1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

WEIL, GOTSHAL & MANGES LLP

Stephen Karotkin (pro hac vice) 

(stephen.karotkin@weil.com) 

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

(ray.schrock@weil.com) 

Jessica Liou (pro hac vice) 

(jessica.liou@weil.com) 

767 Fifth Avenue 

New York, NY 10153-0119 

Tel: 212 310 8000 

Fax: 212 310 8007 

KELLER & BENVENUTTI LLP 

Tobias S. Keller (#151445) 

(tkeller@kellerbenvenutti.com) 

Jane Kim (#298192) 

(jkim@kellerbenvenutti.com) 

650 California Street, Suite 1900 

San Francisco, CA 94108 

Tel: 415 496 6723 

Fax: 650 636 9251 

Attorneys for Debtors and Debtors in Possession

Additional Counsel Listed on Following Page

CRAVATH, SWAINE & MOORE LLP

Paul H. Zumbro (pro hac vice) 

(pzumbro@cravath.com) 

Kevin J. Orsini (pro hac vice) 

(korsini@cravath.com) 

Omid H. Nasab (pro hac vice) 

(onasab@cravath.com) 

825 Eighth Avenue 

New York, NY 10019

Tel: 212 474 1000 

Fax: 212 474 3700 

MUNGER, TOLLES & OLSON LLP 

Brad Brian (#79001) 

(Brad.Brian@mto.com) 

Thomas B. Walper (#96667) 

(thomas.walper@mto.com) 

Henry Weissmann (#132418) 

(henry.weissmann@mto.com) 

Bradley Schneider (#235296) 

(bradley.schneider@mto.com) 

Seth Goldman (#223428) 

(seth.goldman@mto.com) 

350 South Grand Avenue, Fiftieth Floor 

Los Angeles, CA 90071 

Tel: 213 683 9100 

Fax: 213 683 3702 

UNITED STATES BANKRUPTCY COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

 In re: 

PG&E CORPORATION,

 - and - 

PACIFIC GAS AND ELECTRIC 

COMPANY,

Bankruptcy Case No. 19-30088 (DM)

Chapter 11 

(Lead Case) 

(Jointly Administered) 

RETAINED PROFESSIONALS’ JOINT 

RESPONSE TO MOTION TO APPROVE 

FEE PROCEDURES AND FEE 

EXAMINER PROTOCOL 

Date: October 7, 2019

Time: 1:30 p.m. PST 

Place: United States Bankruptcy Court 

 Courtroom 17, 16th Floor 

 San Francisco, CA 94102 

Re: Docket Nos. 701, 2267, 2231, 3762, 

3898, 3918, 3950

Debtors.

 Affects PG&E Corporation 

 Affects Pacific Gas and Electric Company 

Affects both Debtors 

* All papers shall be filed in the Lead Case, 

No. 19-30088 (DM). 

Case: 19-30088 Doc# 4064 Filed: 10/01/19 Entered: 10/01/19 21:58:20 Page 1 of

24
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

COBLENTZ PATCH DUFFY & BASS LLP 

Gregg M. Ficks (#148093) 

(ef-gmf@cpdb.com) 

One Montgomery Street, Suite 3000 

San Francisco, CA 94104-5500 

Tel: 415 391 4800 

Fax: 415 989 1663 

Special Counsel to Debtors 

and Debtors in Possession 

JENNER & BLOCK LLP 

Randall E. Mehrberg 

(rmehrberg@jenner.com) 

Angela M. Allen 

(aallen@jenner.com) 

353 N. Clark Street 

Chicago, IL 60654 

Tel: 312 222 9350 

Fax: 312 527 0484 

Special Corporate Defense & Energy Counsel 

for Debtors and Debtors in Possession

SIMPSON THACHER & BARTLETT LLP 

Jonathan Sanders (#228785) 

2475 Hanover Street 

Palo Alto, CA 94304 

Tel: 650 251 5000 

Fax: 650 251 5002 

Michael H. Torkin 

Nicholas Goldin

Kathrine A. McLendon 

Jamie J. Fell 

425 Lexington Avenue 

New York, NY 10017

Tel: 212 455 2000 

Fax: 212 455 2502 

Counsel for the Board of Each of PG&E 

Corporation and Pacific Gas and Electric 

Company and for Certain Current and Former 

Independent Directors

GROOM LAW GROUP, CHARTERED 

David N. Levine 

(dlevine@groom.com) 

1701 Pennsylvania Avenue, NW 

Washington, DC 20006-5811 

Tel: 202 861 5436 

Fax: 202 659 4503 

BAKER & HOSTETLER LLP 

Robert A. Julian (#88469) 

(rjulian@bakerlaw.com) 

Cecily A. Dumas (#111449) 

(cdumas@bakerlaw.com) 

160 Battery Street, Suite 100 

San Francisco, CA 94111 

Tel: 628 208 6434 

Fax: 310 820 8859 

Eric E. Sagerman (#155496) 

(esagerman@bakerlaw.com) 

Lauren T. Attard (#320898) 

(lattard@bakerlaw.com) 

11601 Wilshire Boulevard, Suite 1400 

Los Angeles, CA 90025 

Tel: 310 820 8800 

Fax: 310 820 8859 

Elizabeth A. Green (pro hac vice) 

(egreen@bakerlaw.com) 

200 S Orange Avenue, Suite 2300 

Orlando, FL 32801 

Tel: 407 649 4036 

Attorneys for the Official Committee of 

Tort Claimants

Case: 19-30088 Doc# 4064 Filed: 10/01/19 Entered: 10/01/19 21:58:20 Page 2 of

24
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

TABLE OF CONTENTS 

Page 

TABLE OF AUTHORITIES .................................................................................................................4

PRELIMINARY STATEMENT ...........................................................................................................5

PROCEDURAL HISTORY...................................................................................................................7

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

I. The Principles for Reviewing Professional Fees in Bankruptcy Are Set by Congress. ..........10

II. The Protocol and Motion Impermissibly Depart from the Judgment of Congress by 

Imposing More Onerous Restrictions on Professional Compensation. ...................................12

A. The Protocol and Motion Improperly Limit Fees Spent Preparing Fee and 

Retention Applications.................................................................................................12

B. The Protocol and Motion Improperly Prohibit All Compensation for NonWorking Travel Time, Even at Reduced Rates. ..........................................................16

C. The Motion Improperly Interferes with the Court’s Prior Scheduling Orders. ...........17

D. The Protocol and Motion Improperly Preclude Compensation for Time Entries 

That Include Any Redactions.......................................................................................19

E. The Protocol and Motion Improperly Impose Additional Unwarranted Barriers 

to Compensation. .........................................................................................................21

