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AKIN GUMP STRAUSS HAUER & FELD LLP

Michael S. Stamer (pro hac vice) 

Ira S. Dizengoff (pro hac vice) 

David H. Botter (pro hac vice) 

Abid Qureshi (pro hac vice) 

One Bryant Park 

New York, New York 10036 

Telephone: (212) 872-1000 

Facsimile: (212) 872-1002 

Email: mstamer@akingump.com 

 idizengoff@akingump.com 

 dbotter@akingump.com 

 aqureshi@akingump.com 

AKIN GUMP STRAUSS HAUER & FELD LLP

Ashley Vinson Crawford (SBN 257246) 

580 California Street 

Suite 1500 

San Francisco, CA 94104 

Telephone: (415) 765-9500 

Facsimile: (415) 765-9501 

Email: avcrawford@akingump.com 

Counsel to the Ad Hoc Committee of Senior Unsecured 

Noteholders of Pacific Gas and Electric Company 

UNITED STATES BANKRUPTCY COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

In re:

PG&E CORPORATION, 

-andPACIFIC GAS AND ELECTRIC 

COMPANY,

Bankruptcy Case

No. 19-30088 (DM) 

Chapter 11 

(Lead Case) 

(Jointly Administered) 

THE AD HOC COMMITTEE OF SENIOR 

UNSECURED NOTEHOLDERS’ JOINDER 

TO THE OBJECTION OF THE OFFICIAL 

COMMITTEE OF UNSECURED 

CREDITORS TO MOTIONS OF (I) AD HOC 

GROUP OF SUBROGATION CLAIM 

HOLDERS AND (II) OFFICIAL 

COMMITTEE OF TORT CLAIMANTS FOR 

RELIEF FROM AUTOMATIC STAY 

Hearing 

Date: July 24, 2019 

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

Place: Courtroom 17 

 450 Golden Gate Ave, 16th Floor 

 San Francisco, CA 94102 

Re: Docket Nos. 2904, 2855, 2863 

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).

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The Ad Hoc Committee of Senior Unsecured Noteholders of Pacific Gas and Electric Company 

(the “Ad Hoc Committee”) in the above-captioned chapter 11 cases of Pacific Gas and Electric 

Company (the “Utility”) and PG&E Corporation (“PG&E” and, together with the Utility, the 

“Debtors”), by its undersigned counsel, Akin Gump Strauss Hauer & Feld LLP, hereby joins (the 

“Joinder”) the Objection of The Official Committee of Unsecured Creditors to Motions of (i) Ad Hoc 

Group Of Subrogation Claim Holders and (ii) Official Committee of Tort Claimants for Relief From 

Automatic Stay [Docket. No. 3101] (the “Official Committee Objection”),1 filed in objection to the (i) 

Motion of the Ad Hoc Group of Subrogation Claim Holders for Relief from the Automatic Stay [Docket 

No. 2863] (the “Subrogation Group Motion”) and (ii) Amended Motion of the Official Committee of 

Tort Claimants for Relief from Automatic Stay to Permit State Court Jury Trial of 2017 Tubbs Wildfire 

Claims [Docket No. 2904] (the “TCC Motion” and, together with the Subrogation Motion, the 

“Motions”).2 In support of the Joinder, the Ad Hoc Committee respectfully states the following: 

1. The Ad Hoc Committee joins in the Official Committee Objection and agrees that the 

Motions should be denied because the Subrogation Group and the TCC have failed to establish cause 

for granting relief from the automatic stay. 

2. As the Official Committee explains, the TCC and the Subrogation Group’s request to 

try individual wildfire claims would frustrate the purpose of these chapter 11 proceedings. The 

Debtors entered bankruptcy to ensure an efficient and prompt resolution of the wildfire claims by 

avoiding piecemeal litigation through a centralized forum for resolution of the claims. As the Official 

Committee notes, estimation in the bankruptcy proceedings, which, in the Ad Hoc Committee’s view, 

should have been initiated at the outset of these cases, was designed for this precise purpose: to 

“facilitate the speedy and expeditious resolution of claims in bankruptcy courts[,]” Matter of Interco 

Inc., 137 B.R. 993, 997 (Bankr. E.D. Mo. 1992), and “promote a fair distribution to creditors through a 

realistic assessment of uncertain claims.” Matter of Ford, 967 F.2d 1047, 1053 (5th Cir. 1992). 

