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28 Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153-0119

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) 

Theodore Tsekerides (pro hac vice) 

(theodore.tsekerides@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 

Attorneys for Debtors and Debtors in Possession 

 KELLER & BENVENUTTI LLP 

Tobias S. Keller (#151445) 

(tkeller@kellerbenvenutti.com) 

Peter J. Benvenutti (#60566) 

(pbenvenutti@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 

UNITED STATES BANKRUPTCY COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

In re: 

PG&E CORPORATION, 

 - and - 

PACIFIC 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).

 Bankruptcy Case 

No. 19-30088 (DM) 

Chapter 11 

(Lead Case) 

(Jointly Administered) 

PRELIMINARY RESPONSE IN 

OPPOSITION TO PHILIP VERWEY 

FARMS’ (“PVF”) MOTION FOR 

RELIEF FROM AUTOMATIC STAY 

TO EXERCISE SETOFF PURSUANT 

TO 11 U.S.C. §§ 362 AND 553 

[Relates to Dkt. No. 1141–1148] 

Date: May 9, 2019 

Time: 9:30 a.m. 

Place: United States Bankruptcy Court 

 Courtroom 17, 16th Floor 

 San Francisco, CA 94102 

 

Case: 19-30088 Doc# 1817 Filed: 05/02/19 Entered: 05/02/19 17:50:06 Page 1 of

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28 Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153-0119

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”), respectfully submit this preliminary 

response in opposition to Philip Verwey Farms’ (“PVF”) Motion for Relief from Automatic Stay to 

Exercise Setoff Pursuant to 11 U.S.C. §§ 362 and 553 (the “Motion”). See Dkt. No. 1141. 

PVF’s Motion acknowledges that it owes the Utility hundreds of thousands of dollars1 in 

charges related to construction of a pipeline on PVF’s property and for electricity and gas usage 

by PVF. However, PVF asserts that it is entitled to withhold those funds pursuant to an alleged 

right to setoff. See Motion at 7. At the crux of PVF’s setoff claim is a claim for damages arising 

out of an alleged explosion on PVF property, for which PVF has filed an amended proof of claim 

against the Utility, seeking $1,234,469.61. See id. at 8, 18. PVF’s Motion should be denied for 

several reasons. 

First, any request by PVF for “relief from stay” to assert a claim against PG&E is 

misplaced because PVF has already filed a proof of claim against PG&E for the claims related to 

the alleged explosion. Indeed, the Motion indicates that on February 14, 2019, PVF filed a proof 

of claim against PG&E for these claims and on March 5, 2019, PVF filed an amended proof of 

claim asserting its rights to setoff pursuant to Sections 542(b) and 553 of the Bankruptcy Code. 

Motion at 8. 

Further, it appears that PVF’s Motion seeks not just a right to setoff, but also seeks a 

determination of liability, amounts owed, or whether PVF’s asserted claim against the Debtors are 

“liquidated” or “non-contingent.” See Mot. at 16–17. Such request is overly broad, premature 

and inappropriate relief requested on a motion for relief from stay to exercise setoff. The 

Bankruptcy Appellate Panel has found that “consideration of setoff is premature” when, as here, 

“the record has not established the existence of such a debt.” In re Brown & Cole Stores, LLC, 

375 B.R. 873, 880 (B.A.P. 9th Cir. 2007) (Montali, J.). “If and when such claims are asserted in 

proper form and adjudicated by the bankruptcy court, then any and all defenses, setoffs, and 

 

1 The Motion asserts that PVF owes the Utility $390,874.17. 

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28 Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153-0119

counterclaims can be considered.” Id. at 881. Here, the Debtors dispute PVF’s claim, both as to 

liability and amount—and any relief granted on this Motion should not permit PVF to have any 

broader relief or access to any other litigation process, or impose on the Utility any litigation 

burden, beyond what is involved in the normal claims review and allowance process. 

Simply put, PVF’s Motion is not the proper vehicle for attending to “a full adjudication of 

the merits of the parties.” See In re Luz Int’l, Ltd., 219 B.R. 837, 841 (B.A.P. 9th Cir. 1998) 

(reversing bankruptcy court for making a final adjudication on the setoff motion in the context of a 

motion for relief from stay). Thus, this Court should reject PVF’s invitation to expedite and 

adjudicate its claim outside of the normal claims reconciliation and administration process. 

Numerous creditors have already asserted proofs of claims against the Debtors, and nothing under 

sections 362 or 363 of the Bankruptcy Code grants PVF the right to jump the line. Moreover, 

granting such relief would invite other creditors to file similar motions to adjudicate or liquidate 

their claims, which would require the Debtors to take time and attention away from the critical 

task of formulating a chapter 11 plan to effectively determine claims even before a bar date has 

been set by the Court. 

In sum, PVF’s requested relief is overly broad, premature, and should be denied. 

Alternatively, PG&E respectfully requests that this Court schedule a final hearing and set a 

briefing schedule for PG&E to submit a full opposition to PVF’s Motion. 

Dated: May 2, 2019 

WEIL, GOTSHAL & MANGES LLP 

KELLER & BENVENUTTI LLP 

By: /s/ Peter J. Benvenutti 

 Peter J. Benvenutti 

Attorneys for Debtors and Debtors in Possession

Case: 19-30088 Doc# 1817 Filed: 05/02/19 Entered: 05/02/19 17:50:06 Page 3 of

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