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TOGUT, SEGAL & SEGAL LLP

One Penn Plaza, Suite 3335

New York, NY 10119

TOGUT, SEGAL & SEGAL LLP

Albert Togut (pro hac vice pending)

(altogut@teamtogut.com)

Kyle J. Ortiz (admitted pro hac vice)

(kortiz@teamtogut.com) 

Amy M. Oden (admitted pro hac vice)

(aoden@teamtogut.com)

Amanda C. Glaubach (admitted pro hac vice)

(aglaubach@teamtogut.com)

One Penn Plaza, Suite 3335

New York, NY 10119

Tel: 212-594-5000

Fax: 212-967-4258

- and -

SCHNADER HARRISON SEGAL & LEWIS LLP

George H. Kalikman

650 California Street, 19th Floor

San Francisco, CA 94108-2736

Direct (415) 364-6734

(gkalikman@schnader.com)

Attorneys for Compass Lexecon, LLC

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)

STATEMENT OF COMPASS LEXECON, 

LLC IN SUPPORT OF APPLICATION 

PURSUANT TO 11 U.S.C. § 327 AND 

FED. R. BANKR. P. 2014(a) AND 2016 

FOR AUTHORITY TO RETAIN AND 

EMPLOY COMPASS LEXECON, LLC 

AS ECONOMIC CONSULTANTS TO 

THE DEBTORS NUNC PRO TUNC TO 

PETITION DATE

Re: Docket Nos. 1756 and 1842

Date: May 22, 2019

Time: 9:30 a.m. (Pacific Time)

Place: United States Bankruptcy Court

Courtroom 17, 16th Floor

San Francisco, CA 94102

Debtors.

 ̈ Affects PG&E Corporation 

 ̈ Affects Pacific Gas and Electric Company 

þ Affects both Debtors

* All papers shall be filed in the Lead Case, 

No. 19-30088 (DM). 

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Compass Lexecon, LLC (“Compass”), as economic consultant to Cravath, Swaine & Moore 

LLP (“Cravath”), lead coordinating counsel for all wildfire-related issues involving PG&E 

Corporation (“PG&E Corp.”) and Pacific Gas and Electric Company (the “Utility”), as debtors and 

debtors in possession (together, “PG&E” or the “Debtors”) in the above-captioned cases 

(the “Chapter 11 Cases”), respectfully submits this statement (the “Statement”)1 in support of the 

Application Pursuant to 11 U.S.C. § 327(a) and Fed. R. Bankr. P. 2014(a) and 2016 for Authority 

to Retain and Employ Compass Lexecon, LLC as Economic Consultants to the Debtors Nunc Pro 

Tunc to Petition Date [Docket No. 1756] (the “Application”).2 In support of this Statement, 

 1 Compass understands that (a) the United States Trustee (the “U.S. Trustee”) will be 

withdrawing its objection [Docket No. 1858] and (b) the Official Committee of Tort Claimants 

(the “TCC”) will be withdrawing its objection [Docket No. 1860] (the “TCC Objection”), in 

each case substantially contemporaneously with the filing of this Statement. The U.S. Trustee 

and Compass have agreed that Compass will waive $93,000 of its postpetition fees, which is 

attributed to the time spent addressing the U.S. Trustee’s concerns regarding the Application. 

Compass, the Debtors, the Official Committee of Unsecured Creditors (the “Committee”), and 

the TCC have agreed to an information-sharing protocol, described below, that resolves the 

TCC Objection. 

2 Compass hereby incorporates by reference the Application and the supporting arguments and 

evidence contained in the following documents:

a. the Declaration of Adel Turki in Support of Debtors’ Application Pursuant to 11 U.S.C. 

§ 327(a) and Fed. R. Bankr. P. 2014(a) and 2016 for Authority to Retain and Employ 

Compass Lexecon, LLC as Economic Consultants to the Debtors Nunc Pro Tunc to 

Petition Date [Docket No. 1757] (the “Original Turki Declaration”);

b. the Declaration of Paul H. Zumbro in Support of Debtors’ Application Pursuant to 11 

U.S.C. § 327(a) and Fed. R. Bankr. P. 2014(a) and 2016 for Authority to Retain and 

Employ Compass Lexecon, LLC as Economic Consultants to the Debtors Nunc Pro Tunc 

to Petition Date [Docket No. 1758] (the “Zumbro Declaration”);

c. the Supplement to Debtors’ Application Pursuant to 11 U.S.C. § 327(a) and Fed. R. 

