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Tig WEIL, GOTSHAL & MANGES LLP 

Stephen Karotkin (pro hac vice) 

(stephen.karotkin@weil.com) 

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

(ray.schrock@weil.com) 

Jessica Liou (pro hac vice) 

(jessica.liou@weil.com) 

Matthew Goren (pro hac vice) 

(matthew.goren@weil.com)| 

767 Fifth Avenue 

New York, NY 10153-0119 

Tel: 212 310 8000 

Fax: 212 310 8007 

Attorneys for Debtors 

and Debtors in Possession 

KELLER & BENVENUTTI LLP 

Tobias S. Keller (#151445) 

(tkeller@kellerbenvenutti.com) 

Peter J. Benvenutti (#60566) 

(pbenvenutti@kellerbenvenutti.com) 

Jane Kim (#298192) 

(jkim@kellerbenvenutti.com) 

650 California Street, Suite 1900 

San Francisco, CA 94108 

Tel: 415 496 6723 

Fax: 650 636 9251 

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) 

DEBTORS’ PRELIMINARY 

OPPOSITION TO MOTION FOR 

RELIEF FROM AUTOMATIC STAY 

TO PERMIT THE COURTS OF THE 

STATE OF CALIFORNIA TO 

CONDUCT A JURY TRIAL AND 

RELATED PRETRIAL AND POST 

TRIAL MATTERS IN 

CONNECTION WITH THE GHOST 

SHIP FIRE CASES 

Relates to Dkt. Nos. 4875-4879, 4945, 

5036 

Date: December 17, 2019 

Time: 10:00 a.m. 

Place: United States Bankruptcy Court 

 Courtroom 17, 16th Floor 

 San Francisco, CA 94102

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TABLE OF CONTENTS 

I. PRELIMINARY STATEMENT ...................................................................................1

II. FACTUAL BACKGROUND ........................................................................................3

III. ARGUMENT .................................................................................................................4

A. The “Balance of Hurt” Necessitates Maintaining the Stay (Curtis Factor 12) ..5

1. Lifting the Stay is Inappropriate Given the Tort Claimant RSA and the 

Treatment of the Ghost Ship Plaintiffs’ Claims under the Amended 

Plan ........................................................................................................5

2. Litigation of the Ghost Ship Action Risks Harm to the Debtors’ 

Reorganization Efforts ...........................................................................6

3. Denying the Motion Will Not Prejudice the Ghost Ship Plaintiffs .......8

B. The Other Curtis Factors upon Which Movant Relies are Unavailing ..............9

1. No Specialized Tribunal is Adjudicating the Ghost Ship Action (Curtis

Factor 4) .................................................................................................9

2. The Debtors’ Insurance Has Not Yet Assumed Full Financial 

Responsibility for the Ghost Ship Action (Curtis Factor 5) ................10

3. The Interests of Judicial Economy Favor Maintaining the Stay (Curtis 

Factor 11) .............................................................................................11

4. The Parties are Not Ready for Trial (Curtis Factor 12) .......................11

IV. CONCLUSION ............................................................................................................12

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TABLE OF AUTHORITIES 

Cases Page(s) 

In re Am. Spectrum Realty, Inc., 540 B.R. 730 (Bankr. C.D. Cal. 2015) ........................................12 

In re Baleine, LP, 2015 U.S. Dist. LEXIS 140145 (C.D. Cal. Oct. 13, 2015) ................................12

In re Curtis, 40 B.R. 795 (Bankr. D. Utah 1984) .................................................................... passim 

In re Dampier, 2015 WL 6756446 (10th Cir. BAP Nov. 5, 2015) ..................................................12 

In re Kronemyer, 405 B.R. 915 (B.A.P. 9th Cir. 2009) .....................................................................4 

In re Landmark Fence Co., 2011 U.S. Dist. LEXIS 150928 (C.D. Cal. Dec. 9, 2011) ...............5, 10 

In re MBF Inspection Servs., Inc., 2018 WL 6584286 (Bankr. D. N.M. Dec. 12, 2018) ................12 

