Hedge Funds Move In to Buy Up Vendors’ Claims Against PG&E

Hedge funds are buying up many of the claims those vendors have filed against bankrupt utility giant PG&E, Bloomberg News’ David R. Baker and Dawn McCarty write.

• Vendors selling their claims receive less than the full amount PG&E owes them, but get paid quickly without waiting for the bankruptcy process to end. The hedge funds profit on the difference between the amount they pay the vendors and the money PG&E will eventually pay them.
• The claims trading hands illustrate just how far the shock waves from PG&E’s bankruptcy—the largest utility restructuring in U.S. history—have rippled across California’s economy.

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