(Reuters) - PG&E Corp’s shares and bonds fell sharply for a second day on Tuesday, as a failure to make interest payments by the California power utility added to investor nerves following the company’s plans to seek Chapter 11 bankruptcy protection.

FILE PHOTO: PG&E works on power lines to repair damage caused by the Camp Fire in Paradise, California, U.S. November 21, 2018. REUTERS/Elijah Nouvelage/File Photo

The state’s biggest private utility’s shares have lost 71 percent of their value since the start of January, when the company began exploring options for protection from claims its equipment was responsible for California’s catastrophic wildfire in November.

PG&E’s shares lost 52 percent of their value on Monday after the company said it was preparing to file for Chapter 11 protection, and they closed down 18 percent on Tuesday.

PG&E missed interest payment of about $21.6 million of its 2040 bond due Tuesday, per regulatory filing and the company said it has a 30-day grace period to make the interest payment.

California politicians are in a quandary over whether to offer a bailout or risk allowing the state’s largest private utility to fail.

Governor Gavin Newsom, a Democrat, told reporters late on Monday his team was discussing the possibility of helping PG&E stay solvent, but no decisions had been made.

PG&E said on Tuesday that Rothschild Inc banker Roger Kimmel had resigned from the company’s board, adding only that the resignation did not involve any disagreement on any matter relating to its operations.

Rothschild did not respond to a Reuters request for comment.

PG&E, which provides electricity and natural gas to 16 million customers in northern and central California, faces widespread litigation, government investigations and liabilities that could potentially exceed $30 billion due to the fires.

The company’s chances of emerging from bankruptcy proceedings hinge in part on an arcane California legal rule that threatens to keep it perpetually on the hook for liabilities from catastrophic wildfires.

The doctrine, known as “inverse condemnation”, exposes utilities in the state to liabilities from wildfires regardless of their negligence, as long as their equipment is involved.

That legal rule could keep PG&E exposed to additional liabilities from future fires and leave the company stuck in bankruptcy limbo, according to restructuring experts and people familiar with the matter.

Still, analysts from Chicago-based brokerage Morningstar, said in a note to clients that this was one of the rare cases where shares could emerge from the process with some value.

“The most likely near-term scenario is a fourth-quarter 2018 accounting charge that cuts PG&E’s book equity well below its allowed regulatory capital structure,” they said.

“Our new fair value estimate for PG&E is $11 per share after considering possible bankruptcy scenarios.”