CONCLUSION ....................................................................................................................................22

Case: 19-30088 Doc# 4064 Filed: 10/01/19 Entered: 10/01/19 21:58:20 Page 3 of

24
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

TABLE OF AUTHORITIES 

 Page(s) 

Cases 

Baker Botts LLP v. ASARCO, 

135 S. Ct. 2158 (2015) .............................................................................................................13, 14 

In re Nucorp Energy, Inc., 

 764 F.2d 655 (9th Cir. 1985) .............................................................................................10, 11, 13 

In re Thomas, 

474 F. App’x 500 (9th Cir. 2012) ..................................................................................................15 

In re Wind N’ Wave, 

509 F.3d 938 (9th Cir. 2007) .............................................................................................10, 13, 15 

Statutes & Rules 

11 U.S.C. § 330 ............................................................................................................................ passim 

Bankruptcy Rule 2016 .....................................................................................................................8, 14 

Rule 5.3 of the New York Rules of Professional Conduct ....................................................................9 

Other Authorities 

Guidelines for Compensation and Expense Reimbursement of Professionals and 

Trustees for the U.S. Bankruptcy Court of the Northern District of California, 

effective Feb. 19, 2014........................................................................................................... passim 

The U.S. Trustee’s Guidelines for Reviewing Applications for Compensation and 

Reimbursement of Expenses Filed under 11 U.S.C. § 330 by Attorneys in Larger 

Chapter 11 Cases, effective November 1, 2013, 78 Fed. Reg. No. 116 ................................ passim 

Practices and Procedures in Judge Montali’s Court, effective July 2018 ................................6, 15, 16 

 

Case: 19-30088 Doc# 4064 Filed: 10/01/19 Entered: 10/01/19 21:58:20 Page 4 of

24
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Cravath, Swaine & Moore LLP, Weil, Gotshal & Manges LLP, Keller & Benvenutti 

LLP, Munger, Tolles & Olson LLP, Jenner & Block, LLP, Coblentz Patch Duffy & Bass LLP, Groom 

Law Group, Chartered (collectively, “Debtors’ Professionals”), attorneys for PG&E Corporation 

(“PG&E Corp.”) and Pacific Gas and Electric Company (the “Utility”), as debtors and debtors in 

possession (collectively, “PG&E” or the “Debtors”) in the above-captioned chapter 11 cases (the 

“Chapter 11 Cases”); Simpson Thacher & Bartlett LLP, attorneys for Debtors’ boards of directors 

and certain former directors; and Baker & Hostetler LLP, attorneys for the Official Committee of Tort 

Claimants (the “Tort Claimants Committee”; together with the Official Committee for Unsecured 

Creditors, the “Committees”; and together with all signatories, the “Retained Professionals”) jointly 

submit this response (the “Response”) to the Motion to Approve Fee Procedures [Docket No. 3950] 

(the “Motion”) and the Fee Examiner Protocol [Docket No. 3762, Ex. A] (the “Protocol”). 

PRELIMINARY STATEMENT 

The Chapter 11 Cases and the hundreds of stayed and contemplated litigations 

concerning the 2015 Butte fire, the 2017 North Bay fires and the 2018 Camp fire (collectively, the 

“Wildfire Litigations”) are large and complex cases that call for prompt resolution. The 

unprecedented scale and scope of the reorganization effort and the administration of claims against 

the estates required the retention of a large number of bankruptcy, litigation and corporate governance 

attorneys, as well as other subject matter experts, on behalf of Debtors and the Committees. Together, 

these professionals discharge their court-ordered duties sometimes cooperatively, and sometimes 

through the adversary system, as necessary to move these large and complex cases forward on an 

expedited basis. 

The Retained Professionals are entitled to reasonable compensation for the actual and 

necessary services they render in connection with the Chapter 11 Cases and the Wildfire Litigations. 

To assist the Court in its determination of whether the Retained Professionals’ applications for 

compensation and reimbursement reflect reasonable fees for actual and necessary services, the Court 

appointed Professor Bruce A. Markell as the Fee Examiner (the “Fee Examiner”) in the Chapter 11 

Cases. The Court further ordered the Fee Examiner to file with the Court, subject to the Court’s review 

Case: 19-30088 Doc# 4064 Filed: 10/01/19 Entered: 10/01/19 21:58:20 Page 5 of

24
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

and approval, a protocol detailing the procedures by which the Fee Examiner would conduct his 

review. The Court ordered that the Fee Examiner’s reports would present information relevant to 

whether fee applications comply with the Bankruptcy Code and the Bankruptcy Rules, as well as 

whether the Retained Professionals made a good-faith effort to respond to U.S. Trustee requests for 

information pursuant to the U.S. Trustee Guidelines.1 But, respectfully, the Protocol and Motion 

exceed this mandate and seek to impose additional and unnecessary requirements on the 

Retained Professionals’ fee applications not found in any of the Code, Rules or Guidelines. 

This Response proceeds in two parts. First, as explained below, the Bankruptcy Code, 

Bankruptcy Rules and the Guidelines2 all reflect the judgment of Congress that professionals in 

bankruptcy should be compensated at rates comparable to those they would earn in similarly situated 

non-bankruptcy work. But the Protocol and Motion generally eschew a comparability analysis in 

favor of the Fee Examiner’s views on, among other things, the hours the Retained Professionals should 

work each day and the maximum amount of compensation that can be awarded for certain categories 

of work. These arbitrary restrictions exceed the Fee Examiner’s authority and should not be permitted. 

Second, the Response reviews the salient, specific areas of disagreement between the Fee Examiner 

and the Retained Professionals: (a) the Protocol and Motion inappropriately erect barriers to 

compensation for fees incurred preparing retention and fee applications; (b) the Fee Examiner 

inappropriately seeks to disallow compensation for any non-working travel time, even at a discounted 

rate (a position the Fee Examiner admits “is controversial and not supported by the majority of cases” 

(Motion at 9), nor is it consistent with the Chambers Guidelines); (c) the Fee Examiner injects 

1

 The U.S. Trustee’s Guidelines for Reviewing Applications for Compensation and Reimbursement of 

Expenses Filed under 11 U.S.C. § 330 by Attorneys in Larger Chapter 11 Cases, effective November 

1, 2013, 78 Fed. Reg. No. 116 (the “U.S. Trustee Guidelines”). 

2

 Specifically, the U.S. Trustee Guidelines, Guidelines for Compensation and Expense Reimbursement 

of Professionals and Trustees for the U.S. Bankruptcy Court of the Northern District of California, 

effective Feb. 19, 2014 (the “Local Guidelines”) and the Practices and Procedures in 

Judge Montali’s Court, effective July 2018 (the “Chambers Guidelines”) (and, collectively with the 

U.S. Trustee Guidelines and the Local Guidelines, the “Guidelines”). 

