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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 

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 

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) 

DEBTORS’ OBJECTION TO CLASS 

REPRESENTATIVE’S MOTION TO EXTEND 

APPLICATION OF FEDERAL RULE OF CIVIL 

PROCEDURE 23 TO PROOF OF CLAIM 

[Related to Dkt. No. 5042] 

Date: January 29, 2020 

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

Place: United States Bankruptcy Court 

 Courtroom 17, 16th Floor 

 San Francisco, CA 94102 

 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). 

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TABLE OF CONTENTS 

Page 

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

BACKGROUND .................................................................................................................................... 4

A. The Chapter 11 Cases ..................................................................................................... 4

B. The Putative Class Actions ............................................................................................. 8

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

I. IT IS INAPPROPRIATE TO APPLY BANKRUPTCY RULE 7023 HERE .......................... 10

A. There Is No Pre-Petition Certified Class ...................................................................... 11

B. Putative Class Members Received Adequate Notice of the Bar Date After 

Movant Had the Opportunity to Be Heard on the Bar Date Motion ............................. 13

C. Granting the Motion Would Adversely Affect the Administration of these 

Estates and Class Actions Are Not Superior to the Proof of Claim Process ................ 19

II. MOVANT DOES NOT ADDRESS THE BASIC REQUIREMENTS OF CIVIL RULE 

23............................................................................................................................................... 22

CONCLUSION ..................................................................................................................................... 23

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TABLE OF AUTHORITIES 

 Page(s) 

Cases 

In re Amdura Corp., 

 170 B.R. 445 (D. Colo. 1994) ........................................................................................................ 17

In re Aughney, 

No. 10-12666, 2011 WL 479010 (Bankr. N.D. Cal. Feb. 4, 2011) ................................................ 10 

In re Bally Total Fitness of Greater New York, Inc., 

402 B.R. 616 (Bankr. S.D.N.Y.), aff’d, 411 B.R. 142 (S.D.N.Y. 2009) ................................. passim

In re Blockbuster Inc., 

441 B.R. 239 (Bankr. S.D.N.Y. 2011) .......................................................................... 13, 16, 17, 21 

In re Chaparral Energy, Inc., 

 571 B.R. 642 (Bankr. D. Del. 2017) .............................................................................................. 17 

In re Charter Co., 

 876 F.2d 866 (11th Cir. 1989) ........................................................................................................ 12 

Chemetron Corp. v. Jones, 

 72 F.3d 341 (3d Cir. 1995) ....................................................................................................... 14, 15 

In re Comput. Learning Ctrs., 

344 B.R. 79 (Bankr. E.D. Va. 2006) ............................................................................................... 20 

In re Connaught Grp., Ltd., 

 491 B.R. 88 (Bankr. S.D.N.Y. 2013) .............................................................................................. 13 

In re Craft, 

321 B.R. 180 (Bankr. N.D. Tex. 2005) ........................................................................................... 11 

In re Dewey & LeBoeuf LLP, 

487 B.R. 169 (Bankr. S.D.N.Y. 2013) ............................................................................................ 10 

In re Ephedra Prod. Liab. Litig., 

329 B.R. 1 (S.D.N.Y. 2005) ................................................................................................ 10, 21, 22 

Fogel v. Zell, 

 221 F.3d 955 (7th Cir. 2000) ......................................................................................................... 15 

In re GAC Corp., 

 681 F.2d 1295 (11th Cir. 1982) ..................................................................................................... 16 

Gentry v. Siegel, 

 668 F.3d 83 (4th Cir. 2012) ............................................................................................................ 12 

In re Jamesway Corp., 

No. 95 B 44821 (JLG), 1997 WL 327105 (Bankr. S.D.N.Y. June 12, 1997).......................... passim

In re MF Glob. Inc., 

 512 B.R. 757 (Bankr. S.D.N.Y. 2014) ...................................................................................... 12, 13 

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In re Motors Liquidation Co., 

 447 B.R. 150 (Bankr. S.D.N.Y. 2011) ........................................................................................... 17 

Mullane v. Central Hanover Bank & Trust Co., 

 339 U.S. 306 (1950) ................................................................................................................. 14, 18 

In re Musicland Holding Corp., 

362 B.R. 644 (Bankr. S.D.N.Y. 2007) ..................................................................................... passim

In re Pac. Sunwear of Cal., 

Case No. 16-10882 (LSS), 2016 WL 4250681 (Bankr. D. Del. Aug. 8, 2016) ........................ 10, 11 

In re Placid Oil Co., 

 753 F.3d 151 (5th Cir. 2014) ......................................................................................................... 18 