In re Plumberex Specialties Prods., Inc., 311 B.R. 551 (Bankr. C.D. Cal. 2004) .............................4 

In re Sunland, Inc., 508 B.R. 739 (Bankr. D. N.M. 2014) ...............................................................12 

In re Torres-Montoya, 2017 WL 5713198 (Bankr. D. N.M. Nov. 21, 2017) ..................................10 

In re Tucson Estates, Inc., 912 F.2d 1162 (9th Cir. 1990) .................................................................4 

Statutes & Rules 

11 U.S.C. § 362(d) ................................................................................................................... passim 

Other Authorities 

3 Collier on Bankruptcy ¶ 362.10 (2019) .........................................................................................4 

 

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

and together with the Utility, the “Debtors”), as debtors and debtors in possession in the abovecaptioned chapter 11 cases (the “Chapter 11 Cases”), respectfully submit this Preliminary 

Opposition (the “Opposition”) to the Motion for Relief from Automatic Stay to Permit the Courts 

of the Stay of California to Conduct a Jury Trial and Related Pretrial and Post Trial Matters in 

Connection with the Ghost Ship Fire Cases, filed on November 26, 2019 [Docket No. 4875] (the 

“Motion”), by the Plaintiffs’ Executive Committee appointed by the Superior Court of the State of 

California, in and for the County of Alameda, in Case No. RG16843631 (DM) and related cases 

(the “Ghost Ship Executive Committee” or “Movant”).1 The Ghost Ship Executive Committee 

seeks relief from the automatic stay, pursuant to section 362(d) of title 11 of the United States 

Code (the “Bankruptcy Code”), to prosecute against the Debtors the claims of plaintiffs (the 

“Ghost Ship Plaintiffs”) pending in the Superior Court of the State of California, in and for the 

County of Alameda (the “State Court”), in the matter of In re Ghost Ship Fire Litigation, Case No. 

RG16843631 (and Related Cases) (the “Ghost Ship Action”). In support of the Opposition, the 

Debtors submit the Declaration of Elizabeth Collier (the “Collier Declaration”), filed 

contemporaneously herewith. 

I. PRELIMINARY STATEMENT 

The Court should deny the Motion because allowing the Ghost Ship Action to go forward 

would significantly prejudice the Debtors and would undermine the significant settlement the 

Debtors have reached with the TCC and other stakeholders to resolve the Debtors’ aggregate 

wildfire liability to individual claimants, as well as the broad consensus the Debtors have achieved 

in these Chapter 11 Cases. Moreover, modification of the stay as requested is completely 

antithetical to the intent and purpose of section 362 of the Bankruptcy Code and the orderly 

administration of these Chapter 11 Cases. As the Court is aware, the Debtors recently entered into 

1 This Opposition also responds to the Joinder of the Official Committee of Tort Claimants (the 

”TCC”) to Ghost Ship Plaintiffs’ Motion for Relief from Stay, filed Dec. 2, 2019 [Dkt. No. 4945] 

(the “TCC Joinder”), and the Joinder in Motion for Relief from Automatic Stay in Connection 

with the Ghost Ship Fire Claims, filed Dec. 9, 2019 [Dkt. No. 5036]. 

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a settlement agreement (the “Tort Claimant RSA”) with the TCC, law firms representing 

individuals holding approximately 70% in number of prepetition fire claims filed against the 

Debtors, and certain funds and accounts managed by Abrams Capital management, LP, and 

Knighthead Capital Management, LLP (the “Shareholder Proponents”). The Tort Claimant RSA 

will resolve over $36 billion in asserted prepetition fire liabilities (the “Fire Victim Claims”), 

including the Ghost Ship Plaintiffs’ claims, through the Debtors’ contribution of approximately 

$13.5 billion in cash and stock and the assignment of certain rights and causes of action to a trust 

established for the benefit of the fire claimants (the “Fire Victim Trust”). The settlement, which 

is embodied in the Tort Claimant RSA and the term sheet annexed thereto, will be implemented 

pursuant to, and incorporated in, the amended plan of reorganization to be filed shortly by the 

Debtors and Shareholder Proponents (the “Amended Plan”). The significance of what has been 

achieved in the Tort Claimant RSA cannot be overstated. Having reached a settlement with the TCC 

and law firms representing an overwhelming number of the individual fire claimants, no real 

obstacles remain to a swift confirmation of the Amended Plan and a successful exit from these 

Chapter 11 Cases well within the June 30, 2020 deadline established under AB 1054. 

