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WEIL, GOTSHAL & MANGES LLP 

Stephen Karotkin (pro hac vice) 

(stephen.karotkin@weil.com) 

Ray C. Schrock, P.C. (pro hac vice) 

(ray.schrock@weil.com) 

Jessica Liou (pro hac vice) 

(jessica.liou@weil.com) 

Matthew Goren (pro hac vice) 

(matthew.goren@weil.com) 

767 Fifth Avenue 

New York, NY 10153-0119 

Tel: 212 310 8000 

Fax: 212 310 8007 

KELLER & BENVENUTTI LLP 

Tobias S. Keller (#151445) 

(tkeller@kellerbenvenutti.com) 

Jane Kim (#298192) 

(jkim@kellerbenvenutti.com) 

650 California Street, Suite 1900 

San Francisco, CA 94108 

Tel: 415 496 6723 

Fax: 650 636 9251 

Attorneys for Debtors 

and Debtors in Possession 

UNITED STATES BANKRUPTCY COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

In re: 

PG&E CORPORATION,

 - and - 

PACIFIC GAS AND ELECTRIC 

COMPANY,

Bankruptcy Case 

No. 19-30088 (DM) 

Chapter 11 

(Lead Case) 

(Jointly Administered) 

DEBTORS’ OBJECTION TO MOTION BY 

TURN FOR APPOINTMENT OF 

OFFICIAL COMMITTEE OF 

RATEPAYER CLAIMANTS 

Docket Ref.: 1324 

Hearing Date: May 8, 2019 

Time: 9:30 a.m. (Pacific Time) 

Place: United States Bankruptcy Court 

 Courtroom 17, 16th Floor 

 San Francisco, CA 94102 

Judge: Hon. Dennis Montali 

Debtors.

 Affects PG&E Corporation 

 Affects Pacific Gas and Electric Company 

 Affects both Debtors 

* All papers shall be filed in the Lead Case, 

No. 19-30088 (DM). 

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PG&E Corporation (“PG&E Corp.”) and Pacific Gas and Electric Company 

(the “Utility”), as debtors and debtors in possession (collectively, “PG&E” or the “Debtors”) in the 

above-captioned chapter 11 cases (the “Chapter 11 Cases”), hereby submit this Objection 

(the “Objection”) to the Motion by TURN for Appointment of Official Committee of Ratepayer 

Claimants Pursuant to 11 U.S.C. §§ 1102(a)(2), 105(a); Memorandum of Points & Authorities, dated 

April 10, 2019 [Docket No. 1324] (the “Motion1”). In support of the Objection, the Debtors submit 

the Declaration of Bruce T. Smith (the “Smith Declaration”), filed contemporaneously herewith. 

 

1

 Capitalized terms used but not otherwise herein defined shall have the meanings ascribed to such 

terms in the Motion. 

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TABLE OF CONTENTS 

Page 

I. PRELIMINARY STATEMENT ...............................................................................................6 

II. BASIS FOR RELIEF .................................................................................................................9 

a. TURN has Failed to Demonstrate that Ratepayers are Prepetition Creditors of 

the Estates as Required under Section 1102 of the Bankruptcy Code to 

Support the Extraordinary Remedy of Appointing a Third Official Committee .........10 

b. Special Interest Groups are not Appropriate Members of Official Committees 

as they are Neither Creditors of the Debtors nor Authorized Representatives of 

Creditors .......................................................................................................................12 

c. TURN has Failed to Demonstrate that the Appointment of a Third Official 

Committee is Required to Adequately Represent Ratepayer Interests ........................13 

III. CONCLUSION ........................................................................................................................15 

 

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TABLE OF AUTHORITIES 

 Page(s) 

Cases 

Assembly v. Public Utilities Commission

(1995 23 Cal.4th 87) ...................................................................................................................... 8 

California Manufacturer’s Association v. Public Utilities Commission, 

24 Cal3d. 836 (1979) ..................................................................................................................... 8 

In re Dana Corp., 

344 B.R. 35 (Bankr. S.D.N.Y. 2006) ....................................................................................... 9, 10 

In re Dow Corning Corp., 

194 B.R. 121 (Bankr. E.D. Mich. 1996), rev’d on other grounds, 212 B.R. 258 

(E.D. Mich. 1997) .......................................................................................................................... 9 

