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TURNER CONSTRUCTION COMPANY’S PRELIMINARY OBJECTION AND RESERVATION OF RIGHTS WITH 

RESPECT TO DEBTORS’ OPERATIONAL INTEGRITY, LIEN CLAIMANTS, AND DIP FINANCING MOTIONS 

CASE NO. 19-30088 

54654108v.2 

SEYFARTH SHAW LLP

M. Ryan Pinkston (SBN 310971) 

rpinkston@seyfarth.com 

Christopher J. Harney (SBN 322306) 

charney@seyfarth.com 

560 Mission Street, Suite 3100 

San Francisco, California 94105 

Telephone: (415) 397-2823 

Facsimile: (415) 397-8549 

Attorneys for 

Turner Construction Company

UNITED STATES BANKRUPTCY COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

In re: 

PG&E CORPORATION, 

Debtors. 

Case No.: 19-30088

Chapter 11 

Hon. Dennis Montali 

(Request for joint administration pending) 

TURNER CONSTRUCTION 

COMPANY’S PRELIMINARY 

OBJECTION AND RESERVATION OF 

RIGHTS WITH RESPECT TO DEBTORS’ 

OPERATIONAL INTEGRITY MOTION 

(DKT. NO. 12), LIEN CLAIMANTS 

MOTION (DKT. NO. 13) AND DIP 

FINANCING MOTION (DKT. NO. 23) 

In re: 

PACIFIC GAS & ELECTRIC COMPANY, 

Debtors. 

Creditor Turner Construction Company (“Turner”) hereby files this preliminary objection to the 

Motion to Pay Prepetition Obligations Owed to Certain Safety and Reliability, Outage, and Nuclear 

Facility Suppliers (Dkt. No. 12) (the “Operational Integrity Motion”), Motion to Pay Prepetition 

Obligations Owed to Lien Claimants (the “Lien Claimants Motion”) (Dkt. No. 13), and Motion to 

Authorize Senior Secured, Superpriority, Postpetition Financing (the “DIP Financing Motion”) (Dkt. 

No. 23) (collectively, the “Motions”) filed by Debtors PG&E Corporation (“PG&E Corp.”) and Pacific 

Gas & Electric Company (the “Utility”) (collectively, the “Debtors”). In support thereof, Turner 

respectfully states as follows: 

Case: 19-30088 Doc# 164 Filed: 01/31/19 Entered: 01/31/19 01:46:36 Page 1 of 4
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TURNER CONSTRUCTION COMPANY’S PRELIMINARY OBJECTION AND RESERVATION OF RIGHTS WITH 

RESPECT TO DEBTORS’ OPERATIONAL INTEGRITY, LIEN CLAIMANTS, AND DIP FINANCING MOTIONS 

CASE NO. 19-30088 

54654108v.2 

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BACKGROUND 

The Utility and Turner are counterparties to a Master Services Agreement, as amended, pursuant 

to which Turner has provided prepetition and postpetition construction services on various projects. 

Turner and its numerous subcontractors continue to provide construction services on numerous projects, 

including mission critical work with respect to the Debtors’ energy grid. Turner is owed at least $20 

million for unpaid prepetition services that it has performed for the Debtors (which includes over 

$6.6 million in retainage) and is also owed an increasing amount for postpetition services being provided 

to the Debtors. Notably, Turner’s prepetition and postpetition claims against the Debtors are secured by 

constitutional and statutory liens in favor of Turner against the Debtors’ property and equipment for 

amounts owed.1

OBJECTIONS 

A. The Operational Integrity Motion 

In the Operational Integrity Motion, the Debtors request authority to pay prepetition obligations 

totaling $116,200,000 owed to certain vendors, suppliers, service providers, and other creditors that the 

Debtors argue are critical to the Debtors’ operations (the “Critical Vendors”). Although the Debtors 

state that certain vendors are critical to their operations, they fail to identify with specificity a single 

Critical Vendor that they intend to pay pursuant to the motion or the amount that they request to pay any 

Critical Vendor. Instead, the Debtors propose to delegate the responsibility of designating particular 

vendors as critical to a “Supplier Management Committee.” The Debtors provide scant details regarding 

this committee, including which individuals will serve on the committee, their qualifications, how the 

committee will reach its determinations, by when the determinations will be reached, or whether said 

determinations will remain subject to this Court’s review and approval. 