Case: 19-30088 Doc# 4064 Filed: 10/01/19 Entered: 10/01/19 21:58:20 Page 6 of

24
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

uncertainty and duplication into the Interim Fee Application schedule by reserving the right to object 

to Interim Fee Applications that the Court has already approved, in perpetuity and concurrently with 

future Interim Fee Applications, and by penalizing late-filed Interim Fee Applications; and (d) the 

Fee Examiner’s position that any redacted time entry is per se not compensable. The Protocol and 

Motion contain other discrepancies from the Bankruptcy Code and Guidelines or unnecessary 

prefatory clauses of uncertain meaning, which are summarized briefly in Part II.E below. A markup 

of all the revisions to the Protocol proposed jointly by the Retained Professionals is attached as 

Exhibit A to the Declaration of Paul H. Zumbro (the “Zumbro Declaration”) filed herewith, and a 

clean copy of the Protocol incorporating those edits is attached as Exhibit B to the 

Zumbro Declaration. These proposed revisions were previously suggested by the 

Retained Professionals to the Fee Examiner to address the issues discussed above; however, the 

Fee Examiner rejected nearly all such revisions. As explained more fully below, the Court should 

deny the Motion in part and enter the revised protocol attached as Exhibit B to the 

Zumbro Declaration. 

PROCEDURAL HISTORY 

On February 27, 2019, the Court entered an order establishing procedures for interim 

compensation and reimbursement of expenses for professionals, which, among other things, set a 

schedule for the filing of Interim Fee Applications. [Docket No. 701] (the “Interim Compensation 

Order”). On April 12, 2019, the U.S. Trustee moved for the Court to appoint Professor Markell as 

the Fee Examiner in the Chapter 11 Cases. [Docket No. 1370.] Following the Court’s May 22, 2019 

hearing, Professor Markell filed a statement in response to the Court’s request that he “set[] forth his 

understanding of his role and responsibilities as Fee Examiner”. [Docket No. 2231 at 2.] 

Professor Markell’s statement of duties explained that the “primary purpose” of a fee examiner “is to 

ensure that all professional fees and expenses comply with Section 330 of the Bankruptcy Code; that 

is, that such fees and expenses are reasonable, actual, and necessary.” [Id., Ex. A, ¶ 1.] His statement 

further acknowledged the “novel and complex legal issues presented by these cases”. [Id., Ex. A, ¶ 2.] 

Case: 19-30088 Doc# 4064 Filed: 10/01/19 Entered: 10/01/19 21:58:20 Page 7 of

24
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

The Court appointed Professor Markell as the Fee Examiner on May 28, 2019. [Docket 

No. 2267] (“Order Appointing Fee Examiner”). The Order Appointing Fee Examiner established a 

schedule pursuant to which the Fee Examiner would prepare an Initial Report within 21 days of the 

filing of an Interim Fee Application and file a Final Report within 14 days of service of the 

Initial Report, each: 

designed to quantify and present factual data relevant to whether the requested fees 

and expenses of each Applicant are in compliance with the applicable standards of 

section 330 of the Bankruptcy Code and Rule 2016 of the Bankruptcy Rules, and 

whether the Applicant has made a good faith reasonable effort to comply with the 

U.S. Trustee Guidelines. 

[Docket No. 2267 ¶ 6(g).] The Court further ordered the Fee Examiner to “establish, subject to court 

review and approval, a Protocol, which shall contain procedures for the submission and consideration 

of” fee applications. [Id. ¶ 6(a).] The Court ordered that the Fee Examiner “shall use best efforts to 

have the undisputed portion of Applications allowed by this Court and paid as soon as reasonably 

practicable.” [Id. ¶ 8.] The Court retained “the ultimate authority to determine whether fees and 

expenses requested are necessary and reasonable under section 330 of the Bankruptcy Code.” [Id.

¶ 21.] 

The Fee Examiner filed the Protocol as a “Notice” on August 30, 2019, explaining that 

he had “rejected most of the requested revisions” proposed jointly by counsel for the Debtors and the 

Committees. [Docket No. 3762 at 2.] That filing did not seek for the Court to review and approve the 

Protocol or otherwise seek to modify the Interim Compensation Order. Instead, it explained that the 

Protocol is “a statement as to the Fee Examiner’s position as to expectations for the submission of fee 

applications, as well as a statement of the Fee Examiner’s beliefs as to the state of the law in various 

areas.” [Id.] The Fee Examiner invited professionals “to raise objections to the Protocol” at fee 

application hearings and reserved “the right to vary from the terms of the Protocol”. [Id. at 2-3.] 

On September 16, 2019, the Fee Examiner filed an Ex Parte Application describing the 

need for various relief. [Docket No. 3898]. The Court issued an order the next day, explaining that it 

was “unwilling to act as quickly or as summarily as the Examiner propose[d]” and ordering the 

Case: 19-30088 Doc# 4064 Filed: 10/01/19 Entered: 10/01/19 21:58:20 Page 8 of

24
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Fee Examiner to file a motion directing professionals to the Local and Chambers Guidelines. [Docket 

No. 3918 at 2.] The Fee Examiner’s Motion followed. 

This Response is filed in opposition to certain of the relief sought in the Motion and 

additionally objects to the provisions of the Protocol identified herein and in Exhibit A to the 

Zumbro Declaration, to the extent that the Motion is construed as seeking the Court’s approval of the 

Protocol. 

The U.S. Trustee subsequently filed a purported “Response to Motion to Approve Fee 

Procedures and Comments Regarding First Interim Fee Applications” on September 27, 2019. 