Bankr. P. 2014(a) and 2016 for Authority to Retain and Employ Compass Lexecon, LLC 

as Economic Consultants to the Debtors Nunc Pro Tunc to Petition Date [Docket No. 

1842] (the “Supplemental Application”); and

d. the Supplemental Declaration of Adel Turki in Support of Debtors’ Application Pursuant 

to 11 U.S.C. § 327(a) and Fed. R. Bankr. P. 2014(a) and 2016 for Authority to Retain 

and Employ Compass Lexecon, LLC as Economic Consultants to the Debtors Nunc Pro 

Tunc to Petition Date [Docket No. 1844] (the “Supplemental Turki Declaration,” and 

together with the Application, the Original Turki Declaration, the Zumbro Declaration, 

and the Supplemental Application, the “Compass Retention Documents”).

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Compass submits the Second Supplemental Declaration of Adel Turki in Support of Debtors’ 

Application Pursuant to 11 U.S.C. § 327(a) and Fed. R. Bankr. P. 2014(a) and 2016 for Authority 

to Retain and Employ Compass Lexecon, LLC as Economic Consultants to the Debtors Nunc Pro 

Tunc to Petition Date (the “Turki Declaration”),3 filed contemporaneously herewith, and 

respectfully states:

PRELIMINARY STATEMENT4

Compass’s retention is permissible under the Bankruptcy Code and of vital importance to 

these Chapter 11 Cases. Compass has served as an economic consultant analyzing the losses and 

potential damages associated with the Northern California Wildfires since February 2018, when 

Compass was retained by Cravath, the Debtors’ corporate and litigation counsel. During its 

engagement, Compass has performed the critical task of investigating, analyzing, and evaluating 

the losses arising from those Northern California Wildfires, as well as the potential damage claims

that might be asserted against the Debtors arising from the North Bay Fire and the Camp Fire. 

Compass’s work already has been, and will continue to be, instrumental in assisting Cravath in 

advising the Debtors’ management regarding potential damages relating to the Northern California 

Wildfires, and a critical element of these Chapter 11 Cases. Given all the valuable work that 

Compass has done already both prior to and during the course of the Chapter 11 Cases, it would be 

extremely costly and prejudicial to the Debtors and their estates if Compass cannot continue its 

work. Cravath would have to retain new, separate economic consultants, who presumably would 

need to incur the same costs already incurred by Compass. For all of the reasons explained in the 

submissions of both Compass and the Debtors, the Committee’s retention of FTI should not

adversely impact the Debtors’ ability to continue to utilize Compass. 

As the Debtors have observed in the Compass Retention Documents, it is far from clear that 

Cravath’s prior retention of Compass, as an economic consultant and potential expert witness in 

 3 Capitalized terms used but not defined herein shall have the meanings ascribed to them in the 

Application or the Turki Declaration, as applicable.

4 Capitalized terms used but not otherwise defined in the Preliminary Statement shall have the 

meanings ascribed to them herein.

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these Chapter 11 Cases, requires Court approval pursuant to section 327(a) of the Bankruptcy 

Code. Economic consultants and expert witnesses are routinely retained by counsel to debtors 

without being separately retained by such debtors as estate professionals. Indeed, as described in 

the Turki Declaration, Compass is almost always engaged through counsel to debtors in chapter 11 

cases and only rarely is directly retained by the debtors themselves. That is why these Debtors did 

not file a retention application for Compass until after the application was filed by the Committee

to retain FTI Consulting, Inc. (“FTI”), as its financial advisor, which was required.

5 Compass also 

believes that its services as an economic consultant and potential expert witness do not fall within 

the scope of section 327(a) and do not require Court approval. 

