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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

UNITED STATES BANKRUPTCY COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

In re: 

PG&E CORPORATION 

 - and - 

PACIFIC GAS AND ELECTRIC 

COMPANY,

Debtors.

Case No. 19-30088 (DM) 

Chapter 11 

(Lead Case) 

(Jointly Administered) 

STATEMENT OF THE OFFICIAL 

COMMITTEE OF UNSECURED 

CREDITORS IN SUPPORT OF THE JOINT 

MOTION OF THE OFFICIAL 

COMMITTEE OF TORT CLAIMANTS AND 

AD HOC COMMITTEE OF SENIOR 

UNSECURED NOTEHOLDERS TO 

TERMINATE THE DEBTORS’ EXCLUSIVE 

PERIODS 

Date: October 7, 2019 

Time: 1:30 p.m. (Pacific Time) 

Place: United States Bankruptcy Court 

 Courtroom 17, 16th Floor 

 450 Golden Gate Avenue 

 San Francisco, CA 94102 

Re: Docket No. 3940 

 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# 4049 Filed: 10/01/19 Entered: 10/01/19 15:37:34 Page 1 of

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44553.00001

The Official Committee of Unsecured Creditors (the “Official Committee”) respectfully 

submits this statement (this “Statement”) in support of the Joint Motion to Terminate the Debtors’ 

Exclusive Periods Pursuant to Section 1121(d) of the Bankruptcy Code (the “Motion”) [Docket 

No. 3940], filed jointly by the Official Committee of Tort Claimants (the “TCC”) and the Ad Hoc 

Committee of Senior Unsecured Noteholders (the “Ad Hoc Group” and, together with the TCC, 

the “Movants”).1 

STATEMENT 

1. As the Court is aware, in recent weeks there have been several noteworthy 

developments in these cases. Driven by the June 30, 2020 bankruptcy resolution deadline 

established by A.B. 1054 but also fueled by competition between potential plan proponents, parties 

have put forward two materially more developed plan proposals, each based on significant 

proposed settlements of wildfire-related claims. The Official Committee believes that the 

competitive forces that have created the current positive momentum are vital for a successful 

outcome in these cases. These developments reflect considerable progress, but further work 

remains to be done on all fronts. For this reason, the Official Committee agrees with the Movants 

that exclusivity should be terminated to allow those parties to continue to push forward with their 

plan proposal (the “AHG/TCC Plan”). 

2. The AHG/TCC Plan represents a significant step forward in these cases—for the 

first time, a plan is being proposed that pays all unsecured claims, including wildfire claims, in 

full, is supported by the TCC, a fiduciary for all wildfire claimants, and is backed by evidence of 

substantial committed financing. Moreover, the AHG/TCC Plan does not require, and is not 

conditioned on, a lengthy and uncertain estimation process and a state court trial with respect to 

the Tubbs Fire that will cost tens of millions of dollars. By agreeing to a $25.5 billion cap on 

 

1

 Capitalized terms not otherwise defined herein have the meanings ascribed to them in the Motion. 

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44553.00001

wildfire claims, the TCC has accepted what the parties believe is the maximum amount that can 

be paid by the Debtors’ estates, while still ensuring that these estates remain solvent. And it is 

important to note that embedded in this cap is a separate trust for the holders of subrogation claims 

in the amount of $11 billion dollars, the precise amount in which the Debtors propose to settle with 

these claimants. While the Official Committee sees much to commend in the AHG/TCC Plan, it 

nonetheless remains under review, and the Official Committee’s consideration of the AHG/TCC 

Plan itself remains subject to ongoing due diligence. Accordingly, while the Official Committee 

fully supports termination of exclusivity to permit the AHG/TCC Plan to move forward, the 

Official Committee does not yet endorse the AHG/TCC Plan at this time. 

3. From the perspective of all unsecured creditors, the Debtors’ Plan stands in 

relatively stark contrast to the AHG/TCC Plan. In its October rulings on exclusivity, lifting of the 

automatic stay with respect to the Tubbs Fire trial and setting in motion the process going forward 

for estimation, the Court made crystal clear its view that resolution of the wildfire claims and 

payment of the individual victims is the Court’s paramount objective in these cases. The Ad Hoc 

Group and the TCC took that guidance to heart, got in a room and reached a fair and reasonable 

agreement that stands to benefit all creditors. The Debtors, on the other hand, chose instead to 

focus their efforts on a bilateral settlement with a single group of institutional creditors. 

4. Rather than providing a clear and smooth pathway to full creditor recoveries, the 

Debtors’ Plan is instead intent on preserving value for the prepetition equity holders and “rolls the 

dice” on the solvency issue by requiring that the estimation process and the Tubbs Fire trial 

proceed, thereby subjecting the estates’ unsecured creditors to the possibility that the resulting 

claims will exceed the $8.4 billion cap embedded in the Debtors’ Plan.2

 As a creditor fiduciary, 

 

2

 In its efforts to protect existing equity holders, the Debtors’ Plan also makes inevitable litigation with 

creditors over issues of creditor entitlement to postpetition interest at the contract rate and payment on 

account of make-whole provisions. The AHG/TCC Plan, in contrast, would honor those contractual 

entitlements and resolve these issues in the creditors’ favor.

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44553.00001

the Official Committee does not believe unsecured creditor recoveries should be exclusively tied 

to such a plan. To the contrary, the Official Committee submits that a competitive process between 

the Debtors’ Plan and the AHG/TCC Plan is beneficial to all parties, except perhaps old equity 

itself. 

5. Accordingly, the Official Committee believes that exclusivity should be terminated 

to allow the AHG/TCC Plan to move forward in parallel with the Debtors’ Plan, in the belief that 

the competition may result in the Debtors becoming more transparent and cooperative, and will 

continue to generate improvements in both plans that serve to increase the likelihood of a 

successful outcome in these cases.3

 

6. Finally, the Official Committee also believes that allowing the competing plans to 

go forward (at the same time and on terms to be determined by the Court) will also provide the 

best opportunity for a global resolution by the parties themselves or through a mediator. Having 

both plans filed will also permit the CPUC to begin its review process with respect to each plan, 

thus avoiding a rush should the AHG/TCC Plan ultimately be the plan that the Court wishes to 

confirm. 

[Remainder of Page Left Intentionally Blank] 

 

3

 The Court has repeatedly heard from various creditor groups in these cases, including the Official 

Committee, of the Debtors’ lack of disclosure and refusal to engage on virtually all important matters. 

The only lever that appears to have been effective in pressuring the Debtors to attempt to move the plan 

process forward has been the ongoing threat of an alternative plan. This simple fact provides further 

justification for granting the Motion. 

Case: 19-30088 Doc# 4049 Filed: 10/01/19 Entered: 10/01/19 15:37:34 Page 4 of

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44553.00001

CONCLUSION 

7. For the reasons set forth above, the Official Committee respectfully requests that 

the Court grant the Motion and such other relief as may be appropriate.

Dated: October 1, 2019 

MILBANK LLP 

/s/Gregory A. Bray . DENNIS F. DUNNE 

SAMUEL A. KHALIL 

GREGORY A. BRAY 

THOMAS R. KRELLER 

Counsel for the Official Committee of 

Unsecured Creditors 

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