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Andrew I. Silfen (pro hac vice) 

Beth M. Brownstein (pro hac vice) 

ARENT FOX LLP 

1301 Avenue of the Americas, 42nd Floor 

New York, New York 10019 

Telephone: (212) 484-3900 

Facsimile: (212) 484-3990 

Email: andrew.silfen@arentfox.com 

 beth.brownstein@arentfox.com 

 

Aram Ordubegian (SBN 185142) 

ARENT FOX LLP 

55 Second Street, 21st Floor 

San Francisco, CA 94105 

Telephone: (415) 757-5500 

Facsimile: (415) 757-5501 

Email: aram.ordubegian@arentfox.com 

Counsel for BOKF, NA, solely in its capacity as 

Indenture Trustee for the Utility Senior Notes 

Dennis F. Dunne (admitted pro hac vice) 

Samuel A. Khalil (admitted pro hac vice) 

MILBANK LLP 

55 Hudson Yards 

New York, New York 10001-2163 

Telephone: (212) 530-5000 

Facsimile: (212) 530-5219 

and 

Gregory A. Bray (SBN 115367) 

Thomas R. Kreller (SBN 161922) 

MILBANK LLP 

2029 Century Park East, 33rd Floor 

Los Angeles, CA 90067 

Telephone: (424) 386-4000 

Facsimile: (213) 629-5063 

Counsel for the Official Committee 

of Unsecured Creditors

Michael S. Stamer (admitted pro hac vice) 

Ira S. Dizengoff (admitted pro hac vice) 

David H. Botter (admitted pro hac vice) 

Abid Qureshi (admitted pro hac vice) 

AKIN GUMP STRAUSS HAUER & FELD 

LLP 

One Bryant Park 

New York, New York 10036 

Telephone: (212) 872-1000 

Facsimile: (212) 872-1002 

and 

Ashley Vinson Crawford (SBN 257246) 

AKIN GUMP STRAUSS HAUER & FELD 

LLP 

580 California Street 

Suite 1500 

San Francisco, CA 94104 

Telephone: (415) 765-9500 

Facsimile: (415) 765-9501 

Counsel for the Ad Hoc Committee of Senior 

Unsecured Noteholders of Pacific Gas and 

Electric Company 

 

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UNITED STATES BANKRUPTCY COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

In re: 

PG&E CORPORATION, 

 - and – 

PACIFIC 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).

Case No. 19-30088 (DM) 

Chapter 11 

(Lead Case) 

(Jointly Administered) 

CONSOLIDATED OPENING BRIEF OF 

CERTAIN CREDITOR GROUPS AND 

REPRESENTATIVES REGARDING THE 

ENTITLEMENT OF HOLDERS OF 

UTILITY FUNDED DEBT CLAIMS TO 

OPTIONAL EARLY REDEMPTION, 

MAKE-WHOLE, OR SIMILAR AMOUNTS 

IN A SOLVENT DEBTOR CASE 

Hearing

Date: January 14, 2020 

Time: 10:00 a.m. (Pacific Time) 

Place: United States Bankruptcy Court 

 Courtroom 17 

 450 Golden Gate Ave, 16th Floor 

 San Francisco, CA 94102 

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TABLE OF CONTENTS

Page

 -iPRELIMINARY STATEMENT ..................................................................................................... 2 

BACKGROUND ............................................................................................................................ 3 

I. Debtors’ Wildfire Litigation Exposure Leads to Bankruptcy Filing .................................. 3 

II. The Senior Notes ................................................................................................................. 4 

A. Certain Terms Are Common to All Senior Notes ................................................... 5 

B. The Optional Redemption Provisions Vary Across Senior Notes .......................... 6 

1. The Fixed Date Optional Redemption Provisions ...................................... 6 

2. The Any Time Optional Redemption Provisions ........................................ 8 

3. The 2034 Notes Optional Redemption Provision ....................................... 9 

III. Treatment of the Senior Notes in the Proposed Plans ......................................................... 9 

ARGUMENT ................................................................................................................................ 10 

I. The Noteholders Are Entitled to Optional Redemption Premiums, Under 

Applicable Non-Bankruptcy Law, If the Debtors Elect to Discharge the Senior 

Notes Pursuant to the Debtor Plan .................................................................................... 12 

A. The Debtors’ Choice to Satisfy the Senior Notes Pursuant to the Debtor 

Plan is “Optional.” ................................................................................................ 12 

B. The Debtors’ Choice to Satisfy the Senior Notes Under the Debtor Plan 

Constitutes a “Redemption” Entitling Noteholders to the Optional 

Redemption Premium ........................................................................................... 15 

1. The Proposed Plans’ Treatment of the Senior Notes Constitutes a 

“Redemption” Under The Note Documents’ Plain Terms ........................ 15 

a. Fixed Date Notes ........................................................................... 17 

b. Any Time Notes ............................................................................ 17 

c. 2034 Notes .................................................................................... 18 

2. Redemption Can Occur After a Bankruptcy-Induced Acceleration

as a Matter of Law..................................................................................... 20 

3. The Second Circuit’s Momentive Decision Does Not Counsel a 

Contrary Result ......................................................................................... 24 

II. The Optional Redemption Premiums Are Not Disallowed by the Bankruptcy Code....... 26 

A. The Optional Redemption Premiums Are “Charges,” or “Liquidated 

Damages,” Not “Interest.”..................................................................................... 27 

B. The Optional Redemption Premiums Are Fully Matured, and Cannot 

Constitute “Unmatured” Interest ........................................................................... 28 

C. The Solvent Debtors Must Honor the Note Documents In Any Event ................. 29 

STATEMENT OF CREDITORS’ COMMITTEE........................................................................ 31 

CONCLUSION ............................................................................................................................. 31 

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TABLE OF AUTHORITIES 

 Page(s) 

Cases 

In re 1141 Realty Owner LLC, 

598 B.R. 534 (Bankr. S.D.N.Y. 2019) ................................................................................25, 27 

In re 360 Inns, Ltd., 

76 B.R. 573 (Bankr. N.D. Tex. 1987) .......................................................................................29 

In re 433 S. Beverly Drive, 

117 B.R. 563 (Bankr. C.D. Cal. 1990) ..........................................................................13, 27, 28 

In re AMR Corp, 

730 F.3d 88 (2d Cir. 2013) ........................................................................................................26 

Balsam v. Tucows Inc., 

627 F.3d 1158 (9th Cir. 2010) ...................................................................................................23 

Carman v. Alvord, 

644 P.2d 192 (Cal. 1982) ..........................................................................................................20 

In re Chemtura Corp., 

439 B.R. 561 (Bankr. S.D.N.Y. 2010) .............................................................................. passim

Chesapeake Energy Corp. v. Bank of N.Y. Mellon Tr. Co., 

773 F.3d 110 (2d Cir. 2014) ......................................................................................................16 

In re Chicago, Milwaukee, St. Paul & Pac. R.R. Co., 

791 F.2d 524 (7th Cir. 1986) ...............................................................................................14, 30 

Compagnie Financiere de CIC et de L’Union Europeenne v. Merrill Lynch, 

Pierce, Fenner & Smith Inc., 

232 F.3d 153 (2d Cir. 2000) ......................................................................................................16 

Crosby v. HLC Properties, Ltd., 

167 Cal. Rptr. 3d 354 (Cal. App. 2014) ....................................................................................18 

Debentureholders Protective Comm. of Cont’l Inv. Corp. v. Cont’l Inv. Corp., 

679 F.2d 264 (1st Cir. 1982) .....................................................................................................30 

In re Dow Corning Corp., 

244 B.R. 678 (Bankr. E.D. Mich. 1999) ...................................................................................15 

In re Dow Corning Corp., 

456 F.3d 668 (6th Cir. 2006) ...............................................................................................14, 30 

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In re Energy Future Holdings Corp., 

842 F.3d 247 (3d Cir. 2016) .............................................................................................. passim

Fed. Nat. Mortg. Ass’n v. Miller, 

473 N.Y.S.2d 743 (N.Y. Sup. Ct. 1984) ...................................................................................20 

Felin v. Kyle, 

102 F.2d 349 (3d Cir. 1939) ......................................................................................................16 

Gen. Elec. Capital Corp. v. Future Media Prods., Inc., 547 F.3d 956 (9th Cir. 

2008) ........................................................................................................................................13 

Heine v. Signal Cos., 

No. 74 Civ. 3036, 1977 WL 930 (S.D.N.Y. Mar. 4, 1977) .......................................................16 

In re Imperial Coronado Partners, Ltd., 

96 B.R. 997 (B.A.P. 9th Cir. 1989) ................................................................................... passim

Johnson v. Norris, 

190 F. 459 (5th Cir. 1911) .........................................................................................................30 

L&J Anaheim Assocs. v. Kawasaki Leasing Int’l, Inc., 

995 F.2d 940 (9th Cir 1993) ........................................................................................................2 

In re Lappin Elec. Co., Inc., 

245 B.R. 326 (Bankr. E.D. Wis. 2000) ...............................................................................27, 28 

In re Los Angeles Dodgers LLC, 

465 B.R. 18 (D. Del. 2011) .................................................................................................14, 30 

Matter of MPM Silicones, L.L.C., 

874 F.3d 787 (2d Cir. 2017) ..........................................................................................24, 25, 26 

In re MPM Silicones, LLC, 

No. 14-22503-RDD, 2014 WL 4436335 (Bankr. S.D.N.Y. Sept. 9, 2014) ..............................25 

NML Capital v. Republic of Arg., 

952 N.E.2d 482 (N.Y. 2011) .........................................................................................21, 22, 23

Nw. Mut. Life Ins. Co. v. Uniondale Realty Assocs., 

816 N.Y.S.2d 831 (N. Y. Sup. Ct. 2006) ..................................................................................25 

Olin Corp. v. Am. Home Assurance Co., 

704 F.3d 89 (2d Cir. 2012) ........................................................................................................16 

In re Outdoor Sports Headquarters, 

161 B.R. 414 (Bankr. S.D. Ohio 1993) .....................................................................................29 

Perez-Encinas v. AmerUs Life Ins. Co., 

468 F. Supp. 2d 1127 (N.D. Cal. 2006) ....................................................................................16 

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In re Planvest, 

94 B.R. 644 (Bankr. D. Ariz. 1988) ..........................................................................................28 

In re Premier Entm’t Biloxi LLC, 

445 B.R. 582 (Bankr. S.D. Miss. 2010) ..............................................................................11, 24 

Quadrant Structured v. Vertin, 

16 N.E. 3d 1165 (N.Y. 2014) ....................................................................................................16 

In re Read-Rite Corp., 

No. 03-43576 RN7, 2005 WL 2210659 (Bankr. N.D. Cal. Aug. 11, 2005) .............................27 

Ridgley v. Topa Thrift & Loan Ass’n, 

17 Cal. 4th 970 (1998) ..............................................................................................................12 

Roden v. AmerisourceBergen Corp., 

113 Cal. Rptr. 3d 20 (Cal. Ct. App. 2010) ................................................................................18 

Ruskin v. Griffiths, 

269 F.2d 827 (2d Cir. 1959) ......................................................................................................29 

In re S. Side House, LLC, 

451 B.R. 248 (Bankr. E.D.N.Y. 2011) ......................................................................................12 

In re School Specialty, Inc., 

No. 13-10125, 2013 Bankr. LEXIS 1897 (Bankr. D. Del. Apr. 22, 2013) ...............................28 

SDC/Pullman Partners v. Tolo Inc., 

70 Cal. Rptr. 2d 62 (Cal. Ct. App. 1997) ..................................................................................18 

In re Skyler Ridge, 

80 B.R. 500 (Bankr. C.D. Cal. 1987) ..................................................................................21, 28 

Travelers Cas. & Sur. Co. of Am. v. Pac. Gas & Elec. Co., 

549 U.S. 443 (2007) ..................................................................................................................11 

Treasurer of N.J. v. U.S. Dep’t of Treasury, 

684 F.3d 382 (3d Cir. 2012) ......................................................................................................20 

In re Trico Marine Servs., Inc., 

450 B.R. 474 (Bankr. D. Del. 2011) ...................................................................................27, 28 

U.S. Bank Nat. Ass’n v. S. Side House, LLC, 

No. 11-CV-4135 ARR, 2012 WL 273119 (E.D.N.Y. Jan. 30, 2012) .......................................10 

Ultra Petroleum Corp. v. Ad Hoc Comm. of Unsecured Creditors of Ultra Res., 

Inc. (In re Ultra Petroleum Corp.), 

913 F.3d 533 (5th Cir. 2019) .....................................................................................................27 

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Ultra Petroleum Corp. v. Ad Hoc Comm. of Unsecured Creditors of Ultra Res., 