[Docket No. 4025.] Although styled as a “Response,” the U.S. Trustee’s filing seeks the Court to 

order relief in addition to the relief sought in the Motion, and to make that ruling applicable to “any 

Interim Applications that have already been filed in these cases . . . without regard to the passage of 

any purported objection period for those applications.” [Docket No. 4025 at 21.] That is not 

appropriate. If the U.S. Trustee seeks relief in addition to that sought by the Fee Examiner, the 

U.S. Trustee should present those arguments in a motion that permits professionals to respond on an 

ordinary briefing schedule. The U.S. Trustee’s filing raises significant new issues only two business 

days before the Court ordered responses on the Motion, which does not give the 

Retained Professionals adequate time to respond. [See Docket No. 3918 at 3.] The 

Retained Professionals accordingly reserve all rights with respect to the issues raised in the 

U.S. Trustee’s filing.3

3

 Cravath offers the following limited response to the U.S. Trustee’s filing to refute any suggestion 

that law clerks who kept time in these Chapter 11 Cases following their graduation from law school 

and completion of the bar examination, but prior to their formal admission to the bar, “engaged in the 

unauthorized practice of law” because their time was charged at the same rate as admitted first-year 

associates. [Docket No. 4025 at 18.] Certain of the timekeepers listed in Cravath’s First Interim 

Fee Application [Docket No. 3683] were law clerks during the period addressed by the First Interim 

Fee Application (the “Cravath Law Clerks”). [Zumbro Decl. ¶ 5.] The educational requirements to 

become a law clerk at Cravath are the same as those for associates, including, at a minimum, a law 

degree. [Id. ¶ 6.] All of the Cravath Law Clerks listed in Cravath’s First Interim Fee Application 

[Docket No. 3683] passed the Bar Examination prior to starting work at Cravath, and all have since 

been admitted to the Bar. [Id. ¶ 7.] Prior to their admission to the Bar, Cravath Law Clerks worked 

under the direct supervision of partners and associates, all of whom are New York-licensed attorneys 

Case: 19-30088 Doc# 4064 Filed: 10/01/19 Entered: 10/01/19 21:58:20 Page 9 of

24
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

ARGUMENT 

I. The Principles for Reviewing Professional Fees in Bankruptcy Are Set by Congress. 

The factors affecting professional compensation in large chapter 11 cases like these are 

established in the first instance by Congress, which, in section 330 of the Bankruptcy Code, sought 

“to ensure adequate compensation for bankruptcy attorneys so that highly qualified specialists would 

not be forced to abandon the practice”. In re Wind N’ Wave, 509 F.3d 938, 943 (9th Cir. 2007) (citing 

Nucorp Energy, Inc., 764 F.2d 655, 658 (9th Cir. 1985)). The statutory scheme provides for 

“reasonable compensation for actual, necessary services rendered by” the professional. 11 U.S.C. 

§ 330(a)(1)(A). In assessing the reasonableness of fees, “the court shall consider the nature, the extent, 

and the value of such services, taking into account all relevant factors, including: 

(A) the time spent on such services; 

(B) the rates charged for such services; 

(C) whether the services were necessary to the administration of, or 

beneficial at the time at which the service was rendered toward the 

completion of, a case under this title; 

(D) whether the services were performed within a reasonable amount of 

time commensurate with the complexity, importance, and nature of the 

problem, issue, or task addressed; 

(E) with respect to a professional person, whether the person is board 

certified or otherwise has demonstrated skill and experience in the 

bankruptcy field; and 

(F) whether the compensation is reasonable based on the customary 

compensation charged by comparably skilled practitioners in cases 

other than cases under this title.” 

Id. § 330(a)(3). 

The touchstone for compensation under section 330 is comparability to compensation 

outside of bankruptcy. As the Ninth Circuit explained, “Congress made clear its intent to ensure 

[id. ¶ 8], in accordance with Rule 5.3 of the New York Rules of Professional Conduct. Cravath Law 

Clerks have not argued in Court or taken depositions in these Chapter 11 Cases. [Id. ¶ 9.] 

Case: 19-30088 Doc# 4064 Filed: 10/01/19 Entered: 10/01/19 21:58:20 Page 10

of 24
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

competent representation of debtors by requiring compensation of ‘attorneys and other professionals 

serving in a case under Title 11 at the same rate as the attorney or other professional would be 

compensated for performing comparable services’ in non-bankruptcy cases.” Nucorp Energy, 764 

F.2d at 658 (quoting collected legislative history). The Bankruptcy Code and Rules, as supplemented 

by the Guidelines and the orders of this Court, contain the exclusive set of requirements for 

compensation for retained professionals in a case under chapter 11. The fact that these are large 

chapter 11 cases necessarily involving significant professional fees does not change the applicable 

comparability analysis. Indeed, the U.S. Trustee Guidelines that apply in larger chapter 11 cases 

likewise use a “comparable services standard” directed at determining whether “the compensation 

sought is reasonable as compared to the market measured by the billing practices of the applicant and 

its peers for bankruptcy and non-bankruptcy engagements.” 78 Fed. Reg. No. 116 at 36249-50. 

The U.S. Trustee, the Court and the Fee Examiner himself have explained that the 

purpose of the Fee Examiner is “to ensure that professional fees and expenses paid by the estate are 

reasonable, actual, and necessary, as required by section 330 of the Code.” 78 Fed. Reg. No. 116 at 

36256; [see also Docket No. 2231, Ex. A, ¶ 1; Docket No. 2267 ¶ 6(g)]. But the Fee Examiner in 

practice appears to view his mandate differently, using the Protocol to “integrate and elaborate upon 

the Fee Examiner’s role and standards” (Protocol § 1), “supplement” controlling authority (id.), define 

“bad faith” (id. § 2.2), exercise “judgment” regarding “each task’s staffing efficiency, workflow 

efficiency and value” (id. § 5.1.1), assess the “professional fatigue” and “judgment and 

professionalism” of those seeking compensation (id. § 5.1.2) and state his “beliefs as to the state of 

the law in various areas” [Docket No. 3762 at 2]. To the extent that the Fee Examiner seeks in practice 

to reduce rates to maximize the assets of the estate—such as by calling for categorical rate 

reductions—that goal, however laudable, conflicts with the Bankruptcy Code as it exists today. 

Section 330 “repudiate[d] a series of judicial decisions which had held that the compensation of 

attorneys in bankruptcy proceedings was subject to the overriding concern, unique to bankruptcy 

cases, of preserving the estate.” Nucorp Energy, 764 F.3d at 658. The Fee Examiner instead must 

Case: 19-30088 Doc# 4064 Filed: 10/01/19 Entered: 10/01/19 21:58:20 Page 11

of 24
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

follow Congress’s judgment in ensuring that compensation for actual and necessary services in 

bankruptcy cases is comparable to compensation in non-bankruptcy practice. 

II. The Protocol and Motion Impermissibly Depart from the Judgment of Congress by 

Imposing More Onerous Restrictions on Professional Compensation. 

The Protocol and Motion exceed the limitations set by Congress and the Guidelines by 

erecting new requirements for the Retained Professionals to obtain the compensation to which they 

would ordinarily be entitled. The Protocol and Motion seek to limit the award of compensation for 

time spent preparing fee and retention applications below the level contemplated by the 

Local Guidelines. (Part II.A.) The Protocol and Motion absolutely prohibit the award of even reduced 

fees for non-working travel time, when the Local and Chambers Guidelines contemplate such 

compensation. (Part II.B.) The Motion seeks to override the deadlines established in the Court’s 

Order Appointing Fee Examiner, unnecessarily penalizing late-filed fee applications. (Part III.C.) The 

Protocol and Motion invent a new rule that any time entry redacted in any way is per se not 

compensable. (Part III.D.) Finally, the Protocol contains several other flaws addressed by the 

Retained Professionals’ joint proposed edits. (Part II.E.) 

