Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153-0119

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WEIL, GOTSHAL & MANGES LLP

Stephen Karotkin (pro hac vice) 

(stephen.karotkin@weil.com) 

Ray C. Schrock, P.C. (pro hac vice) 

(ray.schrock@weil.com) 

Jessica Liou (pro hac vice) 

(jessica.liou@weil.com) 

Matthew Goren (pro hac vice) 

(matthew.goren@weil.com) 

767 Fifth Avenue 

New York, NY 10153-0119 

Tel: 212 310 8000 

Fax: 212 310 8007 

KELLER & BENVENUTTI LLP 

Tobias S. Keller (#151445) 

(tkeller@kellerbenvenutti.com) 

Peter J. Benvenutti (#60566) 

(pbenvenutti@kellerbenvenutti.com) 

Jane Kim (#298192) 

(jkim@kellerbenvenutti.com) 

650 California Street, Suite 1900 

San Francisco, CA 94108 

Tel: 415 496 6723 

Fax: 650 636 9251 

Attorneys for Debtors and Debtors in Possession 

UNITED STATES BANKRUPTCY COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

In re: 

PG&E CORPORATION,

 - and - 

PACIFIC GAS AND ELECTRIC 

COMPANY,

Case No. 19-30088 (DM)

Chapter 11 

(Lead Case) (Jointly Administered) 

DEBTOR’S MOTION PURSUANT TO FED. R. 

BANKR. P. 4001(d) TO APPROVE 

STIPULATION BETWEEN DEBTOR PACIFIC 

GAS AND ELECTRIC COMPANY AND 

KATHLEEN PELLEY AND ALLAN PELLEY 

REGARDING MODIFICTION OF 

AUTOMATIC STAY 

Objection Deadline: October 2, 2019 

 4:00 pm (Pacific Time) 

No hearing requested absent timely objection. If 

timely objection is filed, hearing reserved for:

Date: October 22, 2019 

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

Place: United States Bankruptcy Court 

 Courtroom 17, 16th Floor 

San Francisco, CA 94102

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). 

Case: 19-30088 Doc# 3874 Filed: 09/11/19 Entered: 09/11/19 10:08:43 Page 1 of

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28 Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153-0119

PG&E Corporation and Pacific Gas and Electric Company (the “Utility”), as 

debtors and debtors in possession (each, a “Debtor,” and collectively, the “Debtors”) in the abovecaptioned chapter 11 cases (the “Chapter 11 Cases”), hereby submit this Motion (the “Motion”), 

pursuant to section 362(d) of title 11 of the United States Code (the “Bankruptcy Code”), Rule 

4001(d) of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and Rules 4001-

1 and 9014-1(b)(3) of the Bankruptcy Local Rules for the United States Bankruptcy Court for the 

Northern District of California (the “Bankruptcy Local Rules”), for approval of an agreement 

between the Utility and Kathleen Pelley and Allan Pelley (together, the “Pelleys,” and, together 

with the Utility, the “Parties”), as embodied in the Stipulation Between Debtor and Kathleen Pelley 

and Allan Pelley Regarding Modification of the Automatic Stay (the “Stipulation”), a true copy of 

which is attached as Exhibit A, by issuance of an order in the form attached hereto as Exhibit B

(the “Proposed Order”). In support of the Motion, the Debtors submit the Declaration of Jana 

Contreras (the “Contreras Declaration”) and the Declaration of Joseph Echols (the “Echols 

Declaration”), both filed contemporaneously herewith. 

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28 Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153-0119

MEMORANDUM OF POINTS AND AUTHORITIES 

I. JURISDICTION 

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

1334, the Order Referring Bankruptcy Cases and Proceedings to Bankruptcy Judges, General 

Order 24 (N.D. Cal.), and Bankruptcy Local Rule 5011-1(a). This is a core proceeding pursuant to 

28 U.S.C. § 157(b). Venue is proper in this Court pursuant to 28 U.S.C. §§ 1408 and 1409. 

II. BACKGROUND 

On January 29, 2019 (the “Petition Date”), the Debtors commenced these Chapter 

11 Cases. The Debtors continue to operate their businesses and manage their properties as debtors 

in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. The Chapter 11 Cases 

are being jointly administered for procedural purposes only pursuant to Bankruptcy Rule 1015(b). 

On February 12, 2019, the United States Trustee (the “U.S. Trustee”) appointed an 

Official Committee of Unsecured Creditors (the “Creditors Committee”). On February 15, 2019, 

the U.S. Trustee appointed an Official Committee of Tort Claimants (the “Tort Claimants 

Committee,” and, together with the Creditors Committee, the “Committees”). 

