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DIEMER & WEI, LLP

Kathryn S. Diemer (#133977)

100 West San Fernando Street, Suite 555

San Jose, CA 95113

Telephone: 408-971-6270 

Facsimile: 408-971-6271 

Email: kdiemer@diemerwei.com 

WILLKIE FARR & GALLAGHER LLP

Matthew A. Feldman (pro hac vice)

Joseph G. Minias (pro hac vice)

Daniel I. Forman (pro hac vice)

787 Seventh Avenue

New York, NY 10019-6099

Telephone: (212) 728-8000

Facsimile: (212) 728-8111

Email: mfeldman@willkie.com

jminias@willkie.com

dforman@willkie.com

Counsel for Ad Hoc Group of Subrogation Claim Holders

UNITED STATES BANKRUPTCY COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO DIVISION

In re:

PG&E CORPORATION,

-andPACIFIC GAS AND ELECTRIC 

COMPANY, 

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)

Chapter 11 

Bankr. Case No. 19-30088 (DM)

(Jointly Administered)

MEMORANDUM OF LAW IN SUPPORT 

OF THE MOTION OF THE AD HOC 

GROUP OF SUBROGATION CLAIM 

HOLDERS PURSUANT TO 11 U.S.C. 

§§ 105(a), 107(b) AND 501 AND FED. R. 

BANKR. P. 3001(a) AND 9018 FOR ENTRY 

OF AN ORDER APPROVING PROPOSED 

MODEL OMNIBUS INSURANCE 

SUBROGATION PROOF OF CLAIM FORM 

FOR SUBROGATION CLAIMS AND 

RELATED PROCEDURES

Hearing Date: June 11, 2019

Hearing Time: 9:30 a.m. (PT)

Hearing Location: 450 Golden Gate Ave., 

San Francisco, CA, Courtroom 17

Judge: Hon. Dennis Montali

Objection Deadline: May 28, 2019

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PRELIMINARY STATEMENT1

1. The Court is asked to decide between competing motions to establish a form proof of 

claim for Subrogation Claims relating to fire losses. Though superficially similar, there are 

important differences between the form proposed by the Ad Hoc Subrogation Group and the form 

proposed by the Debtors. The Subrogation Group’s Form is reasonably detailed, drafted with its 

intended audience in mind, requests the information necessary to assert and analyze a claim and 

allow the Debtors to administer their cases, and does not ask for any information that is 

unnecessary, unduly burdensome, confidential and/or unavailable. Contemporaneously with the 

filing of the motion to approve the Subrogation Group’s Form (the “Subrogation Group’s 

Motion”) and this accompanying memorandum of law, the Ad Hoc Subrogation Group is also 

filing an objection to the Debtors’ bar date motion, which describes in detail the issues with the 

Debtors’ proposed form.

2. Importantly, the parties do not dispute the need for a specific proof of claim form for 

the assertion of Subrogation Claims, which present unique and complex issues both for those filing 

claims and for the Debtors’ claims reconciliation process. Subrogation Claims will have to be 

matched to claims filed by individual claimants to avoid any overlapping recoveries, and to make 

sure all damages are fairly compensated. In addition, there is a long history of information 

exchanged between holders of Subrogation Claims and utilities (including PG&E). The claim form 

should request the same information that subrogation claim holders have historically exchanged 

with defendants. However, as is set forth in the Ad Hoc Subrogation Group’s objection to the 

Debtors’ Motion, the Debtors’ proposed form uses confusing terminology, and asks for information 

that has not been historically provided to the company when settling these claims. The claim form 

proposed by the Ad Hoc Subrogation Group, attached to the Subrogation Group’s Motion as 

Exhibit A (the “Subrogation Group’s Form”) and filed contemporaneously herewith, corrects 

those issues.

 

1 Capitalized terms used but not defined in this section shall have the meanings ascribed below.

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I. JURISDICTION

3. This Court has jurisdiction to consider this matter pursuant to 28 U.S.C. §§ 157 and 

1334, the Order Referring Bankruptcy Cases and Proceedings to Bankruptcy Judges, General 

Order (N.D. Cal.), and Rule 5011-1(a) of the Bankruptcy Local Rules for the United States District 

Court for the Northern District of California (the “Bankruptcy Local Rules”). This is a core 

proceeding pursuant to 28 U.S.C. § 157(b). Venue is proper before the Court pursuant to 28 U.S.C. 

