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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) 

REPLY IN SUPPORT OF CORRECTED 

MOTION OF DEBTORS PURSUANT 

TO 11 U.S.C. § 1121(d) TO EXTEND 

EXCLUSIVE PERIODS 

Re: Docket Nos. 1795, 1797, 2006, 2008, 2009, 2017, 

and 2019 

Date: May 22, 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). 

Case: 19-30088 Doc# 2121 Filed: 05/20/19 Entered: 05/20/19 18:01:30 Page 1 of

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PG&E Corporation (“PG&E Corp.”)1 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 Reply (the “Reply”) in support of the 

Corrected Motion of Debtors Pursuant to 11 U.S.C. § 1121(d) to Extend Exclusive Periods [Dkt. 

No. 1797] (the “Exclusivity Motion”)2 and in response to the (i) Limited Objection of Governor Gavin 

Newsom to Corrected Motion of Debtors Pursuant to 11 U.S.C. § 1121(d) to Extend Exclusive Periods 

[Dkt. No. 2006] (the “Governor’s Limited Objection”); (ii) Limited Objection of the Official 

Committee of Unsecured Creditors to Debtors’ Corrected Motion Pursuant to 11 U.S.C. § 1121(d) to 

Extend Exclusive Periods [Dkt No. 2009] (the “UCC Limited Objection”); (iii) Objection of the 

Official Committee of Tort Claimants to Corrected Motion of Debtors Pursuant to 11 U.S.C. § 1121(d) 

to Extend Exclusivity Periods [Dkt. No. 2017] (the “TCC Objection”); and (iv) Objection by the 

Singleton Law Firm Fire Victim Claimants to PG&E’s Exclusivity Motion [Dkt. No. 2019] (the “SLF 

Objection,” and together with the Governor’s Limited Objection, the UCC Limited Objection, and the 

TCC Objection, the “Objections”)3, and respectfully represent as follows: 

 

 

1

 Capitalized terms used but not otherwise defined herein have the meanings assigned to them in the 

Exclusivity Motion. 

2

 An otherwise identical version of the Exclusivity Motion was filed inadvertently without signature 

[Dkt. No. 1795]. 

3

 In addition to the Objections, the Ad Hoc Committee of Senior Unsecured Noteholders filed a 

Statement of the Ad Hoc Committee of Senior Unsecured Noteholders to Corrected Motion of Debtors 

Pursuant to 11 U.S.C. § 1121(d) to Extend Exclusive Periods [Dkt. No. 2008] (“Statement of the Ad 

Hoc Noteholders”). 

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Preliminary Statement 

Recognizing the obvious complexity and early stage of these Chapter 11 Cases, and the 

incontrovertible fact that certain fundamental issues must be addressed before any feasible and 

confirmable chapter 11 plan can be negotiated and filed, the Debtors filed the Exclusivity Motion to 

extend the Exclusive Periods for approximately 6 months. These fundamental issues include, among 

others, the aggregate amount of the Debtors’ liability for wildfire claims to be addressed in a plan of 

reorganization and, as plainly recognized by the Governor of California, obtaining the necessary 

regulatory and legislative relief that all constructive parties in interest in these cases realize is essential 

to any feasible chapter 11 plan and the Debtors’ long-term viability. 

Indeed, as the Governor’s Limited Objection notes, the goal is to enact legislation “this summer 

that will reshape the existing policy and regulatory frameworks” that will be key to the chapter 11 process 

and the Debtors’ successful emergence from Chapter 11. PG&E shares the Governor’s goal of a fair and 

expeditious resolution of the Chapter 11 Cases and is hopeful the necessary legislative and regulatory 

reform will be achieved in the Governor’s timeframe. One thing, however, is absolutely clear – the time 

simply is not ripe for the Debtors to negotiate and file a chapter 11 plan, and the Debtors should be 

granted the requested extension of the Exclusive Periods so that they will have the full and fair 

opportunity contemplated by Congress in enacting section 1121 of the Bankruptcy Code. 

The following responsive pleadings have been filed to the Exclusivity Motion: 

A. Limited Objection of the Official Committee of Unsecured Creditors (the “UCC”) – 

(extension should be limited to four months); 

B. Statement of the Ad Hoc Group of Noteholders – (no objection to Debtors’ requested 

extension) 

C. Limited Objection of Governor Gavin Newsom – (extension should be limited to 75 days); 

D. Objection of the Official Committee of Tort Claimants (the “TCC”) – (no extension should 

be granted); and 

E. Objection by the Singleton Law Firm Fire Victim Claimants – (no extension should be 

granted). 