 

1

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

Committee Objection. 

2

 In addition to the TCC Motion, the TCC also filed the Amended Memorandum of Points and Authorities in 

Support of Motion of the Official Committee of Tort Claimants for Relief from Automatic Stay to Permit State Court Jury 

Trial of 2017 Tubbs Wildfire Claims [Docket No. 2855] (the “TCC Memorandum”). 

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3. The TCC admittedly seeks a strategic advantage at the expense of other creditors, the 

Debtors, and judicial economy. The TCC admits, for example, that it seeks relief from the stay 

primarily to strengthen its position against the Debtors in settling and negotiating a reorganization plan. 

TCC Memorandum at 3 (“[R]elief from stay would result in settlement of the Chapter 11 Cases, 

because PG&E’s three year track record in the fire litigation establishes that PG&E settles every single 

fire claim before the jury trial[.]”); TCC Memorandum at 21 (“[T]his Court should order a jury trial 

because the trial setting would result in settlement.”). This is a tactic that the Ninth Circuit has called 

“highly inappropriate” and one that weighs against granting relief from the stay. In re Conejo 

Enterprises, Inc., 96 F.3d 346, 353 (9th Cir. 1996) (affirming the Bankruptcy Court’s determination 

that staying a pre-petition state court action preserved a level playing field for negotiation of a 

consensual reorganization plan in light of the movant’s admission that it sought relief from the 

automatic stay to strengthen its position against the debtor and other creditors in negotiating a 

reorganization plan). 

4. The TCC’s proposal would unacceptably delay these proceedings and critically 

prejudice the Debtors for the sole benefit of one subset of wildfire claimants. If, for example, the 

Debtors were to lose the state court action, findings on issues in that case may be asserted as collateral 

estoppel against the Debtors, but the estoppel may be nonmutual. See Vandenberg v. Superior Court, 

21 Cal. 4th 815, 829-30 (1999) (collateral estoppel may be asserted against a defendant that was a 

party to prior litigation, but it cannot be asserted by a victorious defendant against plaintiffs who were 

not parties to the litigation). In other words, each of the Tubbs Preference Plaintiffs would have a 

separate opportunity to convince a jury that the Debtors are liable for the Tubbs Fire. Even if the 

Debtors won ten out of eleven trials, but lost the last, other Tubbs claimants could use the one adverse 

verdict against the Debtors for every case thereafter. 

5. The inefficiency and prejudice to the Debtors and all other creditors is even further 

exacerbated by what would undoubtedly be a lengthy appellate fight over any verdict. Even with 

preference for trial setting and appeal, the cases may take years to become final. See Nat’l Union Fire 

Ins. Co. v. Stites Prof. Law Corp., 235 Cal. App. 3d 1718, 1726 (1991); Gabor v. Deshler, No. 17-CV01524-LHK, 2017 WL 4151042, at *11 (N.D. Cal. Sept. 19, 2017) (refusing to apply collateral 

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estoppel because California state court judgment was pending on appeal); see also Cal. Code Civ. Proc. 

§1049 (an action remains pending “until its final determination upon appeal, or until the time for 

appeal has passed, unless the judgment is sooner satisfied”). 

6. Because a trial will not necessarily resolve the claims and could needlessly delay 

resolution of this bankruptcy for years, a trial of the Tubbs Wildfire Claims is not in the interest of 

judicial economy and would severely prejudice the interests of all creditors and the Debtors. It is 

imperative that the Debtors move as expeditiously as possible to exit bankruptcy. The legislation 

signed by Governor Newsom on July 12, 2019, sets a deadline of June 30, 2020 for the Debtors to exit 

these chapter 11 proceedings to access the new Wildfire Fund for future wildfires. Without the 

protection of the Wildfire Fund, future wildfires could severely diminish all creditors’ recoveries and 

continue to threaten the financial viability of the Debtors. A trial of the Tubbs Wildfire Claims would 

prolong, not hasten, the Debtors’ exit from chapter 11. 