 The requested stay relief is flatly inconsistent with the Amended Plan, pursuant to which the 

Ghost Ship Plaintiffs’ claims and all other Fire Victim Claims will be channeled to a Fire Victim 

Trust, to be satisfied solely from the Fire Victim Trust’s assets, without further recourse to the 

Debtors. If the stay is lifted, the Debtors will be forced to bear the burden, cost, and expense of 

litigating the Ghost Ship Plaintiffs’ claims, which is completely contrary to the terms of the 

Amended Plan and to the manner in which claims such as those of the Ghost Ship Plaintiffs are 

addressed and resolved in cases under chapter 11 of the Bankruptcy Code. 

Permitting the Ghost Ship Action to proceed at this critical juncture would unduly burden 

the Debtors and their employees, who are dedicating their time and resources on a variety of fronts 

to accomplish all that is necessary to confirm the Amended Plan by June 30, 2020, as required by 

AB 1054. Any unnecessary diversion of the Debtors’ personnel from these matters would be 

detrimental to all parties in interest. 

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Additionally, as discussed further below, lifting the stay and compelling the Debtors to 

proceed to a trial on the same schedule as the other parties to the Ghost Ship Action, who have been 

litigating that matter for nearly a year while the Debtors have been administering these Chapter 11 

Cases, would place the Debtors at a significant disadvantage in the underlying proceedings. 

In the Court’s recent decision in which it continued a motion to lift the stay, it acknowledged 

that the “Debtors and their litigation counsel have very full plates.”2 The burden on the Debtors at 

this critical juncture of these Chapter 11 Cases is even more apparent, and as such, the Court should 

reach the same conclusion here. 

 In sum, lifting the stay and allowing the Ghost Ship Action to proceed would be inconsistent 

with the Amended Plan, would unnecessarily and detrimentally burden the Debtors, and perhaps 

most importantly, would be at odds with the intent and purpose of section 362. Leaving the stay in 

place, however, would not harm the Ghost Ship Plaintiffs, as doing so would simply allow for the 

liquidation and treatment of their claims in the orderly manner contemplated by the Amended Plan. 

 For these reasons, and as more fully set forth below, the Debtors respectfully request that the 

Court deny the Motion. 

II. FACTUAL BACKGROUND 

 On December 2, 2019, a fire broke out during an event at a warehouse known as the “Ghost 

Ship” in Oakland, California (the “Ghost Ship Fire”). As of October 16, 2019, 53 individual 

lawsuits have been filed arising out the Ghost Ship Fire.3 The State Court consolidated these 

lawsuits into what is now the Ghost Ship Action and designated the matter as a “Complex Case.” 

See id. ¶¶ 9-10. Numerous entities and individuals are defendants in the Ghost Ship Action, 

including, among others, the Debtors, the City of Oakland, and the owners of the warehouse. See

id. ¶ 14. The current operative complaint against the Debtors is the Second Amended Master 

Complaint, filed on January 19, 2019 (the “Operative Complaint”). See id. ¶ 17. The Operative 

2 See Docket Text Order, dated Nov. 10, 2019, regarding Motion for Relief from the Automatic 

Stay Pursuant to 11 U.S.C. § 362(d)(1), filed by Tiger Natural Gas, Inc. [Dkt No 4322]. 

3 See Declaration of Mary E. Alexander in Support of Motion, dated November 26, 2019 [Dkt. No. 

4877] (the “Alexander Declaration”), ¶ 9.

