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

DIEMER & WEI, LLP

Kathryn S. Diemer (#133977)

100 West San Fernando Street, Suite 555

San Jose, CA 95113

Telephone: 408-971-6270 

Facsimile: 408-971-6271

Email: kdiemer@diemerwei.com 

WILLKIE FARR & GALLAGHER LLP

Matthew A. Feldman (pro hac vice)

Joseph G. Minias (pro hac vice)

Benjamin P. McCallen (pro hac vice)

Daniel I. Forman (pro hac vice)

787 Seventh Avenue

New York, NY 10019-6099

Telephone: (212) 728-8000

Facsimile: (212) 728-8111

Email: mfeldman@willkie.com

jminias@willkie.com

dforman@willkie.com

Counsel for Ad Hoc Group of Subrogation Claim Holders

UNITED STATES BANKRUPTCY COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO DIVISION

In re:

PG&E CORPORATION,

-andPACIFIC 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)

Ch. 11 Bankr. Case No. 19-30088 (DM) (Jointly Admin.)

DECLARATION OF BENJAMIN P. MCCALLEN IN 

SUPPORT OF THE AD HOC GROUP OF 

SUBORGATION CLAIM HOLDERS’ REPLY IN 

SUPPORT OF 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 TO 

ENTER INTO RESTRUCTURING SUPPORT 

AGREEMENT WITH THE CONSENTING 

SUBROGATION CLAIMHOLDERS, (II) 

APPROVING THE TERMS OF SETTLEMENT 

WITH SUCH CONSENTING SUBROGATION 

CLAIMHOLDERS, INCLUDING THE ALLOWED 

SUBROGATION CLAIM AMOUNT, AND (III) 

GRANTING RELATED RELIEF

Date: October 23, 2019 

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

Place: United States Bankruptcy Court

 Courtroom 17, 16th Floor

 San Francisco, CA 94102

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 1

of 30
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

2

I, Benjamin P. McCallen, declare as follows:

1. I am a member of the Firm of Willkie Farr & Gallagher LLP, counsel to the Ad Hoc 

Group of Subrogation Claim Holders (the “Ad Hoc Subrogation Group”). I submit this 

Declaration in Support of the Ad Hoc Subrogation Group’s Reply in Support of Debtor’s Motion 

Pursuant to 11 U.S.C. §§ 363(b) and 105(a) and Fed. R. Bankr. P. 6004 and 9019. 

2. Attached hereto as Exhibit 1 is a true and correct copy of excerpts of the Transcript of 

Proceedings, In re PG&E Corp. and Pac. Gas and Elec. Co., No. 19-30088 (Sept. 24, 2019).

3. Attached hereto as Exhibit 2 is a true and correct copy of excerpts of the Transcript of 

Proceedings, In re PG&E Corp. and Pac. Gas and Elec. Co., No. 19-30088 (October 7, 2019). 

4. Attached hereto as Exhibit 3 is a true and correct copy of excerpts of the 30(b)(6) 

Deposition of Homer Parkhill, In re PG&E Corp. and Pac. Gas and Elec. Co., No. 19-30088 (Oct. 

10, 2019). 

5. Attached hereto as Exhibit 4 is a true and correct copy of a letter from Matthew 

Feldman, counsel to the Ad Hoc Subrogation Group, to the 9019 Motion Objectors (Oct. 21, 2019).

I declare under penalty of perjury of the laws of the United States that the foregoing is true 

and correct and that I would be competent to testify thereto if called upon to do so.

Executed on the 21st day of October, 2019 at New York, New York.

/s/ Benjamin P. McCallen ___________

Benjamin P. McCallen

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 2

of 30
Exhibit 1

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 3

of 30
1 

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

UNITED STATES BANKRUPTCY COURT 

NORTHERN DISTRICT OF CALIFORNIA 

-oOoIn Re: 

PG&E CORPORATION AND PACIFIC 

GAS AND ELECTRIC COMPANY 

 Debtors. 

_____________________________

) 

)

)

)

)

)

)

Case No. 19-30088 

Chapter 11

San Francisco, California

Tuesday, September 24, 2019

9:30 AM

STATUS CONFERENCE RE: 

DEBTOR'S PLAN

FIFTH OMNIBUS MOTION OF THE 

DEBTORS PURSUANT TO 11 U.S.C. 

SECTION 365(A), FED. R. 

BANKR. P. 6006, AND B.L.R. 

6006-1 FOR AN ORDER APPROVING 

ASSUMPTION OF CERTAIN REAL 

PROPERTY LEASES ("LEASE 

ASSUMPTION MOTION") [3726]

TRANSCRIPT OF PROCEEDINGS 

BEFORE THE HONORABLE DENNIS MONTALI 

UNITED STATES BANKRUPTCY JUDGE 

APPEARANCES: 

For the Debtors: STEPHEN KAROTKIN, ESQ. 

JESSICA LIOU, ESQ. 

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, NY 10153

(212)310-8000 

For Official Committee of 

Unsecured Creditors:

DENNIS F. DUNNE, ESQ. 

Milbank LLP

55 Hudson Yards

New York, NY 10001

(212)530-5000 

For Official Committee of 

Tort Claimants: 

CECILY A. DUMAS, ESQ. 