In re Eastern Maine Electric Cooperative, Inc., 

121 B.R. 917 (Bankr. D. Me. 1990)............................................................................................. 11 

In re Enron Corp., 

279 B.R. 671 (Bankr. S.D.N.Y. 2002) ..................................................................................... 9, 10 

In re Johns-Manville Corp., 

68 B.R. 155 (Bankr. S.D.N.Y. 1986), appeal dismissed 824 F.2d 176 (2d Cir. 

1987) ............................................................................................................................................ 10 

In re Kalvar Microfilm, Inc., 

195 B.R. 599 (Bankr. D. Del. 1996) ............................................................................................ 10 

In re Leap Wireless Intern., Inc., 

295 B.R. 135 (Bankr. S.D. Cal., 2003) ........................................................................................ 10 

In re McLean Indus., Inc., 

70 B.R. 852 (Bankr. S.D.N.Y. 1987) ........................................................................................... 10 

Mirant Americas Energy Mktg., L.P. v. Official Comm. of Unsecured Creditors of 

Enron Corp., No. 02 CIV. 6274 (GBD), 2003 WL 22327118 (S.D.N.Y. Oct. 10, 

2003) ........................................................................................................................................ 9, 14 

In re Nat’l R.V. Holdings, Inc., 

390 B.R. 690 (Bankr. C.D. Cal., 2008) .................................................................................... 9, 10 

In re Nationwide Sports Distributors, Inc., 

227 B.R. 455 (Bankr. E.D. Pa. 1998) ............................................................................................ 4 

In re Pacific Gas & Electric Company, 

Case No. 01-30923 (DM), (Bankr. N.D. Cal. May 18, 2001) ....................................................... 6 

In re Park W. Circle Realty, LLC, 

No. 10-12965 (AJG), 2010 Bankr. LEXIS 2463 (Bankr. S.D.N.Y. Aug. 11, 2010) ................... 10 

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In re Residential Capital, LLC, 

480 B.R. 550 (Bankr. S.D.N.Y. 2012) ......................................................................................... 14 

Statutes 

11 U.S.C. § 101 .............................................................................................................................. 7, 12 

11 U.S.C. § 1102(a) ........................................................................................................... 9, 10, 11, 12 

11 U.S.C. § 1129(a)(6) ................................................................................................................... 8, 13 

Cal. Const. art. XII, § 1 ........................................................................................................................ 6 

Cal. Pub. Utils. C. § 20(a) .................................................................................................................... 6 

Cal. Pub. Utils. C. § 1801 .................................................................................................................... 6 

Other Authorities 

CPUC Decision No. 18-03-017 .................................................................................................. 7-8, 11 

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MEMORANDUM OF POINTS AND AUTHORITIES 

I. PRELIMINARY STATEMENT 

As the Debtors continue to administer these Chapter 11 Cases, they remain firmly 

committed to providing their approximately 16 million customers with the safe and reliable natural 

gas and electric service they expect and deserve. As provided by the California Constitution and the 

California Legislature, one of the primary means by which the Utility’s customers can and do provide 

their view and input on the Utility’s public utility services is through the California Public Utilities 

Commission (“CPUC”).2 TURN and the entities supporting its Motion have been and continue to be 

active participants in CPUC proceedings, which provide not only a forum for TURN and such other 

entities to present and litigate their positions on behalf of their constituencies, but also provide a 

statutory means for them to receive compensation for their costs of intervention.3 The Debtors 

continue to fully support the rights and opportunities for TURN and other consumer representatives 

to fully participate in CPUC proceedings, including those current proceedings relating to safety and 

reliability that TURN and other interested parties are actively participating in currently. 

However, the critical and determinative facts before the Court today have not changed 

from the time that TURN previously sought the appointment of a ratepayer committee in the Utility’s 

2001 chapter 11 case and such an extraordinary remedy remains unnecessary and unwarranted here. 

