Current proposals for avoiding a formal bankruptcy by Southern California Edison, as embodied in alternative draft legislative Memoranda of Understanding (MOU) now under consideration, explicitly will create a hierarchy of favored and less-favored creditors. This approach will create powerful incentives for those with lower priority to force Edison into bankruptcy immediately, in substantial part because of fiduciary responsibilities to their owners or shareholders. In short: Despite the ostensible purpose of the MOU in terms of avoiding a formal bankruptcy filing by Edison, this provision seems designed to force such a filing while shifting the attendant political responsibility to the less-favored creditors.
The following provides key research findings from a forthcoming study by Dr. Benjamin Zycher, which the Pacific Research Institute will publish in fall 2001.
Here on California’s central coast is the ideal place to escape the summer heat and take in the full measure of silliness that our fellow citizens elsewhere in the nation come to expect from the Golden State.