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Complaint is 121 pages long and asserts the following claims against the Debtors: (1) negligence; 

(2) premises liability; (3) negligent hiring, supervision, training, and/or retention; (4) public 

nuisance; (5) strict liability; (6) survival; (7) negligent infliction of emotional distress; and (8) 

intentional infliction of emotional distress. See id., Ex. 4. 

 The Debtors filed these Chapter 11 Cases on January 29, 2019 (the “Petition Date”). As a 

result, the Ghost Ship Action is currently stayed as against the Debtors pursuant to section 362(a) 

of the Bankruptcy Code. The Ghost Ship Action is currently scheduled to proceed to trial on May 

26, 2020, against the remaining defendants in the Ghost Ship Action. The City of Oakland has filed 

a motion, scheduled to be heard on December 20, 2019, requesting that the State Court continue the 

trial until September 2020.4 

III. ARGUMENT 

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

automatic stay for “cause,” which “has no clear definition and is determined on a case-by-case 

basis.” In re Tucson Estates, Inc., 912 F.2d 1162, 1166 (9th Cir. 1990) (citation omitted). The party 

requesting stay relief bears the burden of making a prima facie showing of cause under section 

362(d)(1). See In re Plumberex Specialties Prods., Inc., 311 B.R. 551, 553 (Bankr. C.D. Cal. 2004); 

3 Collier on Bankruptcy ¶ 362.10 (2019) (“Failure to prove a prima facie case requires denial of the 

requested relief.”). In determining whether cause exists to permit an action to proceed in a nonbankruptcy forum, courts analyze the twelve factors set forth in In re Curtis, 40 B.R. 795 (Bankr. 

D. Utah 1984);5 see also In re Kronemyer, 405 B.R. 915, 921 (B.A.P. 9th Cir. 2009) (“We agree 

4 See Ghost Ship Executive Committee’s Supplement to Motion, dated December 3, 2019 [Dkt. 

No. 4962]. 

5 The Curtis factors are: (1) whether the relief will result in partial or complete resolution of issues; 

(2) the lack of any connection with or interference with the bankruptcy case; (3) whether the foreign 

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

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

(5) whether the debtor’s insurance carrier has assumed full financial responsibility for defending the 

litigation; (6) whether the action essentially involves third parties, and the debtor functions only as 

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

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

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

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that the Curtis factors are appropriate, nonexclusive, factors to consider in deciding whether to grant 

relief from the automatic stay to allow pending litigation to continue in another forum.”). 

As discussed below, the most relevant Curtis factors mandate keeping the stay in place and denying 

the Motion. 

A. The “Balance of Hurt” Necessitates Maintaining the Stay (Curtis Factor 12) 

 As the Ghost Ship Plaintiffs concede, the “most important factor in determining whether to 

grant relief from the automatic stay to permit litigation against the debtor in another forum is the 

effect of such litigation on the administration of the estate.” Mot. at 14 (quoting In re Curtis, 40 

B.R. at 806). And as the Curtis Court further noted, “even slight interference with the administration

may be enough to preclude relief in the absence of a commensurate benefit.” 40 B.R. at 806 

(emphasis added). Indeed, “[i]t is not enough for the creditor to merely show that it will be hurt by 

the continuation of the stay, rather the creditor must show that neither the debtor nor the other 

creditors will be injured if the stay is lifted.” In re Landmark Fence Co., No. 11-00934, 2011 WL 

6826253, at *9 (C.D. Cal. Dec. 9, 2011). The Motion does not and cannot make this showing. 

1. Lifting the Stay is Inappropriate Given the Tort Claimant RSA and the 

Treatment of the Ghost Ship Plaintiffs’ Claims under the Amended Plan 

 Lifting the stay runs directly counter to the process that the Debtors and the TCC (of which 

certain Ghost Ship Plaintiffs are members) have agreed to for resolving the Ghost Ship Plaintiffs’ 

claims. Under the Amended Plan, the Debtors’ funding of the Fire Victim Trust with $13.5 billion 

in cash and stock will satisfy all Fire Victim Claims, including the Ghost Ship Plaintiffs’ claims.6 

Those claims will be channeled to, and liquidated and resolved by, the Fire Victim Trust. See id. 

