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WILLIAM S. LISA (SBN 310541)

wlisa@nixonpeabody.com

NIXON PEABODY LLP

One Embarcadero Center, 32nd Floor

San Francisco, CA 94111

Tel: 415-984-8200

Fax: 415-984-8300

RICHARD C. PEDONE (pro hac vice 

forthcoming)

rpedone@nixonpeabody.com

NIXON PEABODY LLP

Exchange Place

53 State Street 

Boston, MA 02109 

Tel: 617-345-1000

Fax: 617-345-1300

Attorneys for CALIFORNIA SELF-INSURERS’ 

SECURITY FUND

ROBERT N. H. CHRISTMAS (pro hac vice 

forthcoming)

rchristmas@nixonpeabody.com

MAXIMILIAN A. FERULLO (pro hac vice 

forthcoming)

mferullo@nixonpeabody.com

NIXON PEABODY LLP

55 West 46th Street 

New York, NY 10036

Tel: 212-940-3000

Fax: 212-940-3111

UNITED STATES BANKRUPTCY COURT

NORTHERN DISTRICT OF CALIFORNIA

In re:

PG&E CORPORATION

Debtor. 

Tax I.D. No. 94-0742640

Case No. 19-30088

Chapter 11

STATEMENT AND RESERVATION 

OF RIGHTS OF THE CALIFORNIA 

SELF-INSURERS’ SECURITY FUND 

REGARDING THE DIP MOTION 

AND ENTRY OF THE PROPOSED 

INTERIM DIP ORDER

In re:

PACIFIC GAS AND ELECTRIC 

COMPANY

Debtor.

Tax I.D. No. 94-0742640

California Self-Insurers’ Security Fund (the “Fund”), by and through its counsel, Nixon 

Peabody LLP, hereby files this statement (the “Statement”) regarding the Motion of Debtors 

Pursuant to 11 U.S.C. §§ 105, 362, 363, 364, 503 and 507, and Fed. R. Bankr. P. 2002, 4001, 

Case: 19-30088 Doc# 172 Filed: 01/31/19 Entered: 01/31/19 07:42:17 Page 1 of 4
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6003, 6004 and 9014 For Interim and Final Orders (I) Authorizing the Debtors to Obtain Senior 

Secured, Superpriority, Postpetition Financing, (II) Granting Liens and Superpriority Claims, 

(III) Modifying the Automatic Stay, (IV) Scheduling Final Hearing and (V) Granting Related 

Relief [Docket No. 23] (the “DIP Motion”) with respect to the proposed Interim DIP Order.

1

In 

connection therewith, the Fund respectfully states as follows:

Statement

Prior to the Petition Date, Pacific Gas and Electric Company and certain affiliates (the 

“Debtors”) elected to self-insure their workers' compensation obligations under California law.

Section 3701 of the California Labor Code requires self-insured employers to deposit 

security for their obligations in the form of either a surety bond issued in favor of the Department 

of Industrial Relations for the State of California (the “Department”), cash or marketable 

securities, or an irrevocable letter of credit. The amount of the security to be posted by the selfinsured employer is determined by, and may be increased or decreased from time to time by, the 

Department.

On January 16, 2019, prior to the Petition Date, the director of the Office of SelfInsurance Plans (an office of the Department) sent to the Debtors a demand for the posting of 

additional collateral in accordance with Section 3701 of the California Labor Code (the 

“Demand”). To date, the Debtors have not posted the additional collateral.

As a result of and immediately effective upon and contemporaneous with the Demand, the 

Fund obtained a valid and perfected lien on the Debtors’ assets pursuant to Section 3701(k) of the 

California Labor Code (the “Fund Lien”).

The Fund has been engaged in discussions with the Debtors to address the Fund’s 

concerns regarding the treatment of the Fund Lien, and its cash collateral thereunder, as proposed 

 

1 Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the DIP Motion.

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in the Interim DIP Order. As a result of those discussions, the Fund believes it has reached an 

agreement in principal concerning language to be included in the proposed Interim DIP Order to 

address those concerns.

By and through this Statement, the Fund expressly reserves its right to object to the DIP 

Motion with respect to entry of the proposed Interim DIP Order in the event the Debtors and the 

Fund fail to agree on final language or the Debtors or the Court further modify the Interim DIP 

Order in a way that adversely impacts the Fund, the Fund Lien and its cash collateral thereunder.

2

 

2 Nothing herein shall be construed to constitute a waiver of the Fund’s right to object to any proposed final relief 

with respect to the DIP Motion.

Case: 19-30088 Doc# 172 Filed: 01/31/19 Entered: 01/31/19 07:42:17 Page 3 of 4
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DATED: January 31, 2019 NIXON PEABODY LLP

By: /s/ Robert N.H. Christmas

ROBERT N.H. CHRISTMAS (pro hac vice 

forthcoming)

WILLIAM S. LISA (SBN 310541)

wlisa@nixonpeabody.com

One Embarcadero Center, 32nd Floor

San Francisco, CA 94111

Tel: 415-984-8200

Fax: 415-984-8300

RICHARD C. PEDONE (pro hac vice 

forthcoming)

rpedone@nixonpeabody.com

Exchange Place

53 State Street 

Boston, MA 02109 

Tel: 617-345-1000

Fax: 617-345-1300

MAXIMILIAN A. FERULLO (pro hac vice 

forthcoming)

55 West 46th Street 

New York, NY 10036

Tel: 212-940-3000

Fax: 212-940-3111

Attorneys for CALIFORNIA SELF 

INSURERS’ SECURITY FUND

Case: 19-30088 Doc# 172 Filed: 01/31/19 Entered: 01/31/19 07:42:17 Page 4 of 4