Hedge Funds Unite to Press Bankrupt PG&E for Management Overhaul
(Bloomberg) -- A group of investors including Knighthead Capital Management LLC, Redwood Capital Management and Abrams Capital Management have formed to press bankrupt utility giant PG&E Corp. for a management overhaul.
The hedge funds said in filings late Friday that they’re looking at nominating directors to PG&E’s board and want a say in who the company’s next chief executive officer will be. The funds represent almost 10 percent of PG&E’s outstanding shares, according to the filings.
The emergence of the latest group sets the stage for a potential fight among investors over the future of PG&E, which filed for bankruptcy in January to deal with $30 billion worth of wildfire liabilities. Shareholder BlueMountain Capital Management LLC has already nominated its own slate of directors.
PG&E didn’t immediately respond to a request for comment.
Bill Johnson, the outgoing chief of power agency Tennessee Valley Authority, is PG&E’s top pick for the CEO spot, but the company hasn’t made a final decision, people familiar with the situation said this week.
The utility is also close to picking new directors for its board, and it probably won’t include BlueMountain’s picks, they said, asking not to be identified because the information isn’t public.
BlueMountain’s recommendations included former California treasurer Phil Angelides, National Transportation Safety Board ex-chairman Christopher Hart and Jeff Ubben, the CEO of activist ValueAct Capital Management. The company, which owned a 1.5 percent stake in PG&E as of Dec. 31, declined to comment.
PG&E said earlier this month that it was looking to replace the majority of its board members with new, independent directors. The San Francisco-based company has been searching for a new chief executive since since Geisha Williams resigned in January, just two weeks before the California utility giant filed for bankruptcy.
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