Baker & Hostetler LLP

11601 Wilshire Boulevard

Suite 1400

Los Angeles, CA 90025

(310)820-8800 

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 4

of 30
91 

PG&E Corp., Pacific Gas and Electric Co. 

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

things, just to do exactly what I don't want to do, is get into 

the merits. I found it strange to read the TCCs papers to have 

them citing a case that is so pivotal that went the wrong way. 

Normally, I was told, don't cite a case that went the wrong way 

if you think it's making your point. And I don't, so -- but 

Mr. Feldman, help me. Should I have Mr. Karotkin coordinate 

with the other parties -- 

MR. FELDMAN: Well, here -- 

THE COURT: -- to tee up the legal issues, or not? 

MR. FELDMAN: Well, here is what I was going to say, 

Your Honor. I think this legal issue is teed up, and I think 

it's teed up in connection with the soon-to-be-filed motion to 

approve our settlement. So I think the Court is going to have 

to deal with this issue in connection with that motion. 

But what I would also say, which I did not intend to say as I 

was sitting in the courtroom today, until Mr. Qureshi got up, 

is that, frankly, Your Honor, I'm not sure how you can rule on 

the exclusivity motion without having resolved this issue 

because it's fundamental to their plan that they be able to 

subordinate the subrogation claims. 

THE COURT: Well -- 

MR. FELDMAN: And Mr. Qureshi suggested, through 

announcing settlement proposals, that maybe it's not 

fundamental, but I'm not going to go down that road. I'm going 

to -- I'm going to -- I'm going to comment only on what's in 

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 5

of 30
92 

PG&E Corp., Pacific Gas and Electric Co. 

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

the record today, which is a plan that seeks to subordinate us. 

Which if it's dead in the water -- 

THE COURT: Well, but -- 

MR. FELDMAN: -- before we start -- 

THE COURT: But that's -- 

MR. FELDMAN: -- why are you terminating exclusivity 

for? 

THE COURT: Well, that's my point. If it's dead in 

the water as a matter of law, I wouldn't terminate, so -- 

MR. FELDMAN: Correct, Your Honor. 

THE COURT: I -- 

MR. FELDMAN: Well, then we have to tee it up between 

now and whatever date Your Honor decides we ought to hear 

exclusivity. But I think it's more appropriately teed up in 

connection with the company's 9019 motion related to our 

settlement, which I expect -- 

THE COURT: What -- 

MR. FELDMAN: -- will be filed today. 

THE COURT: Well, when do you -- well, so I had talked 

to Mr. Karotkin before about -- 

MR. FELDMAN: I believe he told you it was going to be 

teed up for the 23rd. 

THE COURT: The 23rd. So I mean, this is not going to 

sit well with your opponents, here, but -- 

MR. FELDMAN: But I think they've given -- 

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 6

of 30
93 

PG&E Corp., Pacific Gas and Electric Co. 

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

THE COURT: -- should I -- 

MR. FELDMAN: -- you this, Your Honor. I wasn't 

planning to stand up and say this, but I don't see how it could 

be done otherwise. 

THE COURT: Well, I didn't -- I didn't think about a 

separate 9019 motion until I read a little bit more on the 

documents that were filed yesterday. So I read -- I know 

that -- I knew that there was this eleven-billion-dollar 

settlement and wasn't surprised to see it make it to the 

revised plan. But what struck me as different was to hear it 

is also coming as a 9019 motion. It didn't -- I don't get 

worried about it, I don't think it's the wrong thing to do, 

it's just something I didn't anticipate because I thought it 

would be a plan issue. 

So but your point is a good point. If it's relevant 

to exclusivity, then the question is, should I tier exclusivity 

and the 9019 motion all together, and you're making a good 

argument that maybe I should do that, which is not what the 

exclusivity -- opponents of exclusivity want to hear. But it 

would be unfortunate to have everybody rush discovery, rush 

briefing, rush an argument, only to have me come out here on 

the 7th and say, continue to -- 

MR. FELDMAN: Can't decide it, right. 

THE COURT: Can't decide it. 

MR. FELDMAN: Right. 

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 7

of 30
111 

PG&E Corp., Pacific Gas and Electric Co. 

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

(Recess from 11:27 a.m., until 11:43 a.m.) 

THE CLERK: All rise. 

THE COURT: Okay, please remain seated. You're all 

standing up anyway. 

So I took a minute before -- a little longer than I 

expected, because we were checking our calendars. And I 

checked with my staff, and I'm sorry about that mix-up on the 

holiday -- the Jewish holiday. We cleared dates -- all the 

PG&E dates in advance, and so maybe that slipped through. But 

again, after we hear from the other counsel, I'll figure out 

what to do about rescheduling what we need to reschedule, so, 

let's go -- 

MR. STAMER: Good afternoon, Your Honor. For the 

record, Mike Stamer from Akin Gump, on behalf of the ad hoc 

noteholder group. 

Your Honor, I am not going to be responding to Mr. 

Bennett's comments, including his comments about the 

credibility of the tort victims' lawyers. I assume there'll be 

a few people in the courtroom that will be responding to that. 

