EXHIBIT A

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09/10/2019 Hearing USDC NDCA Transcript 19-cv-05257

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2 UNITED STATES DISTRICT COURT

3 NORTHERN DISTRICT OF CALIFORNIA

4 Before The Honorable James Donato, Judge

5 IN RE: PG&E CORPORATION and )

PACIFIC GAS AND ELECTRIC )

6 COMPANY, )

)

7 Debtors. ) NO. 19-05257 JD

)

8 )

9 San Francisco, California

Tuesday, September 10, 2019

10

TRANSCRIPT OF PROCEEDINGS

11

APPEARANCES:

12

For Creditor Committee Official Committee of Tort Claimants:

13 BAKER & HOSTETLER LLP

Levi's Plaza

14 1160 Battery Street East - Suite 100

San Francisco, California 94111

15 BY: ROBERT A. JULIAN, ATTORNEY AT LAW

KIMBERLY S. MORRIS, ATTORNEY AT LAW

16

For Ad Hoc Group of Subrogation Claim Holders :

17 WILLKIE, FARR & GALLAGHER LLP

878 Seventh Avenue

18 New York, New York 10019

BY: ANTONIO YANEZ JR., ATTORNEY AT LAW

19 BENJAMIN P. MCCALLEN, ATTORNEY AT LAW

20 WILLKIE, FARR & GALLAGHER LLP

1875 K Street, N.W.

21 Washington, D.C. 20006

BY: JOSEPH G. DAVIS, ATTORNEY AT LAW

22

23 (APPEARANCES CONTINUED ON FOLLOWING PAGE)

24 REPORTED BY: Jo Ann Bryce, CSR No. 3321, RMR, CRR, FCRR

Official Reporter

25

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1 MR. ORSINI: So let me keep going down the list.

2 THE COURT: Okay. But, no, I mean, does that sound

3 about right, Mr. Julian? You haven't had a chance to say much

4 yet so far, but --

5 MR. JULIAN: Five or six days --

6 THE COURT: Okay.

7 MR. JULIAN: -- on liability, not on damages.

8 THE COURT: Five or six days on the hook?

9 MR. JULIAN: Your Honor, we just got their -- yeah.

10 They raised more issues than they're talking about, but if I

11 may address estimation overall --

12 THE COURT: Yes.

13 MR. JULIAN: -- in answering your question.

14 THE COURT: Let's just pause for a moment and let

15 him -- yes, go ahead.

16 MR. JULIAN: Sure. First of all, the cases they're

17 talking about, the principles they're talking about, apply when

18 one is estimating claims for determining how big of a claim you

19 have to vote in a bankruptcy case or whether the plan is

20 feasible.

21 We're here for a completely different reason, and there's

22 a different standard that applies to that. We're here by their

23 own admission to estimate how many claims will be allowed for

24 purposes of payment in a capped trust.

25 And the reason why I say there's a difference is because

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1 when you're estimating -- when the Bankruptcy Court estimates

2 claims to determine a tort claim as for contract claimants --

3 contract claim or tort claim of a million dollars for purposes

4 of voting, if the judge is wrong, it doesn't matter because the

5 reorganized debtor comes out of bankruptcy and pays that claim

6 eventually whether it was $500,000 or a million two.

7 When you're dealing with what they're trying to do here

8 and like what happens in a mass tort case, it's this: Their

9 plan essentially says that everyone in this case gets paid in

10 full except for the wildfire victims comprised of the insurers,

11 of some public entities, and the victims themselves. And the

12 victims are going to have to live with whatever money is put

13 into that trust, and the amount of money that's put into that

14 trust is determined by your determining the value of those

15 claims as determined in the tort system in two ways:

16 Settlements and jury trials.

17 So you're predicting what will happen in settlements

18 historically with PG&E and what would happen in the future in

19 jury trials. And here's the rub. And there are only two cases

20 that really talk about this, Dow Corning involving products

21 liability, and the Archbishop of Portland cases involving mass

22 tort sexual abuse cases involving emotional distress; and the

23 judges in those cases said, "You know, if we estimate and we're

24 wrong and the trust is capped and the money is put in based on

25 my estimate, the judge's estimate, and the tort victims later

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1 have their jury trials, as they're entitled to because they're

2 personal injury claims, the later jury trials could turn out to

3 be establishing damages higher than the estimation did."