If the Court determines that Compass must be retained under section 327(a) of the 

Bankruptcy Code, its retention should be approved. No party has taken issue with Compass’s 

qualifications to serve in this role, or the fees being charged to do so. Nor has any party identified 

a disqualifying conflict. Furthermore, with the filing of this Statement, the U.S. Trustee has agreed 

to withdraw its objection to the continued employment and retention of Compass by Cravath and 

the Committee’s retention of FTI. Finally, to save costs, it has been agreed that a significant 

volume of publicly available data obtained to date by Compass will be shared with the Committee, 

FTI, and the TCC, to facilitate their work, which otherwise will remain entirely separate and 

independent. This information-sharing protocol, described below, resolves the TCC Objection. 

For the reasons set forth below, Compass respectfully requests that the Court hold that 

Compass may continue to be retained by Cravath without the need for Court approval. The 

Debtors and the U.S. Trustee agree that Compass’s retention falls outside the scope of section 

327(a). Provided the Court agrees, the Debtors will withdraw the Application and Compass will 

continue to be retained solely by Cravath as an expert witness. In the alternative, if the Court finds 

 5 The issue of Compass’s retention arose following the U.S. Trustee’s objection to the 

Committee’s proposed retention of FTI, Compass’s parent company, as its financial advisor. 

Although the Debtors agreed, at the Court’s suggestion, to file a retention application for 

Compass pursuant to section 327(a) out of an abundance of caution, the Court has yet to find 

that Compass is actually a “professional” within the scope of section 327(a) given its highly 

specialized, narrow role in these Chapter 11 Cases. 

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327(a) retention necessary, Compass respectfully requests that the Court approve the Application 

so that Compass may continue its efforts to the Debtors regarding potential liability for damages 

resulting from the Northern California Wildfires. 

STATEMENT

I. Compass Is an Economic Consultant and Potential Expert Witness and May Be 

Retained by Cravath Without Court Approval.

Section 327 of the Bankruptcy Code and Bankruptcy Rule 2014 require court approval 

before a “professional person” may be retained by a debtor in possession. See Elstead v. Nolden 

(In re That’s Entm’t Mktg. Grp., Inc.), 168 B.R. 226, 229 (N.D. Cal. 1994). “For purposes of 

interpreting § 327, the term ‘professional persons,’ is a ‘term of art reserved for those persons who 

play an intimate role in the reorganization of a debtor’s estate.’” Id. at 230 (quoting Comm. of 

Asbestos-Related Litigants and/or Creditors v. Johns-Manville Corp. (In re Johns-Manville Corp.), 

60 B.R. 612, 619 (Bankr. S.D.N.Y. 1986)). “A person’s status as a ‘professional’ is not 

determinative; the inquiry focuses on that person’s duties.” That’s Entm’t, 168 B.R. at 230. The 

determination whether a person is a “professional” turns on whether “the duties involved are 

central to the administration of the estate.” Id. (quoting In re Sieling Assocs. Ltd. P’ship, 128 B.R. 

721, 723 (Bankr. E.D. Va. 1991)). Courts have recognized duties such as assisting in the 

negotiation of the debtor’s plan, assisting in the adjustment of the debtor/creditor relationship, 

disposing of assets of the estate, and acquiring assets on behalf of the estate to be “central” to the 

administration of the estate. That’s Entm’t, 168 B.R. at 230. 

Courts have routinely held that potential expert witnesses do not fall under this category. 

See, e.g., id. at 230–31 (holding that the employment of an accounting firm as an expert witness 

was not subject to section 327 or Bankruptcy Rule 2014); In re Cyrus II P’ship, No. 05-39857 

(MI), 2008 WL 3003824, at *1 (Bankr. S.D. Tex. July 31, 2008) (holding that expert witness need 

not be retained as “professional persons” under section 327(a)); In re Artra Grp., Inc., 308 B.R. 

858, 860 (Bankr. N.D. Ill. 2003) (“Most courts have come to the conclusion that there is no 

requirement of prior court authorization for retention of an expert witness because an expert is not 

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a ‘professional person’ within the meaning of § 327.” (quoting In re Napoleon, 233 B.R. 910, 913 

(Bankr. D.N.J. 1999)); In re First Am. Health Care of Georgia, Inc., 208 B.R. 996, 998 (Bankr. 