Inc. (In re Ultra Petroleum Corp.), 

No. 17-20793, 2019 WL 6318074 (5th Cir. Nov. 26, 2019) ..............................................27, 28 

UPS Capital Bus. Credit v. Gencarelli (In re Gencarelli), 

501 F.3d 1 (1st Cir. 2007) .........................................................................................................30 

In re Vanderveer Estates Holdings, Inc., 

283 B.R. 122 (Bankr. E.D.N.Y. 2002) ......................................................................................12 

Wells Fargo Bank, N.A. v. Cabazon Band of Mission Indians, 

No. E060447, 2016 WL 3438920 (Cal. Ct. App. June 15, 2016) ...................................4, 12, 16 

Wilmington Sav. Fund Soc., FSB v. Cash America Int’l, Inc., 

No. 15-cv-5027 (JMF), 2016 WL 5092594 (S.D.N.Y. Sept. 19, 2016)....................................25 

Statutes 

11 U.S.C. § 363 ...............................................................................................................................13 

11 U.S.C. § 502(b)(2) ......................................................................................................3, 27, 28, 29 

11 U.S.C. § 506(b) ..........................................................................................................................27 

11 U.S.C. § 1121(d)(1) ......................................................................................................................9 

11 U.S.C. § 1124(2) ..................................................................................................................13, 14 

Cal. Civ. Code § 1636 .....................................................................................................................16 

Civ. Code § 1638 ............................................................................................................................18 

Cal. Civ. Code § 1639 .....................................................................................................................16 

Cal. Civ. Code § 1641 .....................................................................................................................18 

Cal. Civ. Code § 1644 .....................................................................................................................16 

Civ. Code § 1653 ............................................................................................................................18 

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BOKF, NA (“BOKF”), solely in its capacity as successor indenture trustee under the 

Indentures dated as of (i) April 22, 2005 Supplementing, Amending and Restating the Indenture 

of Mortgage Dated March 11, 2004; (ii) November 29, 2017 and (iii) August 6, 2018, each as 

supplemented or amended, pursuant to which Pacific Gas and Electric Company (the “Utility”) 

issued the senior notes (the “Senior Notes”) to investors (the “Noteholders”), by and through its 

counsel, Arent Fox LLP, and the Ad Hoc Committee of Senior Unsecured Noteholders of Pacific 

Gas and Electric Company (the “AHC”), by and through its counsel Akin Gump Strauss Hauer & 

Feld LLP, hereby submit this Brief pursuant to the Court’s October 31, 2019 Order [Docket No. 

4540] (the “Scheduling Order”) in which the Court ordered briefing on certain discrete, threshold 

legal issues, with the potential to impact creditors’ rights and generate appellate activity, prior to 

confirmation proceedings. In particular, the Debtors’ proposed chapter 11 plan treats the 

Noteholders’ claims as “unimpaired,” despite the fact that it proposes to pay the Noteholders cash 

in “full and final satisfaction, settlement, release and discharge” of the Senior Notes without

including the optional early redemption premiums owed to the Noteholders under the terms of the 

applicable documents governing the Senior Notes. 

This brief is intended to address only the discrete issue of optional early redemption 

premiums. Acknowledging the importance of this threshold issue, the parties and the Court 

agreed to forgo formal adversary proceedings and brief it in advance of plan confirmation to 

facilitate its early resolution. Through this brief, BOKF and the AHC respectfully move for an 

order declaring that (i) the Noteholders are entitled to Optional Redemption Premiums (as defined 

below) if the Senior Notes are satisfied (without reinstatement) and/or cancelled, and (ii) should 

any plan proponent propose to satisfy principal and interest due on the Senior Notes without 

paying the Noteholders the Optional Redemption Premiums, the Noteholders will be impaired 

and entitled to vote to accept or reject the applicable chapter 11 plan. This brief is submitted 

pursuant to the Scheduling Order, and should not be construed to set forth BOKF’s or the AHC’s 

position on any matter other than the Optional Redemption Premium issue, as ordered by the 

Court. 

The Official Committee of Unsecured Creditors appointed in these chapter 11 cases (the 

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“Creditors’ Committee”) is a party to this brief solely with respect to the Creditors’ Committee’s 

Reservation of Rights and Statement set forth below (the “UCC Statement”). 

PRELIMINARY STATEMENT1

 The Utility filed for chapter 11 protection to address tort claims based on the Utility’s 

alleged culpability in connection with the Wildfires that ripped through Northern California in 

2015, 2017, and 2018. At issue here are the Utility’s obligations to pay contractually-owed 

optional early redemption premiums due under the plain terms of three Indentures and their 

Supplements should the Utility decide to redeem $17.525 billion in Senior Notes it issued over 

the past ten years, some even following the 2017 Fires. 

 The Utility and its parent company, HoldCo, are solvent debtors for purposes of this brief. 

As such, the Debtors are presumed able to satisfy their debts, including paying the Noteholders 

in full, inclusive of the contractual Optional Redemption Premium. Alternatively, the Debtors are 

free to reinstate the Senior Notes and continue to honor their contractual obligations to pay the 

Noteholders principal and interest. Either of the two options available to the Debtors would leave 

intact the Noteholders’ legal and contractual rights, which is the touchstone of unimpairment. But 

if the Debtors seek to alter those rights, they cannot take the position that no impairment results.2

 

The plain language of the Indentures and related instruments contractually requires the payment 

of the Optional Redemption Premium under the circumstances here, and the Debtors’ proposal to 

redeem the Senior Notes without the Optional Redemption Premium impairs the Noteholders’ 

claims. 

Optional redemption premiums must be paid in chapter 11 unless (1) state law and the 

language of the applicable documents specifies a different result, or (2) the Bankruptcy Code 

otherwise disallows such claims. The applicable state law governing the Indentures—New York 

and California—and fundamental rules of contract interpretation demonstrate that the Optional 

 

1

 Capitalized terms in this Preliminary Statement have the meanings given below. 

2

 “Congress define[d] impairment in the broadest possible terms,” such that “any alteration of rights constitutes 

impairment.” L&J Anaheim Assocs. v. Kawasaki Leasing Int’l, Inc., 995 F.2d 940, 942 (9th Cir 1993) (internal citation 

and quotation omitted); see also Consol. Opening Br. of the Official Comm. of Unsecured Creditors & Other Creditor 

Groups & Representatives Regarding the Appropriate Postpetition Interest Rate Payable on Unsecured Claims in a 

Solvent Debtor Case [Docket No. 4634] ¶¶ 13–21. 

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Redemption Premiums would be due and owing if the Debtors elect to satisfy the Senior Notes 

prior to the schedules specified in the applicable Note Documents. Under the Note Documents, 

these payments are due if the Debtors (1) voluntarily (2) redeem the Senior Notes prior to the 

dates specified therein, including stated maturity. 

Both elements are satisfied here. First, there can be no question that, as a matter of law, 

the Debtors, who voluntarily chose (i) to file for chapter 11 bankruptcy protection despite claiming 

to be solvent, (ii) not to reinstate the Senior Notes, and (iii) to propose a plan that prepays the 

Senior Notes, are acting “voluntarily.” The Utility is not, by virtue of the bankruptcy filing, 

required to redeem the Senior Notes. Its proposal to do so is “optional.” 

Second, the Debtors’ proposed action would constitute a “redemption” under the Note 

Documents. A redemption occurs when a company pays off its debts before the relevant stated 

maturity dates. This can, as a matter of law, occur before, on, or after, a bankruptcy-triggered 

acceleration. That interpretation is reflected in the Note Documents’ Optional Redemption 

Provisions. Though the specific language of these provisions varies somewhat, they uniformly 

provide that an Optional Redemption Premium is due if the Utility elects to satisfy the Senior 

Notes, in full or in part, prior to either the fixed dates specified in the Indentures or the Indentures’ 

defined stated maturity dates. 

Nothing in the Bankruptcy Code disallows the Optional Redemption Premiums. Such 

premiums are not “unmatured interest,” disallowed under 11 U.S.C. § 502(b)(2), but are rather 

charges or liquidated damages. Cases in the Ninth Circuit have repeatedly recognized the validity 

of optional redemption premiums in chapter 11. Accordingly, because the Optional Redemption 

Provisions are recognized by state law, and because the Bankruptcy Code does not disallow them, 

as recognized by the Ninth Circuit, the Noteholders are entitled to Optional Redemption 

Premiums should the Debtors satisfy the Senior Notes during these bankruptcy cases.

BACKGROUND 

I. DEBTORS’ WILDFIRE LITIGATION EXPOSURE LEADS TO BANKRUPTCY 

FILING. 

The Utility is one of the largest combined natural gas and electric energy companies in the 

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United States. Based in San Francisco, the Utility is a subsidiary of PG&E Corporation 

(“HoldCo” and, together with the Utility, the “Debtors”). The Utility’s power infrastructure is 

alleged to have caused or been a contributing factor in the catastrophic wildfires in Northern 

California in 2015 (the “Butte Fire”), 2017 (the “2017 Fires”) and 2018 (the “Camp Fire” and, 

collectively, the “Wildfires”). The Wildfires and related litigation have left the Debtors with a 

potential liability in excess of $30 billion. See Decl. of Jason P. Wells in Supp. of First Day 

Motions and Related Relief [Docket No. 28] pp. 11-16. Accordingly, on January 29, 2019 (the 

“Petition Date”), the Utility and HoldCo filed voluntary petitions for relief under chapter 11 of 

title 11 of the United States Code (as amended, the “Bankruptcy Code”). 

II. The Senior Notes 

The Utility issued Senior Notes before, during, and after the Wildfires with an aggregate 

principal balance of $17.525 billion. There are 29 series of Senior Notes outstanding, issued by 

the Utility under three indentures and their supplements.3 New York law governs the 2017 and 

 

3

 The applicable indentures are: (1) the Indenture Dated as of April 22, 2005 Supplementing, Amending and Restating 

the Indenture of Mortgage, dated as of March 11, 2004, as supplemented by a First Supplemental Indenture, dated as 

of March 23, 2004, and a Second Supplemental Indenture, dated as of April 12, 2004 (as amended or supplemented, 

the “2005 Indenture”), attached as Exhibit A to the Declaration of Andrew I. Silfen in Support of the Consolidated 

Opening Brief of Certain Creditor Groups and Representatives Regarding the Entitlement of Holders of Utility 

Funded Debt Claims to Optional Early Redemption, Make-Whole, or Similar Amounts in a Solvent Debtor Case (the 

“Silfen Decl.”); (2) the Indenture Dated as of November 29, 2017 between Pacific Gas and Electric Company, Issuer 

and the Bank of New York Mellon Trust Company, N.A., Trustee (as amended or supplemented, the “2017 Indenture”), 

Silfen Decl. Exhibit B; and (3) the Indenture Dated as of August 6, 2018 between Pacific Gas and Electric Company, 

Issuer and the Bank of New York Mellon Trust Company, N.A., Trustee, Silfen Decl. Exhibit C (as amended or 

supplemented, the “2018 Indenture”, together with the 2005 Indenture and the 2017 Indenture, the “Indentures”). 

 The Senior Notes can be broken down into three categories: 

1. The “2005 Notes,” comprised of (i) the 6.05% Senior Notes due 2034 (the “2034 Notes”), issued under the 

2005 Indenture’s predecessor document, continued by the 2005 Indenture, and are subject to the 2005 

Indenture as if issued thereunder; and (ii) twenty-four (24) series issued under Supplements to the 2005 

Indenture (collectively, the “Supp. 2005 Indentures” and individually, the “1st Supp. Indenture,” “3rd Supp. 

Indenture”; etc. ). The Supp. Indentures are attached to the Silfen Decl. as Exhibits A-1 – A-29. 

2. The “2017 Notes,” comprised of the 3.30% Senior Notes due 2027 and the 3.95% Senior Notes due 2047, 

issued pursuant to the 2017 Indenture. 

3. The “2019 Notes,” comprised of the 4.25% Senior Notes due 2023 and the 4.65% Senior Notes due 2028, 

issued pursuant to the supplement to the 2018 Indenture (the “Supp. 2018 Indenture” and, together with the 

Supp. 2005 Indentures, the “Supp. Indentures”). The Supp. 2018 Indenture is attached to the Silfen Decl. as 

Exhibit C-1. 

 Collectively, the Indentures, Supplemental Indentures and any ancillary documents and agreements are referred 

to as the “Note Documents.” 

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2018 Indentures; California law governs the 2005 Indenture. See Indentures4 § 1.12. BOKF is 

the successor trustee under the Note Documents. 

A. Certain Terms Are Common to All Senior Notes. 

Although the interest rates, stated maturity dates, and other terms may vary from series to 

series, certain defined terms and general provisions apply to, and are common among, all Senior 

Notes. 5 

Each of the three Indentures defines “maturity” and “stated maturity” virtually identically: 

Maturity: when used with respect to any Bond, means the date on 

which the principal of such Bond [or an installment of principal or 

any sinking fund payment6] becomes due and payable as provided 

in such Bond or in this Indenture, whether at Stated Maturity, by 

declaration of acceleration, upon call for redemption or otherwise. 

