PG&E shareholder BlueMountain says bankruptcy filing would be ‘utter abdication’ of duty to shareholders
PG&E Corp. shareholder BlueMountain Capital Management LLC, said Thursday PG&E is “solvent,” and therefore believes a bankruptcy filing would be damaging, avoidable and unnecessary. “There is overwhelming evidence that PG&E is solvent,” BlueMountain said in a letter to PG&E’s board of directors. “We simply cannot recall a situation where such a valuable company filed for bankruptcy with such blatant questions about the necessity to do so.” PG&E said Monday it planned to file for bankruptcy on or about Jan. 29, citing mounting potential liability costs related to its role in the California wildfires. BlueMountain, a $5.5 billion asset manager that owned 4.3 million PG&E shares at the end of September, said a Chapter 11 filing would be an “utter abdication” of its duty to act in the best interest of the company and its shareholders. “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’s stock, which rose 6.7% in premarket trade, has plunged 86% over the past three months through Wednesday, while the S&P 500 has slipped 6.9%.