In re Sacred Heart Hosp. of Norristown, 

177 B.R. 16 (Bankr. E.D. Pa. 1995) ........................................................................................ passim

In re Woodward & Lothrop Holdings, Inc., 

205 B.R. 365 (Bankr. S.D.N.Y. 1997) ............................................................................................ 21 

Statutes 

Bankruptcy Code Chapter 11 ......................................................................................................... passim

Bankruptcy Code Sections 1107(a) and 1108 ......................................................................................... 4 

Other Authorities 

Bankruptcy Rule 7023 ........................................................................................................ 10, 11, 20, 21 

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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”), hereby submit this objection (the “Objection”) to the 

Securities Lead Plaintiff’s Motion to Apply Bankruptcy Rule 7023 to Class Proof of Claim [Dkt. No. 

5042] (the “Motion”). 

In support of the Objection, the Debtors submit (i) the Declaration of Christina Pullo 

(I) Regarding Implementation of the Debtors’ Notice Procedures and (II) in Support of the Debtors’ 

Objection to Securities Lead Plaintiff’s Motion to Apply Bankruptcy Rule 7023 to Proof of Claim (the 

“Pullo Declaration”), (ii) the Declaration of Benjamin P.D. Schrag (I) Regarding Implementation of 

the Debtors’ Notice Procedures and Supplemental Notice Plan and (II) In Support of the Debtors’ 

Objection to Securities Lead Plaintiff’s Motion to Apply Bankruptcy Rule 7023 to Proof of Claim (the 

“Schrag Declaration”), (iii) the Declaration of Jeanne C. Finegan (I) Regarding Implementation of 

the Debtors’ Notice Procedures and Supplemental Notice Plan and (II) In Support of the Debtors’ 

Objection to Securities Lead Plaintiff’s Motion to Apply Bankruptcy Rule 7023 to Proof of Claim (the 

“Finegan Declaration”), and (iv) the Debtors’ Request for Judicial Notice in Support of Debtors’ 

Objection to Class Representative’s Motion to Extend Application of Federal Rule of Civil Procedure 

23 to Proof of Claim (the “Request for Judicial Notice”). 

PRELIMINARY STATEMENT 

In its Motion, Public Employees Retirement Association of New Mexico (the “Movant” or 

“PERA”) seeks permission to file a class proof of claim on behalf of purchasers of the Debtors’ debt 

and equity securities from April 29, 2015 through November 15, 2018 (the “Class Period”) who 

purport to have suffered losses as a result of alleged misstatements and omissions made by the Debtors. 

Although Courts have discretion to extend Rule 23 of the Federal Rules of Civil Procedure (“Civil 

Rule 23”), pursuant to Rule 7023 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy 

Rules”), to allow for the use of class proofs of claim in chapter 11 cases, Courts generally prohibit 

them where, as here, there is no pre-petition certified class and adequate bar date notice procedures 

were approved and implemented after extensive hearings and the opportunity for all interested parties 

to be heard. The reasons to deny the Motion are even stronger where, as here, Movant delayed in filing 

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the Motion until late in these Chapter 11 Cases—waiting nearly 11 months since the Petition Date and 

approximately 50 days after the passage of the Bar Date to bring this Motion. 

The Motion raises the same arguments that the Court recently rejected in the motion brought 

by David Alonzo to treat a proof of claim as a claim on behalf of a putative class of former employees. 

See Tentative Ruling on Class Representative Motion to Extend FRCP 23 (Nov. 14, 2019) (the “Alonzo 

Ruling”). Alonzo argued, as does Movant here, that the Debtors were aware of the existence of the 

putative class at the time of the Bar Date Notice and, therefore, the Debtors had a duty to serve actual 

(as opposed to constructive) notice on each of the absent class members. Consistent with wellestablished precedent, the Court denied Alonzo’s motion: “The persuasive arguments of debtors re 

robust noticing, absence of pre-petition class certification and lateness in motion well-after the bar date 

notice alone justify denial.” Id. 

This Motion should likewise be denied. Importantly, there has been no pre-petition certified 

class. Further, as the Court has recognized, the Debtors provided “robust” notice of the Bar Date. Id. 

The Debtors’ Notice Procedures, including their multifaceted media plan for providing supplemental 

and constructive notice to unknown claimants and other parties in interest, comprised one of the largest 

and most comprehensive notice and media campaigns implemented in chapter 11 history. Over 6.5 

million Bar Date Notices were mailed to potential creditors and parties in interest—including mailing 

over 100,000 Bar Date Notices to holders of the Debtors’ notes and equity. The Debtors provided 

actual notice of the Bar Date to all holders of the Debtors’ securities based on a “Record Date” of July 

1, 2019, which likely included most, if not virtually all, of the record holders of securities Movant 

purports to represent. 