As the Court correctly held in 2001 and remains true today, the Debtors’ customers generally do not 

hold prepetition claims against the estates in their capacities as ratepayers; rather, from time to time 

they are entitled to recover credits as determined by the CPUC in the form of rate adjustments to their 

monthly billing statements.4 See In re Pacific Gas & Electric Company, Case No. 01-30923 (DM), at 

6 (Bankr. N.D. Cal. May 18, 2001) [Docket No. 599] (the “2001 Decision”). 

 

2 See Cal. Const. art. XII, § 1 and Cal. Pub. Utils. C. § 20(a). 

3 See Cal. Pub. Utils. C. § 1801.

4

 The Debtors recognize that certain ratepayers may otherwise hold claims against the estates in other 

capacities, including claims arising out of or relating to the Northern California Wildfires; however, 

to the extent any ratepayers hold claims in such other capacities, the Debtors submit, and it is not 

contested by TURN, that the interests of such parties are more than adequately represented by the 

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Notwithstanding the Court’s prior 2001 Decision, TURN, in an attempt to manufacture 

some support for its Motion, cites to the fact that certain of the Utility’s customers are entitled to 

receive annual credits in their upcoming billing cycles on account of greenhouse gas (“GHG”) 

allowance auctions as the sole differentiating factor from 2001 and evidence, in TURN’s view, that 

the ratepayers now hold prepetition claims against the Utility as defined under section 101(5) of the 

Bankruptcy Code – however, the amounts cited by TURN as being “owed” have been continuously 

credited and continue to be credited to the rates of ratepayers as reflected in the applicable Utility 

tariffs and rate schedules. See Smith Decl. at 3. Any additional amounts that have been or in the 

future are determined by the Utility’s regulatory authorities to be credited to the ratepayers in the form 

of rate adjustments will be issued or applied by the Utility in accordance with its applicable tariffs and 

rate schedules as required under CPUC rulings and regulations and as previously authorized by the 

Court on a final basis in connection with the Debtors’ Public Purpose and Customer Programs 

Motion.5 Furthermore, as previously set forth in the Public Purpose and Customer Programs Motion, 

these credits and rate adjustments represent funds that are collected and remitted under California’s 

GHG emissions reduction programs and rules and, therefore, are mandated by state law. See Public 

Purpose and Customer Programs Motion, at 33–34. And the Debtors fully intend to comply with their 

ongoing regulatory obligations, including with respect to rates and rate adjustments, as mandated by 

the CPUC and otherwise required under the law. 

Moreover, even if the Utility was not continuing to issue the credits and rate 

adjustments cited by TURN (which it is), the ratepayers still would not hold prepetition claims against 

the estates. The CPUC already has concluded that the GHG credits are not “refunds” owed to 

 

Official Committee of Unsecured Creditors or the Official Committee of Tort Claimants that have 

been appointed in these Chapter 11 Cases. 

5

 The “Public Purpose and Customer Programs Motion” refers to the Motion of Debtors Pursuant 

to 11 U.S.C. §§ 105(a), 363(b), and 507(a) and Fed. R. Bankr. P. 6003 and 6004 for Interim and Final 

Orders (i) Authorizing Debtors to (a) Maintain and Administer Customer Programs, Including Public 

Purpose Programs, and (b) Honor any Prepetition Obligations Relating Thereto, and (ii) Authorizing 

Financial Institutions to Honor and Process Related Checks and Transfers [Docket No. 16], which 

was approved by the Court on a final basis by order dated March 12, 2019 [Docket No. 843] (the 

“Final Public Purpose and Customer Programs Order”). 

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individual customers under California utility law. See CPUC Decision No. 18-03-017 (“GHG 

allowance proceeds are not analogous to the funds found to qualify as ‘rate refunds’ in California 

Manufacturer’s Association v. Public Utilities Commission, 24 Cal3d. 836 (1979) and Assembly v. 

Public Utilities Commission (1995 23 Cal.4th 87.”). 

Furthermore, as was similarly the case in 2001, TURN is not suggesting that its 

proposed ratepayer committee be comprised of any of the individuals or small business owners that 

TURN argues may be prepetition creditors of the estates; rather, TURN suggests that such a committee 

should be comprised of special interest groups that are not creditors themselves and do not owe 

financial fiduciary duties to, or maintain agency relationships with, the ratepayers they would purport 

to represent. Such groups have their own mandates, agendas, and interests in the outcome of the 

Debtors’ Chapter 11 Cases and pursuing or representing those going forward interests is not a proper 

purpose for appointing of an official committee. As the Court previously stated in 2001, “having an 

interest in a result (as all ratepayers do), does not rise to the level of having a claim as defined in the 

Bankruptcy Code.” 2001 Decision, at 8. 

