Hedge Funds Have $500 Million Riding on PG&E Paying Bills (1)

Bankrupt utility giant PG&E Corp. owes a lot of money to a lot of businesses. A tree-trimming service. A California car dealership. A laundromat. Construction contractors galore.

Now, hedge funds including Olympus Peak Asset Management LP and Whitebox Advisors LLC are buying up claims vendors have filed against PG&E, aiming to cash in.

In many cases, vendors are recouping around 90 cents on every dollar PG&E owes them. But they’re paid quickly, without having to wait for the bankruptcy process to wrap up. The hedge funds, which can afford to wait, profit on the difference between the amount they pay ...