Moreover, this Court held extensive Bar Date notice hearings and ultimately determined that 

the procedures for providing actual and constructive notice were “robust” and constitutionally 

appropriate. Movant, which is on the master service list, received copies of all notices and other 

pleadings since appearing in these cases back in March 2019 [Dkt. No. 1126], and was actively engaged 

in litigation with the Debtors before this Court while the Debtors sought approval of the Bar Date 

notice, had ample opportunity to appear and be heard on the adequacy of the Bar Date and notice but 

did not object or raise any concerns. Nonetheless, Movant now seeks at this late date to make a 

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collateral attack on the adequacy of the Court’s noticing procedures. If Movant truly had concerns 

about the adequacy of the Bar Date Notice, it should have timely raised any concerns prior to approval 

of the Bar Date, and it is now long past the appropriate time for any such objection. 

In any event, the argument that notice to the absent class members here needed to be actual 

rather than constructive is wholly unsupported. Movant concedes that Courts now routinely apply the 

standard in Musicland in determining whether to allow a class proof of claim in chapter 11. Yet, 

Musicland itself recognized that the second factor—whether notice was sufficient—is met by 

constructive notice. See In re Musicland Holding Corp., 362 B.R. 644, 654 (Bankr. S.D.N.Y. 2007) 

(“[I]f the putative unnamed class members have clearly received actual or constructive notice of the 

bankruptcy case and the bar date, denial of the . . . class proof of claim device appears advisable.” 

(quoting In re Sacred Heart Hosp. of Norristown, 177 B.R. 16, 22 (Bankr. E.D. Pa. 1995)). 

In addition, the Motion was not filed until December 9, 2019, long after the Bar Date, and long 

after Alonzo’s motion was filed. See Motion to Allow Claims – to Extend Application of Federal Rule 

of Civil Procedure 23 to Class Proofs of Claim filed by Creditor David Alonzo [Dkt. No. 4370] (filed 

October 21, 2019). Just as with the motion by Alonzo, denial of the Motion also is justified by the 

“lateness” of the filing of the Motion “well after the bar date.” See Alonzo Ruling. 

Allowing Movant to proceed with a class proof of claim at this late stage of the Chapter 11 

Cases may undermine the Debtors’ ability to confirm a chapter 11 plan of reorganization in time to 

meet the June 30, 2020 deadline established under AB 1054. The Debtors are engaged in a highly 

contested competing chapter 11 plan process with significant confirmation-related issues being 

litigated before the Court that will have a material impact on both proposed plans. They are also 

engaged in regulatory proceedings involving numerous stakeholders before the California Public 

Utility Commission regarding their proposed plan. This is in addition to maintaining the Debtors’ 

normal day-to-day operations, managing their vast network of vendors, suppliers, and contract 

counterparties, and focusing on delivering power to their 16 million customers in a safe and reliable 

manner. Allowing this class claim would add further complexity and potential delay. 

The Motion also fails by not even arguing that a class should be certified under Civil Rule 23. 

Establishing that the class meets Civil Rule 23 is a required element of Movant’s Bankruptcy Rule 

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7023 Motion. That Movant has not even attempted to meet that burden is yet another independent 

basis for denying the Motion. Accordingly, the Motion should be denied. 

BACKGROUND 

A. The Chapter 11 Cases 

On January 29, 2019 (the “Petition Date”), the Debtors commenced with the Court voluntary 

cases under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”). The Debtors 

continue to operate their business and manage their properties as debtors in possession pursuant to 

sections 1107(a) and 1108 of the Bankruptcy Code. No chapter 11 trustee or examiner has been 

appointed in either of the Chapter 11 Cases. The Debtors’ Chapter 11 Cases are being jointly 

administered for procedural purposes only pursuant to Bankruptcy Rule 1015(b). 

1. The Bar Date Order 

On May 1, 2019, the Debtors filed their motion [Dkt. No. 1784] (the “Bar Date Motion”) 

requesting entry of an order (i) establishing October 21, 2019 as the last date to file proofs of claim in 

the Chapter 11 Cases (the “Bar Date”), (ii) establishing the form and manner thereof, and 

(iii) approving the Debtors’ plan for providing notice (the “Notice Procedures”) of the Bar Date and 

other important deadlines and information to all creditors and potential creditors, including publication 

and other supplemental noticing procedures (the “Supplemental Notice Plan”).1 See Bar Date Order 

[Dkt. No. 2806] at 2; see also generally Schrag Declaration; Finegan Declaration; Pullo Declaration. 