THE COURT: Well, I'm not going to take any action on 

that anyway, but -- 

MR. STAMER: Understood. Your Honor, what I'm 

standing up to do, hopefully, is take a legal issue -- a legal 

issue off your plate. 

Mr. Feldman, in his presentation, talked about the 

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 8

of 30
112 

PG&E Corp., Pacific Gas and Electric Co. 

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

issue associated with subordination between the tort claims and 

the subrogation claimants. I can announce to the Court, and 

I've conferred with counsel for the TCC, that we anticipate, in 

advance of the hearing on the 7th that we will be modifying our 

term sheet, that we will be increasing the twenty-four number 

to a larger number, and we will be providing the full eleven 

billion dollars to the subrogation claimants, the same amount 

that is being offered or settled by the company. 

We believe that this renders the subordination issue 

academic. 

THE COURT: Well, are they pari passu or similar? I 

mean, are they going to be treated equally? 

MR. STAMER: They'll be treated such that eleven 

billion dollars will be carved out for the benefit of the 

subrogation claimants. 

THE COURT: But pro rata or pari passu or some other 

legal term that doesn't -- 

MR. STAMER: We can use whatever Latin you need to, 

Judge. That -- 

THE COURT: Any language will do. 

MR. STAMER: -- but the bottom line is that they have 

asked for and negotiated with the company for an elevenbillion-dollar pool of capital: cash, potentially some other 

noncash items. 

As Mr. Qureshi said before, we actually offered that 

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 9

of 30
113 

PG&E Corp., Pacific Gas and Electric Co. 

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

to the subrogation claimants over the weekend. And Your Honor, 

we will put that offer in a modified term sheet -- 

THE COURT: But listen -- 

MR. STAMER: Yes, sure. 

THE COURT: -- my question is -- because I'll have to 

look at this document. And will it tell the eleven-billiondollar class members that they are going to be paid in the same 

priority which the tort victims will be paid? 

MR. STAMER: Your Honor, the answer is yes. 

THE COURT: Okay. 

MR. STAMER: I believe the way it will work is there 

will be segregated pools of capital. 

THE COURT: That's fine. 

MR. STAMER: And therefore they will be treated the 

same as the other tort victims. 

Your Honor, as I think you heard from Mr. Qureshi, 

what we have done is we have agreed with the TCC to a pool of 

capital that will be available to settle all of the tort 

claims. 

THE COURT: So -- 

MR. STAMER: And that number is twenty-four billion 

dollars. 

THE COURT: But it's going up. 

MR. STAMER: And I'm happy to stand up and say, Your 

Honor, it's going up. Competition is a good thing. 

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 10

of 30
114 

PG&E Corp., Pacific Gas and Electric Co. 

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

THE COURT: Okay, but my point is, I don't care 

whether it's going up or not, you've made it clear to me -- I 

take it you believe, Mr. Stamer, that if we're having this 

exclusivity hearing on the 7th or some other day, I won't be 

told that the plan is dead as a matter of law because of an 

improper or impermissible subordination -- 

MR. STAMER: That is correct, Your Honor. 

THE COURT: -- of a class? 

MR. STAMER: That is -- 

THE COURT: Okay. 

MR. STAMER: -- it took me a little while to get 

there, but that's exactly why I'm standing up, Your Honor. 

THE COURT: Well, you -- 

MR. STAMER: We are taking that legal issue off of 

your plate. We anticipate the subrogation claimants -- it's 

the eleven billion dollars they're focused on, not focused on 

whose money that is. So we anticipate this will completely 

remove that issue from contention, and therefore, we should be 

clear to go forward on the 7th. 

THE COURT: It won't get rid of the make-whole 

argument, if that's a part -- a separate issue. 

MR. STAMER: The made-whole argument -- you're talking 

about the argument that is assertible by the tort claimants -- 

THE COURT: I -- 

MR. STAMER: -- to be made whole -- 

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 11

of 30
115 

PG&E Corp., Pacific Gas and Electric Co. 

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

THE COURT: Yes. 

MR. STAMER: -- for amounts not covered by insurance? 

Correct, Your Honor. 

THE COURT: Yeah. 

MR. STAMER: This does not address that issue. 

THE COURT: It's a different issue. 

MR. STAMER: That is an issue that will likely come up 

in connection with the motion to approve the settlement with 

the subros; and leading that charge, I anticipate, will be the 

tort claimants committee and individual tort claimants. 

THE COURT: Okay. And the proposal that you're now 

talking about is not -- you're not going to make a separate 

9019-type motion, or you are? 

MR. STAMER: Your Honor, the -- and maybe I can 

clarify the comments that Mr. Qureshi made before about the 

settlement and the question that you asked. 

As Your Honor knows, you can settle claims in 

connection with a plan of reorganization -- 

THE COURT: Yes, of course. 

MR. STAMER: -- under 9019. As a plan proponent, if 

we're fortunate enough to be given the right to file a plan, we 

will be proposing to settle all of the tort claims, subros and 

the like, for an aggregate amount of twenty-four billion plus 

whatever we put in the next round. 

