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Recently I read an article on a PG&E settlement which stated that

PG&E shareholders would pay a $40 million fine and spend another $85 million

Why is the fine being levied on PG&E shareholders? Isn't the owner of a share not supposed to be liable for company debts?

Furthermore, how would this fine be carried out? Is every individual shareholder being sent a bill based on their percent ownership of the company?

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    This seems to be legal question not economics question so I am moving it to the law.se although it is possible the article was talking figuratively not literally a fine on a company will have to be paid from company’s assets (cash). Value of a company depends on its profitability and market value of its assets.
    – 1muflon1
    Nov 5 '21 at 20:46
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They aren’t

The journalist is attributing a payment by the company as a cost to the shareholders.

In accounting terms, that’s a fair equivalency - the shareholder’s equity will fall by the amount of the liability.

In legal terms, it isn’t - the company is a seperate legal entity from the shareholders and a payment by one is not a payment by the other, even though for each shareholder, the value of their shares will change.

However, markets being what they are, the change in value is unlikely to be exactly the same as the amount the company pays, the value may even rise if the market expected the costs to be bigger than they are. They may rise even if the actual costs are bigger than the expectation - markets prefer certainty over uncertainty even in bad news.

Of course, the bulk of the actual cost is likely to be borne by PG&E’s insurers.

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    A distinction for regulated utilities is that the regulator will usually allow the utility to raise rates to recover proper, prudent expenses. They will not be allowed to raise rates to recover the cost of fines, so there will be less money available to pay dividends to shareholders. Nov 6 '21 at 4:09

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