PG & E DECLARES BANKRUPTCY. PG & E DECLARES BANKRUPTCY. A California Public Utilities Commission official said on a conference call hosted by Bank of America Corp. in November that the agency doesn’t want PG&E to go bankrupt, shares soared.
PG&E said in a securities filing Monday that it concluded state assistance would take years—too long to avoid a bankruptcy proceeding. California Gov. Gavin Newsom, who took office this month, said he would work with state lawmakers “throughout the months ahead” on a solution but didn’t say he would try to prevent a bankruptcy filing.
Unlike in most states, California utilities can be found liable if their equipment contributed to a fire, regardless of negligence.
Some hedge funds began buying into PG&E in late 2017 after the wine-country fires introduced uncertainty around the company and drove down its stock price. By the third quarter of 2018—the most recent quarter for which such data is available—PG&E was one of the hedge-fund industry’s most widely held stocks. About 19% of PG&E stock was held by hedge funds
Some viewed the risk of another major wildfire in 2018 as low or believed the state would bail out the utility if a major blaze occurred, traders said.
It turns out they were VERY wrong. Major learning lesson-don't trust regulators, hedge funds, or the belief that share price will return to the highs. T
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