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28 BAKER

& HOSTETLER LLP

ATTORNEYS AT LAW

SAB FRANCISCO, CA 

 

Robert A. Julian (SBN 88469) 

Cecily A. Dumas (SBN 111449) 

BAKER & HOSTETLER LLP 

1160 Battery Street, Suite 100 

San Francisco, CA 94111 

Telephone: 628.208.6434 

Facsimile: 310.820.8859 

Email: rjulian@bakerlaw.com 

Email: cdumas@bakerlaw.com 

Eric E. Sagerman (SBN 155496) 

Lauren T. Attard (SBN 320898) 

BAKER & HOSTETLER LLP 

11601 Wilshire Blvd., Suite 1400 

Los Angeles, CA 90025-0509 

Telephone: 310.820.8800 

Facsimile: 310.820.8859 

Email: esagerman@bakerlaw.com 

Email: lattard@bakerlaw.com 

Counsel for Official Committee of Tort Claimants 

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) 

Bankruptcy Case 

No. 19-30088 (DM) 

Chapter 11 

(Lead Case) 

(Jointly Administered) 

APPLICATION OF THE OFFICIAL 

COMMITTEE OF TORT CLAIMANTS 

FOR ENTRY OF AN ORDER 

SUPPLEMENTING COMPENSATION 

PROCEDURES ORDER FOR 

RETENTION OF EXPERTS (DOC. NO. 

701) 

Date: July 23, 2019 

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

Place: United States Bankruptcy Court 

 Courtroom 17, 16th Floor 

 San Francisco, CA 94102 

Objections Due: July 16, 2019

Case: 19-30088 Doc# 2675 Filed: 06/20/19 Entered: 06/20/19 09:36:37 Page 1 of

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The Official Committee of Tort Claimants (the “TCC”) of PG&E Corporation and Pacific 

Gas and Electric Company (collectively, the “Debtors”) hereby submits this application (the 

“Application”) for the entry of an order, substantially in the form attached hereto as Exhibit A, 

supplementing the Order Pursuant to 11 U.S.C. §§ 331 and 105(a) and Fed. R. Bankr. P. 2016 for 

Authority to Establish Procedures for Interim Compensation and Reimbursement of Expenses of 

Professionals (the “Compensation Procedures Order”) [Doc. No. 701] to provide for the TCC’s 

employment of experts (the “Experts”) and approving the compensation procedures in connection 

therewith. In support of the Application, the TCC respectfully represents as follows: 

Jurisdiction 

1. The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 

and the Order Referring Bankruptcy Cases and Proceedings to Bankruptcy Judges of the United 

States District Court of the Northern District of California, General Order 24 (N.D. Cal.), and Rule 

5011-1(a) of the Bankruptcy Local Rules for the United States Bankruptcy 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 this Court pursuant to 28 U.S.C. §§ 1408 and 1409. 

Background 

2. On January 29, 2019 (the “Petition Date”), the Debtors filed voluntary petitions for 

relief under chapter 11 of the Bankruptcy Code (the “Cases”) in the United States Bankruptcy 

Court for the Northern District of California (the “Court”). On January 31, 2019, the Court 

entered an order consolidating the Cases for joint administration [Doc. No. 207]. 

3. The Debtors continue to manage their assets and operate their businesses as debtorsin-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No trustee has been 

appointed in the Cases. 

4. On February 15, 2019, the Office of the United States Trustee (“U.S. Trustee”)

filed an Appointment of the Official Committee of Tort Claimants [Doc. No. 453]. Following the 

resignation of Richard Heffern from the original committee and the addition of Tommy Wehe, on 

February 21, 2019, the U.S. Trustee filed the Amended Appointment of the Official Committee of 

Tort Claimants [Doc. No. 530]. The members of the TCC are: (i) GER Hospitality, LLC, in its 

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capacity as an individual claimant; (ii) Kirk Trostle; (iii) Tommy Wehe; (iv) Angelo Loo; (v) 

Karen K. Gowins; (vi) Agajanian, Inc.; (vii) Susan Slocum; (viii) Samuel Maxwell; (ix) Karen M. 

Lockhart; (x) Wagner Family Wines-Caymus Vineyards; and (xi) Gregory Wilson. The TCC 

conducted a meeting on February 15, 2019, at which all members were present, and appointed 

Karen M. Lockhart as Chairperson. 