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

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

economical determination of litigation for the parties; (11) whether the foreign proceedings have 

progressed to a point where the parties are prepared for trial; and (12) the impact of the stay and the 

“balance of hurt.” 40 B.R. at 799-800. 

6 See Debtors’ Motion Pursuant to 11 U.S.C. §§ 363(b) and 105(a) and Fed. R. Bankr. P. 6004 and 

9019 for Entry of an Order (I) Authorizing the Debtors and TCC to Enter into Restructuring 

Support Agreement with the TCC, Consenting Fire Claimant Professionals, and Shareholder 

Proponents, and (II) Granting Related Relief, dated Dec. 9, 2019 [Dkt. No. 5038], Ex. A.. 

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Under these circumstances, there is no reason to modify the stay. Indeed, under any circumstances, 

the Ghost Ship Plaintiffs’ claims should be addressed in a chapter 11 plan rather than liquidated in 

separate proceedings. 

2. Litigation of the Ghost Ship Action Risks Harm to the Debtors’ 

Reorganization Efforts 

If the Ghost Ship Action were to proceed against the Debtors, it would impose a significant 

and inappropriate burden on the administration of these Chapter 11 Cases. 

 The Ghost Ship Action is a highly complex litigation comprised of fifty-three (53) individual 

lawsuits commenced by more than 70 plaintiffs, including representatives of 33 decedents, against 

more than 10 defendants. See Collier Decl. ¶ 6. The Ghost Ship Action involves a complicated fact 

pattern that spans a number of years. See id. The Ghost Ship Plaintiffs assert various theories of 

legal liability against the numerous Ghost Ship Action defendants. See id. These theories and the 

facts on which they are premised differ significantly depending on the defendant. See id. 

Highlighting the complex and burdensome nature of the Ghost Ship Action is the fact that, as the 

Ghost Ship Executive Committee notes, litigation of the case to date has required at least 15 Case 

Management Conferences and 13 Informal Discovery Conferences. See Alexander Decl. ¶ 10. 

Lifting the stay would require the Debtors to parachute into the middle of the case, get up to speed 

on a year of discovery and other activities, and otherwise fully engage in this complex litigation. 

 If the Ghost Ship Action were to proceed to trial against the Debtors in 2020, the Debtors 

would be at a significant disadvantage because they have not been active participants in the case 

since January 29, 2019. See Collier Decl. ¶ 7. During the past year, the other parties to the Ghost 

Ship Action have been conducting discovery, filing pleadings, and proceeding with other aspects of 

litigation that are customary to a complex, multi-party matter. See id. 

 With respect to discovery specifically, and as it relates to just one Ghost Ship Action 

defendant—the City of Oakland (“Oakland”)—since January 29, 2019, the Ghost Ship Plaintiffs 

have deposed at least seven Oakland police officers, several Oakland fire department employees, 

and one Oakland planning and building department employee. See Collier Decl. ¶ 8. They also 

have served numerous additional deposition notices of Oakland employees to take place shortly. 

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See id. In addition, the Ghost Ship plaintiffs have requested and Oakland has produced a significant 

number of documents. See id. Moreover, in recent months, the other Ghost Ship Action defendants 

have taken depositions of Ghost Ship Plaintiffs who suffered personal injuries, and have begun 

taking depositions of Ghost Ship Plaintiffs who are decedents’ representatives. See id. 

 It is self-evident from the significant amount of litigation activity that has occurred since the 

implementation of the automatic stay nearly a year ago that the other parties to the Ghost Ship 

Action have had the opportunity to develop their relevant their legal claims and defenses, while the 

Debtors have not. As a result of the stay, however, neither the Debtors nor their counsel have 

participated in any depositions or document discovery during this extensive pre-trial discovery 

period. Nor have Debtors’ counsel extensively reviewed any pleadings, discovery requests or 

responses, or documentary or testimonial evidence that the parties have filed, served or produced 

since January 29, 2019. See Collier Decl. ¶ 9. The burden associated with the in-depth study, on 

an expedited timeframe, of these materials would be significant, see id., and should not fall on the 

Debtors, particularly at this juncture of these Chapter 11 Cases and because these claims should be 

addressed under the Amended Plan in a manner similar to other Fire Claims. 