Stated Maturity: when used with respect to any obligation 

(including any Bond of any series) or any installment of principal 

thereof or interest thereon, means the date on which the principal 

of such obligation or such installment of principal or interest is 

stated to be due and payable (without regard to any provisions for 

redemption, prepayment, acceleration, purchase or extension). 

Indentures § 101. 

The Indentures’ "Events of Default provisions (Indentures § 9.01) and Acceleration 

provisions (Indentures § 9.02) are also substantively identical. Where an Event of Default has 

occurred and is continuing: 

[T]he Trustee or the Holders of not less than thirty-three percent 

(33%) in aggregate principal amount of Bonds then Outstanding, 

considered as one class, may declare the principal amount . . . of all 

Bonds then Outstanding to be due and payable immediately, by a 

notice in writing to the Company . . . and upon such declaration 

such principal amount . . . together with premium, if any, and 

accrued interest, if any, thereon, shall become immediately due and 

payable; provided, however, that with respect to [a bankruptcy-

 

4

 Citations to a specific section in the Indentures (plural) herein indicates that the section cited appears in all three 

Indentures. 

5

 A schedule categorizing the Senior Notes by the Indenture or Supp. Indenture under which they were issued and 

their specific interest rates, stated maturity dates, and certain other variable terms is attached hereto as Exhibit 1 (the 

“Senior Note Schedule”). 

 Certain of the Senior Notes were issued pursuant to Supp. Indentures, and in those cases, to the extent the terms 

or provisions in the Supp. Indentures conflict with the terms or provisions in the Indentures, the language in the Supp. 

Indentures control. See, e.g., 1st Supp. Indenture § 401. 

6

 The bracketed portion appears in the 2005 and 2018 Indentures, but not the 2017 Indenture. 

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related Event of Default], the principal amount . . . of all Bonds 

then Outstanding shall be due and payable immediately without 

further action by the Trustee or Holders. 

Id. § 9.02. 

B. The Optional Redemption Provisions Vary Across Senior Notes. 

The Senior Notes are subject to optional early redemption provisions (the “Optional 

Redemption Provisions”) that obligate the Debtors to pay a premium if they voluntarily redeem a 

particular series prior to the date specified in the applicable Note Document. The Optional 

Redemption Provision applicable to each series of Senior Notes is, generally, located in the Note 

Document under which that series was first issued.7 

While each series has its own Optional Redemption Provision, these provisions largely 

follow the same structure. The Debtors may, at their option, redeem the Senior Notes at a 

redemption price that is equal to the greater of either (a) 100% of the principal amount of the 

Senior Notes in question to be redeemed, plus accrued and unpaid interest; or (b) the sum of the 

present values of the remaining scheduled payments of principal and interest on the Senior Notes 

to be redeemed, discounted to the redemption date on a semi-annual basis at the Adjusted Treasury 

Rate, plus accrued and unpaid interest. The premium charged to the Debtors for optionally 

redeeming the Senior Notes early is the amount by which (b) exceeds (a) (the “Optional 

Redemption Premium”). 

The Optional Redemption Provisions can be broken down into three categories: (1) the 

Fixed Date Optional Redemption Provisions, (2) the Any Time Optional Redemption Provisions, 

and (3) the 2034 Notes Optional Redemption Provision (described below). 

1. The Fixed Date Optional Redemption Provisions

Fixed Date Notes—the largest category of Senior Notes—contain provisions setting out a 

fixed date in the future (the “Fixed Date Variable”), generally three or six months prior to the 

 

7

 The Optional Redemption Provisions for the 2017 Senior Notes, first issued directly under the 2017 Indenture, 

however, are not contained in the 2017 Indenture itself. Rather, they are contained in the Reverse of Senior Note 

included in the form of senior notes that are attached to the 2017 Indenture as Exhibit 1 to the Rule 144A/Regulation 

S Appendix (the “Model 2017 Senior Notes”). The terms of the Model 2017 Senior Notes are “incorporated and 

expressly made part of [the 2017 Indenture]” and likewise include language incorporating the corresponding Reverse 

of Senior Note’s contract terms. See 2017 Indenture § 3.02 & Ex. 1–15. 

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series’ “Stated Maturity” date, where an Optional Redemption Premium is incurred if the 

applicable Senior Notes are optionally redeemed by the Utility. These Optional Redemption 

Provisions apply to the Senior Notes first issued pursuant to the 10th Supp. Indenture (dated 

September 15, 2010) through the most recent 2018 Senior Notes first issued in the Supp. 2018 

Indenture (dated August 6, 2018) (collectively, the “Fixed Date Notes”). Fixed Date Notes 

account for approximately $11.825 billion of the $17.525 billion outstanding principal balance, 

and include all Short-Term Notes (defined below). Since Fixed Date Notes were issued under all 

three Indentures, see Senior Notes Schedule, New York law governs certain of the Fixed Date 

Notes and California law governs others.8

Subject to certain immaterial differences,9

 the Fixed Date Optional Redemption 

Provisions for these Senior Notes provide as follows: 

(a) Subject to the terms and conditions of the [applicable Indenture], 

at any time prior to [the Fixed Date Variable], the [applicable

Senior Notes] are redeemable at the option of the Company in 

whole or in part at any time at a redemption price equal to the

greater of: 

(i) 100% of the principal amount of the [applicable Senior Notes] 

to be redeemed; or 

(ii) as determined by the Quotation Agent, the sum of the present 

values of the Remaining Scheduled Payments of principal and 

interest on the [applicable Senior Notes] to be redeemed (not 

including any portion of payments of interest accrued as of the

Redemption Date)[10] discounted to the Redemption Date on a 

semi-annual basis at the Adjusted Treasury Rate, plus [the 

Basis Points Variable]11; 

plus, in either event of the above cases, accrued and unpaid interest 

thereon to but not including the Redemption Date. 

(b) subject to the terms and conditions of the Indenture, at any time on 

or after [the Fixed Date Variable], the [applicable Senior Notes] are 

redeemable at the option of the Company in whole or in part at 

 

8

 New York law applies to those Fixed Date Notes issued under the 2017 and 2018 Indentures; California Law applies 

to those issued under the 2005 Indenture. 

9

 For example, the Optional Redemption Provisions applicable to the 2018 Senior Notes replace the Fixed Date 

Variable with the defined terms “[2023 or 2028] Par Call Date” which are defined as July 1, 2023 and May 1, 2028. 

10 The Fixed Date Optional Redemption Provisions applicable to Senior Notes first issued under the 23rd Supp. 2005 

Indenture (dated August 18, 2014) and later include the following additional language: “. . . as of the Redemption 

Date), calculated as if the Maturity Date of [the notes in question] was [the Fixed Date Variable] (the date that 

is [three/six] months prior to the Maturity Date), discounted to the . . . .” See, e.g., 23rd Supp. Indenture § 301 

(emphasis added). 

11 The “Basis Point Variable” supplies a basis point between 15 and 40 to add to the present value of the remaining 

scheduled payments to calculate the Optional Redemption Premium. 

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100% of the principal amount of the [applicable Senior Notes] to 

be redeemed plus accrued and unpaid interest thereon to but not

including the Redemption Date. 

See, e.g., 10th Supp. Indenture § 301 (emphasis added). 

 In sum, the applicable Note Documents provide unambiguously that if the Debtors 

voluntarily redeem the Fixed Date Notes before the Fixed Date Variable relevant to the applicable 

series of Senior Notes, they will owe the Noteholders the Optional Redemption Premium. 

2. The Any Time Optional Redemption Provisions 

The Any Time Optional Redemption Provisions provide that the applicable Senior Notes 

are redeemable “at any time.” The Any Time Optional Redemption Provisions apply to the Senior 

Notes first issued pursuant to the 1st Supp. Indenture (dated March 13, 2007) through the 8th 

Supp. Indenture12 (dated November 18, 2009) (collectively, the “Any Time Notes”). The Any 

Time Notes account for $2.7 billion of the $17.525 billion outstanding principal balance. All Any 

Time Notes were issued under 2005 Supp. Indentures, see Senior Notes Schedule, thus California 

law governs. 

The Any Time Notes provide as follows: 

Subject to the terms and conditions of the [2005 Indenture], the 

[notes in question] are redeemable at the option of the 

Company in whole or in part at any time at a redemption price 

equal to the greater of: 

(a) 100% of the principal amount of the [notes in question] to be 

redeemed; or 

(b) as determined by the Quotation Agent, the sum of the present 

values of the Remaining Scheduled Payments of principal and 

interest on the [applicable Senior Notes] to be redeemed (not 

including any portion of payments of interest accrued as of the

Redemption Date) discounted to the Redemption Date on a 

semi-annual basis at the Adjusted Treasury Rate, plus [the 

Basis Points Variable]; 

plus, in either event of the above cases, accrued and unpaid interest 

thereon to but not including the Redemption Date (the 

“Redemption Price”). The Redemption Price shall be calculated 

 

12 The 9th Supp. Indenture does not include an Optional Redemption Provision because no Senior Notes were first 

issued under it. Rather, it merely reopened an offering of earlier issued Senior Notes, the 5.80% Senior Notes due 

March 1, 2037, first issued under the 1st Supp. Indenture. See 9th Supp. Indenture at art. 2. 

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assuming a 360-day year consisting of twelve 30-day months. 

See, e.g., 1st Supp. Indenture § 301 (emphasis added). 

3. The 2034 Notes Optional Redemption Provision

The 2034 Notes Optional Redemption Provision—which applies only to one series of 

Notes—replaces “are redeemable . . . at any time” with “are redeemable . . . at any time after the 

Initial Issuance Date and prior to Maturity[.]” 2005 Indenture § 4.03(d). This category of 

Optional Redemption Provisions only applies to the 2034 Notes, accounting for approximately 

$3.0 billion out of the $17.525 billion outstanding principal balance. Because the 2034 Notes 

were issued under the 2005 Indenture, see Senior Notes Schedule, California law applies. 

III. Treatment of the Senior Notes in the Proposed Plans 

On September 23, 2019, the Debtors filed their First Amended Joint Chapter 11 Plan of 

Reorganization [Docket No. 3966] (as amended on November 4, 2019 [Docket No. 4563], the 

“Debtor Plan”). Under the Debtor Plan, the Senior Notes claims are treated as “unimpaired.” The 

Debtors contemplate paying the Noteholders cash in “full and final satisfaction, settlement, 

release and discharge” of the Senior Notes; but the Debtor Plan specifically excludes from the 

allowed amount of the Noteholders claims “any Claim for make-whole or similar amounts.” 

Debtor Plan § 4.16(a). Should the Court find that the Noteholders are entitled to the Optional 

Redemption Premiums, however, the Debtor Plan provides that it “shall be modified in a manner 

to render the [Noteholders’] Claim Unimpaired.” Id. The Debtor Plan also proposes to cap the 

claims of individual wildfire victims while permitting HoldCo’s common interest claimants to 

retain their interests, subject to dilution, and reinstating HoldCo’s equity interests in the Utility. 

Debtor Plan §§ 1.124, 4.12, 4.13, 4.20, 4.26–4.27, 4.37. The Debtor Plan therefore seeks a 

windfall for equity holders by paying the Senior Notes early—presumably by refinancing them at 

lower interest rates—while evading the bargained-for Optional Redemption Premiums, estimated 

at $5.8 billion if the Debtors redeem the Senior Notes on June 1, 2020. 

On October 9, 2019, the Court entered its Order Granting Joint Motion of the Official 

Committee of Tort Claimants and Ad Hoc Committee of Senior Unsecured Noteholders to 

Terminate the Debtors’ Exclusive Periods Pursuant to Section 1121(d)(1) of the Bankruptcy Code

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[Docket No. 3940] modifying the Debtors’ exclusivity to file, solicit and confirm plans in these 

chapter 11 cases. Shortly thereafter, the Official Committee of Tort Claimants and Ad Hoc 

Noteholder Group filed an alternative Joint Chapter 11 Plan of Reorganization of Official 

Committee of Tort Claimants and Ad Hoc Committee of Senior Unsecured Noteholders [Docket 

No. 4257] (the “Alternative Plan” and, together with the Debtor Plan, the “Proposed Plans”). The 

Alternative Plan also treats the Noteholders’ claims as unimpaired; but unlike the Debtor Plan, it 

contemplates (1) paying in full certain short-term Senior Notes with maturity dates earlier than 

December 31, 2022 (the “Short Term Notes”), including Optional Redemption Premiums, and 

(2) reinstating the Senior Notes with maturity dates after December 31, 2022, leaving all of the 

Noteholders’ legal, equitable and contractual rights unaltered. 