Notably, the UCC, which is a fiduciary to a constituency of prepetition unsecured creditors 

holding more than $22 billion in claims against the Debtors, the Ad Hoc Group of Noteholders, which 

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represents the interests of a majority of the Utility’s approximately $20.5 billion in funded debt, and the 

Governor, who represents the interests of all the citizens of the State of California (including the Debtors’ 

16 million customers), all understand the complexities and realities of these Chapter 11 Cases and have 

acknowledged that an extension of the Exclusive Periods is warranted. 

Without any basis, the TCC opposes any extension of the Exclusive Periods, once again citing 

irrelevant prepetition history, attacking the Debtors’ management and Board, and baselessly asserting 

that the members of the Debtors’ Board will breach their fiduciary duties. 

As demonstrated in the Exclusivity Motion and the facts of these cases, cause clearly exists for 

an extension of the Exclusive Periods – indeed, the size and complexity of these cases alone warrant a 

reasonable initial extension as contemplated by section 1121. The Debtors are moving these Chapter 11 

Cases forward as expeditiously as possible, particularly given the complexities and plan gating issues 

involved, and are keenly focused on addressing and resolving their liabilities fairly and equitably, and 

ensuring their long-term ability to deliver safe and reliable service to their 16 million customers. 

The requested extension of the Exclusive Periods recognizes the circumstances of these Chapter 

11 Cases and what must be accomplished before a comprehensive plan formulation and negotiation 

process can take place in earnest. Granting a short extension or terminating exclusivity ignores the 

reality of these cases and will only serve to undermine the business stability that the Debtors have been 

able to achieve, create an unnecessary crisis in confidence in the Debtors’ business partners, and 

jeopardize, rather than promote, the successful conclusion of these Chapter 11 Cases and distributions 

to wildfire claimants.

The Objections Should be Overruled 

The primary thrust of the TCC’s objection and what the Governor raises as well is the Debtors’ 

historical prepetition conduct. That, however, has no relevance as to whether cause exists to extend the 

exclusive periods. Indeed, all of the relevant factors considered by the Courts in addressing motions 

under section 1121 focus on postpetition activities. See Exclusivity Motion at pp 9-10. 

Further, there is no basis to attack the integrity of the new Board, Mr. Johnson, the new CEO, or 

their commitment to safety and to the appropriate and successful administration of these cases. Several 

of the new board members have significant industry and safety experience as detailed in the Debtors’ 

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public filings. Others have substantial restructuring expertise that is directly relevant to one of the largest 

and most complex chapter 11 cases in recent United States history. 

Moreover, Mr. Johnson, the Debtors’ newly hired CEO, plainly demonstrates the commitment 

to safety and change. Mr. Johnson recently completed a more than six-year tenure as President and CEO 

of the Tennessee Valley Authority (“TVA”), with responsibility for leading the nation’s largest publicly 

owned utility in its mission of providing energy, environmental stewardship, and economic development 

across a seven-state region. Additionally, during Mr. Johnson’s time at the TVA, the organization 

achieved the best safety records in its 85-year history and has been a perennial top decile safety performer 

in the utility industry. In that same period, Mr. Johnson led the retirement of more than half of TVA’s 

coal generation, resulting in a reduction of TVA’s carbon emissions by about 50% over the last decade. 

He was responsible for leading the generation of more than 50% of TVA’s energy from non-greenhouse 

gas emitting sources. He also oversaw TVA’s expansion into utility scale solar in recent years, with the 

addition of approximately 1,000 megawatts (mWs), and pursued the modernization of its hydro assets 

to increase the overall amount of renewable resources. TVA’s renewable portfolio includes almost 2,400 

mWs of wind and solar and 5,800 mWs of hydro capacity. 

The TCC’s reliance on In re Dow Corning, 208 B.R. 661 (Bankr. E.D. Mich. 1997), to argue that 

the magnitude of the wildfire claims to be addressed in a chapter 11 plan is somehow irrelevant to the 

plan process and to an extension of the exclusive periods is perplexing. Dow, in fact, fully supports the 

relief the Debtors are seeking. In Dow, the Court already had extended the exclusive periods for more 

than two years expressly to address the estimation of mass tort claims. Nevertheless, and despite finding 

that the debtor had engaged in stalling, the Court denied a motion by the tort claimants to terminate 

exclusivity, noting the “chaos factor” that would result from competing plans. In re Dow Corning, 208 

B.R. at 670. 