The Bar Date Motion and Notice Procedures were heavily litigated; this Court heard extensive 

briefing and argument from the various constituencies on, among other things, the length of the 

proposed Bar Date, the various proof of claim and notice forms, and the proposed procedures for 

providing notice of the Bar Date and related procedures to known and unknown claimants. Among 

others, the Tort Claimants Committee (“TCC”), the U.S. Trustee, certain wildfire claimants, certain 

state and public entities, and the Ad Hoc Group of Subrogation Claimholders filed objections, limited 

objections, joinders, or other related pleadings. See Dkt. Nos. 2043, 2238, 2239, 2240, 2242, 2248, 

2256, 2306, 2307, 2308, 2316, 2321, 2324, 2326, 2346, and 2453. As noted above, Movants first 

1

 On November 11, 2019, the Bar Date was extended by the Court for unfiled, non-governmental Fire 

Claimants (as defined in the Bar Date Order) to December 31, 2019 [Dkt. No. 4672]. 

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appeared in these cases on March 29, 2019 [Dkt. No. 1126] and requested notice and service of all 

notices and pleadings filed in the Chapter 11 Cases. As a result, Movants were added to the Master 

Service List and received actual notice of the Bar Date Motion. Despite Movant’s active participation 

in these Chapter 11 Cases, as explained more fully below, Movant did not raise any objections to entry 

of the Bar Date Order or approval of the Debtors’ Notice Procedures. After extensive hearings, 

including the opportunity to object and cross-examine witnesses, the Court approved the Bar Date 

Motion and the Debtors’ Notice Procedures, as modified prior to and at the hearing, by order dated July 

1, 2019 [Dkt. No. 2806] (the “Bar Date Order”). 

2. The Notice Procedures 

At the Debtors’ direction, and consistent with the Bar Date Order, over 6.5 million Bar Date 

Notices were directly mailed to potential claimants and interest holders, which included notice of the 

deadline for filing claims and related procedures as well as an applicable proof of claim form. See 

Schrag Decl. ¶ 7; Certificate of Service of Herb Baer [Dkt. No. 3159]. 

Direct-mail recipients included, among others, the Debtors’ approximately 6.2 million 

customers and 141,000 potential creditors, contract counterparties, and other parties in interest. See 

Schrag Decl. ¶ 7. Included in this group were 111,000 holders of the Debtors’ common equity, 11,300 

noteholders, and 1,352 brokerage nominees, including all record holders of the Debtors’ securities 

based on the Record Date. See id. ¶ 8; Pullo Decl. ¶ 5. 

Service of the Bar Date Notice on holders of the Debtors’ securities followed ordinary and 

customary noticing procedures for the noticing of public securities holders in chapter 11. Pullo Decl. 

¶ 6. The Debtors’ noticing agent, Prime Clerk LLC (“Prime Clerk”), received a listing of all entities 

(“Nominees”) holding the Debtors’ securities on behalf of beneficial owners based on the Record Date. 

Id. ¶¶ 11–12. Prime Clerk then delivered to a mailing agent or to the Nominees the number of paper 

copies of the Bar Date Notice needed to provide notice by mail to beneficial holders. Id. ¶ 13. The 

Nominees or mailing agent, in turn, forwarded the Bar Date Notice to beneficial owners. Id. ¶ 14. 

Prime Clerk also requested that the Bar Date Notice be published on the electronic notification system 

of the Depository Trust Company. Id. ¶ 16. 

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The Bar Date Notice was also served directly on all registered holders of the Debtors’ securities. 

Id. ¶¶ 8–10. Although not expressly required under the terms of the Bar Date Order, the Debtors took 

the additional step of serving registered holders of PG&E Corp. common equity to ensure that all parties 

received notice and the opportunity to file claims. Affidavits certifying direct service in accordance 

with the Bar Date Order, the Bankruptcy Code, and otherwise applicable law, and the method of such 

service, of a Claims Package that included: (i) the Standard Bar Date Notice, and (ii) the Standard 

Proof of Claim Form, were filed by Prime Clerk on July 23, 2019 [Dkt. No. 3159], July 30, 2019 [Dkt. 

No. 3262], and August 8, 2019 [Dkt. No. 3474]. Prime Clerk directly served the Claims Package upon 

Movant’s counsel. See Certificate of Service of Herb Baer [Dkt. No. 3159], Ex. A at 7, 13; Ex. D at 

706; Ex. Q at 8. 

Given the nature of these Chapter 11 Cases, in addition to actual notice, the Debtors also 

implemented their Supplemental Notice Plan to provide extensive and robust constructive notice to 

known and unknown claimants and interest holders using both traditional and non-traditional means. 