THE COURT: But that's -- I mean, that's the nature of 

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 12

of 30
Exhibit 2

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 13

of 30
1 

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

UNITED STATES BANKRUPTCY COURT 

NORTHERN DISTRICT OF CALIFORNIA 

-oOoIn Re: 

PG&E CORPORATION AND PACIFIC 

GAS AND ELECTRIC COMPANY 

 Debtors. 

_____________________________

) 

)

)

)

)

)

Case No. 19-30088 

Chapter 11

San Francisco, California

Monday, October 7, 2019 

10:00 AM

JOINT MOTION OF THE OFFICIAL 

COMMITTEE OF TORT CLAIMANTS 

AND AD HOC COMMITTEE OF 

SENIOR UNSECURED NOTEHOLDERS 

TO TERMINATE THE DEBTORS' 

EXCLUSIVE PERIODS PURSUANT TO 

SECTION 1121(D)(1) OF THE 

BANKRUPTCY CODE [3940]

MOTION TO APPROVE FEE 

PROCEDURES FILED BY BRUCE 

MARKELL [3950] 

TRANSCRIPT OF PROCEEDINGS 

BEFORE THE HONORABLE DENNIS MONTALI 

UNITED STATES BANKRUPTCY JUDGE 

APPEARANCES: 

For the Debtors: PAUL H. ZUMBRO, ESQ. 

KEVIN J. ORSINI, ESQ.

Cravath, Swaine & Moore LLP

825 Eighth Avenue 

New York, NY 10019

(212)474-1000 

For the Debtors: STEPHEN KAROTKIN, ESQ. 

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, NY 10153

(212)310-8000 

For Bruce A. Markell: SCOTT H. MCNUTT, ESQ. 

McNutt Law Group LLP

219 9th Street

San Francisco, CA 94103 

(415)995-8475 

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 14

of 30
61 

PG&E Corp., Pacific Gas and Electric Co. 

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

MR. QURESHI: Sure. 

THE COURT: -- exceeds your figure, right? 

MR. QURESHI: Not exceeds, Your Honor. If estimation 

plus TUBS plus the government claims -- 

THE COURT: I'm backing your eleven billion for the 

(indiscernible) and just focusing on the fire victims. So 

that's fourteen and a half billion, right? Right? 

MR. QURESHI: So you -- 

THE COURT: Right? 

MR. QURESHI: Correct, so -- 

THE COURT: So if the estimation is sixteen billion 

for fire damage, what does that do to your plan? 

MR. QURESHI: Our plan in that circumstance is not 

dead, Your Honor, because we have an agreement, a settlement, 

with the TCC for an aggregate cap of 25.5. So let's talk about 

a world where ours is the only plan -- not suggesting that 

that's the case, but just to test the -- 

THE COURT: Well, you'd like there to be, but at the 

moment, that isn't the case. 

MR. QURESHI: And we're not suggesting today, Your 

Honor, that the debtor shouldn't be permitted to proceed with 

their plan. But just to illustrate this point. So our plan, 

we do not believe requires estimation. 

THE COURT: No, I know that. I know that. 

MR. QURESHI: Right? 

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 15

of 30
62 

PG&E Corp., Pacific Gas and Electric Co. 

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

THE COURT: But that's not, but that -- 

MR. QURESHI: Right. 

THE COURT: -- but until your plan is in and their 

plan is withdrawn, there's got to be an estimation if we want a 

compromise, right? 

MR. QURESHI: We agree. 

THE COURT: So you still haven't explained -- 

MR. QURESHI: We -- we -- 

THE COURT: I'll shut up and let you tell me, but 

explain to me -- 

MR. QURESHI: Sure. 

THE COURT: -- what happens if the estimation exceeds 

14.5 for the victims. 

MR. QURESHI: Our plan is still confirmable in that 

eventuality. Again, we have an agreement with the TCCs to have 

the aggregate liabilities to be 25.5 billion dollars, 

irrespective of what might happen in estimation. So we would 

then proceed to confirmation with our plan -- 

THE COURT: But -- but why -- but suppose -- wait a 

minute. If the estimation comes in more than the twenty-five 

and a half -- and again, it's easier for me to focus on the -- 

MR. QURESHI: Sure. 

THE COURT: -- take the subrogation out. So if -- if 

magically I could tell Judge Donato plus TUBS jury says 18 

billion, how -- what -- well, your 14.5 is off the table. Who 

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 16

of 30
63 

PG&E Corp., Pacific Gas and Electric Co. 

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

would ever vote for it? 

MR. QURESHI: Well, Your Honor, the point is in that 

circumstance, unlike the equity holders, if it comes in above 

that number, we will have the ability, if it is necessary, to 

increase the recoveries in our plan. So the point -- 

THE COURT: And wouldn't PG&E have the similar ability 

to do it? 

MR. QURESHI: Theoretically, Your Honor, that is 

right. But the point with the equity plan is they're not going 

to have an economic incentive to do that. 

THE COURT: Why would your plans have an economic 

incentive? 

MR. QURESHI: Because -- 

THE COURT: Well, it's the same numbers, right? The 

same residual value. 

MR. QURESHI: No, Your Honor. 

THE COURT: No? 

MR. QURESHI: Because of the absolute priority rule. 