5. On February 6, 2019, the Debtors filed the Motion of Debtors Pursuant to 11 U.S.C. 

§§ 331 and 105(a) and Fed. R. Bankr. P. 2016 for Authority to Establish Procedures for Interim 

Compensation and Reimbursement of Expenses of Professionals [Doc. No. 349]. 

6. On February 28, 2019, the Court entered the Compensation Procedures Order [Doc. 

No. 701]. The Compensation Procedures Order does not specifically provide for procedures 

regarding the retention and compensation of expert witnesses. 

7. On May 29, 2019, the Court entered the Order Appointing Fee Examiner and 

Establishing Procedures for Consideration of Requested Fee Compensation and Reimbursement 

of Expenses (“Fee Examiner Order”) [Doc. No. 2267]. The Fee Examiner Order applies to 

professionals “requesting compensation and/or reimbursement of expenses for services rendered 

pursuant to sections 327, 330 and 331...” Fee Examiner Order at ⁋ 2. The Fee Examiner Order 

also amended the Compensation Procedures Order to provide that the fee examiner (the “Fee 

Examiner”) must be served with the fee statements and fee applications of professionals, and to 

grant the Fee Examiner status as a professional with standing to object to fee statements and fee 

applications. 

Experts Compensation Procedures 

8. The Compensation Procedures Order presently provides that Retained 

Professionals, including the TCC’s counsel, “may seek interim payment of compensation and 

reimbursement of expenses in accordance with ...” the terms of the Compensation Procedures 

Order. Id. at ⁋ 2. However, the Compensation Procedures Order does not specifically provide 

procedures for the retention and compensation of experts. 

9. One of the most critical threshold issues in these Cases is the accurate quantification 

of tort claim damages (the “Tort Claims”). Given the importance and complexities of this issue 

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to the Cases, the TCC will be required to retain Experts to assist the TCC in quantifying the tens 

of billions of dollars of Tort Claims to assist in the Debtors’ reorganization and plan process. 

Indeed, the Debtors have hired their own experts to assist in their quantification of the Tort Claims 

and, for there to be potential consensus, the TCC will also have to retain Experts. The TCC 

believes that the Experts will provide services to the TCC and its advisors. However, if ultimately 

necessary, certain of the Experts may also be required to offer opinion testimony in proceedings 

before the Court. 

10. Among its other professionals, the Debtors have retained Compass Lexecon, LLC 

(“Compass”) as a consultant and expert witness to assist the Debtors, through counsel, in the 

analysis and evaluation of wildfire damages and claims. Compass’ retention was done without 

court order, and presumably its fees and expenses will be passed through Debtors’ counsel as an 

estate expense. The TCC submits that the Court should permit the TCC’s counsel to retain Experts 

similarly whose compensation will be paid as an estate expense. 

11. The TCC proposes amending the Compensation Procedures Order to add the 

following requirements for Experts: 

 The TCC, Debtors and Official Committee of Unsecured Creditors (the “UCC”) 

are authorized to retain expert witnesses and consultants for the purposes of claims 

calculation, litigation and related matters, without need for further order of the 

Court, and the Debtors shall pay such fees and expenses pursuant to the 

Compensation Procedures Order and as amended by the revised procedures. 

 

 Counsel for the TCC, UCC and Debtors will include the aggregate amount of each 

Expert’s monthly fees and expenses as a line item in each of their monthly fee 

statements. There shall be a separate line item for each Expert. The names of the 

Experts will be redacted to protect confidentiality and potential privilege issues. 

 Upon request, counsel for the TCC, UCC or Debtors, as applicable, will submit 

unredacted invoices to the U.S. Trustee and Fee Examiner. To the extent a dispute 

relating to any Expert invoice is presented to the Court, such invoice will be 

submitted under seal to the Court. All invoices so submitted will remain under seal 

and confidential and not made available to anyone without the consent of the TCC, 

UCC or Debtors, as applicable, or further order of the Court. 

 The provisions of the Compensation Procedures Order governing payment of fee 

statements and fee applications will govern payment to the TCC, UCC, Debtors or 

their respective counsel for the Experts. 

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12. The TCC submits that the proposed amendments to the Compensation Procedures 

Order will avoid any potential issues regarding the compensation of Experts whose services are 

necessary to ensure the continued progress of the Cases. Counsel for the TCC has consulted with 

counsel for the Debtors and the UCC and they consent to the relief requested herein. 

