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UNITED STATES BANKRUPTCY COURT

 NORTHERN DISTRICT OF CALIFORNIA

In re

PG&E CORPORATION, 

and

PACIFIC GAS AND ELECTRIC

COMPANY,

Debtors. 

9 Affects PG&E Corporation

X Affects Pacific Gas and Electric Co.

9 Affects both Debtors

* All papers shall be filed in 

 Lead Case, No. 19-30088-DM.

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Chapter 11

Bankruptcy Case 

No. 19-30088-DM (Lead Case)

Bankruptcy Case

No. 19-30089-DM

(Jointly Administered)

MEMORANDUM DECISION ON MOTIONS FOR RELIEF FROM STAY

I. INTRODUCTION

The court held hearings on May 9, 2019, on motions for relief

from stay filed by Marina and Mikhail Gelman (“Gelmans”) (Dkt. No.

1310) and Valero Refining Company - California (“Valero”) (Dkt. No.

315). The two motions are unrelated and have not been consolidated

for any purpose. For the reasons explained below, neither motion

will be granted at this time.1

1

After the court reviewed the motions and the accompanying

briefs and reflected on the oral arguments that had been presented,

it began and nearly completed this memorandum disposing of them. 

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Signed and Filed: May 12, 2019

________________________________________

DENNIS MONTALI

U.S. Bankruptcy Judge

Entered on Docket 

May 13, 2019

EDWARD J. EMMONS, CLERK 

U.S. BANKRUPTCY COURT 

NORTHERN DISTRICT OF CALIFORNIA

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The reason these motions are being discussed together is

because the disposition of each is for the same reason: it is still

too early in these complex reorganization cases to force the Debtors

to defend the claims of the two movants in two different courts

while at the same time attempting to make progress toward the goal

of a successful reorganization. While there is no doubt that

Pacific Gas and Electric Company’s (“PG&E”) alleged liability must

be determined, if at all, and perhaps for both claims liquidated as

to amount, it is far more preferable to make progress toward that

goal before the individual claims be dealt with.

II. DISCUSSION

The underlying facts are well-established in the moving papers. 

Marina Gelman suffered personal injuries in January 2016, and has

not fully recovered after lengthty medical treatment. She and her

husband filed suit in San Francisco Superior Court in January, 2017,

naming as defendants PG&E, the City and County of San Francisco

(“CCSF”), and The Palm House restaurant. Much of the pretrial

activity has been completed, and the trial has been set previously,

continued once, and then continued again until this December.

If the Gelmans obtain relief from stay to liquidate their

claims and prevail against PG&E, they will still not be able to

enforce their claim or take other actions to recover without further

permission from the court. Thus relief now will not finally resolve

Then it learned of the Debtors' Letter to Court Regarding Motion

for Relief from Stay by Valero Refining Company-California (Dkt.

No. 1980)(filed at 5:25 PM PDT on May 10, 2019). The information

contained in the letter had no influence on the decision that had

been reached and is reflected in this memorandum. Nothing further

needs to be filed to supplement the record.

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their involvement in this case. Nothing prevents them from severing

their action and proceeding separately against the other 

defendants but they have declined that option.

Valero suffered a loss of power and a subsequent complete

shutdown at its Benecia, California refinery in May, 2017. It sued

PG&E the following month, claiming damages in excess of $75,000,000;

it may also be permitted to seek punitive damages. If it obtains a

judgment above PG&E’s applicable insurance deductible it may be able

to recover from insurance. As with the Gelmans, even if the court

grants relief from stay, Valero will not be able to enforce any

judgment or take other actions to recover from PG&E without further

permission.

The Valero action was scheduled to go to trial in the United

States District Court for the Eastern District of California in June

of this year. It has been postponed because of the PG&E bankruptcy.

The court is satisfied that both movants have shown prima facie

cause for relief from stay under 11 U.S.C. § 362(d). No purpose

would be served by further explanation of their contentions and

arguments. That said, the court will use its discretion to deny

such relief at this time. PG&E has carried its burden in opposition

under 11 U.S.C. § 362(g)(2).

 In the Corrected Motion of Debtors Pursuant to 11 U.S.C. §

1121(d) to Extend Exclusive Periods (Dkt. 1737)2

, Debtors make a

2

 The Corrected Motion was filed before the May 9, 2019,

hearing but had not been reviewed by the court nor made part of the

record of the motions. Whether or not either movant was even aware

of it is of no moment. Reasons for extending exclusivity are not

reasons for granting or denying relief from stay. Even referring

to it now is only to provide a summary of the many complex and

varied matters that have taken place in under four months and to

illustrate the court’s reason why these two motions (and perhaps

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persuasive demonstration that more time is needed to attend to

myriad issues in this case without forcing them to resume defense of 

these two actions absent compelling circumstances to justify relief

now.3 That is not to ignore the obvious, namely that PG&E and its

parent have numerous counsel and other professionals dealing with

its affairs and litigation counsel defending these two tort actions

may have little or no involvement with the reorganization efforts. 

Beyond the specifics of defending these two actions, however,

Debtors’ many challenging tasks include figuring out the structure

and implementation methods of any viable reorganization, not the

least of which task is the liquidation or aggregate estimation of

countless claims from the recent wildfires, other tort liabilities

and billions of dollars of contractual liabilities of all types.

From this court’s experience, both in the prior PG%E case and

many other cases over the years, there is too much at stake in

needing to craft the contours of the reorganization than to require

a debtor this soon to tackle specific individual cases. They must

have breathing room in order at least outline where and how these

and other claims will be handled. 

The court must analyze each such request for relief on a caseby-case basis. The Gelmans and Valero may be closer to relief than

others, and this is a close call given the status of both of these

many more) must be denied, or at least deferred, for the time

being. It makes no determination on the merits of the Corrected

Motion.

3

For example, the lengthy litigation between CCSF and PG&E

before the Federal Energy Regulatory Commission justified relief

from stay, to the extent the stay applies at all, to CCSF at the

same May 9, 2019, hearing. That litigation before a specialized

tribunal will take far longer, and is arguably far more complex

than the Gelman and Valero litigation.

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actions, but relief from stay for these two motions now is not

appropriate.

III. DISPOSITION

The court will follow its usual practice of continuing rather

than denying motions such as these. Both preliminary hearings are

continued to September 10, 2019, at 9:30 AM. If either the Gelmans

or Valero prefer a final order denying their motion in order to

facilitate an appeal, their counsel should serve and upload an order

denying the motion “for the reasons stated in this memorandum”. In

that case the particular motion will be dropped from the September

10 calendar.

For motions remaining on calendar, the movant(s) may supplement

the motion no later than twenty-one days before the continued

hearing and PG&E may file a further response to the motion and any

supplement no later than five days before the hearing. 

* * * END OF MEMORANDUM DECISION * * *

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