7. Rather than litigating a single subset of claims in the California Superior Court, the 

interests of judicial economy, efficiency, the Debtors, and all creditors favor a claims estimation 

process in the bankruptcy proceedings. As explained in the Official Committee Objection and the 

Debtors’ Motion Pursuant to 11 U.S.C. §§ 105(a) and 502(c) for the Establishment of Wildfire Claims 

Estimation Procedures [Docket No. 3091] (“Estimation Motion”), through the claims estimation 

process, the Court can fairly and efficiently determine the value of the unliquidated claims against the 

Debtors while expeditiously moving the case towards completion. The estimation process is 

particularly valuable to chapter 11 bankruptcies involving mass tort claims, where courts consistently 

find that estimation is required because trying individual claims will unduly delay administration of the 

bankruptcy.3 See, e.g., A.H. Robins Co. v. Piccinin, 788 F.2d 994, 1012-13 (4th Cir. 1986) (Finding 

that 5,000 personal injury claims must be estimated in the bankruptcy proceeding before trials because 

estimation would facilitate “the real purpose of the proceeding (i.e., a reorganization of the debtor and 

its continuance as a going business)” and observing that “the authorities which have considered this 

question in connection with a complicated products liability situation such as this are all unanimous. 

 

3

 The Court’s decision in In re Dow Corning Corp., 211 B.R. 545, 561 (Bankr. E.D. Mich. 1997), relied upon by 

the TCC, is an outlier on this point. 

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The estimations of the potential and pending claims by the bankruptcy courts should precede any trials 

of the claims”); In re Fed.-Mogul Glob., Inc., 330 B.R. 133, 154 (D. Del. 2005) (finding trials of 

unliquidated personal injury and wrongful death asbestos claims would unduly delay administration of 

bankruptcy such that estimation was required: “[I] n accordance with the underlying principles in 

bankruptcy of promoting the quick and efficient administration of the estate, the estimation of the 

aggregate allowable amount on all . . . pending and future asbestos claims will be determined by this 

Court.”); In re Johns-Manville Corp., 45 B.R. 823, 826-27 (S.D.N.Y. 1984) (finding that trying 

asbestos victims’ personal injury claims would unduly delay bankruptcy proceedings such that 

estimation was required because, even though the claimant argued that an immediate trial was 

necessary in light of his declining health, the court did not “see the sense in ordering the parties to trial 

until a plan has been developed and until there is reason to believe that the time and expense of 

potentially 25,000 trials will not deplete the estate and leave other creditors with empty judgments”); 

see also In re Baldwin-United Corp., 57 B.R. 759, 765 (S.D. Ohio 1985) (affirming the bankruptcy 

court’s determination that litigation of class action involving approximately 100,000 claimants “would 

disastrously delay or undermine debtors’ [chapter 11] reorganization.”). 

8. Contrary to the TCC’s claim, nothing prevents the Court from estimating the wildfire 

victims’ claims at the appropriate time.4 Indeed, courts can and have routinely estimated personal 

injury and wrongful death claims in this context. The fact that the Ad Hoc Committee’s plan will 

include a cap on aggregate liability does not change the analysis. Estimation here will result only in a 

determination of the aggregate amount necessary to pay claims. And even if a cap were to be imposed 

on wildfire claims through the estimation proceeding, claimants with a right to a jury trial could still 

exercise that right, for example, against a capped trust established under a plan of reorganization to 

which the wildfire victims would be channeled. The estimation contemplated in the Ad Hoc 

Committee’s term sheet, filed as an exhibit to the Motion of the Ad Hoc Committee of Senior 

 

4

 The TCC assumes that the Tubbs Preference Plaintiffs’ alleged emotional distress claims qualify as “personal 

injury torts” under 28 U.S.C. § 157(b)(2)(B). TCC Memorandum at 10. However, it is not clear that all of the 

noneconomic damages sought as “personal injury torts” qualify under 28 U.S.C. § 157(b)(2)(B). Courts have split on how 

to interpret “personal injury torts” under the statute, and the Ninth Circuit has not addressed the issue. See Estimation 

Motion at 15, n.10. 