Basis for Relief 

A. Individual Retention Applications Are Not Required For Experts 

13. Courts have held that a formal retention application is not always a prerequisite for 

employment of experts. See, e.g. Order Approving Pacific Gas and Electric Company’s Motion 

to Authorize the Retention of Experts Without Further Order of the Court, In re Pacific Gas and 

Electric Co., Case No. 01-30923 DM (Bankr. N.D. Cal. July 12, 2002), ECF No. 8741; Elstead v. 

Nolden (In re That’s Entertainment Marketing Group, Inc.), 168 B.R. 226 (N.D. Cal. 1994). 

Instead, persons retained to provide expert opinions or testimony are routinely employed and 

compensated by estates without formal retention applications. In re That’s Entertainment 

Marketing Group, Inc., 168 B.R. at 230; In re Napoleon, 233 B.R. 910, 911 (Bankr. D.N.J. 1999); 

In re Ponce Marine Farm, Inc., 259 B.R. 484, 494 (Bankr. D.P.R. 2001). “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 a ‘professional person’ within the meaning of § 327.” In re 

Napoleon, 233 B.R. at 913. Indeed, the Court approved the retention of Compass in May, 2019 

without the necessity of a court order. In re PG&E Corp., Case No. 19-30088 (DM), May 22, 

2019 Hearing, Tr. at 9:1-7. Accordingly, the TCC submits that it may retain Experts in the course 

of its duties without first filing individual retention applications. 1

B. Supplement to the Compensation Procedures Order 

14. The TCC’s counsel will continue to apply to the Court for payment of compensation 

and reimbursement of expenses in accordance with applicable provisions of the Bankruptcy Code, 

the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), the Compensation 

Procedures Order, the Guidelines promulgated by the Office of the United States Trustee, and any 

 

1

 If the Court determines that the TCC must seek approval of each Expert, the TCC respectfully requests that the Court 

permit the TCC to file the applications under seal. Otherwise the TCC will be prejudiced, including by being forced 

to reveal work product and case strategy. 

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SAN FRANCISCO, CA 

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additional procedures that may be established by the Court in these Cases. However, the TCC 

respectfully requests that the Compensation Procedures Order be amended as set forth above to 

avoid any ambiguity regarding payment of Experts, and to shield information which is protected 

by the work product doctrine and any other privileges from disclosure. 

15. Subject to the Court’s approval, the Experts will be compensated at their standard 

hourly rates, which are based on the Experts’ level of experience, plus reimbursement of the actual 

and necessary expenses that the Experts incur in accordance with the ordinary and customary rates 

which are in effect on the date the services are rendered. 

16. The Experts will maintain detailed, contemporaneous records of time and any 

necessary costs and expenses incurred in connection with the rendering of their services and will 

be reimbursed for such costs and expenses in conformity with the Guidelines promulgated by the 

U.S. Trustee as in effect in this District. 

Notice 

17. Notice of this Application will be provided to (i) the Office of the United States 

Trustee for Region 17 (Attn: James L. Snyder, Esq. and Timothy Laffredi, Esq.); (ii) counsel to 

the Creditors Committee; (iii) counsel to the Debtors; (iv) the Securities and Exchange 

Commission; (v) the Internal Revenue Service; (vi) the Office of the California Attorney General; 

(vii) the California Public Utilities Commission; (viii) the Nuclear Regulatory Commission; (ix) 

the Federal Energy Regulatory Commission; (x) the Office of the United States Attorney for the 

Northern District of California; (xi) counsel for the agent under the Debtors’ debtor in possession 

financing facility; and (xii) those persons who have formally appeared in these Cases and requested 

service pursuant to Bankruptcy Rule 2002. The TCC respectfully submits that no further notice is 

required. 

No Prior Request 

18. No previous request for the relief sought herein has been made to this or any other 

court. 

Reservation of Rights 

19. The TCC respectfully reserves the right to file a brief and memorandum of law in 

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response to any objection to this Application. 

WHEREFORE, the TCC respectfully requests that this Court enter an order, in the form 

attached hereto as Exhibit A, (a) supplementing the Compensation Procedures Order, and (b) 

granting such other and further relief as is just and proper. 

Dated: June 20, 2019 

BAKER & HOSTETLER LLP 

By: /s/ Kimberly Morris 

Robert A. Julian 

Kimberly Morris 

Attorneys for Official Committee of Tort 

Claimants 

Jorian L. Rose 

Elyssa S. Kates 

BAKER & HOSTETLER LLP 

45 Rockefeller Plaza 

New York, NY 10111 

 

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