S.D. Ga. 1996) (holding that expert witness’s retention was outside the scope of section 327(a) and 

that expert witness could be employed by debtor’s criminal defense counsel and counsel could seek 

reimbursement of expert witness fees as a pass-through expense); In re Babcock Dairy Co. of 

Ohio, Inc., 70 B.R. 691, 693 (Bankr. N.D. Ohio 1987) (holding that expert witnesses should not be 

considered “professionals” because of their tangential relationship to the administration of the 

estate).

An expert witness is a witness that has “knowledge, skill, experience or education or a 

combination thereof” that “could assist the trier of fact in understanding the evidence or 

determining a fact in issue.” Hon. Barry Russell, Bankruptcy Evidence Manual § 702:1 (2018 ed.); 

see also Fed. R. Evid. 702 (stating that an expert may be qualified by “knowledge, skill, 

experience, training, or education” and that an “expert’s scientific, technical, or other specialized 

knowledge [must] help the trier of fact to understand the evidence or to determine a fact in issue”); 

United States v. Rivera, 43 F.3d 1291, 1295 (9th Cir. 1995) (“Expert witnesses may testify if they 

are qualified and if their testimony will assist the trier of fact in understanding the evidence or 

determining a fact in issue.”) (internal quotation marks and citation omitted). This all applies to 

Compass’s retention by Cravath, as both an economic consultant and potential expert witness on 

behalf of the Debtors to analyze the losses and assess potential damages arising from the Northern 

California Wildfires. 

As described in further detail in the Turki Declaration, Compass has dedicated significant 

time, more than a year, on this engagement. Turki Decl. ¶ 10. It has conducted individual 

evaluations and assessments of the losses and potential damage claims resulting from the North 

Bay Fires and the Camp Fire. Id. ¶¶ 8–10. As a result of that work, Compass has deeply 

specialized knowledge, skill, and experience about the types of damage claims involved and their 

magnitude, and, in the event that Compass personnel are asked to testify as an expert witness, that

expertise could assist a trier of fact in understanding the evidence or determining a fact in issue. 

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As described in the Compass Retention Documents, Compass has been providing and will 

continue to provide the following services to Cravath:

a. analyzing the losses and potential damages associated with the Northern 

California Wildfires;

b. assisting in any claims estimation process in the Chapter 11 Cases, including 

performing economic analysis and data review pertaining to the estimation of 

potential liability in connection with the Northern California Wildfires; 

c. performing related empirical analyses; 

d. providing expert testimony in connection with any of the foregoing services; 

and

e. providing consulting services related to a proceeding initiated by the 

California Public Utilities Commission to implement the requirement of 

Senate Bill 901 concerning utility requests for wildfire cost recovery.

App. at 5; Supp. App at 3. 

Unlike a “professional person,” Compass’s role does not involve formulation of strategies or 

managing the Debtors’ estates or their liabilities. Instead, Compass gathers, organizes, and 

analyzes information and provides such information and analyses to Cravath. Cravath, the 

Debtors, and the Debtors’ other professionals formulate and implement strategy based, in part, on 

the information and analyses provided by Compass.

For these reasons, Compass respectfully submits that its retention falls outside the scope of 

section 327(a) and does not require court approval.

II. Compass’s Relationship with FTI Is Not Disqualifying.

Even if the Court requires 327(a) retention as an estate professional, as set forth in the 

Compass Retention Documents, Compass satisfies the section 327(a) standard and is a 

“disinterested person” within the meaning of section 101(14) of the Bankruptcy Code.6

Public policy favors permitting parties to retain professionals of their choice. See, e.g., In re 

Christ’s Church of the Golden Rule, 157 F.2d 910, 911 (9th Cir. 1946); see also In re Caldor, Inc., 

193 B.R. 165, 170 (Bankr. S.D.N.Y. 1996). 

 6 See App. at 6–10; Initial Turki Decl. at 6–11; Zumbro Decl. at 4–7. 

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Section 327 of the Bankruptcy Code permits the retention of professionals who “do not hold 

or represent an interest adverse to the estate” and that are “disinterested persons.” 11 U.S.C. 