See generally Finegan Decl. The Supplemental Notice Plan included publication in, among others, 

print, online, social, radio, and television media outlets. See id. ¶ 6. As has been previously reported 

to the Court, the program ultimately resulted in over 730,000,000 impressions, i.e., opportunities to see 

the Bar Date Notice.2 See id. ¶¶ 6–7. 

The Finegan Declaration describes these efforts in detail and some of the most salient features 

are highlighted below. In accordance with the Bar Date Order, the Debtors published the Bar Date 

Notice in (i) three nationally distributed magazines—People, Sports Illustrated, and Sunset Magazine, 

(ii) two nationally circulated newspapers—Wall Street Journal and USA Today, and (iii) three separate 

times in twenty-seven local newspapers, including the Los Angeles Times and San Francisco 

Chronicle. See id. ¶¶ 11–14. Proof of publication affidavits are incorporated by reference into the 

Finegan Declaration. Additionally, the Debtors placed banner advertisements across approximately 

2

 As set forth in the Finegan Declaration, an impression translates into an opportunity to see a message 

in a given medium. Here, it measures each time the Bar Date Notice is displayed and potentially 

viewed by claimants. For example, each direct mailing of the Bar Date Notice sent out to Known 

Claimants constitutes one impression. Every time, the Bar Date was displayed in a television 

advertisement similarly constitutes one impression for each person estimated to be viewing the 

advertisement at the time of airing. See Finegan Decl. ¶ 7. 

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4,000 websites—including top-tier news and other websites. See id. ¶¶ 15–17. The Debtors also 

launched social media campaigns on Twitter, Facebook, Instagram, and YouTube that included the 

engagement of social influencers to further reach potential claimants and interest holders, including 

those outside of California. See id. ¶¶ 18–23. Moreover, the Debtors also provided notice via 

television, radio, billboards, and other non-traditional means, including nationwide cable television 

commercials aired across CNN, FOX NEWS, History Channel, and TNT networks. See id. ¶¶ 25–43. 

As set forth above, the Notice Procedures were one of the largest, most comprehensive notice and 

media campaigns implemented in chapter 11 history. Any former security holder who wished to file a 

claim against the Debtors had notice and opportunity to do so during the Bar Date period. Movant does 

not provide any evidence that any securities holder did not receive actual or constructive notice of the 

existence of the Chapter 11 Cases and the Bar Date. 

3. Progress Toward Confirmation 

The Court is well aware of the complexity of these Chapter 11 Cases, as well as the substantial 

progress the Debtors have made toward confirmation of a plan in time to meet the deadline established 

under AB 1054. Some highlights of these efforts include: 

 After extensive negotiations, the Debtors filed their chapter 11 plan of reorganization 

on September 9, 2019 [Dkt. No. 3841] (as thereafter amended on September 23, 2019 

[Dkt. No. 3966], November 4, 2019 [Dkt. No. 4563], and December 12, 2019 [Dkt. 

No. 5101], and as may be further modified, amended, or supplemented from time to 

time, the “Plan”) that was structured and designed to enable the Debtors to (i) fairly and 

expeditiously treat pre-petition wildfire claims in full compliance with AB 1054, 

(ii) achieve a rate-neutral solution, on average, for customers, (iii) meet the AB 1054 

June 30, 2020 timeline for confirmation of the Plan, (iv) achieve required CPUC 

approvals, (v) support California’s clean energy goals, and (vi) ensure that the 

Reorganized Debtors have access to sufficient liquidity upon chapter 11 emergence. 

Since filing the Plan, the Debtors have actively engaged with the Governor’s Office to 

address any concerns and ensure that the Plan will be AB 1054 compliant. 

 The Debtors have now achieved settlements with all three of the critical wildfire claim 

constituencies to be satisfied and discharged pursuant to their Plan. The first settlement 

fully resolves all of the wildfire claims held by the 18 settling Public Entities for the 

aggregate amount of $1 billion. The second settlement fully resolves all of the claims 

held by Subrogation Claimants in the asserted amount of approximately $20 billion for 

consideration in the amount of $11 billion, representing a 45% reduction. Pursuant to 

the third settlement, with the assistance of the Court-appointed mediator, the Debtors, 

certain funds and accounts managed or advised by Knighthead Capital Management, 

LLC and Abrams Capital Management, L.P. (together, the “Shareholder 

Proponents”), the TCC, and certain professionals representing approximately 70% in 

number of the holders of Fire Victim Claims have entered into an agreement to settle 

the total aggregate amount of the Debtors’ pre-petition liabilities to individual Fire 

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Victims for $13.5 billion in cash and stock to support confirmation of the Debtors’ Plan, 

as amended to incorporate the terms of that settlement. As a result, four major 

constituencies (the TCC and individual fire claimants, the Subrogation Claimants, the 

Public Entities, and the Shareholder Proponents), which represent all the impaired 

classes in these cases, will be fully supportive of one plan—the Debtors’ Plan. 

