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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)

PARTIAL OBJECTION OF AD HOC GROUP 

OF SUBROGATION CLAIM HOLDERS TO 

MOTION OF DEBTORS PURSUANT TO 11 

U.S.C. §§ 502(b)(9) AND 105(a), FED. R. 

BANKR. P. 2002, 3003(c)(3), 5005, AND 9007, 

AND L.B.R. 3003-1 FOR ORDER 

(I) ESTABLISHING DEADLINE FOR 

FILING PROOFS OF CLAIM, 

(II) ESTABLISHING THE FORM AND 

MANNER OF NOTICE THEREOF, AND 

(III) APPROVING PROCEDURES FOR 

PROVIDING NOTICE OF BAR DATE AND 

OTHER INFORMATION TO ALL 

CREDITORS AND POTENTIAL 

CREDITORS

Hearing Date and Time: June 11, 2019 at 9:30 a.m. (PT)

Hearing Location: 450 Golden Gate Ave., San Francisco, 

CA, Courtroom 17

Judge: Hon. Dennis Montali

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The Ad Hoc Group of Subrogation Claim Holders1(the “Ad Hoc Subrogation Group”) 

hereby submits this objection (the “Objection”) to the Motion of Debtors Pursuant to 11 U.S.C. §§ 

502(b)(9) and 105(a), Fed. R. Bankr. P. 2002, 3003(c)(3), 5005, and 9007, and L.B.R. 3003-1 for 

Order (I) Establishing Deadline for Filing Proofs of Claim, (II) Establishing the Form and Manner 

of Notice Thereof, and (III) Approving Procedures for Providing Notice of Bar Date and Other 

Information to All Creditors and Potential Creditors [Docket No. 1784] (the “Debtors’ Motion”).

2

 

In support of the Objection, the Ad Hoc Subrogation Group, by and through its undersigned 

counsel, respectfully represents as follows: 

PRELIMINARY STATEMENT

1. Setting a bar date for the filing of proofs of claim is a step in the right direction. But 

the Debtors’ Motion seeks to outline the evidentiary support the Debtors unilaterally determine 

should be presented in support of certain claims and to have this Court issue an order that provides 

a blanket disallowance of claims that don’t comply in each and every respect. This overreaching 

should not be sanctioned by this Court. Other than outlining the potential consequences of 

submitting an untimely claim, the order setting the Bar Date should not dictate allowance or 

disallowance of any claims. The Debtors’ attempt to deprive claimants of due process in 

consideration of their claims is inappropriate. The purpose of the proof of claim process is simply 

to put interested parties on notice of the claim—not to provide all of the evidence needed to 

adjudicate the claim. Bankruptcy Code section 502 makes clear that a creditor is entitled to notice 

and a hearing on any objection to a claim. Instead of filing a simple, non-controversial motion to 

set a claims bar date with model forms that are personalized for the claims in these cases, the 

Debtors are asking the Court to make substantive rulings on which claims to allow or disallow.

2. Specifically, the proposed order, read literally, appears to set up a foot-fault where a 

claimant that is unable to answer every question or respond completely to very specific information 

 

1 The Ad Hoc Subrogation Group’s 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].

2 Capitalized terms not defined herein have the meanings ascribed to them in the Debtors’ Motion. 

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requests “in the appropriate form shall . . . be forever barred, estopped, and enjoined from asserting 

such claims against the Debtors.” Debtors’ Motion, Exhibit A, ¶ 5. The penalty for less than 

perfect compliance cannot be that an otherwise valid claim is disallowed. Such an outcome is 

demonstrably at odds both with established precedent permitting claimants to amend their proofs of 

claim following an objection, and fundamental principles of fairness.

3. The above concern is heightened by the fact that the Debtors’ proposed form 

(Debtors’ Motion, Exhibit C-3, the “Debtors’ Form”) for insurance subrogation3claims 

(“Subrogation Claims”) uses confusing terminology and asks for information that is either 

unavailable or unduly burdensome to collect. Despite the fact that there is a long history of 

information exchanged between holders of subrogation claims and utilities (including PG&E), the 

Debtors have deviated from what is typical, without explanation. As more fully detailed herein, the 

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

exchanged with defendants. 

4. The Debtors’ Form also asks for information related to claims transfers. But whether 

a party filing a proof of claim has transferred the claim, or is the transferee now holding a 

transferred claim, is irrelevant to whether a claim exists. Bankruptcy Rule 3001(e) sets forth the 

proper procedure to notify parties in interest of claims transfers. If the Debtors intend to take a 

position concerning the efficacy of claims transfers, they should not use the proof of claim process 

to collect information to do so. Finally, the Debtors’ proposed order does not sufficiently protect 

information that may be commercially sensitive and/or implicates individual tort victims’ personal 

privacy. The order should seal such information, and clarify that it may only be provided to official 

committees on a professional eyes’ only basis.