The Debtors have not provided sufficient details regarding the nature and scope of the relief 

sought in order to permit a thorough vetting of the Operational Integrity Motion. Therefore, Turner 

1

 As the Debtors acknowledge, Turner is entitled to administrative expense priority status with 

respect to the Debtors’ unpaid obligations arising from Turner’s postpetition services. (See Lien 

Claimants Motion, at 15:27-16:1 (citing 11 U.S.C. § 503(b)(1)(A)).) 

Case: 19-30088 Doc# 164 Filed: 01/31/19 Entered: 01/31/19 01:46:36 Page 2 of 4
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TURNER CONSTRUCTION COMPANY’S PRELIMINARY OBJECTION AND RESERVATION OF RIGHTS WITH 

RESPECT TO DEBTORS’ OPERATIONAL INTEGRITY, LIEN CLAIMANTS, AND DIP FINANCING MOTIONS 

CASE NO. 19-30088 

54654108v.2 

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objects on a preliminary basis and reserves all of its rights with respect to the interim and final relief 

sought in the Debtors’ Operational Integrity Motion. 

B. The Lien Claimants Motion 

In the Lien Claimants Motion, the Debtors request authority to pay prepetition claims of certain 

creditors who provide goods and services to the Debtors and may be permitted to assert statutory or 

possessory liens against the Debtors’ property and equipment in the event of non-payment (the “Lien 

Claimants”). In particular, the Debtors propose to pay approximately $25,800,000 on an interim basis 

and $65,500,000 on a final basis to the Lien Claimants on a “case-by-case basis.” 

The Debtors’ Lien Claimants Motion lacks details regarding the criteria the Debtors intend to use 

to determine which creditors will be paid pursuant to the motion, how much they will be paid, and 

whether determinations regarding payments will be subject to this Court’s review and approval. In fact, 

the Lien Claimants Motion provides even fewer details than the Operational Integrity Motion with 

respect to how the Debtors will identify which creditors will receive payments pursuant to the motion. 

The Debtors have not provided sufficient details regarding the nature and scope of the relief sought in 

order to permit a thorough vetting of the Lien Claimants Motion. Therefore, Turner objects on a 

preliminary basis and reserves all of its rights with respect to the interim and final relief sought in the 

Debtors’ Lien Claimants Motion. 

C. The DIP Financing Motion 

Turner understands from the DIP Financing Motion, the proposed order thereto, and 

representations made to Turner’s counsel by the Debtors’ counsel that the “DIP Liens” granted pursuant 

to the DIP Financing Motion will be junior and subject to perfected repairmen/materialmen/mechanic’s 

liens (defined in the DIP Financing Motion as “Senior Permitted Liens” and “Permitted Prior Liens”). 

Based on the representations made by the Debtors’ counsel, Turner does not object to the DIP Financing 

Motion at this time, but reserves its right to object to the DIP Financing Motion and the relief sought 

therein on a final basis. 

Case: 19-30088 Doc# 164 Filed: 01/31/19 Entered: 01/31/19 01:46:36 Page 3 of 4
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TURNER CONSTRUCTION COMPANY’S PRELIMINARY OBJECTION AND RESERVATION OF RIGHTS WITH 

RESPECT TO DEBTORS’ OPERATIONAL INTEGRITY, LIEN CLAIMANTS, AND DIP FINANCING MOTIONS 

CASE NO. 19-30088 

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RESERVATION OF RIGHTS 

Turner reserves the right to: (a) amend, supplement or otherwise modify this preliminary 

objection on any grounds whatsoever, regardless of whether those grounds are addressed herein; (b) to 

raise such other and further objections to the extent that the Debtors’ Motions are continued; and (c) to 

raise such other and further objections when the Debtors seek entry of a final order with respect to the 

relief sought in the Motions. 

DATED: January 31, 2019 SEYFARTH SHAW LLP

By: /s/ M. Ryan Pinkston 

M. Ryan Pinkston 

 Christopher J. Harney 

Attorneys for Turner Construction Company

Case: 19-30088 Doc# 164 Filed: 01/31/19 Entered: 01/31/19 01:46:36 Page 4 of 4