 The Court has now approved Restructuring Support Agreements, embodying the 

settlements with both the Subrogation Claimants and the TCC. 

 The Court has recently decided that the holders of unsecured claims are entitled to postpetition interest at the federal judgment rate and the parties have briefed issues relating 

to make-whole premiums. 

While the Debtors have accomplished much in the months since the Petition Date, there is still 

much more to be done that will require additional resources and tremendous efforts. First and foremost, 

the Debtors are in the process of preparing, and will shortly be filing, a disclosure statement and seeking 

authority to commence solicitation of votes from over 100,000 impaired creditors and interest holders. 

 The Debtors are also in the process of seeking approval of their backstopped debt and equity 

commitments, which serve as the foundation for the comprehensive financing package that will fund 

the Plan and the Debtors’ timely emergence from chapter 11. The Debtors will be drafting, negotiating, 

and filing all of the other plan transaction documents, including documents necessary to establish and 

govern the various trusts and reviewing the Debtors’ thousands of executory contracts and leases and 

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

related cure objections. The Debtors have also dedicated substantial resources to securing necessary 

governmental approvals in connection with their Plan, including the CPUC OII proceeding in 

connection with the Debtors’ Plan. The extended Bar Date has now passed and the Debtors are 

beginning the process of reviewing and reconciling the tens of thousands of claims that have been filed 

in these Chapter 11 Cases. This is in addition to maintaining the Debtors’ normal day-to-day 

operations, managing their vast network of vendors, suppliers, and contract counterparties, and 

focusing on delivering power to their 16 million customers in a safe and reliable manner. 

B. The Putative Class Actions 

Movant is the named plaintiff in a securities class action lawsuit pending in the U.S. District 

Court for the Northern District of California, Case No. 18-03509 (the “Securities Litigation”). The 

Securities Litigation was initially filed in June 2018 and was later consolidated with a related class 

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action. See Case No. 18-03509 (N.D. Cal.) [Dkt. No. 117], Request for Judicial Notice Ex. A.3 The 

action asserts claims against the Debtors, along with a number of the Debtors’ current and former 

directors and officers and investment-bank underwriters of certain of the Debtors’ notes offerings. 

Movant’s Third Amended Complaint asserts claims under the Securities Act of 1933, and the 

Exchange Act of 1934 and SEC Rule 10b-5. See id. [Dkt. No. 121], Request for Judicial Notice Ex. B. 

The claims under the Exchange Act allege that during the Class Period the defendants misled investors 

about the state of their wildlife safety practices. The claims under the Securities Act relate to four 

public notes offerings made between March 1, 2016 and April 2, 2018, alleging that the offering 

documents for those notes contained misleading statements. The putative class comprises investors 

who acquired the Debtors’ notes and equity securities during the Class Period. 

The Securities Litigation has been and remains stayed with respect to the Debtors pursuant to 

the automatic stay. Movant continues to pursue the Securities Litigation against the non-Debtor 

defendants. On February 15, 2019, a mere two weeks after the Petition Date, the Debtors filed an 

adversary proceeding seeking to enjoin continued prosecution of the Securities Litigation against 

various non-Debtor defendants. See Debtors’ Complaint for Preliminary and Permanent Injunctive 

Relief as to Actions Against Non-Debtors [Dkt. No. 470]. Movant actively contested this motion, which 

was denied on August 28, 2019. See Adv. Pro. No. 19-03039 [Dkt. No. 23], Request for Judicial Notice 

Ex. C. The non-Debtor defendants have filed motions to dismiss the complaint in the District Court, 

with briefing currently underway and argument scheduled in the District Court for February 6, 2020. 

On October 21, 2019, Movant filed proofs of claim asserting a claim on behalf of itself. Claim 

Nos. 72193, 72273. The claim attached and referred to its Third Amended Complaint. Despite being 

on the Master Service List and, as noted above, actively participating in the Chapter 11 Cases, it was 

not until December 9, 2019 that the Movant filed this Motion to treat its proof of claim as a class proof 

of claim. See Motion [Dkt. No. 5042]. 

3

 The Request for Judicial Notice includes all cited case documents from related adversary 

proceedings and District Court litigation. 

