MIAMI – Shares of the bankrupt company in California
PG & E
(PCG) rises, but this investor says it is based on false hope.
George Schulce, the founder of an upset investor, Schultze Asset Management, who manages about $ 200 million, says he has already won the short-listed shares of a utility company that filed for protection against bankruptcy 11 on Tuesday.
This would make sense: PG & E shares have fallen by 40% this year and dropped nearly 70% since the start of the fires. And shareholders are paid last in bankruptcy, behind bondholders, attorneys and in this case the victims of fires. But the shares of PG & E jumped after filing the request, based on what Schulze says is wrongly set aside for rescue. (The shares fell by 4% on Thursday)
"99.75% of the cases, shareholders do not get anything when the company goes bankrupt," says Schultz at at the Conference Conference Conference in Miami. "But there is a false hope that this time it will not be. A key part of these speculations is that you have to accept that the California Legislature and the California Public Service Commission will help you. And there is such a dislike for this type of deal. "
The destruction caused by the recent Fire Fire is too big and too political – 86 people were killed, thousands of acres were devastated, thousands of structures were destroyed. "So, politically, it is much harder than most cases to provide a restoration to all shareholders," he says.
Of the shares, "Our thesis is that it will go to zero," he says.
A PG & E spokesman said the company did not comment on rumors or speculation on the market.
Schulz says his motives are backed by some moments of a recent hearing in the CCPC, where members of the Democratic Socialists of America have proposed the government to take over. California's "reverse conviction" rule means that the state can hold fire-related investment utilities that their equipment has helped start even if the company has not been negligent. This is mitigated in part by the state law passed last year, which facilitates utilities to transfer fire costs to solvent tariffs, and in some cases allows utilities to issue bills to cover costs. This means that solvent people, rather than shareholders, are likely to pay for liabilities related to last year's Fire Camp.
Judge William Alsop, who chaired a criminal verdict against PG & E from a pipeline explosion in 2010, stressed that the company had paid $ 4.5 billion in dividend dividends to its shareholders in the past five years. This money could be used to cut trees that could help curb or prevent fires, the judge said.
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