 In addition to analyzing the significant developments in the factual record and the evolution 

of the parties’ legal theories since January 29, 2019, the Debtors would need to begin or complete 

these same litigation tasks for themselves, and do so within a highly compressed timeframe. See

Collier Decl. ¶ 10. Among other activities, the Debtors would need to respond to inevitable further 

discovery requests from the Ghost Ship Plaintiffs, who prior to the implementation of the automatic 

stay had sought wide-ranging information, through document requests, interrogatories, and 

depositions. See id. The Debtors also would need to undertake their own affirmative fact discovery 

efforts, conduct expert discovery and related Daubert briefing, submit and potentially defend 

motions for summary judgment, and prepare for and participate in what would likely be a lengthy 

and complex trial, which would likely involve dozens of witnesses, as well as significant pre- and 

post-trial briefing. See id. 

 Given the highly complex nature of the relevant legal and factual issues and the accelerated 

timeframe within which the Debtors would need to prepare for trial, allowing the Ghost Ship Action 

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to proceed would force the Debtors, their senior management, and their Law Department to devote 

significant resources to the defense of the lawsuit that otherwise would be devoted to the successful 

administration of these Chapter 11 Cases. See Collier Decl. ¶ 11. Diversion of such resources at 

this critical time during which the Debtors are focused squarely on tasks that will further their 

successful reorganization, to the ultimate benefit of all their stakeholders, should not be permitted 

and is antithetical to the automatic stay provisions of the Bankruptcy Code.7

 In these Chapter 11 Cases alone, the Debtors are currently or will soon be fully engaged in 

the following work streams with respect to the Amended Plan, among many others: (i) briefing and 

arguing the Plan-related issues currently before the Court; (ii) preparing and filing a disclosure 

statement; (iii) soliciting votes on the Plan from 100,000 plus creditors and interest holders; (iv) 

negotiating and finalizing the exit financing documents; (iv) drafting, negotiating and filing all of 

the other plan transaction documents, including documents necessary to establish and govern the 

various trusts; and (v) reviewing the Debtors’ thousands of executory contracts and leases and 

preparing schedules of those executory contracts and leases to be assumed and rejected, and dealing 

with related cure objections. See Collier Decl. ¶ 12. 

 The added burden associated with the Ghost Ship Action would distract the Debtors from the 

tasks. See Collier Decl. ¶ 13. Furthermore, multiple others creditors undoubtedly would view a 

decision granting the Motion as an invitation to seek stay relief themselves, further increasing the 

Debtors’ burden. This result would compound the burden associated with the Ghost Ship Action 

itself. 

3. Denying the Motion Will Not Prejudice the Ghost Ship Plaintiffs 

 In stark contrast to the significant risk of harm to the Debtors should the Ghost Ship Action 

move forward, no adverse consequences would befall the Ghost Ship Plaintiffs if the stay remains 

in place. Consistent with the manner in which other similar claims are to be treated, the Ghost Ship 

Plaintiffs’ claims will be channeled to the Fire Victim Trust and resolved pursuant to the trust 

7 Contrary to the Ghost Ship Executive Committee’s assertion, see Mot. 14-15, these facts 

demonstrate that Curtis factor 2, i.e., the degree to which the Ghost Ship Action would interfere 

with these Chapter 11 Cases, weighs against lifting the stay.

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procedures. There is no reason why the Ghost Ship Plaintiffs’ claims should be treated differently 

than other Fire Claims. 

 Even putting aside the Amended Plan, the Ghost Ship Plaintiffs would not incur any prejudice 

if the Court denies the Motion, and certainly not enough to outweigh the harm that the Debtors 

would incur. The Movant contends that Ghost Ship Action must proceed against the Debtors at the 

same time as the other defendants to avoid the risk of piecemeal litigation. See Mot. at 19-20. 