5. The Ad Hoc Subrogation Group welcomes the setting of a bar date so the Debtors 

 

3 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. These “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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and all parties in interest can better understand the quantum of total claims against the estates, and 

move towards a resolution of these cases. Similarly, using a specific proof of claim form for 

Subrogation Claims—claims that are unique and complex—is also appropriate. However, for the 

reasons set forth more fully below, the Motion is problematic in many critical respects, and should 

not be approved by the Court without the following key modifications.4

BACKGROUND

6. 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”). 

7. The Ad Hoc Subrogation Group’s 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], as may be amended from 

time to time.5 

8. The Debtors’ Motion was filed on May 1, 2019, seeking entry of an order 

establishing the last day to file proofs of claim and approving proposed proofs of claim forms for 

use in these chapter 11 cases, to be heard on May 22, 2019. The Debtors’ Motion has been 

adjourned to June 11, 2019. 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 Motion”) [Docket Nos. 1824 & 1825], 

to be heard on June 11, 2019. Contemporaneously herewith, the Ad Hoc Subrogation Group filed 

 

4 Contemporaneously with the filing of this Objection, the Ad Hoc Subrogation Group has filed a motion (the 

“Subrogation Group’s Motion”) proposing a revised form for the assertion of Subrogation Claims (the 

“Subrogation Group’s Form”). The Subrogation Group’s Form is attached to the Subrogation Group’s 

Motion as Exhibit A, and is also attached hereto as Exhibit A for ease of reference.

5 The Ad Hoc Subrogation Group consists of insurers and other entities that acquired subrogation claims from 

insurers. Subrogation rights may be contractual or equitable under state law, or arise pursuant to section 509 of 

the Bankruptcy Code. Generally, when an insurer pays an insured’s losses or damages for which a third party 

is liable, the insurer is subrogated to the rights of the insured as against the third party. Here, Ad Hoc 

Subrogation Group members hold Subrogation Claims against the Debtors on account of 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.

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the Subrogation Group’s Motion and accompanying memorandum of law.

PARTIAL OBJECTION

9. Before the Debtors’ Motion is granted, the proposed order should be clarified to 

permit claimants to amend their proofs of claim, and the Debtors’ Form should be substituted with 

the Subrogation Group’s Form. 

10. The Ad Hoc Subrogation Group does not dispute the Debtors’ right to object to any 

proof of claim on proper notice for failure to comply with the Bar Date Order. However, the Bar 

Date Order should not forever bar claimants that don’t perfectly complete a complicated form with 

dozens of specific information requests. As would be true in any other bankruptcy case, claimants 

should have an opportunity to revise, amend and/or supplement their claims, even if the Bar Date 

has passed, so long as their originally filed proof of claim form provided the Debtors with sufficient 

notice. The Ninth Circuit has a “long-established liberal policy toward amendment of proof of 

claims.” Pizza of Hawaii, Inc. v. Shakey’s Inc. (In re Pizza of Hawaii, Inc.), 761 F.2d 1374, 1381 

(9th Cir. 1985) (quoting Sambo’s Rests., Inc. v. Wheeler (In re Sambo’s Rests., Inc.), 754 F.2d 811, 

816 (9th Cir. 1985)); see also In re Grivas, 123 B.R. 876, 878 (Bankr. S.D. Cal. 1991). 

Amendments to an already filed proof of claim should be freely allowed, and the salient question is 

whether the “creditor is seeking to introduce a new claim in disguise.” Diversified Pac. 

Opportunity Fund I, LLC v. Cisneros (In re Riley), No. 12-01288 (DMG), 2013 WL 4854485, at *3 

(C.D. Cal. 2013) (internal quotations omitted). Paragraph 5 of the Proposed Order should be 

clarified to reflect this standard by adding the following language: “Notwithstanding anything to 

the contrary herein, claimants that make a good faith effort to assert a claim in the appropriate form 

shall be permitted to revise, amend and/or supplement their proof of claim until such claim is 

allowed or disallowed by Court order.” Claimants’ rights to supplement their claims must be 

preserved in this case (regardless of the form ultimately approved), because claims arising out of 

the most recent wildfires are still developing and may be subject to further modification. The 

proposed Bar Date is less than one year removed from the date of the Camp Fire, which inflicted 

enormous damage in terms of lives lost and structures destroyed. It should be expected that claims 

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will be modified after the Bar Date as more/better information becomes available.

11. Furthermore, preserving claimants’ rights to supplement their proofs of claim is 

particularly critical, because the Debtors’ Form is confusing and asks for information not typically 

provided by subrogated insurers to PG&E when negotiating and settling these types of claims. 

Multiple subrogation lawyers representing a large group of individual insurers track the claims 

made under individual insureds’ policies in a centralized, electronic format. Subrogation counsel 

and PG&E have used that database in the past to resolve Subrogation Claims. The proof of claim 

form should ask for the same information historically exchanged on Subrogation Claims. But, 

certain data points listed in Question 11 of the Debtor’s Form do not conform to historic practice, 

specifically: policy limits, parcel IDs, and reserves per claim broken down by loss type.

12. Policy limits are irrelevant to the asserted claim, because subrogation rights arise as a 

matter of equity from the payment made by the insurer to insured, irrespective of any policy limits. 