§§ 1408 and 1409. 

II. BACKGROUND

4. On January 29, 2019 (the “Petition Date”), PG&E Corporation (“PG&E Corp.”) 

and Pacific Gas and Electric Company (“Utility”), as debtors and debtors in possession 

(collectively, “PG&E” or the “Debtors”), commenced with the Court voluntary cases under 

chapter 11 of the Bankruptcy Code (the “Chapter 11 Cases”). 

5. The Debtors continue to operate their businesses and manage their properties as 

debtors in possession pursuant to sections 1107(a) and 1108 of title 11 of the United States Code 

(the “Bankruptcy Code”). No trustee or examiner has been appointed in the Chapter 11 Cases. 

The Chapter 11 Cases are being jointly administered for procedural purposes only pursuant to Rule 

1015(b) of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”). 

6. The Ad Hoc Group of Subrogation Claim Holders’ (the “Ad Hoc Subrogation 

Group”) membership and collective holdings of claims and interests are disclosed in the First 

Amended Verified Statement of the Ad Hoc Group of Subrogation Claims Holders Pursuant to 

Bankruptcy Rule 9019 [Docket No. 1482]. The Ad Hoc Subrogation Group consists of members 

holding insurance subrogation2claims (“Subrogation Claims”) against the Debtors on account of 

 

2 The use of the shorthand descriptive term “subrogation” herein is not intended to modify or limit the 

substantive rights of the holder of claims or the basis for the claimant’s right to assert claims originating with 

insured tort victims. For purposes of this Motion and Memorandum of Law, Subrogation Claims include, but 

are not limited to, claims that arise from subrogation (whether such subrogation is contractual, equitable or 

statutory), assignment (whether such assignment is contractual, equitable or statutory), or otherwise in 

connection with payments made or to be made by the applicable insurer to insured tort victims, and whether 

arising as a matter of state or federal law, including, without limitation, Section 509 of the Bankruptcy Code.

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payments made (and to be made) to individual insureds relating to damages caused by the 

catastrophic fires that occurred in Northern California prior to the Petition Date.

7. On May 1, 2019, the Debtors filed a motion for entry of an order, among other 

things, establishing the last day to file proofs of claim and approving proposed proofs of claim 

forms for use in these chapter 11 cases (the “Debtors’ Motion”) [Docket No. 1784]. On May 3, 

2019, the Official Committee of Tort Claimants (the “TCC”) filed a motion and accompanying 

memorandum of law seeking approval of its own proposed model proof of claim form for fire 

claims (“TCC’s Motion”) [Docket Nos. 1824 & 1825]. Contemporaneously herewith, the Ad Hoc 

Subrogation Group filed the Subrogation Group’s Motion and an objection to the Debtors’ Motion.

III. THE SUBROGATION CLAIMS, PROPOSED CLAIM FORM AND PROCEDURES 

A. The Subrogation Claims

8. As the Debtors themselves have recognized, Official Form 410 is not useful for the 

assertion of prepetition Subrogation Claims against the Debtors. The official form contains several 

sections that are unlikely to apply to Subrogation Claims—e.g., secured status (Official Form 410 

at § 9), cure amount under a lease (id. at § 10), setoff rights (id. at § 11), and priority (id. at § 12). 

For many (if not all) of those filing Subrogation Claims (each, a “Subrogation Claimant”), the 

amount of their liquidated Subrogation Claims changes constantly as payments are made to 

insureds. The Ad Hoc Subrogation Group respectfully submits that the proof of claim form for 

Subrogation Claims should avoid confusion for the filers, target the same information historically 

shared between subrogation claim holders and defendants, and provide a mechanism for sharing 

such information with the Debtors’ claims and noticing agent. The claim form should not ask for 

information that is unavailable and/or unnecessary to assert a claim and put the Debtors on notice. 

Moreover, a proof of claim form should not require transfer information that is covered by a 

separate procedure governed by Bankruptcy Rule 3001(e), and should protect confidential 

information. 