Additionally, the TCC’s assertion that “many of the wildfire claims were either resolved, close 

to resolution, or certain procedures had been negotiated to facilitate their resolution as the Petition Date” 

is inaccurate. TCC Objection ¶48. The undisputed facts are that none of the 2017 or 2018 wildfire 

claims were close to resolution. In fact, as the tort plaintiff lawyers readily acknowledge, because of 

how recently the Camp Fire occurred, as of the Petition Date, they did not know the number or magnitude 

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of potential claims that might be asserted. Indeed, that is one reason the Debtors filed their Bar Date 

Motion – another prerequisite to the plan process – seeking to obtain relevant information as to the 

magnitude and nature of all of the potential claims, an effort the TCC is also resisting. 

As noted, above, all interested parties other than the TCC recognize the critical importance of 

legislative and regulatory reform to the chapter 11 plan formulation and negotiation process and the 

Debtors’ successful emergence from chapter 11. The Governor’s Objection could not be more clear in 

this regard, and the report of the Governor’s Strike Force plainly focuses on that need, not only for 

PG&E, but for California’s other public and private utilities as well. Wildfires And Climate Change: 

California’s Energy Future, A Report from Governor Newsom’s Strike Force, April 12, 2019, at 2-3. In 

fact, without this reform in place, it is unrealistic to expect that any rational investors would provide 

capital on any reasonable economic terms to fund a chapter 11 plan or that the Debtors would be able to 

attract the ongoing investments necessary to assure their long-term viability. 

As stated in the Governor’s Objection, the “State is working expeditiously to fulfill its role by 

working to enact revisions to the legal and regulatory framework applicable to electric utilities dealing 

with catastrophic wildfires by this summer”. . . . “Additionally, the California Public Utilities 

Commission (the “CPUC”) continues to address the numerous important issues related to PG&E that are 

pending before it.” Governor’s Limited Objection ¶ 3. 

Under these circumstances, no one can seriously dispute that there is a fundamental unresolved 

contingency that warrants a reasonable extension of the Exclusive Periods as requested in the Exclusivity 

Motion. 

And because, as the Governor himself recognizes, the goal is to have this critical legislative and 

regulatory reform addressed by, at the earliest, “this summer” (and possibly toward the end of the 

legislative session in September), neither the Governor’s suggested 75-day extension nor the UCC’s 

suggested four month extension of the Exclusive Periods afford sufficient time for Debtors to formulate 

and negotiate a plan that incorporates the outcome of that process. Indeed, these shorter extensions will 

only result in additional unnecessary motion practice before this Court. 

The Debtors have stated from the outset of these cases that their objectives have been, and 

continue to be, to establish a process to comprehensively address and resolved their wildfire liabilities 

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in a fair and expeditious manner, and implement a financial and operational restructuring that will result 

in a competitive and sustainable cost and capital structure that will ensure their long-term viability. As 

stated, and as recognized by the Governor, this will require significant and substantive legislative and 

regulatory reform. 

As the TCC appropriately recognizes, the purpose of section 1121 of the Bankruptcy Code is to 

afford the debtor a full and fair opportunity to file and obtain acceptances of a chapter 11 plan without 

the threat of competing plans. 

The issue before the Court is not whether cause exists for an extension of the Exclusive Periods, 

because it clearly does. Rather, the issue is – how long the initial extension should be. Based on the 

undisputed size and complexity of these cases and the fundamental gating issues that must be addressed 

before a comprehensive, feasible, and confirmable chapter 11 plan can be formulated, negotiated, and 

proposed, the Debtors believe that the six-month extension requested is reasonable and appropriate. 

Conclusion 

The Debtors request that the Objections be overruled and the relief requested in the Exclusivity 

Motion be granted. 

Dated: May 20, 2019 

WEIL, GOTSHAL & MANGES LLP 

KELLER & BENVENUTTI LLP 

By: /s/ Stephen Karotkin____________

Stephen Karotkin 

Attorneys for Debtors and Debtors in Possession 

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