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ARGUMENT 

A Movant’s burden is two-fold to support a class proof of claim. See In re Pac. Sunwear of 

Cal., Case No. 16-10882 (LSS), 2016 WL 4250681, at *15 (Bankr. D. Del. Aug. 8, 2016). First, a 

Movant must establish that it is beneficial to apply Bankruptcy Rule 7023 to the claims administration 

process under the three-factor framework set forth in In re Musicland, 362 B.R. at 654. See In re Pac. 

Sunwear of Cal., 2016 WL 4250681, at *15. Second, a Movant must satisfy the requirements of Civil 

Rule 23. See id. at *17. Failure to carry the burden on the first prong ends the inquiry. See In re 

Musicland, 362 B.R. at 654. Here, Movant has not only failed to meet its burden on the first prong of 

this analysis but has offered no attempt to establish that the requirements of Civil Rule 23 are satisfied.

I. IT IS INAPPROPRIATE TO APPLY BANKRUPTCY RULE 7023 HERE 

There is no absolute right to file a class proof of claim under the Bankruptcy Code. See In re 

Aughney, No. 10-12666, 2011 WL 479010, at *1 (Bankr. N.D. Cal. Feb. 4, 2011); In re Bally Total 

Fitness of Greater New York, Inc., 402 B.R. 616, 619–20 (Bankr. S.D.N.Y. 2009), aff’d, 411 B.R. 142 

(S.D.N.Y. 2009); In re Musicland, 362 B.R. at 650 (application of Civil Rule 23 is not automatic). In 

fact, a Bankruptcy Court should use “caution” before granting a Bankruptcy Rule 7023 motion and 

should do so sparingly. In re Dewey & LeBoeuf LLP, 487 B.R. 169, 179 (Bankr. S.D.N.Y. 2013). 

Because “class certification may be ‘less desirable in bankruptcy than in ordinary civil 

litigation,’” In re Ephedra Prod. Liab. Litig., 329 B.R. 1, 5 (S.D.N.Y. 2005), Bankruptcy Courts have 

developed a three-factor framework to guide the exercise of this discretion. See In re Musicland, 362 

B.R. at 654. The so-called Musicland factors ask whether: (i) “the class was certified pre-petition,” 

(ii) the putative class members received “actual or constructive notice” of the bar date, and (iii) “class 

certification will adversely affect the administration” of the estate. See id. (internal quotations omitted). 

While no single factor is dispositive, the first two are “critical.” Id. at 655. Indeed, in In re Bally, the 

Court found that the “filing of a class proof of claim is consistent with the Bankruptcy Code generally 

in two principal situations: (i) where a class has been certified pre-petition by a non-bankruptcy court; 

and (ii) where there has been no actual or constructive notice to the class members of the bankruptcy 

case and Bar Date.” 402 B.R. at 620 (emphasis added); see also In re Sacred Heart, 177 B.R. at 22 

(“[I]f the putative unnamed class members have clearly received actual or constructive notice of the 

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bankruptcy case and the bar date, denial of the . . . class proof of claim device appears advisable.”). 

Here, all three factors mandate denial of the Motion. 

A. There Is No Pre-Petition Certified Class 

Not surprisingly, the Motion glosses over the first of the two “critical” Musicland factors: 

whether a non-bankruptcy forum certified the proposed class before the Petition Date. See Mot. at 17–

18 (“[T]hat is not a bar to application of Bankruptcy Rule 7023”). Where, as here, pre-petition 

certification is lacking, putative class members lack “any reasonable expectation that they need not 

comply with the Bar Date Order.” In re Jamesway Corp., No. 95 B 44821 (JLG), 1997 WL 327105, 

at *10 (Bankr. S.D.N.Y. June 12, 1997). As a result, where there has been no pre-petition certified 

class, Bankruptcy Courts are reluctant to allow the filing of class proofs of claim. See In re Pac. 

Sunwear of Cal., 2016 WL 4250681, at *18 (declining to approve class proof of claim for a proposed 

class lacking pre-petition certification); In re Craft, 321 B.R. 189, 198–99 (Bankr. N.D. Tex. 2005) 

(declining to apply Bankruptcy Rule 7023 for a proposed class that was “not yet certified”). The first 

Musicland factor alone supports denying the Motion. 

Movant attempts to sidestep this initial hurdle by claiming that “certification of the Class prior 

to the Petition Date was impossible” because “the Securities Litigation is still at the motion to dismiss 

stage.” Mot. at 17. This argument misses the point. The first Musicland factor does not concern a 

party’s ability or efforts to pursue class certification, but instead whether putative class members may 

have been induced by the fact that a class had been certified to not file an individual proof of claim. In 

circumstances where a class has been certified and class members have received notice of being 

represented by lead counsel, some class members might believe that they need not file a proof of claim 

on their own behalf on the assumption that would be done by class counsel. However, where no prepetition class has been certified, as here, putative class members cannot reasonably assert that they 

were relieved of their obligation to file an individual proof of claim. This factor accordingly weighs 

against class treatment of a proof of claim regardless of how far along a putative class action is when 

it is stayed, and regardless of whether the lead plaintiff diligently pursued, or could have pursued, class 

certification prior to imposition of the stay. 