A. The Protocol and Motion Improperly Limit Fees Spent Preparing Fee and 

Retention Applications. 

The Bankruptcy Code explicitly contemplates awarding compensation for time spent 

preparing fee applications, which it explains “shall be based on the level and skill reasonably required 

to prepare the application.” 11 U.S.C. § 330(a)(6). The Fee Examiner’s view is “that most billing 

matters are overhead, and ought not to be charged to the client” and that “[i]t is double-dipping to 

charge a client for charging a client” (Motion at 13), even in bankruptcy cases. But the relevant 

authorities reject that approach. As the U.S. Trustee Guidelines explain, “[r]easonable charges for 

preparing interim and final fee applications . . . are compensable, because the preparation of a fee 

application is not required for lawyers practicing in areas other than bankruptcy as a condition to 

getting paid.” 78 Fed. Reg. No. 116 at 36250. The Ninth Circuit has likewise “found that it was both 

inconsistent with the policy of the Bankruptcy Reform Act and ‘fundamentally inequitable’ to demand 

Case: 19-30088 Doc# 4064 Filed: 10/01/19 Entered: 10/01/19 21:58:20 Page 12

of 24
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

that counsel prepare and present extensive fee applications and yet simultaneously ‘deny[] 

compensation for the efforts necessary to comply with those requirements.’” Wind N’ Wave, 509 F.3d 

at 943 (quoting Nucorp, 764 F.2d at 659). The Protocol and Motion ignore these principles and create 

two new limitations on compensation for time spent preparing fee applications, both of which are 

inconsistent with the Code, Rules and Guidelines. 

First, the Motion seeks a ruling that compensation for “ongoing billing activities, such 

as preparing fee applications and monthly statements, should be limited to a monthly maximum equal 

to the blended hourly rate [of the Applicant] times 20 hours”. (Motion at 15.) The Local Guidelines, 

however, state that fees incurred in preparing a fee application “may not exceed five percent of the 

total amount of fees and costs requested in the application” as a “ceiling”. Local Guidelines § 6. The 

approach taken by the Local Guidelines—a percentage cap, not a flat fee—makes perfect sense. It 

reflects that the more voluminous and complicated the time entries and invoices that must be reviewed 

in connection with the filing of a fee application, the more time that must be expended and the greater 

the resulting compensation awarded. The Fee Examiner’s admonition that a “reasonably organized 

firm . . . should not take more than half a week to prepare a bill, and to monitor other firms’ billing 

activities” (Motion at 15) ignores the scale of the review of time entries required for the filing of fee 

applications. As explained further below, the preparation of fee applications involves significant time 

to screen time entries for privileged or confidential information. That is an especially onerous task in 

these Chapter 11 Cases given that, for example, the first interim fee period for one 

Retained Professional generated around two thousand pages of time entries. [See Docket Nos. 2645-

4, 3084-4, 3484-4, 3614-4.] Arbitrarily capping time spent preparing fee applications in the context 

of the Fee Examiner’s litany of other new requirements whipsaws the Retained Professionals, 

increasing their burden in preparing fee applications on the one hand but denying compensation for 

that increased effort on the other.4 

4

 The Protocol also provides that if the Fee Examiner “raises issues that a reasonably experienced 

bankruptcy professional should have anticipated due to a lack of compliance with this Protocol 

(including providing insufficient information in the Application or the request for unreasonable fees 

or expenses), then it is the Fee Examiner’s position that Baker Botts LLP v. ASARCO[, 135 S. Ct. 2158 

Case: 19-30088 Doc# 4064 Filed: 10/01/19 Entered: 10/01/19 21:58:20 Page 13

of 24
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

The Fee Examiner similarly seeks a ruling that time spent preparing a retention 

application should be limited to 40 hours total of attorney time, multiplied by the applicant’s blended 

rate (Motion at 14-15, 17), and that cap is flawed for the same reasons. Just as with a fee application, 

a retention application “is not required for lawyers practicing in areas other than bankruptcy as a 

condition to getting paid.” 78 Fed. Reg. No. 116 at 36250. Outside of bankruptcy, clients and their 

counsel enter into retention agreements in the ordinary course without the need to satisfy the litany of 

disclosure requirements in the U.S. Trustee Guidelines or file motion papers and attend a hearing 

seeking court approval of that retention. Accordingly, an arbitrary fixed-hour cap on time spent 

preparing a retention application denies professionals compensation for substantial time that would be 

unnecessary in the comparable non-bankruptcy context.5 The Local Guidelines do not directly address 

the appropriate amount of fees for time spent preparing a retention application, but the five percent 

ceiling that applies to the award of fees incurred preparing fee statements and applications can likewise 

include fees incurred preparing retention applications. That would be a fairer approach, and one that 

is consistent with the Guidelines. 

(2015)] governs, and those fees on fees shall be considered unreasonable.” (Protocol § 5.1.9.) It is 

not clear whether the Fee Examiner means that fees incurred in the initial preparation of a 

Fee Application that he subsequently finds deficient are not compensable, or merely whether time 

spent responding to follow-up questions by the Fee Examiner is not compensable. In any event, both 

go beyond the holding of ASARCO, which stands for the limited proposition that time spent “defending 

a fee application in court” is not compensable, but “time spent preparing a fee application is 

compensable”. 135 S. Ct. at 2167-68. Expanding the holding of ASARCO in the manner suggested 

by the Fee Examiner would be inappropriate. 

5

 The Fee Examiner argues that the Chambers Guideline regarding conflict checks supports a 40-hour 

cap on time spent preparing a retention application. (Motion at 14 (citing Chambers Guidelines 

§ III.I).) That is incorrect. Preparing a retention application involves more than merely checking 

conflicts. Unlike preparing a retention application with an eye toward satisfying the disclosure 

requirements of the U.S. Trustee Guidelines or the ongoing disclosure requirements of 

Bankruptcy Rule 2016, which are unique to bankruptcy practice, conflict checks are routine in nonbankruptcy representations, and such time checking conflicts is “similar to a firm absorbing the time 

expended on its own efforts to secure a new client”. Chambers Guidelines § III.I. To the extent 

Retained Professionals seek reimbursement for time spent running a conflicts check comparable to 

non-bankruptcy representations, that time is properly excluded from any award, but that does not 

justify a presumptive limitation on time spent preparing a retention application writ large. 

