luku, a litigation analyst at

Bloomberg Intelligence.

“The competing plan may

more efficiently solve the

case’s key objective of com-

pensating wildfire victims,”

she wrote in a new report.

The group’s proposal

“represents a path forward

that recognizes the victims’

losses and puts their inter-

ests ahead of shareholders,”

Robert Julian, an attorney

for the official committee

representing fire victims,

said in a statement. PG&E

rejected the idea and af-

firmed support for its own

proposal.

“The bondholders’ plan

is an attempt to pay them-

selves more than they are

entitled to under the law,”

Lynsey Paulo, a PG&E

spokeswoman, said by

email. “Our plan of reorgani-

zation sets forth a frame-

work to meet PG&E’s legal

obligations in full while pri-

oritizing victims and cus-

tomers.”

Montali denied the previ-

ous request last month from

Elliott and the other bond-

holders to make competing

proposals, calling them “a

feast for lawyers, accoun-

tants, investment bankers

and others.” In that Aug. 16

decision, Montali worried ri-

val proposals would spawn

litigation fights that “have

little or nothing to do with

compensating victims.”

Until that August ruling,

Montali hinted that he

would end PG&E’s exclusive

right to develop a plan to pay

fire victims and the other

creditors. On Friday, Mon-

tali set a hearing for Oct. 8 to

decide whether to allow the

new, competing proposal to

go forward, rejecting a re-

quest by the official commit-

tee and bondholders for a

much quicker than normal

schedule.

PG&E filed for Chapter 1 1

bankruptcy protection in

January in the face of an esti-

mated $30 billion or more in

liabilities from wildfires.

Under PG&E’s reorganiza-

tion plan, claims from indi-

vidual wildfire victims would

be capped at $8.4 billion,

while insurers or insurance

claim holders would get $

billion under a settlement

announced last week.

The new bondholder

proposal offers $28.4 billion

in new money in exchange

for 58.8% of the equity in the

reorganized PG&E. Under

an earlier proposal, cred-

itors had offered financing in

exchange for an 85%

to 95% stake in the new com-

pany.

A $24-billion wildfire

trust fund would be set up

and financed through

$12 billion in cash and $12 bil-

lion in stock, according to

the filing. The trust would

have a 39.5% stake in PG&E.

Overall, the creditor group

and the trust would end up

with a combined 98.3% of the

equity in PG&E.

PG&E bondholders, fire victims offer rival plan

Proposal would hit

stockholders hard and

could end the utility’s

ability to control path

out of bankruptcy.

bloomberg

DEMONSTRATORSat PG&E headquarters in San Francisco in December de-

mand the utility be held accountable for the Camp fire in Paradise in November.

Justin SullivanGetty Images

Walmart Inc. will stop
selling e-cigarettes in its U.S.
locations as the country
grapples with a string of vap-
ing-related deaths.
“Given the growing fed-
eral, state and local regula-
tory complexity and uncer-
tainty regarding e-ciga-
rettes, we plan to discontin-
ue the sale of electronic

nicotine delivery products

at all Walmart and Sam’s

Club U.S. locations,” it said

in a statement. “We will com-

plete our exit after selling

through current inventory.”

The decision comes after

the Centers for Disease Con-

trol and Prevention said this

week that 530 people have

fallen ill from a mysterious

vaping-related lung disease.

Eight people have died, two

of them in California. Offi-

cials still haven’t deter-

mined a cause of the ail-

ment, and there didn’t ap-

pear to be one particular

product or substance in-

volved. Cases have been

identified in 38 states.

The e-cigarette removal

marks at least the third time

this year that Walmart Chief

Executive Doug McMillon

has thrown his company’s

considerable heft behind a

big issue. In June, he urged

Congress to boost the na-

tional minimum wage, and

he recently promised to stop

selling bullets for assault-

style weapons and re-

quested that customers not

openly carry firearms in the

company’s more than 4,

U.S. stores.