However, even if the Ghost Ship Plaintiffs someday had to proceed separately against the Debtors 

in State Court, they would not be significantly burdened, as their theories of legal liability against 

Debtors, and the facts on which those theories are premised, differ significantly from their claims 

as to other defendants. See Collier Decl. ¶ 6. Indeed, if piecemeal litigation would in fact result in 

significant harm to the Ghost Ship Plaintiffs, they would surely have sought to lift the stay at some 

point prior to ten months after the Petition Date. Courts have found that such delay is a significant 

factor that points toward leaving the stay in place. See, e.g., In re Smith, 389 B.R. 902, 920 (Bankr. 

D. Nev. 2008) (movant’s three month wait from petition date to filing relief from stay motion “belies 

[his] stated desire for swift resolution . . . [a]gainst this background, the fact that trial was imminent 

in California when [Debtor] filed his case recedes significantly in relevance.”). 

B. The Other Curtis Factors upon Which Movant Relies are Unavailing 

 The Ghost Ship Executive Committee states that Curtis factors 1, 4, 5, 7, 10 and 11 dictate 

granting relief from the stay, but factors 4, 5, 10 and 11, in fact, favor leaving the stay in place, and 

factors 1 and 7 do not come close to outweighing the factors that militate against stay relief.8

1. No Specialized Tribunal is Adjudicating the Ghost Ship Action (Curtis

Factor 4) 

 The Ghost Ship Executive Committee contends that this factor weighs in favor of granting 

relief from the automatic stay because the State Court has been presiding over the Ghost Ship Action 

since its inception. See Mot. at 16. The analysis that must be undertaken with respect to this factor, 

however, is not whether the State Court has previously presided over the Ghost Ship Action, but 

8

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whether the State Court is a “specialized tribunal.” Several Ninth Circuit courts have ruled that 

state courts do not constitute “specialized tribunals.” See, e.g., In re Landmark Fence Co., 2011 

WL 6826253, at *6 (holding that the bankruptcy court did not clearly err in finding that “the state 

court is a court of general jurisdiction” and “not a specialized tribunal”); In re Torres-Montoya, No. 

17-11823, 2017 WL 5713198, at *3 (Bankr. D.N.M. Nov. 21, 2017) (“The state court is not a 

specialized tribunal.”). The fact that State Courts may try more mass tort cases than federal courts 

does nothing to tilt this factor in Movant’s favor. See Landmark Fence, 2011 WL 6826253, at *6 

(holding that it was not clear error to find that state courts are not “specialized tribunals” even if 

they have more expertise in trying certain claims). Indeed, the District Court here was set to estimate 

certain wildfire claims in the estimation proceedings. In any event, the relevant comparison for this 

purpose is not between the State Court and this Court, but between the State Court and the Fire 

Victim Trust procedures, which will produce an efficient and cost-effective resolution of the claims 

of all Fire Victims, including the Ghost Ship Plaintiffs. As such, this factor counts against granting 

the requested relief. 

2. The Debtors’ Insurance Has Not Yet Assumed Full Financial 

Responsibility for the Ghost Ship Action (Curtis Factor 5) 

 The Ghost Ship Executive Committee is correct in its assertion that “there is ample insurance 

to cover . . . the Ghost Ship Litigation,” however it is wrong in its supposition that “a substantial 

portion of the self-insured retention was exhausted pre-petition.” See Mot. at 16-17. The retention 

here is not exhausted and the Debtors will have to expend millions of dollars before accessing the 

insurance. While the Debtors have general liability insurance (“GL Insurance”) that they expect 

will provide coverage for their losses, including attorneys’ fees, that are incurred in connection with 

the Ghost Ship Action, in order to recover for such losses the Debtors must first satisfy an applicable 

$10 million self-insured retention. See Collier Decl. ¶ 14. To date, the Debtors have incurred 

approximately $1.6 million in losses in connection with the Ghost Ship Action. See id. Thus, were 

the Ghost Ship Action to proceed against the Debtors, the next approximately $8.6 million in losses 

which the Debtors incur would be borne directly by the Debtors’ estates. 