Case: 19-30088 Doc# 4064 Filed: 10/01/19 Entered: 10/01/19 21:58:20 Page 14

of 24
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Second, the Protocol states that “[i]n no event . . . is it reasonable to request 

compensation for time spent in making” adjustments to time entries, including “time segregating 

billing entries related to confidential or privileged matters.” (Protocol § 5.1.10.) But redacting, 

revising or otherwise reviewing time entries for privileged or confidential information is compensable. 

The U.S. Trustee Guidelines permit compensating “time spent for redactions” of time entries provided 

with an Application, so long as such fees are “reasonably proportional to the overall fees sought”. 78 

Fed. Reg. No. 116 at 36250. Time spent reviewing and redacting or editing time entries to protect 

privileged or confidential information in bankruptcy cases is compensable for the same reasons that 

time spent preparing fee applications is compensable. Outside of bankruptcy, professionals do not 

need to spend time redacting, revising or reviewing time entries for privileged or confidential 

information as a condition of being paid; time entries need not be publicly filed and can therefore be 

shared with the client in unredacted form without waiving privilege or revealing confidential 

information. In chapter 11 cases, by contrast, time entries must be publicly filed, and therefore time 

spent redacting time entries (or reviewing and revising time entries so as not to reveal privileged 

information) is necessary to preserve privilege and confidentiality. But the Protocol precludes any 

compensation for taking these steps. That is precisely the outcome that the Ninth Circuit has held is 

“inconsistent with the policy of the Bankruptcy Reform Act and ‘fundamentally inequitable’”. Wind 

N’ Wave, 509 F.3d at 943 (citation omitted). 

The Court should (a) rule that fees incurred preparing retention and fee 

applications and conducting related billing activities may be compensated pursuant to the 

Fee Examiner’s proposed limitations in the Motion or an amount not exceeding five percent of 

the aggregate fees sought in the applicable interim fee application, whichever is greater; and 

(b) replace sections 5.1.9 and 5.1.10 of the Protocol with the modified versions shown in 

Exhibit A to the Zumbro Declaration. 

Case: 19-30088 Doc# 4064 Filed: 10/01/19 Entered: 10/01/19 21:58:20 Page 15

of 24
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

B. The Protocol and Motion Improperly Prohibit All Compensation for NonWorking Travel Time, Even at Reduced Rates. 

The Protocol states that “[n]on-working travel time is not compensable.” (Protocol 

§ 5.1.8; see also Motion at 6-12.) That is not the law. The Ninth Circuit has explained that “there will 

be some occasions when travel time can reasonably be reimbursed fully, and other times when it 

reasonably should be discounted.” In re Thomas, 474 F. App’x 500, 502 (9th Cir. 2012) (affirming 

award of travel time to and from courthouse billed at professional’s full hourly rate in Chapter 7 

proceeding). The U.S. Trustee Guidelines explain that the Trustee “may object if the applicant seeks 

compensation at a professional’s full rate” for non-working travel time, strongly suggesting that partial 

or reduced compensation is appropriate. 78 Fed. Reg. No. 116 at 36250 (emphases added). The 

Chambers Guidelines generally “allow up to two hours of compensation for non-working airplane 

travel time to account for inevitable delays for security and administration involved in air travel.” 

Chambers Guidelines ¶ I. The Fee Examiner points to no authority standing for the proposition that 

compensation for non-working travel time is prohibited. Indeed, he concedes that this “position is 

controversial and not supported by the majority of cases.” (Motion at 9 (collecting cases).) 

The Retained Professionals believe that the presumptive two hours of compensation 

for non-working travel time per trip in the Chambers Guidelines can and should be increased consistent 

with other authority because of the significant amount of travel required of the Retained Professionals 

in these Chapter 11 Cases. Although the Local Guidelines state that “[a]irplane travel time is not 

compensable” in the ordinary course, they further provide that where “significant airplane travel time 

is expected in a case, specific guidelines should be obtained for that case.” Local Guidelines ¶ 17.6 

That is the case here, as many of the lead counsel and other professionals in these cases are based in 

New York and must frequently travel to California for representation of the Debtors or the Committees 

6

 The Fee Examiner argues that the Local Guidelines “should be followed” because they “were in 

place when all professional [sic] were hired, thus reducing or eliminating any reliance argument”. 

(Motion at 12.) But as explained above, the Local Guidelines permit compensating non-working travel 

time in cases where significant travel is expected, and the Retained Professionals have also relied on 

the Chambers Guidelines, which provide a minimum amount of compensation for such time. 

Case: 19-30088 Doc# 4064 Filed: 10/01/19 Entered: 10/01/19 21:58:20 Page 16

of 24
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

in the Bankruptcy Court and other state and federal courts located in California. Moreover, unlike in 

a typical chapter 11 proceeding, here there are numerous professionals involved in the 

Wildfire Litigations (and related investigations) who must travel within California to supervise the 

collection of evidence, interview witnesses, attend depositions and the like. This travel can involve 

substantial time driving from San Francisco to fire sites or other locations where potentially relevant 

witnesses live or work. The Local and Chambers Guidelines address only airplane travel; not the 

ground transportation involved in fact development for the Wildfire Litigations. Compensating nonworking travel time in these Chapter 11 Cases at a 50% rate strikes an appropriate balance given the 

significant travel time—by air or otherwise—that the Retained Professionals have incurred. 

Unable to cite any legal authority supporting his position that non-working travel time 

is never compensable, the Fee Examiner makes several policy arguments. (See Motion at 9-12.) But 

the only relevant consideration is whether travel time by a Retained Professional to a court hearing or 

deposition is “actual and necessary” to the administration of the estate and “reasonable” as compared 

to the amounts charged for non-working travel time in comparable non-bankruptcy work. To accept 

otherwise would allow the Fee Examiner to dictate the Debtors’ or Committees’ choice of counsel 

based on geographic location. In any case, these fees are not “hidden”. (Motion at 9.) Travel time 

between New York and California generally takes between seven and ten hours door-to-door, and such 

time (to the extent the Retained Professional is not actually working on the plane) will be subject to a 

50% discount from the professional’s standard hourly rates under the Retained Professionals’ 

proposed approach. 

The Court should order that non-working travel time is compensable at 50% of 

the Retained Professionals’ hourly rates. 