Equity comes last. So the first thing that happens when claims 

start coming in about -- remember, in their plan, they are 

giving existing equity a seven-billion-dollar recovery. So 

when claims -- and that's premised upon an 18.9-billion-dollar 

cap on wildfire liabilities. 

THE COURT: Yes, I understand. 

MR. QURESHI: So if those liabilities come in above 

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 17

of 30
66 

PG&E Corp., Pacific Gas and Electric Co. 

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

THE COURT: Okay, but I'm going to -- I -- I -- 

MR. QURESHI: Sure. 

THE COURT: I gave you time and then I'm taking it 

away. What happens if the estimation comes in below your 

figure? 

MR. QURESHI: The T -- 

THE COURT: Is your plan confirmable? 

MR. QURESHI: Yes. 

THE COURT: Well, why? Doesn't it -- 

MR. QURESHI: Because -- 

THE COURT: -- violate the absolute priority rule by 

overpaying the victims? In other words, again, I want to put 

the subrogation to the side, because that -- unless I'm missing 

something, that's a constant in both plans. So -- 

MR. QURESHI: It -- 

THE COURT: -- to me -- to me, your plan pays the 

victims fourteen and half billion, the PG&E plan that your 

challenging today offers them eight billion or 8.4 billion. So 

there's about a six-billion-dollar delta. But if the 

combination of district court estimation plus TUB fire jury 

comes up lower than your figure, it seems to me that's good for 

the victims, but it makes for an uncomfortable plan because 

they're over -- just as -- as the stockholders have argued, it 

overpays the claim -- the class. 

MR. QURESHI: Let me try to be clear, Your Honor. 

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 18

of 30
71 

PG&E Corp., Pacific Gas and Electric Co. 

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

MR. QURESHI: -- rather than a backup plan. 

THE COURT: Well, the terms in the briefing, it was 

argued that it was kind of -- 

MR. QURESHI: Right. 

THE COURT: -- when -- we need our plan because the 

other one is going to fail. 

MR. QURESHI: And that absolutely is how we view it. 

Again, Your Honor, if the world comes to pass the way the 

equity holders hope that it will, which is underneath that 

18.9-billion-dollar number, then as drafted, our plan would not 

work and we concede that. What we are saying is, because there 

is a tremendous risk that estimation and TUBS and the 

government claims are going to come in well above that -- 

THE COURT: Right. 

MR. QURESHI: -- it is just not a sensible risk for 

this estate to take, to find ourselves, at the conclusion of 

that process, in a place where the financing isn't there to 

satisfy those claims. 

THE COURT: Okay. So -- 

MR. QURESHI: And the only -- 

THE COURT: So that's -- so that's the change that 

you've said. You -- that -- then when I ask for the change, 

your saying they haven't -- they haven't got a financeable plan 

at this point if the numbers come in higher. 

MR. QURESHI: That's one of the changes. Absolutely 

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 19

of 30
72 

PG&E Corp., Pacific Gas and Electric Co. 

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

right. 

Another change, Your Honor, is that every creditor 

constituency in the case that has taken a position on whether 

to terminate exclusivity, with one exception in the subrogation 

holders that I will come to, is in favor of terminating 

exclusivity. The TCC, obviously the fiduciaries for what Your 

Honor has referred to as the involuntary Creditors here -- and 

you're going to here from Ms. Dumas -- the Official Creditor's 

Committee, another estate fiduciary, is in favor of terminating 

exclusivity, the debtor's largest union. The IBEW is in favor. 

THE COURT: No, I know the list. I've got the list. 

MR. QURESHI: Right. And so -- and the subrogation 

holders, Your Honor, the only reason they're objecting, under 

either plan they get an eleven-billion-dollar-allowed claim. 

They don't like the form of consideration in our plan, but they 

also signed an RSA in which the debtors preclude them from 

negotiating with us. When those shackles are lifted, Your 

Honor, we're confident that we can reach an agreement on the 

form of consideration with the subrogation holders. 

And so -- and the public entities, by the way, that 

have the one-billion-dollar settlement with the debtors, that's 

adopted in our plan as well. 

THE COURT: No, I'm aware of that. 

MR. QURESHI: Okay. Right. So the way that all 

shakes out, Your Honor, is you have the equity owners, who 

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 20

of 30
91 

PG&E Corp., Pacific Gas and Electric Co. 

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

MR. MARSHACK: Good morning, Your Honor. Your Honor, 

just a suggestion -- if we're running out of time, and as you 

and I have both agreed upon in the past, Judge Donato's pretty 

quick, if you would like to bring us all back this afternoon? 

THE COURT: No. 

MR. MARSHACK: Okay. 

THE COURT: I don't. 

MR. MARSHACK: We'll make it happen. PG&E says in 

their pleadings that they are ready, willing, and able to 

fairly and fully compensate wildfire victims for their losses. 

They say the amount is 8.4 billion dollars and -- but they are 

capping it at 8.4 billion. They will pay us in full, but they 

will give us a cap. 

THE COURT: Well, that's the plan that's on the table. 

MR. MARSHACK: That's the plan. But their words -- 

THE COURT: But Mr. Marshack, if Judge Donato hits 

them with a larger number, they have two choices, right: fold 

their tent or put the -- plug in the number. And from what Ms. 