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B. The Subrogation Group’s Form

9. To these ends, the Ad Hoc Subrogation Group has prepared the Subrogation Group’s 

Form, which has been tailored to these Chapter 11 Cases and provides the Debtors with all of the 

information they will need to reconcile Subrogation Claims. The Subrogation Group’s Form is 

intended to simplify the process for Subrogation Claimants to file a proof of claim and for the 

Debtors to intake the information necessary to reconcile claims and understand the overall claims 

pool. However, as discussed in the Ad Hoc Subrogation Group’s objection to the Debtors’ Motion, 

there are certain issues with the Debtors’ proposed form which the Subrogation Group’s Form 

addresses. The main differences between the two forms are set forth in the chart below, and the 

specific reasons the Subrogation Group’s Form departs from the Debtors’ form on each issue are 

set forth in the objection filed contemporaneously herewith:

Issue Debtors’ Form Subrogation Group’s Form

Unnecessary 

Information

11. . . . This information must be provided to 

Prime Clerk in the form requested . . . 

4. Policy Limit . . .

10. Parcel ID . . .

15. Total Paid/Reserved by Claim Type 

(e.g., Auto Commercial, Homeowners)

16. Total Paid/Reserved by Loss Type 

(e.g., structure, personal property, 

automobile)

15. . . . This information, to the extent 

maintained by the claimant in the ordinary 

course of business, shall be provided to Prime 

Clerk substantially in the form requested . . .

[Policy Limit and Parcel ID not requested]

13. Total Paid to date by Loss Type (e.g. 

structure, personal property, 

automobile)

[Reserves requested in the aggregate. See

Question 12.]

Terminology: 

“claim” vs. 

“subrogation 

claim”

4. Has this claim been acquired from 

someone else?

7. Do you know if anyone else has filed a 

proof of claim for this claim?

4. Has this subrogation claim been acquired 

from someone else (other than an 

insured)?

9. Do you know if anyone else (other than 

the underlying insureds) has filed a proof 

of claim for this subrogation claim?

Aggregate Claim 

Amounts

10. Total aggregate claim amount (amount to 

reflect all individual claims that have been 

paid or reserved by the Insurer)

10. Liquidated Claims. What is the aggregate 

amount of liquidated claims (i.e. payments 

made to insureds as of the date hereof)?

12. Contingent or Unliquidated Claims. What 

is the aggregate amount of estimated 

contingent and unliquidated claims (i.e.

amounts reserved or estimated for claims 

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C. Proposed Procedures

10. The Ad Hoc Subrogation Group requests that the Court approve the Subrogation 

Group’s Form and find that it complies with Bankruptcy Rule 3001(a), so that it may be used by 

Subrogation Claimants to assert Subrogation Claims. Nothing in the Subrogation Group’s Form is 

intended to prejudice either the claimants’ or the Debtors’ rights with respect to the validity of the 

claims asserted. Rather, the Subrogation Group’s Form was designed to ease the administration of 

these Chapter 11 Cases. To be clear, the Ad Hoc Subrogation Group is not asking the Court to 

establish a bar date for any party to file a proof of claim that is different than the date requested by 

the Debtors, nor to approve the form or manner of any notices to be given to known and unknown 

claimants, including the notice of any bar date or any notice by publication. Rather, the Ad Hoc 

Subrogation Group proposes the following simple procedure to replace the Debtors’ proposed form 

for Subrogation Claimants with the Subrogation Group’s Form: Prime Clerk will modify the 

website maintained for the Debtors’ Chapter 11 Cases located at 

https://restructuring.primeclerk.com/pge/ so that (i) the Subrogation Group’s Form is publicly 

accessible, (ii) the webpage associated with the link entitled “Submit a Claim” is modified so that 

potential Subrogation Claimants that choose to file a proof of claim form for Subrogation Claims 

are directed to, and can, complete the Subrogation Group’s Form, and (iii) the supporting 

information submitted in connection with the Subrogation Group’s Form is maintained in a 

confidential manner. 

to be paid to insureds for incidents that

occurred prepetition)?

Transfer 

Documentation

12. If any individual claims that form the basis 

of this claim have been acquired through an 

assignment, please provide the following 

additional information for each individual 

claim: (1) a copy of the original contract of 

sale/assignment . . . (2) a copy of insurer’s 

written notification to insured (pursuant to 10 

Cal. Code Regs. § 2695.7(p)) . . . (3) a copy of 

the underlying policy . . .

