It appears to be a rather straightforward cash flow problem. Even assuming
their assets on a balance sheet exceed their liabilities, because those
assets are illiquid (e.g. plants and equipment), they can still be unable to
pay their debts as they become due. (FYI -- there is no requirement that a
company be insolvent to file for bankruptcy, but the inability to pay debts
as they become due is a form of insolvency in any event). According to the
utilities, they have paid $12 billion more for electricity than they have
collected from consumers since May 2000. That is an incredible cash drain
and they are now out of cash.
David Shemano
-----Original Message-----
From: [EMAIL PROTECTED]
[mailto:[EMAIL PROTECTED]]On Behalf Of Michael Perelman
Sent: Wednesday, January 17, 2001 2:38 PM
To: [EMAIL PROTECTED]
Subject: [PEN-L:7075] Re: RE: Bankruptcy again
David, how could these bandits be in the hole? I would be sure to defer
Gene Coyle in this regard, is that I thought they had been making money in
hand over fist for many months before the financial crunch hit
--
Michael Perelman
Economics Department
California State University
Chico, CA 95929
Tel. 530-898-5321
E-Mail [EMAIL PROTECTED]