Dumas says, the top of that number is thirteen and a half. 

MR. MARSHACK: You say that, but the TCC's numbers and 

their financial advisors say they don't have any, to quote Ms. 

Dumas, gas in the tank. 

THE COURT: Okay. 

MR. MARSHACK: That's one. And two, if they had more 

money, why aren't they putting it up? A lot of this, Your 

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 21

of 30
92 

PG&E Corp., Pacific Gas and Electric Co. 

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

Honor, is just pure credibility. Hate to be the one that 

really brings this to light, but once upon a time, they said 

that subro was only owed 8.5 billion dollars, but now they say 

it's 11 billion. 

THE COURT: But what did subro say they were owed, 

once upon a time, twenty billion, right? 

MR. MARSHACK: Right. 

THE COURT: Well, wasn't there a compromise from both 

sides? Both sides, both camps here compromised, essentially, 

the subro figure. 

MR. MARSHACK: Correct. 

THE COURT: That's a constant; that's for both plans. 

MR. MARSHACK: Correct. But did the debtor give up 

all the last -- did they give up the last money they had? To 

make the subro agreement, to get them to vote for their plan, 

did they give up a last money they had to do so? 

And my point is this, Your Honor: They say, once upon 

a time, that we were only owed 8.43 billion dollars, and that's 

what they say today. We are going to be owed more money. 

THE COURT: Mr. Marshack, you might recall Mr. Orsini 

has said more than once that they haven't even, in some 

respects, haven't even admitted to that, because there had been 

no determination. But they obviously can't back out of a plan 

they've proposed, and the briefing that cites them in their 

public filings, they say what they say, but -- 

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 22

of 30
123 

PG&E Corp., Pacific Gas and Electric Co. 

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

what is the distributable value available. 

THE COURT: Right. 

MR. KAROTKIN: What is it? Not, are the claims worth 

this? Should they be paid this? Should seven billion dollars 

of equity value be taken away from the shareholders of this 

corporate? 

THE COURT: But you also heard Ms. Dumas concede that, 

if the estimation by the District Court and/or Tubbs fire comes 

in higher, they're not going to try to get the higher number. 

So I mean, do you believe that? 

MR. KAROTKIN: Do I believe it? 

THE COURT: Well, do you believe that they're locked 

in? In other words -- 

MR. KAROTKIN: I don't know, Your Honor. Every day we 

get a new plan with different provisions from them. 

THE COURT: Well, okay. But let's stick with the plan 

that they want to file. If Judge Donato makes a determination 

after the estimation trial and fixes a number that's higher 

than -- again, I'm going to back out the subro -- 

MR. KAROTKIN: Um-hum. 

THE COURT: -- because that's a constant -- higher 

than thirteen and a half billion, I heard Ms. Dumas say the TCC 

will not try to get a higher number. 

MR. KAROTKIN: And is Ms. Dumas, as you said, voting 

on this plan? 

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 23

of 30
Exhibit 3

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 24

of 30
ROUGH FINAL

1 UNITED STATES BANKRUPTCY COURT

2 NORTHERN DISTRICT OF CALIFORNIA

3 SAN FRANCISCO DIVISION

4

5 _________________________________

 )

6 In re: )

 )

7 PG&E CORPORATION, )

 )

8 and ) No. 19-30088 (DM)

 )

9 PACIFIC GAS AND ELECTRIC COMPANY,) Chapter 11

 )

10 Debtors. )

 )

11 _________________________________)

12

13

14 VIDEOTAPED 30(b)(6) DEPOSITION OF HOMER PARKHILL

15 San Francisco, California

16 Thursday, October 10, 2019

17 Volume I

18

19

20

21

22 Reported by:

23 CATHERINE A. RYAN, RMR, CRR

24 CSR No. 8239

25 Job No. 3565635

Page 1

Veritext Legal Solutions

866 299-5127

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 25

of 30
ROUGH FINAL

Page 106

1 A Yeah, would you rephrase the question?

10:55:05

2 Q Let me rephrase it.

3 Other than representing the ad hoc

4 subrogation group and its members in trying to reach

5 a settlement, did these ad hoc professionals file

10:55:11

6 any lawsuits against the debtor, pro- -- line up

7 beside the fire victims in any lawsuits to support

8 the claims against the debtor, or anything else that

9 would have created the atmosphere in which the

10 debtor was agreeing to reach a settlement on these

10:55:28

11 claims?

12 MR. McCALLEN: I'll object to form.

13 THE WITNESS: Well, in the context of

14 negotiating the settlement, there were a number of

15 things the ad hoc group of professionals were

10:55:40

16 focused on, including the formulation and

17 advancement of an alternative plan term sheet, which

18 was filed with the court. There has been multiple

19 meetings and outreach to your clients at the TCC in

20 conjunction with trying to devise a comprehensive

10:56:00

21 settlement for fire victims that happened early on

22 to advocate for the fire victims broadly.

23 So I'd put that in the context of the

24 overall landscape in creating momentum towards and

25 pressure towards a settlement.

10:56:22

Page 107

1 BY MR. RICHARDSON:

10:56:23

2 Q Other than trying to negotiate and obtain

3 a percentage of recovery for their clients, did

4 these ad hoc professionals file any litigation

5 against the debtors or participate in litigation

10:56:33

6 against the debtors?