§ 327(a).

Courts have defined an “interest adverse to the estate” to mean:

(1) possession or assertion of an economic interest that would tend to lessen the 

value of the bankruptcy estate; or (2) possession or assertion of an economic 

interest that would create either an actual or potential dispute in which the estate 

is a rival claimant; or (3) possession of a predisposition under circumstances that 

create a bias against the estate. 

Dye v. Brown (In re AFI Holding, Inc.), 530 F.3d 832, 845 (9th Cir. 2008) (citations omitted). 

“Generally an ‘adverse interest’ takes the form of a competing economic interest tending to 

diminish estate values or to create a potential or actual dispute in which the estate is a rival 

claimant.” Caldor, 193 B.R. at 171; AFI Holding, 530 F.3d at 845. The concept of “adverse 

interest” has also been articulated in terms of motivation: whether the professional possesses “a 

meaningful incentive to act contrary to the best interests of the estate and its sundry creditors.” In 

re Martin, 817 F.2d 175, 180 (1st Cir. 1987); Gosser v. Arkison (In re Hammer), Nos. WW-06-

1373 (MoDJ), 04-22244 (SJS), 2007 WL 7540944, at *6 (9th Cir. B.A.P. Oct. 11, 2007). An actual 

conflict exists “if there is active competition between two interests, in which one interest can only 

be served at the expense of the other.” Hume, Smith, Geddes, Green & Simmons LLP v. Hawkins 

(In re Hummer Transp.), No. CV F 13-1640 (LJO), 2014 WL 412534, at *5 (E.D. Cal. Feb. 3, 

2014); In re Git-N-Go, Inc., 321 B.R. 54, 58 (Bankr. N.D. Okla. 2004) (quoting In re BH & P, Inc., 

103 B.R. 556, 563 (Bankr. D.N.J. 1989) (same), aff’d in pertinent part, 119 B.R. 35 (D.N.J. 1990)).

Courts have recognized that there is an overlap in the “adverse interest” and “disinterested 

person” prongs of section 327(a). See, e.g., Martin, 817 F.2d at 180 (“[T]he twin requirements of 

disinterestedness and lack of adversity telescope into what amounts to a single hallmark.”); In re 

Vebeliunas, 231 B.R. 181, 189 (Bankr. S.D.N.Y. 1999) (“It is well-recognized that the meaning of 

the phrase ‘interest materially adverse’ in the definition of a disinterested person overlaps with that 

of ‘interest adverse’ in the first prong of § 327(a) and, together, they form one hallmark with 

which to evaluate whether professionals seeking court-approved retention (or to remain retained by 

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the estate) meet the absence of adversity requirements embodied in the Bankruptcy Code.”). As 

defined in section 101(14)(C) of the Bankruptcy Code, a “disinterested person” is one that, among 

other things, “does not have an interest materially adverse to the interest of the estate or of any 

class of creditors or equity security holders, by reason of any direct or indirect relationship to, 

connection with, or interest in, the debtor, or for any other reason.” 11 U.S.C. § 101(14)(C). 

When determining whether a professional holds a disqualifying “interest materially adverse” under 

clause (C) of this definition, courts have generally applied a factual analysis to determine whether 

an actual conflict of interest exists.

The case law demonstrates clearly that there is no per se rule that prohibits Compass from 

representing the Debtors while FTI represents the Committee. See, e.g., AFI Holding, 530 F.3d at 

848 (stating that determining whether a party holds an interest that is materially adverse to the 

bankruptcy estate, so as not to qualify as disinterested under the Bankruptcy Code, necessarily 

requires an “objective and fact-driven inquiry” based on an examination of “the full panoply of 

events and elements” or “totality of the circumstances”); Rus, Miliband & Smith, APC v. Yoo (In 

re Dick Cepek, Inc.), 339 B.R. 730, 739–40 & n.10 (9th Cir. B.A.P. 2006) (“[T]he inquiry into 

whether the professional holds interests adverse to the estate, is disinterested or otherwise is 

impaired by conflict of interest (actual or potential) is necessarily case- and fact-specific.”); 

Caldor, 193 B.R. at 171 (explaining that whether an “adverse interest” exists is determined on a 

case-by-case basis).