C. The Motion Improperly Interferes with the Court’s Prior Scheduling Orders. 

The Fee Examiner requests that the Court rule on additional scheduling matters and 

order that disposition of an Interim Fee Application does not waive the Fee Examiner’s ability to 

continue to object on duplication and overlap grounds. (Motion at 3-6.) While the Court’s prior orders 

Case: 19-30088 Doc# 4064 Filed: 10/01/19 Entered: 10/01/19 21:58:20 Page 17

of 24
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

make additional scheduling guidance unnecessary, the Retained Professionals object to two aspects of 

these requested changes. 

First, the Protocol provides that the Fee Examiner’s “[f]ailure to object to an 

Application or Monthly Fee Statement will not bar the Fee Examiner from objecting to time or 

expenses covered by such requests at a later time”. (Protocol § 6; see also Motion at 6 (“[A]ny interim 

award of fees to any fee applicant does not waive or otherwise limit the Fee Examiner’s right to object 

at a future date based upon his determination of duplication or overlap as between multiple firms.”); 

id. at 16-17.) This language is unnecessary given that, under the Interim Compensation Order, the 

failure to file an objection does not waive the ability of any party in interest to object to fees in 

connection with a final fee application. [Docket No. 701 ¶ 2(i).] But permitting the Fee Examiner to 

lodge objections to prior Interim Fee Applications concurrently with pending Interim Fee Applications 

in perpetuity could create an untenable circumstance of constant objections, litigation and the looming 

threat of disgorgement, and in any case disincentivizes the Fee Examiner from completing his work 

within the time periods specified by the Court. The Retained Professionals propose that, following 

the Court’s disposition of an Interim Fee Application, the Fee Examiner may not interpose a new 

objection to fees that are the subject of the resolved Interim Fee Application until those fees are 

presented in a Final Application, consistent with the Interim Compensation Order. This minimizes 

uncertainty but provides the Fee Examiner and the Court with the opportunity to conduct an holistic 

examination of the aggregate fees sought by the professionals at the conclusion of these Chapter 11 

Cases. 

Second, the Fee Examiner unnecessarily penalizes professionals for the late filing of 

Interim Fee Applications by seeking that the Court deem any late-filed Interim Fee Application filed 

at the next deadline—which may be up to four months later. (Motion at 5 (“If an interim fee 

application is filed after the deadline, it will be deemed filed at the next interval.”); see also id. at 16.) 

The Court’s Order Appointing Fee Examiner already contemplates the treatment of late-filed 

Applications and explains that “in the reasonable discretion of the Fee Examiner, [if] the Applicant’s 

failure to meet these deadlines does not allow sufficient time for the review process to be completed, 

Case: 19-30088 Doc# 4064 Filed: 10/01/19 Entered: 10/01/19 21:58:20 Page 18

of 24
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

such Application shall be heard at a subsequent hearing date.” [Docket No. 2267 ¶ 10.] The 

Fee Examiner should not be able to summarily delay the award of compensation for late-filed Interim 

Fee Applications by an additional four months before even reviewing the Application to determine 

whether a review is practicable before the hearing date applicable to that interim period. Indeed, the 

Court ordered that the Fee Examiner “shall use best efforts to have the undisputed portion of 

Applications allowed by this Court and paid as soon as reasonably practicable” [Docket No. 2267 

¶ 8]—not automatically deferred.7 The Court further ordered that the “Debtors may request that the 

Court schedule a hearing on Interim Fee Applications at least once every four months or at such other 

intervals as the Court deems appropriate.” [Docket No. 701 ¶ 2(f) (emphasis added).] Given the 

frequency of hearings in the Bankruptcy Court, it is unnecessary to wait until the next interim period 

to determine the prior period’s fees. 

The Court should order that (a) the Fee Examiner may not interpose a new 

objection to fees that are the subject of a resolved Interim Fee Application until those fees are 

presented in a Final Application and (b) as to late-filed Interim Fee Applications, such 

Applications may be heard, individually or with other late-filed Applications, at any date that is 

convenient for the Court, the Fee Examiner and the Debtors’ Counsel, and need not wait for the 

conclusion of the following interim period to be heard. 

D. The Protocol and Motion Improperly Preclude Compensation for Time Entries 

That Include Any Redactions. 

The Fee Examiner takes the position that compensation “can only be allowed when 

[time entries are] unredacted, or when, subject to appropriate confidentiality and privilege controls, 

the court (or designate [sic]) can review the substance of the redacted entry without destroying any 

7

 This is additionally problematic to the extent that the Fee Examiner seeks to “group” the hearing 

dates on Interim Fee Applications. (See Motion at 5, 16.) The Court ordered that “the delay or 

adjournment of consideration of an Application shall not affect the timing of hearings on the 

Applications of other Applicants.” [Docket No. 2267 ¶ 10.] 

Case: 19-30088 Doc# 4064 Filed: 10/01/19 Entered: 10/01/19 21:58:20 Page 19

of 24
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

claimed privilege.” (Motion at 12; see also Protocol § 5.1.4.) This blanket approach should be 

rejected for two reasons. 

First, partial redactions of time entries may be necessary to protect privileged or 

confidential information but nevertheless may preserve the ability of the Fee Examiner and the Court 

to review their substance. For example, time entries summarizing time spent working with subject 

matter experts who may testify in the estimation proceeding or in other litigation involving the Debtors 

might redact the name of the expert if that expert has not yet been disclosed as a potential testifying 

expert. In such a case, the Fee Examiner and the Court are still able to review the substance of the 

time entry. But under the blanket prohibition proposed by the Fee Examiner, such time entries “are 

not compensable unless and until they are unredacted”. (Motion at 12.) That approach is arbitrary. If 

redactions of a time entry prevent the Fee Examiner from identifying the substance of an entry, the 

Fee Examiner should flag those entries for further explanation by the Retained Professional. If 

redactions do not interfere with the Fee Examiner’s ability to understand the task completed, they 

should not preclude compensation for that time. 

Second, the Fee Examiner believes that he and each Applicant should “reach an 

agreement whereby the Fee Examiner can review the redacted time entries subject to an agreement 

which maintains confidentiality and privilege.” (Motion at 12; see also Protocol § 5.1.4 (“[T]he 

Retained Professional and the Fee Examiner may enter into a confidentiality agreement to enable the 

Retained Professional to provide more detailed information.”).) But executing a side confidentiality 

agreement is unnecessary because the protection of information shared with the Fee Examiner is 

already guaranteed by the Court’s Order Appointing Fee Examiner. [See Docket No. 2267, ¶ 13 (“If 

a Retained Professional or its client provides privileged or work product information to the 

Fee Examiner and identifies the confidential nature of such information to the Fee Examiner, the 

Fee Examiner shall treat such information as confidential.”).] Accordingly, this provision should be 

removed from the Protocol, and the Court should instruct the Fee Examiner to treat as confidential any 

information designated as privileged or confidential pursuant to the Order Appointing Fee Examiner. 