Earlier this year, Wal-

mart stopped selling ciga-

rettes — including electronic

ones — to people under 21.

Cases of the vaping-re-

lated lung disease have been

reported most often in pa-

tients who had vaped prod-

ucts with THC, the key psy-

choactive ingredient in can-

nabis. But some had vaped

both THC and nicotine,

while a small number used

nicotine devices alone.

There are signs the num-

ber of cases in the U.S. is

climbing. On Friday, the

New England Journal of

Medicine published a letter

from researchers at Boston

Children’s Hospital who

identified 908 confirmed and

suspected vaping-related

lung injury cases.

Vaping has also been at

the center of a growing con-

troversy over what U.S.

regulators have described as

an epidemic of underage

use.

Last week, the Trump

administration said it would

take steps to remove almost

all flavored e-cigarette

products from the market,

until and unless those prod-

ucts win approval from the

Food and Drug Administra-

tion.

Convenience store giant

Alimentation Couche-Tard

Inc. — whose chains include

Circle K — said this week

that if policymakers take

draconian measures against

e-cigarettes, that could end

up feeding the black market.

Walmart stock slipped

0.1% on Friday. Shares of Al-

tria Group Inc., the Marl-

boro maker that invested in

e-cigarette giant Juul Labs

Inc. last year, faltered but

then bounced back, closing

with a gain of 1.7%.

Amid deaths, Walmart halts e-cigarette sales

Giant retailer will stop

purchases in U.S. as

the country grapples

with mysterious lung

disease tied to vaping.

bloomberg

Corporate sustainability
efforts are sometimes
framed as acts of altruism —
but for big businesses, pro-
tecting the environment is
often good for the bottom
line.
Nike Inc. has come up
with a way to weave more ef-
ficiently, reducing the raw
material and labor time
needed to make each shoe.
That has kept more than 3.
million pounds of waste
from reaching landfills since

2012. But the good news
      doesn’t stop with the envi-
      ronmental impact. The com-
      pany is spending less on
      transportation, materials
      and waste disposal.
      The shoemaker’s “more
      environmentally conscious
      product has been a source of
      cost savings,” said James
      Duffy, an analyst at Stifel.
      Those flimsy plastic wa-
      ter bottles sold by Nestle?
      The ultra-thin design has a
      smaller effect on the envi-
      ronment while pushing
      down costs associated with
      packaging and shipping.
      Amazon.com Inc. and Wal-
      mart Inc. have poured tens
      of millions of dollars into a
      fund that builds out recy-
      cling infrastructure, reduc-
      ing landfill tipping fees and
      recovering material that
      could be sold as new prod-
      ucts.
      Tech giants have spent
      billions of dollars on solar
      and wind power, cutting
      greenhouse gas emissions
      and energy expenditures at

the same time. Alphabet

Inc.’s Google, Amazon and

Facebook Inc. are now some

of the largest buyers of green

power in America.

Turns out it’s not just

easy being green — it also

can be profitable. “We’ve

moved past this concept

that business versus the en-

vironment is a tradeoff,” said

Tom Murray, who advises

companies on reducing

emissions at the Environ-

mental Defense Fund, in-

cluding Walmart, McDon-

ald’s Corp. and Procter &

Gamble Co. “The business

benefits were always there,

but more and more compa-

nies are going after them.”

The business case for go-

ing green has never been

stronger as companies find

ways to make more from

less. Here’s a look at the

ways corporate America is

making environmentalism

pay.

Lightweight flights cost

less:United Airlines Hold-

ings Inc. has been making its

planes lighter, driving down

fuel use and costs. Airlines

account for almost 2% of

global carbon emissions.

Not even the in-flight maga-

zine has been spared in the

search for unnecessary heft:

Changing to a lighter paper

stock saved almost $300,

per year on fuel. United re-

designed airplane bath-

rooms, switched out bever-

age carts and ended duty-

free sales.