ARGUMENT 

The Noteholders are entitled to Optional Redemption Premiums under the plain terms of 

the Note Documents in the event that the Debtors elect to redeem the Senior Notes or otherwise 

attempt to cancel them prior to the dates specified in the applicable Note Documents. Optional 

early redemption premiums, sometimes called “make-whole” premiums, safeguard the bargain 

struck by lenders and debtors: when debtors are permitted to repay a loan early, make-whole 

premiums “protect lenders’ rights to the yield that was expected at the time that they made their 

loans.” In re Chemtura Corp., 439 B.R. 561, 596 (Bankr. S.D.N.Y. 2010); see In re Energy 

Future Holdings Corp. (“EFH”), 842 F.3d 247, 261 (3d Cir. 2016). Make-whole early redemption 

premiums are rooted in the “rule of perfect tender in time,” which “prohibits early payment of a 

loan under the rationale that the ‘lender or mortgage investor has the absolute right to rely upon 

the income stream contracted for over the life of the loan.’” U.S. Bank Nat. Ass’n v. S. Side House, 

LLC, No. 11-CV-4135 ARR, 2012 WL 273119 at *4 (E.D.N.Y. Jan. 30, 2012) (quoting Nw. Mut. 

Life Ins. Co. v. Uniondale Realty Assocs., 816 N.Y.S.2d 831, 835 (N. Y. Sup. Ct. 2006)). 

Notwithstanding this “absolute right,” contracting parties may agree to permit early repayment of 

the loan. In exchange, the contract may provide for a “make-whole premium,” which “serve[s] 

to memorialize the rule of perfect tender by essentially agreeing ahead of time upon a cost of 

prepayment.” U.S. Bank, 2012 WL 273119 at *4. 

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Make-whole early redemption premiums also alleviate the noteholders’ interest-rate risk. 

If not for make-wholes, noteholders would bear the risk that the issuers would refinance the notes 

when interest rates are lower, forcing the noteholders to acquire new notes at now lower rates. 

See, e.g., In re Premier Entm’t Biloxi LLC, 445 B.R. 582, 641 (Bankr. S.D. Miss. 2010) (quoting 

Am. Bar Foundation Corp. Debt. Fin. Project, Commentaries on Model Debenture Indenture 

Provisions 475 (1971)). Make-whole premiums therefore ensure that both sides are held to their 

bargain. 

Here, the Noteholders are entitled to allowed claims for the Optional Redemption 

Premiums under the Proposed Plans. The Debtors are obligated to pay the Optional Redemption 

Premiums so long as (1) the Noteholders are entitled to the premiums under applicable nonbankruptcy (state) law, and (2) the Bankruptcy Code does not expressly disallow such claims. 

See Travelers Cas. & Sur. Co. of Am. v. Pac. Gas & Elec. Co., 549 U.S. 443, 452 (2007) (claims 

enforceable under non-bankruptcy law are allowable in bankruptcy unless the Bankruptcy Code 

expressly disallows them); see also, e.g., In re Imperial Coronado Partners, Ltd. (“Imperial 

Coronado”), 96 B.R. 997, 999–1000 (B.A.P. 9th Cir. 1989) (claims for prepayment premium are 

enforceable in bankruptcy); In re Chemtura Corp., 439 B.R. at 600 (analyzing allowability of 

make-whole provision under state and bankruptcy law). 

The conditions for the Noteholders’ entitlement to Optional Redemption Premiums are 

satisfied here. First, applicable state law requires payment of the optional redemption premiums. 

Under the plain meaning of the Note Documents, a premium is owed when the Debtors engage in 

an “optional” (i.e., voluntary) “redemption.” The Debtor Plan’s treatment of all of the Senior 

Notes and the Alternative Plan’s treatment of the Short Term Notes are both optional redemptions. 

Second, no provision of the Bankruptcy Code disallows optional redemption premiums. 

Therefore, and especially in light of the Debtors’ assumed solvency, see EFH, 842 F.3d at 253 

n.1, no basis exists for denying Optional Redemption Premiums. The Noteholders are therefore 

entitled to an order declaring that, to the extent the Senior Notes are satisfied prior to the dates 

specified in the applicable Note Documents, absent the payment of these premiums, their claims 

are impaired, and they are entitled to vote on the Proposed Plans. 

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I. The Noteholders Are Entitled to Optional Redemption Premiums, Under 

Applicable Non-Bankruptcy Law, If the Debtors Elect to Discharge the Senior 

Notes Pursuant to the Debtor Plan. 

As a threshold matter, courts in both New York13 and California14 enforce optional 

redemption provisions, like those at issue here. Courts enforce optional redemption provisions 

according to their plain terms, “giving effect to the intent of the parties as revealed by the language 

in their agreement[s].” EFH, 842 F.3d at 256 (quoting Chesapeake Energy Corp. v. Bank of N.Y. 

Mellon Tr. Co., 773 F.3d 110, 113 (2d Cir. 2014)) (interpreting New York law); see also, e.g., 

Wells Fargo Bank, N.A. v. Cabazon Band of Mission Indians (“Cabazon”), No. E060447, 2016 

WL 3438920, at *7 (Cal. Ct. App. June 15, 2016) (same under California law). The Optional 

Redemption Provisions allow the Debtors, at their option, to redeem the Senior Notes at a 

specified redemption price. Supra p. 6. The Optional Redemption Premiums are therefore 

triggered if there is an (1) “optional,” (2) “redemption.” See, e.g., EFH, 842 F.3d 254–55. 

Any attempt by the Debtors to cancel or refinance the Senior Notes prior to the dates upon 

which they may be repaid or the stated maturity under the Note Documents, constitutes an 

“optional” “redemption” entitling the Noteholders to Optional Redemption Premiums. See id.; 

Imperial Coronado, 96 B.R. 999–1000. 

A. The Debtors’ Choice to Satisfy the Senior Notes Pursuant to the Debtor Plan 

is “Optional.” 

The Debtors’ decision to satisfy the Senior Notes prior to the dates specified in the Note 

Documents is “optional,” even when that choice is made after their bankruptcy filing. See 

Imperial Coronado, 96 B.R. 999–1000; EFH, 842 F.3d at 255. The Debtors have the wherewithal 

to pay the Optional Redemption Premiums that are due in the event that the Noteholders are paid 

early. Alternatively, the Debtors can choose to reinstate the Senior Notes and leave their 

 

13 Pursuant to New York law, prepayment or optional redemption provisions are typically treated as liquidated 

damages clauses, and are presumptively enforceable. See, e.g., In re Vanderveer Estates Holdings, Inc., 283 B.R. 

122, 130 (Bankr. E.D.N.Y. 2002) (“finding that the Yield Maintenance Premium provision is an enforceable liquidated 

damages clause under New York law.”); see also In re S. Side House, LLC, 451 B.R. 248, 268 (Bankr. E.D.N.Y. 

2011); In re Chemtura Corp., 439 B.R. at 601-02. 

14 Pursuant to California law, “contractual charges for prepayment of the loan principal are generally considered valid 

provisions for alternative performance, rather than penalties or liquidated damages for breach.” Ridgley v. Topa Thrift 

& Loan Ass’n, 17 Cal. 4th 970, 978 (1998). 

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obligations thereunder intact after the Debtor Plan’s proposed effective date. To the extent that 

the Debtors chose not to reinstate, the redemption of the Senior Notes on the effective date is 

clearly “optional.” 

The Ninth Circuit Bankruptcy Appellate Panel (“BAP”) held in Imperial Coronado that a 

chapter 11 debtor’s satisfaction of a note that allowed for prepayment at “any time” only if the 

debtor paid a make-whole premium, triggered the note’s make-whole provision. 96 B.R. at 999–

1000. There, the BAP considered the allowance of a claim for a make-whole premium that arose 

from a prepayment penalty provision in a note secured by the debtor’s apartment building. Id. at 

998. Before bankruptcy, the debtor defaulted on the note, the note accelerated, and the lender 

initiated foreclosure proceedings. Id. A month before the scheduled foreclosure sale, the debtor 

filed for chapter 11 protection and subsequently sold the building under section 363 of the 

Bankruptcy Code, using the proceeds to satisfy the defaulted note. Id. 

The BAP determined that, notwithstanding the note’s acceleration or the pendency of the 

bankruptcy case, the satisfaction of the note with the proceeds of the sale prior to the note’s stated 

maturity date constituted a prepayment that triggered the make-whole provision. Id. at 999-1000. 

The debtor’s payment was optional because the debtor “had the right to deaccelerate the due date 

of the loan as part of a plan of reorganization . . . [under] 11 U.S.C. § 1124(2).” 96 B.R. at 1000. 

That the debtor was insolvent, and could not afford to pay arrearages and reinstate the loan was 

immaterial to the BAP’s reasoning: “[T]he question is not whether [the debtor] could, as a 

practical matter, afford to exercise its right, but whether it had the right to reinstate the loan.” Id. 

Therefore the debtor’s “decision . . . to pay off the loan” rather than to “reinstate the loan” was 

“voluntary, and the prepayment penalty [was] enforceable.” Id.; see also In re 433 S. Beverly 

Drive, 117 B.R. 563, 568–69 (Bankr. C.D. Cal. 1990) (allowing a prepayment premium despite 

the borrower’s bankruptcy filing).15

Similarly, the Third Circuit in EFH found the solvent debtor’s refinancing of certain notes 

through debtor-in-possession financing to be “optional.” 842 F.3d 255–56. The court rejected 

 

15 Abrogated on other grounds by Gen. Elec. Capital Corp. v. Future Media Prods., Inc., 547 F.3d 956 (9th Cir. 2008) 

(abrogating 433 S. Beverly Drive’s decision with respect to postpetition interest). 

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the debtor’s argument that the notes’ acceleration provision, which rendered the notes “due and 

payable immediately without further action or notice,” negated the voluntariness of the proposed 

redemption; indeed, the debtor “filed for Chapter 11 protection voluntarily.” Id. at 255. 

Additionally, while in bankruptcy the debtor was not forced to repay the notes immediately: it 

“had the option . . . to reinstate the accelerated Notes’ original maturity date under Bankruptcy 

Code § 1124(2) . . . [but] chose not to do so.” Id. Because the chapter 11 filing was voluntary, 

and because the debtor had the choice of different treatment of the notes once in bankruptcy, its 

actions were “optional” as a matter of law and therefore triggered the redemption premium 

payment under the notes’ terms. See id.

That the debtor in EFH was solvent further underscored the voluntary nature of the 

redemption. See id. “[A] chapter 11 debtor that has the capacity to refinance secured debt on 

better terms . . . outside of bankruptcy . . . cannot reasonably assert that its repayment of debt is 

not ‘voluntary.’” Id. (quoting Scott K. Charles & Emil A. Kleinhaus, Prepayment Clauses in 

Bankruptcy, 15 AM. BANKR. INST. L. REV. 537, 552 (2007)).16 Moreover, the redemption of the 

notes was done over the noteholders’ objection; there, the noteholders were contractually 

permitted to deaccelerate the notes, but they were blocked by the automatic stay from doing so. 

Id.17 

Here, as in Imperial Coronado and EFH, the Debtors voluntarily filed for chapter 11 

protection. The Utility is not, by virtue of the bankruptcy filing, or sections 9.01(e) and 9.02 of 

the Indentures, required to redeem the Senior Notes. To the contrary, the Debtors could very well 

seek to reinstate the Senior Notes’ original maturity dates under 11 U.S.C. § 1124(2) to avoid 

 

16 The equities counsel even more strongly in favor of honoring a solvent debtor’s contractual obligations such as the 

payment of optional redemption premiums in bankruptcy than they do when the debtor is insolvent. See, e.g., In re 

Dow Corning Corp., 456 F.3d 668, 678–79 (6th Cir. 2006) (“[W]hen a debtor is solvent, it is the role of the bankruptcy 

court to enforce the creditors’ contractual rights.”); In re Chicago, Milwaukee, St. Paul & Pac. R.R. Co., 791 F.2d 

524, 528 (7th Cir. 1986) (where debtor is solvent, “the task for the bankruptcy court is simply to enforce creditors’ 

rights according to the tenor of the contracts that created those rights”); In re Los Angeles Dodgers LLC, 465 B.R. 18, 

32–33 (D. Del. 2011) (where debtor is solvent, “the equities strongly favor holding the debtor to his contractual 

obligations so long as those obligations are legally enforceable under applicable non-bankruptcy law”).

17 Because the Third Circuit found that the applicable noteholders were entitled to the make-whole premiums, it did 

not reach the alternative argument that the noteholders would have an allowed claim for damages arising from the 

denial of their bargained-for contractual rights. EFH, 842 F.3d at 261 n.4. BOKF and the AHC reserve all rights in 

connection with such argument. 