Finally, as the Court also noted in the 2001 Decision, the ratepayers have other options 

available to them to safeguard and adequately represent their interests and, therefore, the extreme 

remedy of appointing a third official committee in these Chapter 11 Cases is not necessary or 

warranted. TURN and the other special interest and advocacy groups cited in their Motion are 

certainly capable of addressing the concerns of ratepayers in the appropriate fora, including in the 

appropriate legislative and regulatory bodies. As the Court previously observed, “Whatever benefits 

may be ordered by regulatory agencies such as the California Public Utilities Commission (“CPUC”) 

will no doubt follow proceedings before such a body, and the right of ratepayers or others to be heard 

there will be established under applicable non-bankruptcy law.” 2001 Decision, at 6–7. To the extent 

those interests are impacted here in these Chapter 11 Cases, section 1129(a)(6) of the Bankruptcy Code 

generally requires the Debtors receive the approval of the CPUC with respect to rate changes proposed 

in connection with a chapter 11 plan – and the CPUC (as well as other governmental and regulatory 

agencies) have been actively involved and well represented in these Chapter 11 Cases. To the extent 

any customers arguendo are creditors of the estates in their capacities as ratepayers (and the Debtors 

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submit that they are not), they are already represented by the two official Committees appointed in 

these Chapter 11 Cases, most specifically the Official Committee of Unsecured Creditors, which was 

appointed as a fiduciary for all unsecured creditors at large in these Chapter 11 Cases and is more than 

capable of adequately representing the interests of the individuals and small business owners cited by 

TURN. 

The undisputed facts demonstrate that the U.S. Trustee’s conclusion was correct, and 

that the extraordinary remedy of appointing a third official committee to represent ratepayers who are 

not creditors or claimants in these Chapter 11 Cases is not warranted for substantially the same reasons 

as the Court found in the 2001 Decision. Therefore, the Court should reject TURN’s arguments and 

deny the Motion. 

II. BASIS FOR RELIEF 

The appointment of an additional committee under section 1102(a)(2) is considered an 

“extraordinary remedy.” See In re Nat’l R.V. Holdings, Inc., 390 B.R. 690, 695 (Bankr. C.D. Cal., 

2008); see also In re Enron Corp., 279 B.R. 671 (Bankr. S.D.N.Y. 2002), aff’d sub nom. Mirant Ams. 

Energy Mktg., L.P. v. Official Comm. of Unsecured Creditors of Enron Corp., 2003 U.S. Dist. LEXIS 

18149 (S.D.N.Y. Oct. 9, 2003); In re Dana Corp., 344 B.R. 35, 38 (Bankr. S.D.N.Y. 2006). The 

movant has the burden of proving that the appointment of an additional committee is necessary to 

insure “adequate representation” of the moving party. See In re Nat’l R.V. Holdings, Inc., 

390 B.R. at 695; see also In re Enron Corp., 279 B.R. at 685; In re Dow Corning Corp., 194 B.R. 121 

(Bankr. E.D. Mich. 1996), rev’d on other grounds, 212 B.R. 258 (E.D. Mich. 1997). The 

determinative factors in considering the adequacy of representation are: 

(a) The ability of the existing committees to function; 

(b) The nature of the case; 

(c) The standing and desires of the various constituencies; 

(d) The ability for creditors to participate in the case even without an official committee 

and the potential to recover expenses pursuant to section 503(b); 

(e) The delay and additional cost that would result if the Court grants the motion; 

(f) The tasks that a committee or separate committee is to perform; and 

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(g) Other factors relevant to the adequate representation issue. 

In re Enron Corp., 279 B.R. at 685; see also In re Kalvar Microfilm, Inc., 195 B.R. 599, 601 (Bankr. 

D. Del. 1996); In re McLean Indus., Inc., 70 B.R. 852, 860 (Bankr. S.D.N.Y. 1987); In re JohnsManville Corp., 68 B.R. 155 (Bankr. S.D.N.Y. 1986), appeal dismissed 824 F.2d 176 (2d Cir. 1987). 

