"There is overwhelming evidence that PG&E is solvent," hedge fund BlueMountain Capital Management said in an open letter . "We simply cannot recall a situation where such a valuable company filed for bankruptcy with such blatant questions about the necessity of doing so."
Facing pressure from people who lost their homes in the fire and regulators, PG&E shares have lost more than half their value since the end of 2018, prompting the utility to seek bankruptcy protection as it feared a massive charge related to billions in costs associated with the wildfire, Reuters reported on January 4 10 days before PG&E announced its bankruptcy plan.
But BlueMountain says the decision to file for bankruptcy is not in the best interests of all stakeholders.
"A Chapter 11 filing while PG&E is solvent is an utter abdication of this duty," the letter reads.
"It may appear easier for Board members to file for Chapter 11 shifting the burden of dealing with the myriad issues that will face the Board and placing it squarely on the shoulders of the Bankruptcy Court and the companies advisors but it will destroy value for the Company and in particular its shareholders the only groups to which you owe a duty."
PG&E was down 85% since the California wildfire, and are trading near $7.40 a share early Thursday.
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