[Omitted from Subrogation Group’s Form]

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IV. ARGUMENT

11. Bankruptcy Rule 3001(a) provides that: “A proof of claim is a written statement 

setting forth a creditor’s claim. A proof of claim shall conform substantially to the appropriate 

Official Form.” Fed. R. Bankr. P. 3001(a). As discussed in the TCC’s Motion, in mass tort 

bankruptcies, courts routinely permit parties to make modifications to the Official Form 410.3 The 

purpose of a proof of claim is to provide notice. The filing of a proof of claim puts the court and 

other parties in interest “on notice that a particular creditor is asserting a right to payment.” In re 

Gordian Med., 499 B.R. 793, 799 (C.D. Cal. 2013); see als, Spokane Law Enf’t Fed. Credit Union 

v. Barker (In re Barker), 839 F.3d 1189, 1195 (9th Cir. 2016) (“The proof of claim plays the 

important role of alerting the court, trustee, and other creditors, as well as the debtor, to claims 

against the estate, and the creditor’s intention to enforce the claims.”) (internal quotations omitted); 

Brosio v. Deutsche Bank Nat’l Tr. Co. (In re Brosio), 505 B.R. 903, 912 (9th Cir. BAP 2014) (“The 

filing of a proof of claim is analogous to filing a complaint in the bankruptcy case.”) (citations 

omitted). The Subrogation Group’s Form achieves that purpose.

12. The Subrogation Group’s Form is carefully drafted to avoid confusion by using terms 

of art familiar to insurers holding Subrogation Claims. For example, the term “claim” might mean 

one thing in the bankruptcy context, but insurers filing proofs of claim might read the term to mean 

individual claims made under insurance policies. The proposed Subrogation Group’s Form uses 

terminology that the Ad Hoc Subrogation Group members are comfortable with to address such 

issues and avoid confusion among Subrogation Claimants. 

13. The Subrogation Group’s Form is also drafted to match the information the insurers 

historically shared with PG&E to resolve wildfire claims outside of bankruptcy. The Excel 

spreadsheet referenced in the Subrogation Group’s Form to be provided by Prime Clerk and 

submitted by claimants should be compatible with the information the insurers routinely gather. 

 

3 See, Memorandum of Law in Support of TCC’s Motion, pages 7-8. 

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Submitting the information in this manner will allow the Debtors to easily connect an underlying 

tort claimant’s loss with a corresponding Subrogation Claim. 

14. In accordance with section 107(b) of the Bankruptcy Code and Bankruptcy Rule 

9018, the supporting information submitted in connection with Subrogation Group’s Form should 

be sealed, remain confidential in these Chapter 11 Cases, and not become part of the public record. 

Copies of such information may be provided: (a) to the Court, the Debtors, and the Office of the 

United States Trustee; and (b) to counsel for any official committees in these cases on a 

professional eyes’ only basis. Such individual claim information is commercially sensitive and/or 

implicates individual tort victims’ personal privacy. Section 107(b) of the Bankruptcy Code makes 

it “mandatory for a court to protect documents” falling into one of three categories: confidential 

business information, scandalous or defamatory matter, and means of identification. Archdiocese 

of Portland v. Various Tort Claimants (In re Roman Catholic Archbishop of Portland), 661 F.3d 

417, 430-31 (9th Cir. 2011). Clarifying for Subrogation Claimants that such information will be 

kept confidential will encourage cooperation and participation with the filing and administration of 

claims. 

15. Finally, the Subrogation Group’s Form does not require information that is 

unnecessary to put all parties in interest on notice of an alleged claim against the estates. Nothing 

in the form prejudices the claimant’s right to pursue (and the Debtors’ rights to object to) the merits 

of any asserted claim. As the Court is well aware, in designing forms to be used by a large group 

who are unfamiliar with the bankruptcy process, clarity should be at the forefront. As discussed in 

the Ad Hoc Subrogation Group’s objection to the Debtors’ Motion, and detailed above, certain 

information requested by the Debtors is confusing, unnecessary and/or unduly burdensome for 

submission and administration of Subrogation Claims. The proposed Subrogation Group’s Form 

strikes these unnecessary requests, and thus best serves Subrogation Claimants and the

administration of the Debtors’ estates. 

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Counsel to Ad Hoc Group of Subrogation Claim Holders

WILLKIE FARR & GALLAGHER LLP

/s/ Matthew A. Feldman

Matthew A. Feldman (pro hac vice)

Joseph G. Minias (pro hac vice)

Daniel I. Forman (pro hac vice)

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