Additional information regarding the circumstances leading to the commencement 

of the Chapter 11 Cases and information regarding the Debtors’ businesses and capital structure is 

set forth in the Amended Declaration of Jason P. Wells in Support of the First Day Motions and 

Related Relief [Docket No. 263]. 

III. THE STIPULATION 

Since on or around December 30, 1998, Kathleen Pelley has had an ownership interest 

in the real property commonly known as 3906 Pennsylvania Avenue, Eureka, California, and more 

particularly identified as Assessor’s Parcel Number 016-172-007 (the “3906 Property”). Since on or 

around January 10, 2017, Kathleen Pelley has also been the owner in fee simple of an undivided fifty 

percent interest the real property commonly known as 3970 Pennsylvania Avenue, Eureka, California, 

and more particularly identified as Assessor’s Parcel Number 016-172-008 (the “3970 Property,” 

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28 Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153-0119

and, together with the 3906 Property, the “Property”). Since on or around January 10, 2017, Allan 

Pelley has been the owner in fee simple of the other undivided fifty percent interest the 3970 Property. 

Pursuant to an easement agreement created on August 23, 1945 and recorded on August 

28, 1945 in the Official Records of the Humboldt County at Book 276 of Deeds, page 43 (the “1945 

Easement”), the Utility owns an easement that gives it the right to install and use an underground gas 

transmission pipeline with necessary valves and other appliances within a ten foot wide strip of land 

located on the Property. Pursuant to an easement agreement dated January 11, 1958 and recorded on 

January 24, 1958 in the Official Records of the Humboldt County at Volume 476, page 225 (the “1958 

Easement,” and, collectively with the 1945 Easement, the “Easement”), the Utility has the right to 

install and use an underground gas transmission pipeline, with necessary valves and other appliances, 

within a ten foot wide strip of land “contiguous to and northerly of the northern boundary line” of the 

1945 Easement. 

The Property contains certain trees that the Pelleys have caused or permitted to be 

planted and grow and maintained on the land subject to the Easement (the “Incompatible Trees”). 

Due to various factors, such as their size, species, and distance to the pipeline, the Incompatible Trees 

interfere with the Utility’s use of the land subject to the Easement in ways including, but not limited 

to, potentially damaging the Utility’s underground pipe and pipeline, impeding maintenance crews, 

and interfering with inspections required by regulatory authorities. Since 2016, the Utility has been 

working with the Pelleys to obtain their cooperation to remove the Incompatible Trees, without 

success. Accordingly, on or about March 12, 2019, the Utility filed a complaint (the “Complaint”) 

in the Humboldt County Superior Court (the “Superior Court”) seeking declaratory and injunctive 

relief relating to the Utility’s enforcement of the Easement across the Property (the “Humboldt 

Action”). 

On May 23, 2019, the Pelleys filed a cross-complaint against the Utility in the 

Humboldt Action for quiet title and declaratory relief concerning the same general facts and 

circumstances as the Complaint (the “Cross-Complaint”). On June 21, 2019, the Debtors filed a 

Notice of Stay of Proceedings in the Humboldt Action based on these Chapter 11 Cases, which 

operated to stay proceedings on the Cross-Complaint, but not on the Complaint. 

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28 Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153-0119

The Utility has determined that the continuation of the Humboldt Action is in the best 

interests of its estate. Accordingly, the Stipulation provides that the automatic stay shall be modified 

to permit the Pelleys to litigate the Cross-Complaint against the Debtor in the Superior Court and to 

defend themselves against the Complaint. Furthermore, to the extent applicable, the Stipulation 

modifies the automatic stay to permit the Debtor to continue to litigate the Complaint in the Superior 

Court and defend itself against the Cross-Complaint. The Stipulation does not permit, and the 

automatic stay itself shall remain in effect with respect to, the enforcement by the Pelleys of any 

judgment they may obtain in their favor in the Humboldt Action. 

IV. BASIS FOR RELIEF REQUESTED 

Limited relief from the automatic stay as provided in the Stipulation is appropriate 

under section 362 of the Bankruptcy Code. Section 362(d)(1) authorizes a court to modify or terminate 

the stay for “cause.” The definition of “cause” for purposes of granting relief from stay “has no clear 

definition and is determined on a case-by-case basis.” Christensen v. Tucson Estates, Inc. (In re 

Tucson Estates, Inc.), 912 F.2d 1162, 1166 (9th Cir. 1990) (citation omitted). In determining whether 

such cause exists to permit an action to proceed in a non-bankruptcy forum, courts analyze the twelve 

factors set forth in In re Curtis, 40 B.R. 795 (Bankr. D. Utah 1984); see also In re Roger, 539 B.R. 