7 A Would you consider filing an alternative

8 plan and seeking to terminate exclusivity litigation

9 against the debtors?

10 Q If that's all you can identify, that --

10:56:49

11 that could be your answers.

12 A And asides from appearing in court -- in

13 court and objecting to certain other matters

14 throughout these cases that relate to estimation,

15 that relate to claims, there's been a whole series

10:57:04

16 of things, I think that you're aware of, that we've

17 stood side by side with you on relating to all of

18 these matters, so I'm not sure what your definition

19 is of "litigation" vis-a-vis the debtors, but the

20 record's very clear around the activities of the

10:57:17

21 ad hoc group.

22 Q Turning -- at the bottom of the page, do

23 you see, in subparagraph F, where it provides that:

24 In accordance with the provisions of the RSA, the

25 Confirmation Order shall contain the following

10:57:39

Page 108

1 findings and order, and then, in subparagraph 2

10:57:42

2 below, the requirement that any holder of an other

3 wildfire claim shall, quote, contain as a --

4 sorry -- that any settlement with a holder of a

5 wildfire claim shall contain as a condition of

10:58:00

6 payment or other distribution that the holder or

7 holders of such claim contem- -- contemporaneously

8 execute and deliver a release and waiver of any and

9 all claims to the fullest extent permitted by law,

10 and it continues on from there on the following

10:58:14

11 page.

12 Do you see that section?

13 A I do.

14 Q Do you see the specific inclusion of

15 present and former holders of subrogation wildfire

10:58:26

16 claims?

17 A I do.

18 Q Was this release intended to cover

19 made-whole claims the fire victims might pursue?

20 A It was intended to, again, memorialize the

10:58:40

21 concept of this plan, which is that all wildfire

22 victims were being paid in full, which is a

23 requirement of AB 1054 to -- to take advantage of

24 AB 1054; that all wildfire claims have to be paid in

25 full, so yes.

10:59:00

Page 109

1 Q Did you have an understanding, based on

10:59:05

2 any evidence at the time this agreement was signed,

3 that the debtor was going to be paying all fire

4 victims' claims in full?

5 A Our understanding was that if the

10:59:16

6 settlement didn't represent a solvent debtor and

7 didn't comply with 1054, this plan wouldn't be

8 operable, which is why we have termination

9 provisions specifically related to those two points.

10 Q Was that an important term for you in this

10:59:34

11 settlement?

12 A Yes.

13 Q The requirement?

14 A Yes.

15 Q Did it comply with 1054?

10:59:39

16 A Of course.

17 Q Do you know why, then, the subrogation

18 group didn't conduct its own analysis to determine

19 if it would actually be possible for the debtors to

20 pay all other wildfire claims under this plan?

10:59:49

21 A One of the reasons is we don't have the

22 information the debtor has relating to the scope and

23 the landscape of these claims.

24 Q Was it discussed with the debtors that

25 entering into this settlement might force wildfire

11:00:05

28 (Pages 106 - 109)

Veritext Legal Solutions

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 26 866 299-5127

of 30
Exhibit 4

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 27

of 30
October 21, 2019 

VIA EMAIL 

Robert A. Julian 

Cecily A. Dumas 

Dennis F. Dunne 

Samuel A. Khalil 

Michael S. Stamer 

David H. Botter 

Baker & Hostetler LLP 

1160 Battery Street, Suite 100 

San Francisco, CA 94111 

Milbank LLP 

55 Hudson Yards 

New York, NY 10001 

Akin Gump Strauss Hauer & 

Feld LLP 

One Bryant Park 

New York, NY 10036 

Andrew I. Silfen 

Beth M. Brownstein 

Joseph H. Hunt 

Ruth A. Harvey 

Xavier Becerra 

Margarita Padilla 

Arent Fox LLP 

1301 Avenue of the Americas, 

42nd Floor 

New York, NY 10019 

P.O. Box 875 

Ben Franklin Station 

Washington, DC 20044-0875 

1515 Clay Street, 20th Floor 

P.O. Box 70550 

Oakland, CA 94612-0550 

Rebecca J. Winthrop Timothy S. Laffredi 

Norton Rose Fulbright US LLP 

555 South Flower Street, 41st

Floor 

Los Angeles, CA 90071 

United States Department of 

Justice 

Office of the U.S. Trustee 

450 Golden Gate Avenue, 

Suite 05-0153 

San Francisco, CA 94102 

Re: In re PG&E Corp. and Pacific Gas and Electric Company, Case No. 19-30088 (DM) 

Dear Counsel: 

We have reviewed your objections to the pending motion to approve the settlement of 

subrogation claims and associated restructuring support agreement between the PG&E 

Corporation and Pacific Gas and Electric Company (the “Debtors”) and the holders of 

subrogation claims (the “RSA”). In an effort to limit the issues in dispute ahead of this week’s 

hearing, the Ad Hoc Subrogation Group makes the following representations, which we 

understand to be consistent with the Debtors’ understanding of the RSA. With the following 

clarifications, we hope to address many of the concerns raised in your objections, and therefore 

significantly narrow the issues that need to argued before the Court: 