No one factor is dispositive, and the amount of due consideration given to each depends on the 

circumstances of the particular chapter 11 case. See In re Nat’l R.V. Holdings, Inc., 390 B.R. at 695–

96; see also In re Leap Wireless Intern., Inc., 295 B.R. 135, 137 (Bankr. S.D. Cal., 2003); In re Park 

W. Circle Realty, LLC, No. 10-12965 (AJG), 2010 Bankr. LEXIS 2463, *9 (Bankr. S.D.N.Y. Aug. 11, 

2010); In re Dana Corp., 344 B.R. at 38; In re Kalvar Microfilm, 195 B.R. at 600-01. A Court need 

only focus on those factors it deems essential to the particular case. 

TURN has failed to and, indeed cannot, meet this heavy burden as the ratepayers are 

not prepetition creditors as required under section 1102 of the Bankruptcy Code to form an official 

creditors committee. Furthermore, even if the ratepayers were prepetition creditors (which they are 

not), the existing Committees and other legislative and regulatory bodies ensure that the interests of 

the ratepayers are more than adequately represented in these Chapter 11 Cases and, therefore, the 

additional cost and delay to the estates that would be incurred in connection with the appointment of 

a third official committee is not warranted. Accordingly, TURN’s request to appoint an official 

ratepayers committee should be rejected and the Motion should be denied. 

a. TURN has Failed to Demonstrate that Ratepayers are Prepetition 

Creditors of the Estates as Required under Section 1102 of the Bankruptcy 

Code to Support the Extraordinary Remedy of Appointing a Third Official 

Committee 

TURN’s arguments fail to prove that the ratepayers are creditors as defined under the 

Bankruptcy Code. With that failure, TURN is incapable of proving that the U.S. Trustee abused its 

discretion by denying TURN’s request for the appointment of a third official committee.6 

 

6

 TURN correctly notes in the Motion that the applicable standard of review of the U.S. Trustee’s 

decision to decline to appoint a ratepayer committee is, as the Court applied in 2001, the “abuse of 

discretion” standard, which requires TURN to show that the U.S. Trustee “disregarded controlling 

law.” 2001 Decision, at 3–4. 

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Section 1102(a)(1) authorizes the U.S. Trustee to appoint a committee of creditors 

holding unsecured claims and additional committees of creditors or of equity security holders as the 

U.S. Trustee deems appropriate. 11 U.S.C. § 1102(a)(1). Section 1102(a)(2) of the Bankruptcy Code 

authorizes a party in interest to request the court to order the appointment of additional committees of 

creditors or equity holders “if necessary to assure adequate representation of creditors or of equity 

security holders.” 11 U.S.C. § 1102(a)(1). 

 As the Court previously noted in its 2001 Decision (citing In re Eastern Maine Electric 

Cooperative, Inc., 121 B.R. 917, 927 (Bankr. D. Me. 1990)), “Unless the interests of the cooperative’s 

membership [i.e., the ratepayers] can be characterized as those of creditors or of equity security 

holders, [section] 1102(a) grants no authority to establish a committee.” 2001 Decision, at 5 (emphasis 

in original). As set forth above, the ratepayers do not hold prepetition claims against the estates. 

First, notwithstanding TURN’s assertion to the contrary, the CPUC has already ruled 

that the GHG credits are not refunds owed to individual customers under California utilities law. See 

CPUC Decision No. 18-03-017. Second, as set forth in the Smith Declaration, the GHG credits which 

TURN relies on as the sole basis for asserting that ratepayers are prepetition creditors have been and 

continue to be credited to the ratepayers as reflected in the applicable Utility rate schedules and tariffs 

and will be in the future. See Smith Decl. at 3. As set forth in the Public Purpose and Customer 

Programs Motion, the credits and rate adjustments cited by TURN represent funds that are collected 

and remitted as mandated by California’s GHG laws and regulations for credits to the Utility’s rates 

for the benefit of ratepayers and other third parties. Any additional amounts that have been or in the 

future are determined by the Debtors’ regulatory authorities to be credited to the ratepayers will be 

done in accordance with CPUC rulings, regulations, and approved tariffs. 