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triggering the Optional Redemption Provisions. See Imperial Coronado, 96 B.R. at 1000; EFH, 

842 F.3d at 255–56. But they are choosing not to do so. 

The Debtors here are presumed solvent. See Scheduling Order ¶ 9. And, as in EFH, the 

Debtors are strategically utilizing the chapter 11 process to refinance voluntarily the terms of the 

Senior Notes, $4.4 billion of which were issued in the years after the Butte Fire (including $2.8 

billion issued after the 2017 Fires) and as recently as August 2018. See EFH, 842 F.3d at 253 

n.1, 255. The Debtor Plan underscores this intent. In it, the Debtors concede their ability to satisfy 

the Senior Notes in full, including the Optional Redemption Premiums, but only if the Court so 

requires. See Debtor Plan § 4.16(a) (the Plan “shall be modified in a manner to render the 

[Noteholders’] Claim Unimpaired”)). Under these circumstances, the Debtors must be held to 

honor the contractual bargain struck as recently as last year to pay the Optional Redemption 

Premiums where their decision to redeem the Senior Notes is voluntary. Cf. In re Dow Corning 

Corp., 244 B.R. 678, 695 (Bankr. E.D. Mich. 1999) (“A debtor with the financial wherewithal to 

honor its contractual commitments should be required to do so.”). 

B. The Debtors’ Choice to Satisfy the Senior Notes Under the Debtor Plan 

Constitutes a “Redemption” Entitling Noteholders to the Optional 

Redemption Premium. 

The Debtors’ decision to satisfy the Senior Notes prior to the Senior Notes’ stated 

maturity, in addition to being “optional,” also constitutes a “redemption.” See, e.g., EFH, 842 

F.3d at 254–55. Any satisfaction of the Senior Notes that is consistent with the Optional 

Redemption Provisions constitutes a “redemption” under the Note Documents’ plain terms. And 

the fact of the Debtors’ bankruptcy filing does not destroy the Noteholders’ rights under the 

Optional Redemption Provisions: “redemption” can, as a matter of law, occur before or after a 

bankruptcy-triggered acceleration. 

1. The Proposed Plans’ Treatment of the Senior Notes Constitutes a

“Redemption” Under The Note Documents’ Plain Terms. 

The Debtors’ satisfaction of the Senior Notes prior to stated maturity under either of the 

Proposed Plans is a “redemption” under the Note Documents’ plain terms. Under both New York 

and California law, which govern the Note Documents, the interpretation of indentures is a matter 

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of basic contract law. See, e.g., EFH, 842 F.3d at 256 (applying New York contract interpretation 

principles to determine the validity of an optional redemption premium provision); Cabazon, 2016 

WL 3438920, at *6–7 (same, applying California law). The primary objective in contract 

interpretation is to “give effect to the intent of the parties as revealed by the language in their 

agreement.” Compagnie Financiere de CIC et de L’Union Europeenne v. Merrill Lynch, Pierce, 

Fenner & Smith Inc., 232 F.3d 153, 157 (2d Cir. 2000); see also EFH, 842 F.3d at 261 (same) 

(quoting Chesapeake Energy Corp. v. Bank of N.Y. Mellon Tr. Co., 773 F.3d 110, 113 (2d Cir. 

2014)); Perez-Encinas v. AmerUs Life Ins. Co., 468 F. Supp. 2d 1127, 1133 (N.D. Cal. 2006) 

(same); Cal. Civ. Code § 1636 (same). “[T]he words and phrases [in a contract] should be given 

their plain meaning, and the contract should be construed so as to give full meaning and effect to 

all of its provisions.” Olin Corp. v. Am. Home Assurance Co., 704 F.3d 89, 99 (2d Cir. 2012) 

(internal quotations omitted; second alteration in original); see also Cal. Civ. Code §§ 1639, 1641. 

The Note Documents do not define the term “redemption,” so this Court must construe 

this term in accordance with its plain meaning. See, e.g., Quadrant Structured v. Vertin, 16 N.E. 

3d 1165, 1171–72 (N.Y. 2014); Cal. Civ. Code § 1644. “In ordinary corporate parlance, a 

‘redemption’ refers to a corporation’s contractual right to compel holders of a certain class of 

securities . . . to return or exchange them for cash or property on a date specified in the investment 

contract or otherwise determined by the corporation.” Heine v. Signal Cos., No. 74 Civ. 3036, 

1977 WL 930, at *14 (S.D.N.Y. Mar. 4, 1977). Thus, a redemption occurs where “a corporation 

redeems certain outstanding bonds or notes for the purpose of cancelling them” and “satisfying 

[its] indebtedness.” See Felin v. Kyle, 102 F.2d 349, 350 (3d Cir. 1939); see also Chesapeake 

Energy, 957 F. Supp. 2d at 335 n.15 (defining “redemption” as “[t]he reacquisition of a security 

by the issuer”). 

Applying the plain meaning of “redemption” and the basic rules of contract construction, 

the Optional Redemption Provisions provide that all of the Senior Notes—the Fixed Date Notes, 

Any Time Notes, and the 2034 Notes—may be redeemed prior to the dates specified in the 

applicable Note Documents only if the Debtors pay the Optional Redemption Premiums. This 

point is crystal clear with respect to 28 of the 29 series of Senior Notes (the Fixed Date Notes and 

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the Any Time Notes), but it applies equally with respect to the 2034 Notes. 

a. Fixed Date Notes 

The Fixed Date Notes contain virtually indistinguishable Optional Redemption Provisions 

to those the Third Circuit validated in EFH. 842 F.3d at 254 (“At any time prior to December 1, 

2015, the Issuer may redeem all or a part of the Notes at a redemption price . . . .”). As in EFH, 

the Fixed Date Optional Redemption Provisions provide that “at any time prior to the [Fixed 

Date Variable], the [Senior Notes] are redeemable at the option of the Company in whole or in 

part at a redemption price equal to” the Optional Redemption Premium formula. See, e.g., 18th 

Supp. Indenture § 401(a) (emphasis added).18 

In sum, any attempt by the Debtors to satisfy the Fixed Date Notes prior to the applicable 

Fixed Date Variable constitutes a “redemption” that, under the express terms of the Note 

Documents, triggers the Optional Redemption Premium. See id.; see also EFH, 842 F.3d at 254–

56.19 

b. Any Time Notes 

The Noteholders’ entitlement to the Optional Redemption Premiums is just as clear with 

respect to the Any Time Notes, which require premium payments if redeemed at any time—even 

one day—prior to stated maturity. The Debtors’ satisfaction of the Any Time Notes prior to the 

stated specified maturity dates also constitutes a redemption under the applicable Note 

Documents’ plain terms. 

Any Time Notes “are redeemable at the option of the Company in whole or in part at any 

time,” subject to the Optional Redemption Premium. See, e.g., 1st Supp. Indenture § 301 

(emphasis added).20 As noted, the 2005 Indenture supplies redemption procedures to be followed 

 

18 The 18th Supp. Indenture includes a Fixed Date Variable of May 15, 2022. The Note Documents applicable to the 

remaining Fixed Date Notes contain substantively identical terms, with different Fixed Date and Basis Point Variables. 

See, e.g., 19th Supp. Indenture §§ 401-02; see also Senior Notes Schedule (identifying each Fixed Date Notes’ variable 

terms). 

19 The Fixed Date Notes can also be redeemed after the Fixed Date Variable, see, e.g., 18th Supp. Indenture § 401(b), 

but before the date of Stated Maturity (which generally occurs three or six months after the Fixed Date Variable), see, 

e.g., Indentures § 6.01 & Art. VI (providing procedures to be followed when the Company redeems bonds prior to 

their “Stated Maturity”). In those instances, the Debtors owe no Optional Redemption Premiums. See e.g., 18th Supp. 

Indenture § 401(b). 

20 The language in the 1st through 8th Supp. Indentures—under which the Any Time Notes were issued—are 

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if the Debtors redeem the Senior Notes prior to the date of “Stated Maturity.” 2005 Indenture § 

6.01 & Art. VI. Accordingly, any attempt by the Debtors to satisfy the Any Time Notes prior to 

their date of “Stated Maturity” constitutes a “redemption” under the applicable Note Documents. 

c. 2034 Notes 

Finally, satisfaction of the 2034 Notes prior to the date of their stated maturity also 

constitutes a “redemption” pursuant to the rules of contract construction of governing California 

law.21 The 2034 Notes Optional Redemption Provision deviates from the Any Time Optional 

Redemption Provision in only one material way: it replaces “are redeemable . . . at any time” 

with “are redeemable . . . at any time after the Initial Issuance Date and prior to Maturity[.]” 

2005 Indenture § 4.03(d). This provision, if read literally, would lead to an absurd result and 

render the Optional Redemption Provisions a nullity; therefore, “Maturity” must be reconciled 

with the intent of the contract as a whole to mean “Stated Maturity.” 

An indenture’s “literal language . . . does not control if it leads to absurdity (Civ. Code, 

§ 1638) or if it is wholly inconsistent with the main intention of the parties (Civ. Code, § 1653).” 

SDC/Pullman Partners v. Tolo Inc., 70 Cal. Rptr. 2d 62, 67 (Cal. Ct. App. 1997) (citations in 

original); see also, e.g., Roden v. AmerisourceBergen Corp., 113 Cal. Rptr. 3d 20, 46 (Cal. Ct. 

App. 2010) (finding an absurd outcome where the plaintiff’s interpretation of a provision in the 

contract would result in an $8.25 billion windfall contrary to the purpose of the contract). 

Interpretations that render contract provisions superfluous should likewise be avoided. 

See Cal. Civ. Code § 1641; see also, e.g., Crosby v. HLC Properties, Ltd., 167 Cal. Rptr. 3d 354, 

359–60 (Cal. App. 2014). Further, “contract terms cannot be read in isolation” and “must be read 

as a consistent whole, so that some effect will be given to all clauses consistent with the general 

intent and purpose of the instrument[.]” SDC/Pullman, 70 Cal. Rptr. 2d at 67 (citing Cal. Civ. 

Code §§ 1641, 1652). 

Requiring redemption to occur “prior to Maturity,” as opposed to “prior to Stated 

 

substantively identical. California law applies to the Any Time Notes, which were all issued under the 2005 Indenture. 

See 2005 Indenture § 1.12; see also Senior Notes Schedule (identifying the Any Time Notes’ Supp. 2005 Indentures 

and Optional Redemption Provisions). 

21 The 2005 Indenture (and therefore California law) governs the 2034 Notes. See Senior Note Schedule. 

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Maturity,” renders the 2034 Notes Optional Redemption Provision superfluous. “Maturity” is 

defined in the Indentures as “the date on which the principal of such Bond . . . becomes due and 

payable . . . whether at Stated Maturity, by declaration of acceleration, upon call for redemption 

or otherwise.” Indentures § 1.01. Upon a “call for redemption,” the Utility is to give at least 

forty-five (45) days’ notice of the “Redemption Date,” see Indentures § 6.02, i.e., the date the 

principal becomes due and payable. See Indentures §§ 1.01, 6.05. Therefore, upon a “call for 

redemption,” the “Redemption Date” becomes the Maturity Date. As a consequence, redemptions 

can never occur “prior to Maturity,” but only at or after Maturity, by definition. The provision 

of the 2034 Notes Optional Redemption Provision seeming to require redemption “prior to 

Maturity”, therefore, renders the entire Optional Redemption Provision meaningless. That absurd 

result runs contrary to the parties’ intent to condition early redemption on the payment of the 

Optional Redemption Premium. That result also leads to an unjust windfall to the Debtors of 

nearly $1.6 billion in Optional Redemption Premium owed on the 2034 Senior Notes. 

By contrast, reading the 2034 Optional Redemption Provision to require redemption prior 

to “Stated Maturity”—a date fixed by that term’s definition in the Indenture— gives effect to the 

provision consistent with the 2005 Indenture as a whole. The 2005 Indenture contemplates that 

redemption will occur prior to Stated Maturity (not Maturity) by providing procedures for the 

Debtors to redeem the 2034 Notes before their “Stated Maturity.” See 2005 Indenture § 6.01. 

Likewise, section 9.05 of the 2005 Indenture contemplates that the Trustee will file bankruptcy 

proofs of claim that include premiums. Were the 2034 Notes’ Optional Redemption Provision to 

preclude Optional Redemption Premiums in the event of a bankruptcy, this right to include 

premiums in proofs of claim would also be superfluous. The proposed reading of “Maturity” to 

mean “Stated Maturity” in the 2005 Indenture is likewise consistent with the bargain embodied 

in optional redemption provisions generally and the role make-whole premiums play in leveling 

the interest-rate risk between issuers and noteholders. See supra pp. 10–11. The Debtors’ ability 

to trigger “Maturity” by declaring bankruptcy and evade the bargain they struck with the Any 

Time Noteholders—who agreed to lend the Debtors $2.7 billion in principal capital for 

approximately 30 years at fixed rates of interest—would entirely undermine the purpose of the 

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Optional Redemption Provisions and the Note Documents as a whole. 