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 This factor therefore weighs in favor of leaving the stay in place.9 

3. The Interests of Judicial Economy Favor Maintaining the Stay (Curtis 

Factor 11) 

 The Ghost Ship Executive Committee argues that the Court should lift the stay because the 

State Court “is well positioned to continue to preside over the Ghost Ship Litigation” and because, 

if the Court maintains the stay, “a jury trial against the Debtors could be delayed for years.” See

Mot. at 18. These considerations are not relevant in light of the settlement with the TCC and the 

Amended Plan. As discussed above, upon the Debtors’ funding of the Fire Victim Trust 

contemplated by the Amended Plan, the Ghost Ship Plaintiffs will release the Debtors from their 

claims and channel those claims to the trust for resolution in accordance with the streamlined and 

efficient trust procedures. As such, the most “expeditious and economical determination of 

litigation for the parties,” In re Curtis, 40 B.R. at 800, will be for the Ghost Ship Plaintiffs to resolve 

their claims under the procedures contemplated by the Amended Plan. This factor thus militates in 

favor of denying the requested relief. 

4. The Parties are Not Ready for Trial (Curtis Factor 12) 

The Ghost Ship Executive Committee submits that, “because the trial for the Ghost Ship 

Litigation is scheduled to commence on May 26, 2020,” the Debtors “will have ample time to 

prepare for trial.” Mot. at 18-19. As discussed at length above, however, the Debtors are nowhere 

near ready for trial in the Ghost Ship Action, and forcing them to prepare for one in such an 

expedited timeframe, amidst the various other matters to which they are attending, would 

significantly disadvantage them in the underlying proceeding. Indeed, the Debtors would have to 

catch up on nearly a year of active litigation and discovery, including re-taking a significant 

number of depositions to which they were not able to participate. See id. 

Courts have regularly found this factor to weigh against lifting the stay in situations where 

9 The TCC contends that the Ghost Ship Action should proceed because the “Court has granted 

relief from stay for Valero to proceed against the same 2016 insurance [Dkt. No. 3819].” TCC 

Joinder at 2. The continuation of the Valero litigation has no relevance here, however, as Valero’s 

claims are not being channeled to the Fire Victim Trust, and the underlying Valero matter is not 

nearly as complex or burdensome as the Ghost Ship Action.

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significant pre-trial litigation activity remains as of the bankruptcy filing, as it does for the Debtors 

in the Ghost Ship Action. See, e.g., In re Sunland, Inc., 508 B.R. 739, 744-745 (Bankr. D. N.M. 

2014) (no stay relief where trial where no dispositive motions filed); In re MBF Inspection Servs., 

Inc., No. 18-11579-T11, 2018 WL 6584286, at *5 (Bankr. D.N.M. Dec. 12, 2018) (pending cross 

motions for partial summary judgment weighs against stay relief). Moreover, courts have 

generally only found readiness for trial to weigh in favor of lifting the stay where trial was 

imminent as of the Debtors’ filing for bankruptcy. See, e.g., In re Am. Spectrum Realty, Inc., 540

B.R. 730, 742 (Bankr. C.D. Cal. 2015) (five weeks from petition date to scheduled trial date); In 

re Baleine, LP, No. 13-27610, 2015 WL 5979948, at *12 (C.D. Cal. Oct. 13, 2015) (three 

months); In re Dampier, No. BAP CO-15-006, 2015 WL 6756446, at *7 (10th Cir. BAP Nov. 5, 

2015) (discovery completed and foreign proceeding set for trial less than three weeks after petition 

date). This is because the Debtors would then have participated in all of the discovery and pretrial proceedings, which is not the case here. 

This factor weighs against lifting the stay. 

IV. CONCLUSION 

 The Debtors respectfully submit that the Court should deny the Motion. 

Dated: December 12, 2019 WEIL, GOTSHAL & MANGES LLP

KELLER & BENVENUTTI LLP 

By: /s/ Theodore E. Tsekerides 

 Theodore E. Tsekerides 

Attorneys for Debtors and Debtors in Possession

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