What it pays: United has

saved more than $2 billion

on fuel so far.

Reusing towels saves

more than water:It turns

out that simply asking

guests to hang up towels to

dry and forgo daily sheet

changes can take 25% off ho-

tel operators’ annual energy

costs. “To some surprise

within the hotel industry,

this option was quickly em-

braced by hotel guests as a

small way to engage in ener-

gy conservation,” says a re-

port by the Urban Land In-

stitute. Clarion Partners

does that at all its hotels and

went a step further by reduc-

ing flows through toilets,

faucets and showerheads.

What it pays:Cutting wa-

ter use saves Clarion hotels

about $17,250 a year.

Idle trucks, real money:

Walmart runs one of the big-

gest trucking fleets in the

United States. That means

it has scores of semis stand-

ing in traffic at any given

time. At that scale, the intro-

duction of technology that

reduces energy use when

trucks are idling and soft-

ware that creates more effi-

cient routes can improve fuel

efficiency by 90%, reducing

carbon dioxide emissions.

What it pays:Diesel aver-

ages almost $3 a gallon in the

U.S.

Tech’s green power pay-

off:Google, Facebook and

Amazon are among the larg-

est energy consumers in the

United States, and a lot of

that power is now emission-

free. Each company commit-

ted to getting 100% of its

power for its data centers

from renewable resources

such as wind and solar.

Exxon Mobil signed up to en-

ergize its operations in

Texas with solar and wind

energy starting next year,

which would place the oil

producer among the top 10

buyers.

What it pays:With re-

newables now cheaper than

fossil fuels, these green ener-

gy commitments shave an

estimated 10% off tech gi-

ants’ gargantuan utility bills.

Ditching paper towels is

cheaper:Restaurants, mov-

ie theaters and others have

been making the switch

from paper towels to hand

dryers in their restrooms for

years. Dryers have become

the norm because of the sav-

ings on the cost of paper tow-

els and the expense of send-

ing garbage to the landfill.

Soldier Field, home of the

Chicago Bears, made the

switch and cut carbon emis-

sions by 76% per use.

What it pays:A football

stadium can save more than

$12,000 a year on the cost of

paper towels.

Resold clothes are a

moneymaker: Patagonia

Inc. has been repairing and

recycling clothes since its in-

ception in the 1970s, making

the practice a core part of

the brand’s environmental

image. Two years ago, the

company added incentives

for customers who return

used items that Patagonia

can sell again. This wasn’t

just an act of urgency to keep

clothing out of landfills. A 3-

in-1 Snowshot Jacket that

retails new for about $

was recently listed on Pata-

gonia’s Wornwear website

for $187 to $207, more than

twice the amount paid to

customers in a voucher. “It’s

a profitable business unit,”

said Phil Graves, director of

corporate development at

Patagonia.

What it pays:Each resale

of a high-quality used jacket

can net $100.

Cutting down on plastic:

Nestle has been saving mon-

ey with ever-thinner plastic

bottles, cutting the content

in its half-liters by more than

60% since 1990. That also re-

duces the harmful chemicals

and emissions produced

from making plastic and

saves on transportation

costs. There also has been a

push to use more recycled

material. Nestle recently

started offering a 100% recy-

cled bottle for its Pure Life

water brand. Coca-Cola Inc.

has decided to ditch plastic

altogether for its Dasani line

by pumping water into alu-

minum cans. That switch

will make it easier to recycle

and boost profitability. The

cans weigh less, which cuts

transportation costs.

What it pays:72 cents per

pound of plastic resin.

Martin and Dent write for

Bloomberg.

How companies profit by going green

Sustainability goals

are framed as altruism,

but environmentalism

often is good for the

corporate bottom line.

By Chris Martin
and Millicent Dent

THE BUSINESScase for corporate sustainability has never been stronger as companies find ways to earn

more by using less. Above, a worker walks past a United Airlines plane using aviation biofuel at LAX in June.

Mario TamaGetty Images