In sum, the only permissible interpretation, under these circumstances, is to read the 2034 

Notes Optional Redemption Provision in harmony with the definition of Maturity and other 

provisions of the 2005 Indenture contemplating redemption after Maturity but before Stated 

Maturity. See 2005 Indenture §§ 1.01, 4.03(d), 6.01 & Art. VI. 

* * * 

In sum, an attempt by the solvent Debtors to satisfy the Senior Notes prior to the applicable 

fixed dates or the dates of stated maturity constitutes an “optional” “redemption,” entitling the 

Noteholders to Optional Redemption Premiums. 

2. Redemption Can Occur After a Bankruptcy-Induced Acceleration as

a Matter of Law. 

The acceleration of debt under a separate and independent contractual provision in the 

Note Documents does not alter the conclusion that the Optional Redemption Provisions are 

triggered in this case. This is because a redemption can occur, according to “New York and 

federal courts,” “both pre- and post-maturity” of the debt. EFH, 842 F.3d at 255; see also 

Treasurer of N.J. v. U.S. Dep’t of Treasury, 684 F.3d 382, 388 (3d Cir. 2012) (noting that 

regulations allow bondholders to “present . . . long-matured savings bond[s] for redemption”); 

Fed. Nat. Mortg. Ass’n v. Miller, 473 N.Y.S.2d 743, 744 (N.Y. Sup. Ct. 1984)) (declaring that 

“debtor may redeem” mortgage by “pay[ing] . . . accelerated debt”); Carman v. Alvord, 644 P.2d 

192, 196 (Cal. 1982) (because indebtedness includes “obligations which are yet to become due as 

[well as] those which are already matured,” the timing of a repayment does not affect its 

characterization as a “redemption”). 

A redemption can occur before or after acceleration of the debt caused by a bankruptcy 

filing. The Ninth Circuit BAP in Imperial Coronado expressly recognized a secured creditor’s 

contractual right to a prepayment premium following acceleration of the debt and the debtor’s 

bankruptcy filing. 96 B.R. 999–1000. And the Third Circuit in EFH held enforceable an optional 

redemption provision triggered by the debtors’ satisfaction of the debt, despite the fact that the 

notes in question accelerated when the debtors filed for bankruptcy. 842 F.3d at 252, 254–56. 

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This result makes sense: “if automatic acceleration of a debt defeats” an optional redemption 

clause, “such a clause could never be enforced in a bankruptcy case,” and a debtor could “always 

avoid the effect of a prepayment premium clause by filing a bankruptcy case.” In re Skyler Ridge, 

80 B.R. 500, 507 (Bankr. C.D. Cal. 1987). 

In EFH, the court rejected the debtor’s argument that the applicable indentures’ 

acceleration provision—which stated that “all outstanding Notes shall be due and payable 

immediately” upon a bankruptcy filing—foreclosed the noteholders’ entitlement to optional 

redemption premiums owed if the debtors satisfied the notes “[a]t any time prior to December 15, 

2015.” Id. at 254 (quoting Indentures §§ 3.07, 6.02). The debtor there argued that the court 

should limit “redemption” to mean “only repayments of debt that pre-date the debt’s maturity” 

upon bankruptcy. Id. at 254–55. To the contrary, the Third Circuit stated, “redemption . . . 

include[s] both pre- and post-maturity repayments of a debt.” Id. at 255 (citing, e.g., Chesapeake 

Energy Corp. v. Bank of N.Y. Mellon, 773 F.3d 110, 116 (2d Cir. 2014) (“redeem” is to “repay[] 

. . . a debt security . . . at or before maturity” (alterations in original))). 

The presence of a discrete and separate acceleration provision in an indenture does not 

negate an otherwise triggered optional redemption provision; “the two sections simply address 

different things.” EFH, 842 F.3d at 255. While acceleration provisions do advance maturity, they 

do not provide a basis for reading other provisions out of an agreement. See NML Capital v. 

Republic of Arg., 952 N.E.2d 482, 487, 492 (N.Y. 2011) (rejecting the debtor’s argument that 

acceleration terminates the obligation to make interest payments because there is no rule that 

“terms of a contract not necessarily impacted by acceleration . . . automatically cease to be 

enforceable after acceleration.”). In NML Capital, the New York Court of Appeals held that had 

the debtor intended that other provisions, such as the interest payment provision, become 

ineffective upon acceleration or maturity, “it could easily have clarified that intent in any number 

of ways.” Id. at 490. 

Applying NML Capital, the Third Circuit in EFH likewise refused to “choose between” 

the redemption provision and the acceleration provision and, instead, read them as operating 

together, based on the same logic that acceleration did not void the debtor’s interest payment. The 

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Third Circuit explained that any contrary position would render other provisions superfluous. See 

842 F.3d at 257; see also In re Chemtura Corp., 439 B.R. at 601, 603 (bankruptcy acceleration 

did not negate make-whole provision tied to a fixed maturity date). 

EFH speaks directly to the current case. The Indentures governing 24 of the 29 series of 

the Senior Notes (the Fixed Date Notes), worth an aggregate $11.85 billion, state that the Senior 

Notes are redeemable at the option of the Debtors at any time prior to specific dates. For example, 

the 3.75% Senior Notes due 2024 are optionally redeemable until November 15, 2023. See 21st 

Supplement to the 2005 Indenture Art. IV Section 401 (February 21, 2014). Moreover, the 

acceleration provision does not state that the Noteholders forfeit their right to the premium 

otherwise provided for in the contract upon a bankruptcy event of default.22 Thus, for the same 

reasons as in EFH, acceleration of the maturity of the Fixed Date Notes is not pertinent to the 

triggering of the Optional Redemption Premium. See 842 F.3d at 257 (“[T]he result is the same 

no matter the Indenture—there were optional redemptions before a date certain, thereby triggering 

make-whole premiums.”). The same is true of four other series of Senior Notes (the Any Time 

Notes) that give the Debtors the option to redeem “at any time,” subject to the payment of the 

Optional Redemption Premium. See In re Imperial Coronado, 96 B.R. at 999 (awarding makewhole despite acceleration based on provision involving “prepay[ment] . . . in full or in part at 

any time”). 

The acceleration clause also has no contractual effect on the entitlement to a make-whole 

with respect to the 2034 Notes. Just as in NML Capital and EFH, nothing in the Optional 

Redemption Provisions or any other provision of the Note Documents indicates that the parties 

intended for acceleration to supersede any other provision. See EFH, 842 F.3d at 257 (“It 

surpasses strange to hold that silence in [the acceleration provision] supersedes [the optional 

redemption provisions’] simple script.”). To the contrary, the Note Documents make clear that 

 

22 The omission of a reference to any “premium” concerning certain bankruptcy related events of default does not 

evince an intent to deny such premium in bankruptcy. Indeed, section 9.05 of the Indentures expressly permits the 

Trustee to include “premium, if any” among the amounts asserted in bankruptcy proofs of claim; a right that would 

be superfluous were premiums denied in bankruptcy. In fact, the omission of “premium” in connection with automatic 

acceleration in bankruptcy makes practical sense. It is not certain at the outset of a bankruptcy case whether the 

Debtors would elect to cash out or reinstate the Senior Notes and thus, in most circumstances, no Optional Redemption 

Premium is triggered immediately on the filing of the petition.

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section 9.02 and article VI in the Indentures and the Optional Redemption Provisions, and the 

concepts of “acceleration” (one remedy) and “redemption” (a separate remedy), are not mutually 

exclusive, but rather are explicitly permissive and cumulative. See Indentures § 9.10 (“every right 

and remedy shall . . . be cumulative and in addition to every other right and remedy given 

hereunder”); EFH, 842 F.3d at 259 (“The takeaway for us is that [the optional redemption 

provision] applies no less following acceleration of the Notes’ maturity than it would to a preacceleration redemption.”). Under these circumstances, as in Imperial Coronado, NML, and EFH, 

an automatic acceleration caused by a bankruptcy filing does not negate the remedies provided in 

the Optional Redemption Provisions. 

There are still other reasons why acceleration of the debt does not obviate the debtor’s 

obligation to pay a make-whole premium. Most fundamentally, key provisions of the Indentures 

would be rendered nonsensical or superfluous under the Debtors’ assumed interpretation. The 

Trustee, as noted, is empowered to file a bankruptcy claim for the Optional Redemption Premium. 

2005 Indenture § 9.05. The Indentures also state that “notwithstanding any other provision in 

[the] Indenture, the Holder of any Bond shall have the right, which is absolute and unconditional, 

to receive payment of . . . premium, if any.” See, e.g., 2018 Indenture Art. IX § 9.08 

(“Unconditional Right of Holders to Receive Principal, Premium, and Interest”) (August 6, 2018) 

(emphasis added). Those provisions would be meaningless if the acceleration clause defeated the 

express provisions requiring the Debtors to pay a make-whole premium. 

Under New York and California law, courts interpreting contracts have a duty “to give 

full meaning and effect to all of [an] Indenture’s provisions.” EFH, 842 F.3d at 256; see also

Balsam v. Tucows Inc., 627 F.3d 1158, 1162 (9th Cir. 2010) (“The whole of a contract is to be 

taken together, so as to give effect to every part”). The correct interpretation of the Indenture is 

that an acceleration clause that is silent as to premium leaves all other provisions intact; any other 

interpretation would read key terms out of the contract. If a debtor wishes to disclaim the 

obligation to pay a premium upon a bankruptcy filing, it can plainly provide for that contingency. 

The Debtors here did not do so, and they owe the Optional Redemption Premium as a result. 

What is more, the Debtors themselves, and not the lenders, are prompting the acceleration 

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and refraining from de-acceleration on their own volition. “[S]o long as the lender refrains from 

taking overt action, any acceleration triggered by bankruptcy will not defeat the right to a 

prepayment premium.” Premier Entm’t Biloxi LLC v. U.S. Bank Nat’l Assoc. (In re Premier 

Entm’t Biloxi LLC), 445 B.R. 582, 631 (Bankr. S. D. Miss. 2010) (citing In re LHD Realty Corp, 

726 F.2d 327, 332 (7th Cir. 1984)). Therefore, the Noteholders’ right to make-whole premiums 

is unaffected by the acceleration clause. 

3. The Second Circuit’s Momentive Decision Does Not Counsel a 

Contrary Result.

The Debtors will presumably rely on the Second Circuit’s decision in Matter of MPM 

Silicones, L.L.C. (“Momentive”), 874 F.3d 787 (2d Cir. 2017) to argue that the Optional 

Redemption Provisions cannot be triggered following a bankruptcy. However, Momentive is 

contrary to Ninth Circuit BAP precedent, see Imperial Coronado, 96 B.R. 999–1000 (postbankruptcy satisfaction of note constituted optional prepayment), and runs contrary to the New 

York state law upon which it relies. See EFH, 874 F.3d at 257, 259–60 (rejecting reasoning from 

Momentive lower court opinions as contrary to New York law). 

In Momentive, the Second Circuit rejected noteholders’ contention that their optional 

redemption premiums were triggered when the debtor issued replacement notes under chapter 11, 

thereby redeeming the notes “at its option” prior to the notes’ stated, fixed-date maturity terms. 

874 F.3d at 802. At the outset, Momentive has no impact on the make-whole analysis for the 

Fixed Date or Any Time Notes. The relevant indentures in Momentive “called for the recovery 

of a ‘make-whole’ premium if [the debtor] opted to redeem the notes prior to maturity.” Id. at 

792. Though the indentures mentioned the date October 15, 2020, this date simply happened to 

be the indentures’ “maturity date,” id., unlike the dates specified in the Fixed Date Notes at issue 

here. For the Fixed Date or Any Time Notes, the Debtors owe a make-whole premium upon 

optional redemption either prior to a fixed date or at “any time.” The analysis in Momentive is 

therefore inapposite to the large majority of Senior Notes and only relevant, if at all, with respect 

to the 2034 Notes. 

In any event, with respect to all of the Senior Notes, Momentive is also distinguishable 

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and precluded by the “Intentional Evasion” doctrine. In Momentive, the debtors were not solvent; 

they were “substantially overleveraged” and “faced serious financial problems” prior to their 

chapter 11 filings. 874 F.3d at 791; see also In re MPM Silicones, LLC, No. 14-22503-RDD, 

2014 WL 4436335, at *17 (Bankr. S.D.N.Y. Sept. 9, 2014). In EFH, by contrast, the debtors were 

solvent—a factor EFH explicitly noted was potentially relevant to its analysis. See 842 F.3d at 

253 n.1. As in EFH, the Debtors here are presumed to be solvent. Prior to filing for bankruptcy, 

the Debtors had not yet defaulted on any of the Senior Notes. And they have acknowledged their 

financial capacity to modify the Debtor Plan so that the Noteholders are unimpaired if the Court 

determines that Optional Redemption Premiums are owed. See Debtor Plan § 4.16(a). 

