Company: SCE-PL
Filing Date: 2025-09-08
Form Type: SF-1
Source: 0001193125-25-198426
Chunk: 148

Company: SOUTHERN CALIFORNIA EDISON Co
Filing Date: 2025-09-08
Form: SF-1
Chunk 148
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 not otherwise overrule its earlier ruling. The LTV
memorandum opinion serves as an example of the pervasive equity powers of bankruptcy courts and the importance that such courts may ascribe to the goal of reorganization, particularly where the assets sold are integral to the ongoing operation of
the debtor’s business.

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Even if creditors did not challenge the sale of recovery property as a true sale, a
bankruptcy filing by SCE could trigger a bankruptcy filing by us with similar negative consequences for bondholders. In In re General Growth Properties, Inc., 406 B.R. 171, (Bankr. S.D.N.Y. 2009), General Growth Properties, Inc. filed for
bankruptcy together with many of its direct and indirect subsidiaries, including many subsidiaries that were organized as special purpose vehicles. The bankruptcy court upheld the validity of the filings of these special purpose subsidiaries and
allowed the subsidiaries, over the objections of their creditors, to use the lenders’ cash collateral to make loans to the parent for general corporate purposes. The creditors received adequate protection in the form of current interest
payments and replacement liens to mitigate any diminution in value resulting from the use of the cash collateral, but the opinion serves as a reminder that bankruptcy courts may subordinate legal rights of creditors to the interests of helping
debtors reorganize.

We and SCE have attempted to mitigate the impact of a possible recharacterization of the sale of recovery property
from SCE to us as a financing transaction under applicable creditors’ rights principles. The sale agreement will provide that if the transfer of the applicable recovery property is thereafter recharacterized by a court as a financing
transaction and not a true sale, SCE will be deemed to have granted to us on behalf of ourselves and the trustee a first priority security interest in all of SCE’s right, title and interest in and to the recovery property and all proceeds
thereof. In addition, the sale agreement will require the filing of a financing statement naming SCE as the debtor and us as the secured party and identifying the recovery property and the proceeds thereof as collateral in accordance with the
Wildfire Financing Law. As a result of this filing, we would be a secured creditor of SCE and entitled to recover against the collateral or its value. This does not, however, eliminate the risk of payment delays or reductions and other adverse
effects caused by an SCE bankruptcy.

The Wildfire Financing Law provides that the creation, granting, perfection and enforcement of liens
and security interests in recovery property are governed by