Applying the facts and circumstances analysis: (a) Compass operates as a separate corporate 

entity from FTI, with independent management and employees; (b) FTI has not had, and will 

continue to not have, any supervision or control over any of the work performed by Compass 

related to the Northern California Wildfires; (c) Compass has confirmed that FTI has no visibility 

into, or access to, and has not seen to date, any of the work, or the results thereof, that Compass has 

undertaken for Cravath and the Debtors related to the Northern California Wildfires; and (d) FTI 

and Compass will not be working together, in any way, on any matters as to which Compass is 

being retained in the Chapter 11 Cases. See App. at 7–8; Initial Turki Decl. at 7. There is no 

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“dual representation” here. Compass works for Cravath and FTI works for the Committee. Since 

each of Compass and FTI are separate entities, there is no duality. Both Cravath and the 

Committee have received, and will continue to receive, unbiased advice from a disinterested key 

professional. Accordingly, Compass is disinterested and does not hold an interest adverse to the 

estates in accordance with section 327(a) of the Bankruptcy Code.

III. Compass’s Corporate Separateness and Effective Use of Information Barriers Are a

Further Safeguard Against Any Disqualifying Conflict.

As noted above, Compass and FTI are two separate legal entities. Compass’s and FTI’s 

information systems and employees are completely separate, and both entities have robust and 

strict policies concerning confidential information. See App. at 7–9; Initial Turki Decl. at 7; 

Zumbro Decl. at 5–6. They can no more share with each other than they can with unrelated third 

parties. In fact, Compass and FTI routinely represent different parties in the same cases. See 

generally Turki Decl. Ex. 1, Retentions of Compass and FTI by Different Parties in the Same Case. 

FTI and Compass will not be working together, in any way, on any matters as to which Compass is 

being retained in the Chapter 11 Cases. 

Not only does Compass operate as a separate and independent corporate entity from FTI, but 

it also has had effective safeguards and information barriers in place for the entire period where 

Compass has been engaged by the Debtors and FTI has been engaged by the Committee, which has 

ensured that confidential information has not been exchanged between the personnel working on 

either matter. Plainly stated, they are separate corporate entities that do not share information.7 

Neither Compass nor FTI have access to one another’s files. They share no systems and no 

employees. Furthermore, there is no overlap in governance. No FTI executives have any 

governance role with Compass, and no senior professionals of Compass have any role with FTI. 

 7 As stated in the Engagement Letter, “Compass Lexecon is a separate business unit within FTI 

Consulting, Inc., is operated as such, and does not recognize conflicts with the other business 

segments of FTI.” See Engagement Letter at 3 [Docket No. 1757-1]. The Engagement Letter 

further provides that “Compass Lexecon will not share any non-public client information with 

the other divisions within FTI during this engagement or thereafter.” Id. These are both 

standard provisions that are generally included in all of Compass’s engagements. Turki Decl. 

¶ 12.

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Turki Decl. ¶ 13. None of the revenue from Compass’s engagement by Cravath will be 

upstreamed to FTI. Id.

Even when adverse interests are represented by the same entity, safeguards may be put in 

place to reduce even the appearance of conflicts, and courts have held that alleged conflicts are not 

disabling where appropriate safeguards are put in place. See Caldor, 193 B.R. at 182; see also 

Hempstead Video, Inc. v. Village of Valley Stream, 409 F.3d 127, 137 (2d Cir. 2008) (rejecting 

interpretation of Second Circuit precedent that suggested screens and safeguards of client 

confidences may be categorically rejected as means to isolate and protect against disclosure of 

client confidences). Indeed, in Caldor, the Court noted that the existence of information barriers 

such as these “augment[]” the propriety of a dual representation. See Caldor, 193 B.R. at 182.

Here, it isn’t even a matter of erecting safeguards because Compass and FTI are not a single 

entity. Their information systems and employees are completely separate because they are 

different legal entities. 