Furthermore, policy limits generally cannot be boiled down to one single dollar amount—for 

example, policies typically incorporate various limits and sub-limits for different types of losses. It 

would be overly burdensome to provide such information on a policy-by-policy basis. Policy limits 

are also potentially sensitive information for insureds because they indicate the value of the 

insureds’ property. The insureds are involuntary creditors and their private information should not 

be made public through the claims process.

13. A property’s parcel ID is property-tax related information, which is not collected by 

many insurers from the insureds in the ordinary course of business. Collecting such information 

now from thousands of claimants would be extremely time consuming and prohibitively expensive. 

The Subrogation Group’s Form proposes providing the information that is routinely collected: 

street addresses. 

14. Many insurers do not track reserves by loss type (e.g., structure, personal property, 

automobile), as requested in the Debtors’ Form, and therefore cannot provide such information. In 

fact, insurers use a wide variety of reserve practices. Some carriers only track bulk reserves 

relating to a loss event, like a fire or earthquake. The Subrogation Group’s Form more 

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appropriately asks holders of Subrogation Claims to provide aggregate reserves, and that is 

sufficient information to allege a claim. Subrogation Group’s Form, Question 12. 

15. The Debtors’ Form also uses confusing terminology. It asks whether the “claim” 

asserted was acquired from someone else, and whether the claimant is aware of anyone else 

asserting the same “claim.” Debtors’ Form, Questions 4 & 7. Those questions are confusing in the 

subrogation context, where insurers pursue claims as subrogees of their insureds, some of whom 

are individual claimants who may assert their own independent claims. The form should be 

clarified to reference “subrogation claims” rather than “claims,” and note that it is not asking 

whether claims have been “acquired from” or “filed by” the underlying insureds, as set forth in the 

Subrogation Group’s Form. Subrogation Group’s Form, Questions 4 & 9.

16. In addition, the Debtors’ Form asks for aggregate “paid” and “reserved” amounts, but 

that does not clearly allow the claimant to assert claims above and beyond the amount “reserved” 

on their books and records. See Debtors’ Form, Question 10. The amount reserved by an insurer 

for potential future payments to an insured is different from estimating contingent claims in the 

bankruptcy context. Some insurers may wish to assert further estimated amounts in a bankruptcy 

proof of claim form that are not captured in the internal reserve maintained for insurance purposes. 

The Subrogation Group’s Form more appropriately asks for aggregate paid, reserved and estimated 

amounts. Compare Debtors’ Form, Question 10, with Subrogation Group’s Form, Questions 10-

13.

17. Aside from being generally confusing and asking for information that is not readily 

available, the Debtors’ Form also inappropriately requests claims transfer information. Bankruptcy 

Rule 3001(e) governs what must be filed related to claims transfers. By contrast, the proof of claim 

form’s purpose is to notify the world of the creditor’s intention to pursue a claim. See 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 

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Cir. BAP 2014) (“The filing of a proof of claim is analogous to filing a complaint in the bankruptcy 

case.”) (citations omitted). The detailed transfer information requested by the Debtors does not 

further that purpose. Moreover, Question 12(c) of the Debtors’ proposed POC form, which 

purports to require production of the underlying policy for every claim, is extremely 

burdensome. It is also irrelevant because subrogation arises by operation of equity, irrespective of 

the policy terms. The fact that Debtors are only seeking this information from creditors that 

acquired their claims shows that the information is irrelevant.

18. The following chart shows how the Subrogation Group’s Form addresses each of the 

foregoing issues by comparing the Debtors’ Form and the Subrogation Group’s Form side-by-side.

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 

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 

[Omitted from Subrogation Group’s Form]

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19. Finally, the Debtors’ Proposed Order does not sufficiently protect confidential 

information. It provides that supporting documentation “shall remain confidential” and may be 

provided to other parties that “agree[] to keep the information . . . confidential.” Debtors’ Motion, 

Exhibit A, ¶ 4. Some of the information that may be reported in connection with Subrogation 

Claims is particularly sensitive, including individual tort victims’ names, street addresses, and 

dollar amounts paid and/or reserved under insurance policies. 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). As set forth in the proposed order attached to the 

Subrogation Group’s Motion, the order setting a bar date should clearly state that sensitive 

information shall be sealed and held confidentially by Prime Clerk and the Debtors, and may only 

be provided to the Court and the United States Trustee, and, on a professional eyes’ only basis, to 

the official committees.

20. The Ad Hoc Subrogation Group does not object to the establishment of a bar date or 

to the Court approving a specific proof of claim form for Subrogation Claims. However, the 

Debtors’ Proposed Order and the Debtors’ Form will not facilitate a seamless claims process in 

these cases for all the reasons set forth above, each of which is addressed and corrected by the 

Subrogation Group’s Form. 

WHEREFORE, the Ad Hoc Subrogation Group requests that the Court grant it relief 

consistent with this Objection as it determines is just and proper. 

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 . . .

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Dated: May 16, 2019

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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