4 THE COURT: Let me -- yes, I fully embrace that. I

5 get it.

6 MR. JULIAN: Okay.

7 THE COURT: So, look, here are the two poles in my

8 view. Maybe I'm wrong, but here's how I'm thinking of it. On

9 the one hand is making sure that everyone who's injured will be

10 made whole. Okay?

11 MR. JULIAN: Yes, Your Honor.

12 THE COURT: On the other hand is the debtors' need to

13 have a number that they can plan with so that their plan of

14 reorganization can be approved. Something's happening at the

15 PUC. You know, there's a lot of downstream effects so you both

16 need an estimate of what the amount of money is going to be,

17 but the clear goal of estimation is to make sure nobody gets

18 stiffed at the end of it for legitimate claims. So I'm not

19 worried about that. I really want to focus on how we're going

20 to get there.

21 MR. ORSINI: Right, Your Honor.

22 THE COURT: And let me just jump-start it a little

23 bit. Okay?

24 We have ruled out, I believe -- I certainly have -- we're

25 not doing individualized claim hearings. That's just not

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1 consistent at all with Section 502(c) or the amount of time we

2 have, and it's unrealistic and it doesn't matter anyway because

3 I can't bind anybody's hands. So we're not going to add up

4 each claim individually. That's an impossible task.

5 And I'm not -- as I said earlier, I'm not just going to

6 take 17 billion, multiply it by 2 and a half, and call it a

7 day, although I think in all seriousness I could do that, but

8 I'm not going to.

9 So what's the middle ground? I'm asking you for the

10 middle ground. I have come up with one and I'll just propose

11 it to you. One middle ground would be to -- if there are legal

12 issues on liability, we can address those. Those are, I think,

13 relatively straightforward as I suggested; but then past that,

14 what about something like this:

15 We have experts come in. I think this data is readily

16 available, maybe it's not; but I think someone could say --

17 someone has done, I'm sure, detailed studies about what an

18 average wrongful death claim or payout is in a fire situation

19 for various regions of the state or maybe California as a

20 whole.

21 I'm sure there's data what the average property damage

22 claim is for fire. Maybe it's by region in California or on

23 the state as a whole. And then we multiply that by the number

24 of people who realistically -- it's an estimate, it's not an

25 exact headcount and it's also not a guess, it's an estimate --

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1 people who realistically have a claim.

2 And that seems to me to be a week, maybe eight-day

3 expert -- I would probably do something like, you know, I'm

4 fond of a procedure called "hot tubbing" where we just have the

5 experts come in, and I mediate the discussion and we quickly

6 establish common ground among the people who are best situated

7 to know.

8 I mean, isn't something like that --

9 MR. JULIAN: Yes, Your Honor, with one footnote.

10 THE COURT: Oh, so you agree.

11 MR. JULIAN: With one footnote.

12 THE COURT: Okay. I don't really do footnotes but go

13 ahead, yes.

14 MR. JULIAN: In 2015 there was the Butte fire. In

15 fact, they want to estimate the remaining Butte fire claims

16 that have not been paid. There's --

17 THE COURT: 2015, yes.

18 MR. JULIAN: 546 homes were destroyed, some couple

19 hundred other structures. They've paid out so far $900 million

20 in settlements and they've booked 1.1 billion total for that.

21 And we have been asking for their documentation -- we just

22 got it -- because we believe that the average payout in that

23 case for the property damage, the personal injury damages of

24 people suffocating and fleeing the fire and getting burned and

25 fearing for their lives, and the lost profits for the

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