Compass has provided, and continues to provide, critical analysis and loss assessment data 

to Cravath and the Debtors at a crucial juncture in these cases, and its retention is necessary in 

order to assist Cravath and the Debtors in assessing the potential damage claims against the 

Debtors arising from the Northern California Wildfires. There are no facts or legal authorities that 

require this Court to reject Compass’s retention. Doing so would be inconsistent with existing law 

and established practice, and would be unduly prejudicial to the Debtors.

IV. Information-Sharing Protocol.

In an effort to preserve estate resources, Compass and the Debtors have agreed to enter into 

an information-sharing protocol with the Committee, FTI, and the TCC. Pursuant to the 

information-sharing protocol, Compass will share with FTI and the TCC the extensive publicly 

available data that Compass has aggregated to date during its engagement by Cravath in connection 

with the Northern California Wildfires. That information-sharing protocol will preserve estate 

resources and save the Committee, FTI, and the TCC valuable time and cost that would otherwise 

be spent mining much of the same data.

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The data Compass is willing to share is significant. For instance, with regard to just the 

North Bay Fires, Compass has offered to share publicly available data identified and collected over 

multiple months from numerous data sources, pertinent to potential losses including (but not 

limited to) residential property damages, commercial or agricultural property damages, business 

interruption costs, infrastructure damage, and automobile losses. The parties will do their own 

analysis and reach their own conclusions based on that data, but there will no longer be a need on 

the part of the Committee, FTI, or the TCC to duplicate that significant data collection process.

VI. Response to Questions Raised at Hearing on May 9, 2019.

In response to the Court’s questions at the May 9, 2019 hearing, Compass respectfully

submits that it is too early in the case to determine whether the Debtors and the Committee will be 

presenting adverse expert testimony with respect to the wildfire damage claims. Their respective 

analyses, which will be undertaken entirely separately and independently, may have positions of 

overlap and positions of difference. But even if their analyses are different, that does not mean that 

they will be adversarial. As the Court acknowledges, different experts can come to different 

conclusions that must be reconciled, and there can be reasonable differences of opinion. Compass

is a “truth-seeker” in the sense that their role as an economic consultant and expert is to conduct 

analyses and inform Cravath and the Debtors’ management. However, FTI cannot do that for the 

Debtors, and FTI’s role for the Committee is much broader and stretches to all aspects of these

cases.

Regardless, while the Court’s questions are good ones, they are also premature. At this 

stage, there is no way to know what the advisors’ ultimate conclusions will be and what role the 

Court will need to take. That is precisely why Compass is needed to advise and consult with 

Cravath and the Debtors’ management. In any case, the parties will do what they can to share 

information pursuant to the information protocol discussed above, and work together to streamline 

any issues brought before the Court and to clearly delineate what guidance they need from the Court 

at the appropriate times.

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CONCLUSION

For the reasons set forth above, Compass respectfully requests that the Court (a) hold that 

Compass may be retained by Cravath without the need for Court approval, or (b) in the alternative, 

grant the relief requested in the Application and such other and further relief as may be just and 

proper.

Dated: New York, New York

 May 17, 2019 Respectfully submitted,

COMPASS LEXECON, LLC

By Its Attorneys:

TOGUT, SEGAL & SEGAL LLP

/s/ Albert Togut

Albert Togut (pro hac vice pending)

(altogut@teamtogut.com)

Amy M. Oden (admitted pro hac vice)

(aoden@teamtogut.com)

Amanda C. Glaubach (admitted pro hac vice)

(aglaubach@teamtogut.com)

One Penn Plaza, Suite 3335

New York, NY 10119

Tel: 212-594-5000

Fax: 212-967-4258

/s/ Kyle J. Ortiz

Kyle J. Ortiz (admitted pro hac vice)

(kortiz@teamtogut.com)

One Penn Plaza, Suite 3335

New York, NY 10119

Tel: 212-594-5000

Fax: 212-967-4258

- and -

SCHNADER HARRISON SEGAL & LEWIS LLP

George H. Kalikman

650 California Street, 19th Floor

San Francisco, CA 94108-2736

Direct (415) 364-6734

(gkalikman@schnader.com)

Attorneys for Compass Lexecon, LLC

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