1. Plan Negotiations/Global Settlement: Consistent with Judge Montali’s stated desire to 

“facilitate negotiations for a global resolution and narrow the issues which are in 

787 Seventh Avenue

New York, NY 10019-6099 

Tel: 212 728 8000 

Fax: 212 728 8111 

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 28

of 30
NEW YORK WASHINGTON HOUSTON PALO ALTO PARIS LONDON FRANKFURT BRUSSELS MILAN ROME 

legitimate dispute,”1 nothing in the RSA precludes the Debtors and the Ad Hoc 

Subrogation Group from negotiating together with any other creditor constituencies or 

participating in mediation to achieve global consensus. In fact, the settlement of 

subrogation claims for $11 billion resolves one of the few remaining major open issues, 

and brings the cases one step closer to resolution.

2. Consequences of Insolvency: It was never the parties’ intention to require the Debtors to 

file a plan that would pay subrogation claimants $11 billion in cash on $11 billion of 

allowed claims if the Debtors are insolvent. Therefore, we are willing to clarify in an 

amendment to the RSA or the order approving the RSA, that if the Court determines the 

Debtors are insolvent, the Debtors will no longer be required to: 

a. file a plan that pays subrogation claimants $11 billion in cash on $11 billion of 

allowed claims; 

b. require that individual claimants in connection with a voluntary settlement release 

made whole claims per section 3(a)(iii) of the RSA for the portion of their 

allowed claims against the Debtors’ estates that are not fully satisfied under the 

revised plan; or 

c. pursue a plan or confirmation order with the finding set forth in section 3(a)(v)(A) 

of the RSA.2

If the Court determines the Debtors are insolvent and the Debtors file a revised plan that 

does not pay the subrogation claimants $11 billion in cash, the Consenting Creditors 

would be free to vote for or against any such revised plan. For the avoidance of doubt, 

subject to the right to terminate the RSA and seek a higher claim as provided in the RSA, 

the subrogation claims will continue to be allowed in the aggregate amount of $11 

billion. 

3. Releases: Three clarifications with respect to the releases referenced in section 3(a)(iii) 

of the RSA and Section 10.9(b) of the draft plan attached to the RSA: 

 

1

 Order Granting Joint Motion of the Official Committee of Tort Claimants and the Ad Hoc Committee of 

Senior Unsecured Noteholders to Terminate the Debtors’ Exclusive Periods Pursuant ot Section 1121(d)(1) 

of the Bankruptcy Code [Docket No. 4167]. 

2

 Section 3(a)(v)(A) of the RSA provides as follows: 

 Subject to the terms and conditions hereof, for the duration of the Support Period, the Company shall . . . 

(v) propose and pursue the Plan and seek entry of a Confirmation Order that contain (and the Plan and 

Confirmation Order shall contain) the following provisions, findings and orders, as applicable in 

substantially the form set forth below (the “Findings and Orders”): (A) the Bankruptcy Court “has 

determined that the resolution of the insolvency proceeding provides funding or establishes reserves for, 

provides for assumption of, or otherwise provides for satisfying any prepetition wildfire claims asserted 

against the electrical corporation in the insolvency proceeding in the amounts agreed upon in any preinsolvency proceeding settlement agreements or any post-insolvency settlement agreements, authorized by 

the court through an estimation process or otherwise allowed by the court.” 

Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 29

of 30
First. As previously communicated to counsel to the Official Committee of Tort 

Claimants (the "TCC") in person at the October 7 hearing, and in writing by letter 

dated October 8, the releases of subrogation claim holders are intended to 

narrowly address claims related to the bankruptcy and the Debtors' restructuring 

and any made whole claims that may be asserted relating to the 2017 and 2018 

wildfires by individual plaintiffs who elect to settle their claims against the 

Debtors or a post-effective date trust (individually or as a group). There is no 

intention to impose a release of ordinary-course insurance claims by insureds 

arising under their insurance policies. 

Second. The Ad Hoc Subrogation Group would support revising the Debtors' plan 

to require claimants to opt-in to releases, consistent with the Bondholders/TCC's 

plan, at least with respect to any release of subrogation claimants under the plan. 

Third. Per section 3(a)(iii) of the RSA, payments to individual holders of wildfire 

claims that settle their claims against the Debtors or a post-effective date trust 

(individually or as a group) will be conditioned on executing a release of any 

made whole claims against insurers and their assignees. Individual plaintiffs that 

litigate their claims to judgment will have no such requirement. We expect to 

work with the TCC to ensure the form release is drafted to narrowly address only 

its intended purpose. 

4. RSA Amendments: material RSA amendments will be noticed to the Court and parties in

interest with an opportunity to respond, to make sure any material adjustment to the

settlement passes muster under the applicable legal standard.

CC: Stephen Karotkin, Esq. 

Kevin Orsini, Esq. 

Ad Hoc Subrogation Group Steering Committee 

NEWYORK W\SIIINGTON IIOUSTON P\LCL\LTO P\RIS LONDON FR.\NKFURT BRUSSELS ill!L\N R OME Case: 19-30088 Doc# 4348-1 Filed: 10/21/19 Entered: 10/21/19 13:29:21 Page 30

of 30