In light of the Debtors’ asserted solvency, they are precluded from using bankruptcy to 

evade their obligation to pay the Optional Redemption Premiums. Courts recognize that it is 

fundamentally inequitable to allow a borrower to evade payment of a premium by causing the 

default, regardless of whether the borrower had subjective intent to evade payment, because 

allowing such evasion would “place [the borrower] in a better position by breaching the 

[agreement] than it would have occupied had it honored the parties’ contract.” See Wilmington 

Sav. Fund Soc., FSB v. Cash America Int’l, Inc., No. 15-cv-5027 (JMF), 2016 WL 5092594, at 

*6–8 (S.D.N.Y. Sept. 19, 2016); see also Nw. Mut. Life Ins. Co., 816 N.Y.S.2d at 839 (borrowers 

should not be allowed “to intentionally trigger acceleration in order to secure the benefits of 

prepayment in a favorable market while at the same time avoiding the bargained for premium”). 

Under this “intentional evasion” rule, a borrower cannot default to trigger acceleration and 

“evade” associated premiums. See In re 1141 Realty Owner LLC, 598 B.R. 534, 541 (Bankr. 

S.D.N.Y. 2019). The Momentive bankruptcy court acknowledged the intentional evasion rule,23

before declaring it undisputedly factually inapplicable under the circumstances present in that 

case. Id. But the Debtors here, as noted, differ from the Momentive debtors, particularly in that 

they are solvent and have affirmed the ability to make the Optional Redemption Premiums (or 

 

23 In re MPM Silicones, LLC, No. 14-22503-RDD, 2014 WL 4436335, at *13 (Bankr. S.D.N.Y. Sept. 9, 2014), aff’d 

in part, 874 F3d 787 (2d Cir. 2017) (“when the debtor intentionally defaults in order to trigger acceleration and evade 

the prepayment premium or make-whole, the debtor will remain liable for the make-whole notwithstanding 

acceleration of the debt”). 

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otherwise modify the Debtor Plan). Thus, the Debtors should not inappropriately use these 

chapter 11 cases as an opportunity to enhance equity holders’ position by choosing to redeem the 

Senior Notes without paying the bargained for Optional Redemption Premiums. 

In addition to being inapposite and distinguishable, Momentive is wrong. In that case, the 

Second Circuit relied on a single decision, In re AMR Corp, 730 F.3d 88 (2d Cir. 2013), in holding 

that “a payment made mandatory by operation of an automatic acceleration clause is not one made 

at MPM’s option.” MPM Silicones, 874 F.3d at 802–03. But AMR’s acceleration provision 

explicitly disclaimed the availability of the make-whole amounts otherwise due under the note if 

the issuer voluntarily filed for bankruptcy. 730 F.3d at 99 (following voluntary bankruptcy filing, 

acceleration provision provided “unpaid principal amount of the [notes] . . . [plus] accrued but 

unpaid interest thereon and all other amounts due thereunder (but for the avoidance of doubt, 

without Make-Whole Amount), shall be immediately due” (emphasis added)). The plain text of 

the applicable provision in AMR expressly disclaimed the availability of make-whole premiums 

following a bankruptcy-triggered acceleration; thus “AMR is the easy case; just follow the text.” 

EFH, 842 F.3d at 256. The same is not true here. 

As in EFH, the Note Documents’ plain language (i) provides procedures for the Senior 

Notes to be “redeemable before their Stated Maturity” (see Indentures § 6.01), and (ii) permits 

the accrual of Optional Redemption Premiums prior to either fixed dates or stated maturity 

irrespective of any bankruptcy default or accelerations. The Debtors could have chosen to cut off 

Optional Redemption Premiums upon filing of a bankruptcy (as was the case in AMR); they did 

not. See Indentures § 9.02 (no mention of Optional Redemption Provisions). The reasoning in 

EFH, and not Momentive, should apply here. 

In sum, the plain language of the Senior Notes demonstrates that Optional Redemption 

Premiums are available, regardless of the Debtors’ bankruptcy filing, under applicable state law 

should the Debtors satisfy principal and interest due on the Senior Notes prior to the dates 

specified in the Note Documents. 

II. The Optional Redemption Premiums Are Not Disallowed by the Bankruptcy Code 

Nor are the Optional Redemption Premiums disallowed by the Bankruptcy Code. The 

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Optional Redemption Premiums are not “interest,” but rather one-time “charges” purposed to 

compensate the Noteholders for the additional costs they will incur as a result of the Senior Notes 

being satisfied early. Even if the Optional Redemption Premiums are viewed as interest (and they 

should not be), they are fully matured and, therefore, not subject to section 502(b)(2) of the 

Bankruptcy Code. See 11 U.S.C. § 502(b)(2) (disallowing claims for “unmatured interest”). 

A. The Optional Redemption Premiums Are “Charges,” or “Liquidated 

Damages,” Not “Interest.” 

It is well-settled in the Ninth Circuit that make-whole premium claims are allowable under 

the Bankruptcy Code. See Imperial Coronado, 96 B.R. at 106 (finding a make-whole allowable 

as a secured claim under section 506(b) of the Bankruptcy Code); see also In re Read-Rite Corp., 

No. 03-43576 RN7, 2005 WL 2210659 (Bankr. N.D. Cal. Aug. 11, 2005); 433 S. Beverly Drive, 

117 B.R. at 568 (“Nothing in the [Bankruptcy Code] automatically invalidates a provision for a 

Prepayment Premium which is otherwise enforceable under applicable non-bankruptcy 

law . . . .”). 

Likewise, the vast majority of courts outside of the Ninth Circuit have held, either 

expressly or implicitly (through allowance of a claim), that the Bankruptcy Code does not disallow 

make-whole premiums or similar charges. See, e.g., EFH, 842 F.3d at 255; 1141 Realty, 598 B.R. 

at 543–44; In re Trico Marine Servs., Inc., 450 B.R. 474, 480 (Bankr. D. Del. 2011) (make-whole 

was not subject to disallowance under section 502(b)(2)); In re Lappin Elec. Co., Inc., 245 B.R. 

326, 331 (Bankr. E.D. Wis. 2000) (allowing a claim for a termination fee). 

To be sure, a panel of the Fifth Circuit in Ultra Petroleum Corp. v. Ad Hoc Comm. of 

Unsecured Creditors of Ultra Res., Inc. (In re Ultra Petroleum Corp.), 913 F.3d 533 (5th Cir. 

2019), withdrawn, No. 17-20793, 2019 WL 6318074 (5th Cir. Nov. 26, 2019), initially held that 

make-whole premiums constitute “unmatured interest” disallowed under 11 U.S.C. § 502(b)(2). 

But on rehearing, the same Fifth Circuit panel vacated its initial opinion and jettisoned its 

characterization of prepayment premiums as unmatured interest in order to allow the bankruptcy 

court to address this issue, as well as the solvent-debtor exception, in the first instance. See Ultra 

Petroleum Corp. v. Ad Hoc Comm. of Unsecured Creditors of Ultra Res., Inc. (In re Ultra 

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Petroleum Corp.), No. 17-20793, 2019 WL 6318074, at *1, 5–6 (5th Cir. Nov. 26, 2019). In 

addition, the Fifth Circuit went out of its way to note that its “review of the record reveals no 

reason why the solvent-debtor exception could not apply” and expressly instructed the bankruptcy 

court to “consider . . . the applicability of the solvent-debtor exception on remand.” Id. at *6. 

Conducting that analysis harmonized with “other circuits hav[ing] recognized” that, “absent 

compelling equitable considerations, when a debtor is solvent, it is the role of the bankruptcy 

court to enforce the creditor’s contractual rights.” Id. (quoting In re Dow Corning, 456 F.3d 668, 

679 (6th Cir. 2006)) (citing In re Chi., Milwaukee, St. Paul & Pac. R. R. Co., 791 F.2d 524, 528 

(7th Cir. 1986)); see supra p. 14–15 & n.16. 

The Fifth Circuit was right to abandon its minority view. Courts in the Ninth Circuit, 

including the Imperial Coronado decision, treat prepayment premium claims as “charges” or 

“liquidated damages”—both allowable under the Bankruptcy Code. See Imperial Coronado, 96 

B.R. at 1000-01; 433 S. Beverly Drive, 117 B.R. 569 ; In re Planvest, 94 B.R. 644, 645 (Bankr. 

D. Ariz. 1988); Skyler Ridge, 80 B.R. at 506–07. An overwhelming majority of courts in other 

circuits also view make-wholes as charges or liquidated damages and not as unmatured interest. 

See In re School Specialty, Inc., No. 13-10125, 2013 Bankr. LEXIS 1897, at *18 (Bankr. D. Del. 

Apr. 22, 2013) (agreeing with majority that make-whole premiums are not unmatured interest); 

Trico Marine Servs., 450 B.R. at 480 (stating that “substantial majority of courts considering this 

issue have concluded that make-whole or prepayment obligations are in the nature of liquidated 

damages rather than unmatured interest”) (internal citations omitted); Chemtura, 439 B.R. at 604 

(acknowledging “majority view” is that prepayment premium claims are not unmatured interest); 

Noonan v. Fremont Fin. (In re Lappin Elec. Co.), 245 B.R. 326, 330 (Bankr. E.D. Wis. 2000) 

(agreeing “with a majority of courts that view a prepayment charge as liquidated damages, not as 

unmatured interest”). 

B. The Optional Redemption Premiums Are Fully Matured, and Cannot 

Constitute “Unmatured” Interest.

Even if the Optional Redemption Premiums constituted interest (which they do not), they 

still would not be disallowed by section 502(b)(2) of the Bankruptcy Code because they are fully 

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“matured.” Courts hold that where optional redemption provisions that are grounded in prepetition contracts become due by reason of repayment of debt under a plan, they are not unmatured 

interest. See, e.g., In re 360 Inns, Ltd., 76 B.R. 573, 576 (Bankr. N.D. Tex. 1987) (“prepayment 

penalty was not unmatured interest as contemplated in § 502(b)(2), inasmuch as the prepayment 

penalty was activated and matured once the plan of reorganization proposed to prepay UNUM's 

debt”); In re Outdoor Sports Headquarters, 161 B.R. 414, 424 (Bankr. S.D. Ohio 1993) 

(prepayment premiums fully mature “pursuant to the provisions of a contract”). 

The Optional Redemption Premiums are rooted in agreements entered into well before the 

Petition Date. And the Noteholders have fully performed their side of the bargain by investing in 

the Senior Notes, which the Debtors promised not to pay prematurely without the Optional 

Redemption Premiums. By filing for bankruptcy, however, the Debtors elected to temporarily 

stop making payments under the Note Documents and to make all amounts due thereunder 

immediately due and owing. The Debtors could reverse this election by reinstating the Senior 

Notes. But in deliberately deciding not to reinstate or otherwise unimpair the Senior Notes, the 

Debtors have confirmed that their original bargain with the Noteholders will not be honored, 

leaving the Noteholders to liquidate their positions and procure substitute investments. The 

parties no doubt have negotiated the Optional Redemption Provisions to compensate the 

Noteholders in precisely these circumstances. 

C. The Solvent Debtors Must Honor the Note Documents In Any Event

Courts overwhelmingly recognize that a plan of reorganization for a solvent debtor 

generally must satisfy all amounts due unimpaired creditors pursuant to any underlying contracts, 

even where such amounts may be disallowed in an insolvent debtor case. Even if the Court does 

rule that the Optional Redemption Premiums constitute unmatured interest—and they do not—

the presumed-solvent Debtors nevertheless must pay the Optional Redemption Premiums to the 

extent required in the relevant agreements. 

In cases involving solvent debtors, courts have held that creditors are entitled to the full 

benefit of their prepetition bargain, as it is “the opposite of equity to allow the debtor to escape 

the expressly-bargained-for result of its act.” Ruskin v. Griffiths, 269 F.2d 827, 832 (2d Cir. 

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1959); see also UPS Capital Bus. Credit v. Gencarelli (In re Gencarelli), 501 F.3d 1, 7 (1st Cir. 

