BlueMountain Capital Management LLC, a hedge fund with a significant stake in PG&E Corp., has challenged the utility’s board over a plan to resort to bankruptcy to tackle wildfire damages that PG&E estimates could run as high as $30 billion, WSJ Pro Bankruptcy reported. The California utility announced on Monday that it would file for bankruptcy, jolting BlueMountain and other investors that bought up the stock in 2018 before the state’s deadly Camp Fire, which killed 86 people. The utility’s equipment is suspected of having triggered some wildfires. The announcement slammed the already depressed price of PG&E’s shares and bonds. The shares, which were selling for $48.80 just before the Camp Fire broke out in November, fell 9.5 percent to $6.36 yesterday, marking a three-month drop of 87 percent. BlueMountain, which reported owning 4.3 million shares as of Sept. 30, now owns about 11 million shares, according to a person familiar with the firm’s holdings. The hedge fund contends the utility’s board is moving too quickly toward a chapter 11 bankruptcy, destroying value unnecessarily.