Case: 19-30088 Doc# 4064 Filed: 10/01/19 Entered: 10/01/19 21:58:20 Page 20

of 24
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

The Court should order that compensation may be granted for time entries that 

are redacted if the redactions permit the Fee Examiner and the Court to review the material 

substance of the entry. The Court should strike the portion of Section 5.1.4 of the Protocol 

requiring the execution of confidentiality agreements as a condition to the Fee Examiner 

protecting privileged and confidential information. 

E. The Protocol and Motion Improperly Impose Additional Unwarranted Barriers 

to Compensation. 

The Protocol and Motion together contain a litany of requirements that have no basis 

in the Bankruptcy Code, Rules or Guidelines. A markup showing the Retained Professionals’ 

proposed edits to the Protocol is attached as Exhibit A to the Zumbro Declaration. Certain of those 

edits are explained briefly below: 

 Protocol Section 2.2: This Section requires that “[a]t any session with the Fee Examiner, the 

Retained Professional must be represented by a person who has full authority to adjust proposed 

fees and expenses without consultation with another person. Failure to provide such a person 

will be considered to be bad faith.” Professionals, particularly lawyers practicing in a 

partnership, typically cannot make unilateral determinations on billing rates, fees and similar 

items without consulting fellow partners. This provision should be modified or removed. 

 Protocol Sections 5.1 and 5.1.1: These provisions contain unclear prefatory language that should 

be removed or reworded. In Section 5.1, the Protocol explains that “[h]ourly rates should reflect 

a Biller’s . . . time and experience in restructuring companies.” These Chapter 11 Cases involve 

substantial non-bankruptcy litigation, investigatory and corporate work and accordingly, 

“experience in restructuring companies” should not be a reason to reduce fees for such work. 

Section 5.1.1 discusses efficiency but as explained above, the touchstone of the Fee Examiner’s 

review should be comparability with non-bankruptcy work, not whether a work stream could 

hypothetically have been more efficient. 

 Protocol Section 5.1.2: The second paragraph of this Section requires a disclosure of the “total 

recorded hours on all matters for that month”—i.e., for other matters and other clients unrelated 

to the Chapter 11 Cases—for each timekeeper included in an Application who bills more than 10 

hours in the Chapter 11 Cases per month. The Fee Examiner’s role is to ensure that fees sought 

comply with the Bankruptcy Code, not to superintend how a timekeeper divides her practice 

across all clients and matters. The second paragraph of Section 5.1.2 should be deleted. 

 Protocol Section 5.2.5.1: This section declares certain hotels to be “presumptively 

unreasonable” and others to be “presumptively reasonable except when room rates surge for high 

demand events or seasons.” The Retained Professionals do not believe this is the most 

predictable distinction, particularly when travel plans change at the last minute or high demand 

constrains available choices. As the Local Guidelines explain, “[d]ue to wide variation in hotel 

Case: 19-30088 Doc# 4064 Filed: 10/01/19 Entered: 10/01/19 21:58:20 Page 21

of 24
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

costs in various cities, it is not possible to establish a single guideline for this type of expense.” 

Local Guidelines ¶ 37. Instead, all parties would be better served by a bright-line rule that 

provides a minimum amount of compensation. The Retained Professionals propose that they 

may be reimbursed up to a maximum of $600 per night per hotel stay, regardless of the hotel, 

and that any amount exceeding $600 per night be borne by the professionals. This is consistent 

with the approach the Protocol takes to first and business-class airfare, for which reimbursement 

may be obtained at the economy rate, with the balance paid by the professional. (See Protocol 

§ 5.2.2.) And this approach reflects the high hotel rates in San Francisco, which have been 

described as the most expensive in the world.8

CONCLUSION 

The requirements for the award of professional fees in bankruptcy were crafted by 

Congress to treat bankruptcy work commensurate with comparable non-bankruptcy work. Those 

requirements are supplemented by the Rules and Guidelines. The Protocol and Motion should not 

impose requirements beyond what Congress has commanded. The Retained Professionals in these 

Chapter 11 Cases have been working diligently to move these incredibly large and complex cases 

quickly forward towards emergence confirmation, and they are entitled to reasonable compensation 

for their services and efforts as set forth by Congress. The Protocol should be modified to conform 

more closely to the principles Congress chose, and the Motion should be denied in part consistent with 

this Response. 

For the reasons stated above, the Court should deny the Motion in part and enter the 

revised protocol attached as Exhibit B to the Zumbro Declaration. 

 

8 See Nadja Brandt, San Francisco Hotels are World’s Priciest as Rates Surge, Bloomberg, June 30, 

2015, available at https://www.bloomberg.com/news/articles/2015-06-30/san-francisco-hotels-areworld-s-priciest-as-rates-surge. 

Case: 19-30088 Doc# 4064 Filed: 10/01/19 Entered: 10/01/19 21:58:20 Page 22

of 24
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Dated: October 1, 2019 

 

CRAVATH, SWAINE & MOORE LLP 

 /s/ Paul H. Zumbro 

Attorneys for Debtors and Debtors in Possession 

WEIL, GOTSHAL & MANGES LLP 

 /s/ Stephen Karotkin 

Attorneys for Debtors and Debtors in Possession 

 KELLER & BENVENUTTI LLP 

 /s/ Tobias S. Keller 

Attorneys for Debtors and Debtors in Possession 

MUNGER, TOLLES & OLSON LLP 

 /s/ Bradley Schneider 

Attorneys for Debtors and Debtors in Possession 

COBLENTZ PATCH DUFFY & BASS LLP 

 /s/ Gregg M. Ficks 

Special Counsel to Debtors and Debtors in Possession 

GROOM LAW GROUP, CHARTERED 

 /s/ David N. Levin 

Special Counsel to Debtors and Debtors in Possession 

Case: 19-30088 Doc# 4064 Filed: 10/01/19 Entered: 10/01/19 21:58:20 Page 23

of 24
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

JENNER & BLOCK LLP 

 /s/ Angela M. Allen 

Special Corporate Defense & Energy Counsel 

for Debtors and Debtors in Possession

SIMPSON THACHER & BARTLETT LLP 

 /s/ Nicholas Goldin 

Counsel for the Board of Each of PG&E Corporation and 

Pacific Gas and Electric Company and for Certain Current 

and Former Independent Directors

BAKER & HOSTETLER LLP 

 /s/ Elizabeth A. Green 

Attorneys for the Official Committee of 

Tort Claimants

Case: 19-30088 Doc# 4064 Filed: 10/01/19 Entered: 10/01/19 21:58:20 Page 24

of 24