+1-212-474-1596

korsini@cravath.com

November 5, 2019

In re PG&E Corporation and Pacific Gas and Electric Company, 

Case No. 19-30088 (DM) (Jointly Administered)

Dear Judge Montali:

I write on behalf of PG&E Corporation and Pacific Gas & Electric 

Corporation (collectively, the “Debtors”) in response to the letters filed yesterday by the 

Official Committee of Unsecured Creditors (the “UCC”), the Official Committee of Tort 

Claimants (the “TCC”), and the Ad Hoc Committee of Senior Unsecured Noteholders 

(the “AHC” and, together with the UCC and TCC, the “Requesting Parties”)

concerning the Debtors’ Motion for Entry of Orders (I) Approving Terms of, and 

Debtors’ Entry Into and Performance Under, Exit Financing Commitment Letters and 

(II) Authorizing Incurrence, Payment, and Allowance of Related Fees and/or Premiums, 

Indemnities, Costs and Expenses as Administrative Expense Claims (the “Motion”) 

[Docket No. 4446].

A. Background

The Debtors filed the Motion on Wednesday, October 23, 2019. Five days 

later, on Monday, October 28, the Requesting Parties collectively served on the Debtors 

more than one hundred requests for production of documents and issued Rule 30(b)(6) 

deposition notices setting forth more than one hundred topics for examination (including 

subparts). The Requesting Parties also noticed the individual deposition of the Debtors’ 

Chief Financial Officer, Jason Wells, as well as the deposition of Kenneth S. Ziman, 

Managing Director at the Debtors’ financial advisor, Lazard Frères & Co. LLC. After 

having waited five days to serve their discovery requests, the Requesting Parties 

demanded that the Debtors produce all responsive documents within two days and make 

witnesses available to testify on the one hundred topics three business days later. 

The Debtors have worked diligently and in good faith to provide the 

requested discovery. This morning, the Debtors produced more than 7,800 documents in 

response to the requests. The Debtors’ attorneys are actively reviewing documents to 

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respond to the remainder of the requests and expect to complete the production this week. 

The Debtors have agreed to produce nearly all of the documents the parties have 

requested. In addition, the Debtors have designated Mr. Ziman as a Rule 30(b)(6) 

representative to testify on the noticed topics.

Yesterday morning, prior to the Requesting Parties filing their letters with 

the Court, the Debtors consented to extend the Requesting Parties’ objection deadlines to 

November 8, 2019. The Debtors also informed the UCC that they would consider the 

UCC’s request concerning the production of solicitation and pitch materials. 

B. The TCC’s Request for a Continuance

The Debtors are committed to the mediation process and appreciate the 

Court’s order appointing a mediator to facilitate discussions. The Debtors agree that 

seeking a consensual resolution of these cases rather than engaging in protracted 

litigation is in the best interests of all stakeholders. In the service of those efforts and to 

address the parties’ concerns, the Debtors will consent to continue the hearing date on the 

Motion from the current hearing date of November 13, 2019 to the next omnibus hearing 

date, which is November 19, 2019. In connection with a November 19, 2019 hearing 

date, the Debtors will agree to extend the objection deadline to November 13, 2019.

The Debtors cannot currently consent to continue the hearing date beyond 

November 19. Under the terms of the financing commitment letters for which the 

Motion seeks approval, November 20, 2019 is the deadline for Bankruptcy Court 

approval. In the event such approval is not obtained by November 20, 2019, termination 

rights will arise for both the debt and equity commitments. As a result, any adjournment 

of the Motion beyond November 20, 2019 requires an extension of the deadline in the 

debt and equity commitment papers. The Debtors intend to seek such an extension from 

the debt and equity commitment counter-parties. To the extent the Debtors obtain such 

extensions, the parties can then discuss a further adjournment of the Motion. 

C. The UCC’s Request for Discovery Concerning All Solicitations and 

Pitch Materials

The UCC has requested documents concerning “[a]ll potential financing 

parties the Debtors solicited and all pitch materials received from all potential parties, and 

the process by which the Debtors solicited all potential financing parties.” Although the 

Debtors believe this request calls for the production of documents that are not relevant, to 

accommodate the UCC’s concerns, the Debtors will produce any documents that are 

responsive to this request and are located in a reasonable search.

D. The Request for Deposition of CFO Jason Wells

The Debtors disagree that a deposition of their chief financial officer is 

necessary or appropriate in connection with this motion. The Requesting Parties have 

sought testimony from the Debtors on dozens of topics that they contend are relevant to 

the Motion, and the Debtors have agreed to provide that testimony through a corporate 

representative in accordance with Federal Rule of Civil Procedure 30(b)(6). There is no 

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need to impose on the Debtors’ chief financial officer—which would be particularly 

burdensome in light of recent events and the mediation efforts being pursued—to obtain 

testimony that the Requesting Parties already will have obtained from the Debtors’ 

representative. 

As the UCC’s letter concedes, the decision to enter into the exit financing 

commitment letters is a matter of the Debtors’ business judgment. (Dkt. No. 4562 at 2.) 

Once the Debtors articulate a valid business justification, as they have in the Motion, a 

presumption arises that “the directors of a corporation acted on an informed basis, in 

good faith and in the honest belief that the action was in the best interests of the 

company.’” In re Station Casinos, Inc., No. BK-09-52477 (GWZ), 2010 Bankr. LEXIS 

5447, at *7 (Bankr. D. Nev. Feb. 2, 2010) (quoting In re Integrated Resources, Inc., 147 

B.R. 650, 656 (Bankr. S.D.N.Y. 1992)); see also In re AbitibiBowater Inc., 418 B.R. 815, 

831 (Bankr. D. Del. 2009) (business judgment standard is “not a difficult standard to 

satisfy”). To the extent the parties wish to test the presumption that the Debtors acted on 

an informed basis and in good faith, Mr. Ziman’s testimony as the Debtors’ Rule 30(b)(6) 

representative is more than sufficient for that purpose. As the Debtors’ lead financial 

advisor, Mr. Ziman led the efforts to obtain the exit financing commitments at issue and 

participated in the meetings of the Debtors’ board of directors at which the commitments 

were approved. Accordingly, Mr. Ziman has personal knowledge that the Debtors “acted 

on an informed basis” and in good faith—indeed, he was an integral part of supplying the 

information on which the Debtors so acted—and to the extent his personal knowledge 

needs to be supplemented in accordance with Rule 30(b)(6) he will become educated on 

the noticed examination topics prior to his deposition. 

Accordingly, the Debtors respectfully submit that the Court should deny 

the request for Mr. Wells’s deposition.

Respectfully,

/s/ Kevin Orsini

Kevin J. Orsini

Honorable Dennis Montali

United States Bankruptcy Court

Northern District of California

450 Golden Gate Avenue, 16th Floor

San Francisco, CA 94102

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