2007) (explaining that, in a solvent debtor case, “the equities strongly favor holding the debtor to 

his contractual obligations as long as those obligations are legally enforceable under applicable 

non-bankruptcy law”); In re Chi., Milwaukee, St. Paul & Pac. R.R. Co., 791 F.2d 524, 528 (7th 

Cir. 1986) (“[I]f the bankrupt is solvent the task for the bankruptcy court is simply to enforce 

creditors’ rights according to the tenor of the contracts that created those rights. . . .”); 

Debentureholders Protective Comm. of Cont’l Inv. Corp. v. Cont’l Inv. Corp., 679 F.2d 264, 268 

(1st Cir. 1982) (same); Johnson v. Norris, 190 F. 459, 466 (5th Cir. 1911) (“Whether we are 

governed by the apparent intention of Congress as shown by the general purpose of the bankruptcy 

law, or by the general principles of equity, the result would be the same. The bankrupts should 

pay their debts in full, principal and interest to the time of payment, whenever the assets of their 

estates are sufficient.”). 

Indeed, courts have repeatedly held that, in solvent-debtor cases, typical equitable 

concerns for the allocation of a debtor’s “limited pie” give way to “the presumption . . . that a 

bankruptcy court’s role is merely to enforce the contractual rights of the parties.” In re Dow 

Corning, 456 F.3d at 678–79; see also In re Chemtura Corp., 439 B.R. at 605 (“With a solvent 

debtor, issues as to fairness amongst creditors, in sharing a limited pie, no longer apply . . . .”). In 

Dow, the Court of Appeals for the Sixth Circuit considered the plan objections of commercial 

creditors of a solvent debtor reorganizing under chapter 11 in order to resolve mass tort claims, 

like the Debtors’ situation here. The Sixth Circuit held that “the legislative history of the 

Bankruptcy Code makes clear” that when “a solvent debtor seeks confirmation of its plan, . . . 

equitable considerations operate differently” than when the debtor is insolvent and require a 

presumption in favor of enforcing contracts in accordance with applicable non-bankruptcy law. 

Id.; see also In re Los Angeles Dodgers LLC, 465 B.R. 18, 32–33 (D. Del. 2011) (holding that for 

solvent debtors, “the equities strongly favor holding the debtor to his contractual obligations so 

long as those obligations are legally enforceable under applicable non-bankruptcy law”). 

Here, the same principles apply—to the extent the Debtors are solvent, and the Optional 

Redemption Premiums are valid and enforceable under applicable law outside of bankruptcy, all 

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such claims must be satisfied under any plan that may be confirmed in these cases. To do 

otherwise would be contrary both to the preponderance of precedent and to the longstanding 

equitable principles enforcing all of creditors’ state law rights against solvent debtors. 

STATEMENT OF CREDITORS’ COMMITTEE 

The Creditors’ Committee acts as a fiduciary for a broad constituency of unsecured 

creditors’ interests, which includes but is not limited to the Noteholders. As a result, the Creditors’ 

Committee’s sole position with respect to the Optional Redemption Premiums is that, to the extent 

they are enforceable and payable under applicable non-bankruptcy law, any plan that purports to 

render the Noteholders unimpaired must necessarily provide for payment in full of those Optional 

Redemption Premiums. The Creditors’ Committee takes no position on any other views 

expressed herein. Further, if the Debtors’ estates prove to be insolvent, the Creditors’ Committee 

reserves all rights with respect to these issues.

CONCLUSION 

 Should the Debtors elect to satisfy the Senior Notes prior to the dates including the 

maturity dates specified in the Note Documents rather than reinstate them, the Debtors will owe 

the Noteholders the Optional Redemption Premiums under the plain language of the Note 

Documents and applicable bankruptcy law. That these Debtors, who claim to be solvent, have 

sought relief under chapter 11 of the Bankruptcy Code is insufficient, as a matter of law, to avoid 

triggering the Optional Redemption Premiums. The Debtors filed for chapter 11 protection to 

relieve themselves of massive tort liabilities. But they are attempting to use chapter 11 improperly 

to enhance the value of existing equity by (i) capping the maximum amount individual wildfire 

victims can receive on account of their tort claims; and (ii) redeeming the Senior Notes 

(presumably through refinancing at lower interest rates) without paying the Optional Redemption 

Premiums. The Debtors’ bankruptcy does not relieve them of their obligations under the Note 

Documents—some of which were incurred as little as one year ago, and after the first bout of 

Wildfires. 

Accordingly, BOKF and the AHC respectfully request that this Court enter an Order 

declaring that (i) the Noteholders are entitled to Optional Redemption Premiums if the Senior 

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Notes are satisfied and/or cancelled, and (ii) should any plan proponent propose to satisfy 

principal and interest due on the Senior Notes without paying the Noteholders the Optional 

Redemption Premiums, the Noteholders will be impaired and entitled to vote to accept or reject 

any plan incorporating such a proposal. 

Dated: November 27, 2019 ARENT FOX LLP 

 By: /s/ Aram Ordubegian ARAM ORDUBEGIAN (SBN 185142) 

 ANDREW I. SILFEN (pro hac vice) 

 BETH M. BROWNSTEIN (pro hac vice) 

Counsel for BOKF, NA, solely in its capacity as 

Indenture Trustee for the Utility Senior Notes 

AKIN GUMP STRAUSS HAUER & FELD LLP 

/s/ Ashley Vinson Crawford 

ASHLEY VINSON CRAWFORD 

MICHAEL S. STAMER 

IRA S. DIZENGOFF 

DAVID H. BOTTER 

ABID QURESHI 

Counsel for the Ad Hoc Committee of Senior 

Unsecured Noteholders of Pacific Gas and Electric 

Company 

MILBANK LLP 

 /s/ Thomas R. Kreller 

DENNIS F. DUNNE 

SAMUEL A. KHALIL 

GREGORY A. BRAY 

THOMAS R. KRELLER 

Counsel for the Official Committee of Unsecured 

Creditors 

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EXHIBIT 1 

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Optional 

Redemption 

Provision 

Category

Long- or 

Short-Term 

Notes

Outstanding 

Principal

($ millions) Base Indenture Initial Issuing Document

Optional Remption 

Provision: Section 

of Initial Issuing 

Document

Initial 

Issuance Date

Interest 

Rate

Stated 

Maturity 

Date

Basis Point 

Variable 

Fixed Date 

Variable 

(if any)

1. 6.05% Senior Notes due 2034 2034 Notes Long-Term $3,000 2005 Indenture 2005 Indenture § 4.03(d) 3/23/200416.05% 3/1/2034 25 N/A

$3,000 

2. 5.80% Senior Notes due March 1, 2037 Any Time Long-Term $950 2005 Indenture 1st Supp. Indenture § 301 3/13/2007 5.80% 3/1/2037 25 N/A

3. 6.35% Senior Notes due February 15, 2038 Any Time Long-Term $400 2005 Indenture 3rd Supp. Indenture § 401 3/3/2008 6.35% 2/15/2038 30 N/A

4. 6.25% Senior Notes due March 1, 2039 Any Time Long-Term $550 2005 Indenture 6th Supp. Indenture § 301 3/6/2009 6.25% 3/1/2039 40 N/A

5. 5.40% Senior Notes due January 15, 2040 Any Time Long-Term $800 2005 Indenture 8th Supp. Indenture § 301 11/18/2009 5.40% 1/15/2040 20 N/A

$2,700 

6. 3.50% Senior Notes due October 1, 2020 Fixed Date Short-Term $800 2005 Indenture 10th Supp. Indenture § 301 9/15/2010 3.50% 10/1/2020 15 7/1/2020

7. 4.25% Senior Notes due May 15, 2021 Fixed Date Short-Term $300 2005 Indenture 13th Supp. Indenture § 301 5/13/2011 4.25% 5/15/2021 15 2/15/2021

8. 3.25% Senior Notes due September 15, 2021 Fixed Date Short-Term $250 2005 Indenture 14th Supp. Indenture § 301 9/12/2011 3.25% 9/15/2021 20 6/15/2021

9. 2.45% Senior Notes due August 15, 2022 Fixed Date Short-Term $400 2005 Indenture 18th Supp. Indenture § 401 8/16/2012 2.45% 8/15/2022 15 5/15/2022

10. 4.50% Senior Notes due December 15, 2041 Fixed Date Long-Term $250 2005 Indenture 16th Supp. Indenture § 301 12/1/2011 4.50% 12/15/2041 25 6/15/2041

11. 4.45% Senior Notes due April 15, 2042 Fixed Date Long-Term $400 2005 Indenture 17th Supp. Indenture § 301 4/16/2012 4.45% 4/15/2042 20 10/15/2041

12. 3.75% Senior Notes due August 15, 2042 Fixed Date Long-Term $350 2005 Indenture 18th Supp. Indenture § 402 8/16/2012 3.75% 8/15/2042 20 2/15/2042

13. 3.25% Senior Notes due June 15, 2023 Fixed Date Long-Term $375 2005 Indenture 19th Supp. Indenture § 401 6/14/2013 3.25% 6/15/2023 20 3/15/2023

14. 4.60% Senior Notes due June 15, 2043 Fixed Date Long-Term $375 2005 Indenture 19th Supp. Indenture § 402 6/14/2013 4.60% 6/15/2043 20 12/15/2042

15. 3.85% Senior Notes due November 15, 2023 Fixed Date Long-Term $300 2005 Indenture 20th Supp. Indenture § 401 11/12/2013 3.85% 11/15/2023 20 8/15/2023

16. 5.125% Senior Notes due November 15, 2043 Fixed Date Long-Term $500 2005 Indenture 20th Supp. Indenture § 402 11/12/2013 5.125% 11/15/2043 25 5/15/2043

17. 3.75% Senior Notes due February 15, 2024 Fixed Date Long-Term $450 2005 Indenture 21st Supp. Indenture § 401 2/21/2014 3.75% 2/15/2024 20 11/15/2023

18. 4.75% Senior Notes due February 15, 2044 Fixed Date Long-Term $675 2005 Indenture 21st Supp. Indenture § 402 2/21/2014 4.75% 2/15/2044 20 8/15/2043

19. 3.40% Senior Notes due August 15, 2024 Fixed Date Long-Term $350 2005 Indenture 23rd Supp. Indenture § 301 8/18/2014 3.40% 8/15/2024 15 5/15/2024

20. 4.30% Senior Notes due March 15, 2045 Fixed Date Long-Term $600 2005 Indenture 24th Supp. Indenture § 301 11/6/2014 4.30% 3/15/2045 20 9/15/2044

21. 3.50% Senior Notes due June 15, 2025 Fixed Date Long-Term $600 2005 Indenture 25th Supp. Indenture § 301 6/12/2015 3.50% 6/15/2025 20 3/15/2025

22. 4.25% Senior Notes due March 15, 2046 Fixed Date Long-Term $450 2005 Indenture 26th Supp. Indenture § 401 11/5/2015 4.25% 3/15/2046 25 9/15/2045

23. 2.95% Senior Notes due March 1, 2026 Fixed Date Long-Term $600 2005 Indenture 27th Supp. Indenture § 301 3/1/2016 2.95% 3/1/2026 20 12/1/2025

24. 4.00% Senior Notes due December 1, 2046 Fixed Date Long-Term $600 2005 Indenture 28th Supp. Indenture § 308 12/1/2016 4.00% 12/1/2046 20 6/1/2046

25. 3.30% Senior Notes due March 15, 2027 Fixed Date Long-Term $400 2005 Indenture 29th Supp. Indenture § 208 3/10/2017 3.30% 3/15/2027 15 12/15/2026

$14,725 

26. 3.30% Senior Notes due December 1, 2027 Fixed Date Long-Term $1,150 2017 Indenture 2017 Indenture Reverse of Note 11/29/2017 3.30% 12/1/2027 15 9/1/2027

27. 3.95% Senior Notes due December 1, 2047 Fixed Date Long-Term $850 2017 Indenture 2017 Indenture Reverse of Note 11/29/2017 3.95% 12/1/2047 20 6/1/2047

$2,000 

28. 4.25% Senior Notes due August 1, 2023 Fixed Date Long-Term $500 2018 Indenture Supp. 2018 Indenture § 208 8/6/2018 4.25% 8/1/2023 25 7/1/2023

29. 4.65% Senior Notes due August 1, 2028 Fixed Date Long-Term $300 2018 Indenture Supp. 2018 Indenture § 308 8/6/2018 4.65% 8/1/2028 30 5/1/2028

$800 

$11,825 

$1,750 

$15,775 

$17,525 

1

The 6.05% Senior Notes due 2034 were initially issued under the 2005 Indenture's predecessor document, were 

continued under the 2005 Indenture and are subject to the 2005 Indenture as if issued thereunder.

Exhibit 1

Senior Notes Schedule

Long-Term Notes Subtotal:

Senior Notes Total:

2034 Notes Subtotal:

Short-Term Notes Subtotal:

 Fixed Date Notes

 Any Time Notes

 2034 Notes

Any Time Notes Subtotal:

Fixed Date Notes Subtotal:

2005 Indenture Subtotal:

2018 Indenture Subtotal:

2017 Indenture Subtotal:

Senior Notes

Case: 19-30088 Doc# 4902 Filed: 11/27/19 Entered: 11/27/19 16:50:52 Page 41

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