Take the Money and Run

PG&E claims their bailout bonds scheme will protect victims and ratepayers. That simply isn’t true. The bailout is clearly designed to benefit their shareholders.

The bonding scheme is ALL about increasing PG&E’s stock price. When PG&E sought bankruptcy to protect their corporate interests, most of the company’s stock was bought by Wall Street hedge funds (such as Abrams Capital, Redwood Capital and Knighthead Capital to name a few) in hopes of making a quick buck. That is what Wall Street hedge funds do, which is why they are often called “vulture- capitalists.” These Wall Street vultures hope that by taking on massive amounts of additional debt they can clear their liabilities, pay nothing and increase their stock price. The only thing policymakers can count on is that they will take the profits and run, long before the mountains of debt begin to come due. Don’t be fooled. PG&E has a long and not-so-distinguished record of misleading regulators, failed trust, lethal incompetence, and leaving innocent victims in their tracks.

Legislators would be wise to avoid becoming the next victims and look foolish when the vultures take the money and fly the coop.