Moreover, even if the Utility was not already in the process of issuing the credits and 

rate adjustments cited by TURN (which it is), the ratepayers still would not hold prepetition claims 

against the Debtors’ estates. Pursuant to the Final Public Purpose and Customer Programs Order, this 

Court already has authorized the Debtors to continue various programs for the benefit of their 

customers and to advance public policy goals, including the GHG emissions reduction programs cited 

by TURN in the Motion and required by the California Air Resources Board that provide certain 

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credits to customers, and to honor obligations incurred in connection therewith. Final Public Purpose 

and Customer Programs Order, at ¶ 2. The Final Public Purpose and Customer Programs Order also 

authorizes the Debtors to provide credits to Customers in accordance with applicable laws (i) as a 

result of corrections in rates, metering, and other charges, (ii) in connection with the Debtors’ budget 

billing plan, which is intended to normalize Customer payments over the course of the year, and the 

Debtors’ solar tariffs, which compensate Customers for surplus energy delivery, and (iii) to address 

other similar Customer concerns and issues. Id. Accordingly, with respect to the credits referenced 

by TURN, the Utility is continuing to apply such credits to the ratepayers in the form of billing 

adjustments in the ordinary course as required under applicable law and as authorized by this Court. 

Under these circumstance, it is difficult to conceive how ratepayers in their capacities as such, could 

be creditors in these cases to warrant the appointment of an official committee. 

Accordingly, as was the case in the 2001 Decision, the ratepayers do not have 

prepetition claims against the estates and, therefore, the appointment of an official committee of 

ratepayers is not authorized under section 1102(a) of the Bankruptcy Code.7

b. Special Interest Groups are not Appropriate Members of Official 

Committees as they are Neither Creditors of the Debtors nor Authorized 

Representatives of Creditors 

As was similarly the case in 2001, TURN is not suggesting that its proposed ratepayer 

committee be comprised of any of the individuals or small business owners that TURN argues may be 

prepetition creditors of the estates; rather, TURN suggests that such a committee should be comprised 

 

7

 Furthermore, as TURN notes in its Motion, the Semi-Annual California Climate Credits are provided 

to residential customers through the April and October bill cycles. Section 101(10) defines “creditor” 

to mean an entity that has a “claim against the debtor that arose at the time of or before the order for 

relief.” 11 U.S.C. § 101(10) (emphasis added). As the Court stated in the 2001 Decision “Thus, even 

though rights to payment that arose after the order for relief may be encompassed within the definition 

of “claim” (see 11 U.S.C. § 101(5)), Congress had in mind that the creditors committees appointed in 

Chapter 11 could consist only of holders of pre-petition claims, not post-petition claims.” 2001 

Decision, at 5. Accordingly, even if the ratepayers were determined to have claims against the estates, 

there exists a material question of fact as to whether such claims relate to the prepetition or postpetition 

period.

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of special interest groups that are not themselves creditors nor do they owe fiduciary duties to, or 

maintain financial agency relationships with, the ratepayers they would purport to represent. 

Specifically, TURN proposes that an official ratepayer committee be comprised of seven (7) 

individuals from the following special interest groups: (i) TURN; (ii) the Public Advocates Office at 

the CPUC; (iii) the Energy Policy of California Farm Bureau Federation; (iv) Federal Executive 

Agencies; (v) California Large Energy Consumer Advocates; (vi) AARP California; and (vii) 

Greenlining Institute. Motion, at ¶ 4. 

 In its Motion, however, TURN does not cite a single precedent for appointment of an 

official committee consisting solely or principally of special interest organizations or advocacy groups 

that are concededly not themselves creditors – nor can they. At best, such entities may be considered 

“parties in interest” and, as the Court noted in the 2001 Decision, “Congress certainly knew the 

difference between ‘parties in interest’ and ‘creditors’ when it empowered the latter to organize as a 

committee and participate in bankruptcy cases at the expense of the estate. It did not extend that right 

to ‘parties in interest.’” 2001 Decision, at 8. Accordingly, the appointment of an official committee 

of ratepayers comprised exclusively of special interest groups is not proper and the Motion should be 

denied. 

c. TURN has Failed to Demonstrate that the Appointment of a Third Official 

Committee is Required to Adequately Represent Ratepayer Interests 

TURN argues that the interests of ratepayers are not adequately represented and cannot 

be adequately represented by the CPUC or the two official Committees that have already been 

appointed in these Chapter 11 Cases. This statement is both misplaced and unsupportable. 