837, 844-45 (C.D. Cal. 2015); In re Howrey LLP, 492 B.R. 19, 24 (Bankr. N.D. Cal. 2013); In re 

Plumberex Specialties Prods., Inc., 311 B.R. 551, 559 (Bankr. C.D. Cal. 2004). The twelve Curtis

factors are: (1) whether the relief will result in partial or complete resolution of issues; (2) the lack of 

any connection with or interference with the bankruptcy case; (3) whether the foreign proceeding 

involves the debtor as a fiduciary; (4) whether a specialized tribunal has been established to hear the 

particular cause of action and whether the tribunal has expertise to hear such cases; (5) whether the 

debtor’s insurance carrier has assumed full financial responsibility for defending the litigation; 

(6) whether the action essentially involves third parties, and the debtor functions only as a bailee or 

conduit for the goods or proceeds in question; (7) whether the litigation in another forum would 

prejudice the interests of other creditors, the creditors’ committee and other interested parties; 

(8) whether the judgment claim arising from the foreign action is subject to equitable subordination; 

(9) whether movant’s success in the foreign proceeding would result in a judicial lien avoidable by the 

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28 Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153-0119

debtor under section 522(f); (10) the interests of judicial economy and the expeditious and economical 

determination of litigation for the parties; (11) whether the foreign proceedings have progressed to a 

point where the parties are prepared for trial; and (12) the impact of the stay and the “balance of hurt.” 

The applicable Curtis factors all weigh heavily in favor of lifting the stay in the 

Humboldt Action. First and foremost, the Utility has a business need—namely, the removal of the 

Incompatible Trees—to confirm and protect, as promptly as possible, its rights under the Easement; 

and to do so it must litigate its Complaint in the Humboldt Action. Allowing the Pelleys to litigate 

their Cross-Complaint at the same time in the same action will not prejudice the Debtor’s estates or 

other creditors. To the contrary, litigating the entire Humboldt Action will save the Utility’s estate 

time and money: the Complaint and Cross-Complaint relate to the same underlying issues and would 

involve the same or similar discovery and motion practice. It would be inefficient to litigate only the 

Utility’s claims now and to relitigate the Pelley’s claims in this Court through the claims process. The 

Utility also seeks to avoid the time and expense associated with a contested motion for relief from the 

stay which, absent the Stipulation, the Pelleys could be expected to bring, asserting not only the 

foregoing grounds, but also that permitting the Utility to prosecute its Complaint in the Humboldt 

Action while restraining them from litigating their Cross-Complaint would be inequitable. For these 

reasons, the Stipulation provides material benefits to the Debtor and its estate at little cost, has been 

authorized by the Debtor in the exercise of its business judgment, and is in the best interest of the 

Debtor, its estate, and its creditors. 

V. NOTICE 

Notice of motions to approve agreements to modify or terminate the automatic stay is 

governed by Bankruptcy Rule 4001(d)(1)(C), Bankruptcy Local Rule 9014-1(b)(3), and the Second 

Amended Order Implementing Certain Notice and Case Management Procedures entered by this 

Court on May 13, 2019 [Docket No. 1996]. 

Bankruptcy Rule 4001(d)(1)(C) specifies that notice of a motion such as this must be 

served on any official committee and on any other entity that the Court directs. Notice here will be 

given much more broadly than as required by that Rule: notice of this Motion will be provided to 

(1) the Office of the United States Trustee for Region 17 (Attn: Andrew R. Vara, Esq. and Timothy 

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28 Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153-0119

Laffredi, Esq.); (2) counsel to the Creditors Committee; (3) counsel to Tort Claimants Committee; 

(4) the Securities and Exchange Commission; (5) the Internal Revenue Service; (6) the Office of the 

California Attorney General; (7) the California Public Utilities Commission; (8) the Nuclear 

Regulatory Commission; (9) the Federal Energy Regulatory Commission; (10) the Office of the 

United States Attorney for the Northern District of California; (11) counsel for the agent under the 

Debtors’ debtor in possession financing facility; and (12) those persons who have formally appeared 

in these Chapter 11 Cases and requested service pursuant to Bankruptcy Rule 2002, or who, by virtue 

of their counsel being registered electronic filers in this District, automatically receive this and other 

papers through the Court’s ECF system. The Debtor respectfully submits that no further notice is 

required. No previous request for the relief sought herein has been made by the Debtor to this or any 

other court. 

WHEREFORE, the Debtors respectfully request entry of an order granting the relief 

requested herein and such other and further relief as the Court may deem just and appropriate. 

Dated: September 11, 2019 WEIL, GOTSHAL & MANGES LLP 

 KELLER & BENVENUTTI LLP 

 By: /s/Peter J. Benvenutti 

 Peter J. Benvenutti 

Attorneys for Debtors and Debtors in Possession

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