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Unsecured Noteholders to Terminate the Debtors’ Exclusive periods Pursuant to Section 1121(d)(1) of 

the Bankruptcy Code [Docket No. 2741], for example, specifically provides for jury trials for claimants 

who opt out of the proposed agreed capped amounts. Courts have properly estimated the total 

aggregate liability of unliquidated personal injury and wrongful death claims without jury trials under 

these circumstances. See In re A.H. Robins Co., Inc., 88 B.R. 742, aff’d, 880 F.2d 694, 747 (4th Cir. 

1989) (following an estimation hearing, finding reorganization plan that capped debtor’s liability at 

$2.475 billion feasible because that amount was “sufficient to pay in full all Dalkon Shield personal 

injury claims as well as expenses of the Trusts established to administer the claims[.]”); In re Fed.-

Mogul Glob., Inc., 330 B.R. at 135, 155 (estimating, without a jury trial, the “aggregate present value 

of pending and projected future asbestos personal injury and wrongful death claims asserted against” 

the debtors and rejecting the claimants’ argument that jury trials were required because “[t]o do 

otherwise would eviscerate the purposes of the estimation process and place additional financial 

burdens on the very trust which the Court is trying to create.”); see also In re Roman Catholic 

Archbishop of Portland in Or., 339 B.R. at 221 (indicating that the bankruptcy court could, by way of a 

report and recommendation to the district court, estimate the total aggregate liability of personal injury 

claims without a jury trial, and stating: “If debtor decides that it wants to proceed with a plan of 

reorganization that depends on an aggregate estimation of present child sex abuse claims for purposes 

of capping the fund from which tort claims will be paid, I will at the appropriate time prepare a report 

and recommendation to the district court.”) (emphasis added). 

9. The TCC’s heavy reliance on In re Dow Corning Corp., 211 B.R. 545 (Bankr. E.D. 

Mich. 1997) is misplaced. Notably, the Dow Corning Court ultimately confirmed a plan of 

reorganization that established an aggregate fund capping the debtor’s liability over the dissent of 

certain creditors. In re Dow Corning Corp., 244 B.R. 721, 732 (Bankr. E.D. Mich. 1999), rev’d on 

other grounds, 255 B.R. 445 (E.D. Mich. 2000), aff’d and remanded, 280 F.3d 648 (6th Cir. 2002) 

(overruling objections to plan’s $400 million cap on available damages for personal injury claimants 

who chose to litigate their claims after finding fund sufficient to pay claims); In re Dow Corning 

Corp., 255 B.R. 445, 502 (E.D. Mich. 2000), aff’d and remanded, 280 F.3d 648 (6th Cir. 2002) 

(upholding $400 million cap on available damages). 

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RESERVATION OF RIGHTS 

The Ad Hoc Committee reserves the right to raise further and other objections to the Motions at 

the hearing as may be necessary or appropriate. 

WHEREFORE, for the foregoing reasons, the Ad Hoc Committee respectfully requests that 

the Court (i) sustain the Official Committee Objection and deny the Motions, and (ii) grant such other 

and further relief as is just, equitable and proper. 

Dated: July 19, 2019 AKIN GUMP STRAUSS HAUER & FELD LLP 

By: /s/ Ashley Vinson Crawford_____ 

Ashley Vinson Crawford (SBN 257246) 

David H. Botter (pro hac vice) 

Michael S. Stamer (pro hac vice) 

Ira S. Dizengoff (pro hac vice) 

Abid Qureshi (pro hac vice) 

Counsel to the Ad Hoc Committee of Senior 

Unsecured Noteholders of Pacific Gas and Electric 

Company 

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