First, as set forth above, section 1129(a)(6) of the Bankruptcy Code requires the 

Debtors receive the approval of the CPUC with respect to any rate changes proposed in connection 

with a chapter 11 plan – and the CPUC has been actively involved and well represented in these 

Chapter 11 Cases. TURN and the other advocacy and special interest groups cited in the Motion are 

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sophisticated parties that are capable of representing their own interests, and regularly do so before 

the CPUC. 

Second, to the extent that the ratepayers can be categorized as prepetition “creditors” 

of the Debtors’ estates (which, again, the Debtors submit they are not), their interests are more than 

adequately represented by the two official Committees that already have been appointed in these 

Chapter 11 Cases. The Official Creditors Committee, specifically, has been appointed as a fiduciary 

for all unsecured creditors and is more than capable of adequately representing the interests of the 

individuals and small business owners cited by TURN to the extent they have prepetition claims. The 

fact that the Official Creditors Committee represents a variety of unsecured creditors is not uncommon 

as the “principal purpose of creditors’ committees is not to advocate any particular creditor class’s 

agenda, but rather to strike a proper balance between the parties such that an effective and viable 

reorganization of the debtor may be accomplished. Mirant Americas Energy Mktg., L.P. v. Official 

Comm. of Unsecured Creditors of Enron Corp., No. 02 CIV. 6274 (GBD), 2003 WL 22327118, at *6 

(S.D.N.Y. Oct. 10, 2003). 

TURN asserts, however, that the neither Committee “can be expected to separately 

assert and advocate for the interests of ratepayers as regards future rate increases that will necessarily 

be required to confirm a plan.” Motion, at ¶ 12. However, advocating future rates is not the role of 

an official committee of creditors in a chapter 11 case. See In re Nationwide Sports Distributors, Inc., 

227 B.R. 455, 463 (Bankr. E.D. Pa. 1998) (“In general, the purpose of such committees is to represent 

the interests of unsecured creditors and to strive to maximize the bankruptcy dividend paid to that 

class of creditors.”). 

While it has been said countless times already that these Chapter 11 Cases are large 

and complex, the large size of a bankruptcy case alone is not sufficient to warrant the appointment of 

yet another additional official committee. See In re Residential Capital, LLC, 480 B.R. 550, 558 

(Bankr. S.D.N.Y. 2012) (“The large size of a bankruptcy case in and of itself is not determinative of 

whether additional committees should be appointed.”). Clearly here, the added cost and expense that 

would be incurred with the appointment of an official ratepayer committee with its own set of 

professionals and the attenuated delay to the administration and progress of these Chapter 11 Cases 

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outweigh any purported benefit to be gained from the appointment of a third official committee. This 

is particularly the case where, as demonstrated above, the purported constituency of said committee, 

the ratepayers, are not creditors of the estates and, if they were, their interests are already more than 

adequately represented by various other parties and entities in these cases. 

In conclusion, the Court correctly summarized this issue in the closing of its 2001 

Decision where it said: 

In summary, the court reminds the parties that the Bankruptcy Code, and the 

bankruptcy court, were designed to resolve debtor-creditor problems; state agencies 

are where issues such as rates for electricity are handled. In its wisdom, Congress 

was correct: the estate should pay for dealing with those debtor-creditor issues in 

bankruptcy. It should not be burdened with matters likely to be resolved elsewhere. 

2001 Decision, at 10. 

Accordingly, TURN’s request for the appointment of an official committee of 

ratepayers should be rejected and the Motion should be denied. 

III. CONCLUSION

WHEREFORE the Debtors respectfully request that the Court deny the Motion and 

grant such other and further relief as the Court may deem just and appropriate. 

Dated: April 24, 2019 

 WEIL, GOTSHAL & MANGES LLP 

 KELLER & BENVENUTTI LLP

 

/s/ Jane Kim

 Jane Kim 

Attorneys for Debtors and Debtors in Possession

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