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This same issue was present in Alonzo. Although pre-petition certification of Mr. Alonzo’s 

putative class action was actually impossible because the complaint was not filed until after the Petition 

Date, the Court still found that failure to have a class certified pre-petition was fatal to that motion. See 

Alonzo Order [Dkt. No. 4925] (“No non-bankruptcy forum certified the proposed class before the 

Petition Date.”); see also Alonzo Ruling (“The persuasive arguments of debtors re noticing, absence 

of a pre-petition class certification and lateness in motion well-after the bar date notice alone justify 

denial.” (emphasis added)). 

 None of the cases Movant cites justifies departing from the Court’s reasoning in the Alonzo 

Order. In fact, in Gentry v. Siegel, 668 F.3d 83 (4th Cir. 2012), the Fourth Circuit affirmed the 

Bankruptcy Court’s and District Court’s decisions to deny the very relief sought here. Id. at 94 

(“Indeed, the court could discern no substantial benefit in allowing the claimants to proceed through a 

class action process in this case, and we find no reason to find this to be an abuse of discretion.”). 

Moreover, In re Charter Co., 876 F.2d 866, 869 (11th Cir. 1989), is plainly distinguishable. See Mot. 

at 17 (“Charter Co. similarly dispels the notion that class procedures should only be used where a class 

was certified in a non-bankruptcy context.”) (citing In re First Alliance Mortgage Co., 269 B.R. 428, 

444 (C.D. Cal. 2001)). First, Charter Co. was an early case that focused on whether a class proof of 

claim should be permitted at all; it did not apply the Musicland factors or any similar factors and instead 

remanded the issue to the bankruptcy court to decide “whether or not to apply Bankruptcy Rule 7023.” 

Charter Co., 876 F.2d at 876–77. And second, Charter Co. is factually distinguishable because there, 

unlike here, at the time of the bar date notice the district court had already certified a class in the action 

against the officers and directors. Id. at 869. Indeed, the Charter Co. court based its determination 

that a class proof of claim should be permitted upon its findings that it “seemed backwards” to require 

individual class members to file separate proofs of claim after the class had already been certified by 

the district court. See id. at 870–74. Moreover, the Charter Co. court reasoned that it would have been 

unfair to refuse a class claim because the purported representative sought class certification under Civil 

Rule 23 at the earliest possible opportunity, see id., unlike here, where Movant had ample opportunity 

to seek relief under Bankruptcy Rule 7023 or to object to the Bar Date Notice. 

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Finally, Movant misconstrues MF Global, which provides an exception in WARN Act cases, 

where the putative class is created by the bankruptcy itself. See Mot. at 17 (citing In re MF Global 

Inc., 512 B.R. 757, 763–65 (Bankr. S.D.N.Y. 2014)). In that case, the employees who were bringing 

claims under the WARN Act lost their jobs “for the same reasons that precipitated the bankruptcy” and 

therefore under those circumstances there will seldom be time even to file a class action complaint 

before the petition date. In re MF Glob. Inc., 512 B.R. 757, 763 (Bankr. S.D.N.Y. 2014); see also In 

re Connaught Grp., Ltd., 491 B.R. 88, 98 (Bankr. S.D.N.Y. 2013) (“Connaught discharged the class 

members a few days before the bankruptcy cases were commenced and before litigation could have 

occurred . . . . In essence, this is a class created by the bankruptcy itself.”). The WARN Act cases 

provide no basis to depart from the general rule in cases such as here. 

B. Putative Class Members Received Adequate Notice of the Bar Date After Movant 

Had the Opportunity to Be Heard on the Bar Date Motion 

Movant also fails the second Musicland factor, as the filing of a class proof of claim is only 

permissible where there has been no actual or constructive notice to the class members of the chapter 

11 case and bar date. See, e.g., In re Bally, 402 B.R. at 620 (“Actual or constructive notice has been 

given to these putative class members.”); In re Blockbuster Inc., 441 B.R. 239, 242 (Bankr. S.D.N.Y. 

2011) (“[T]he Debtors provided adequate notice to members of the putative class by publishing 

notice . . . .”); In re Sacred Heart, 177 B.R. at 22 (approving of “actual or constructive notice of the 

bankruptcy case and the bar date”). Here, just as with the Court’s rejection of the Alonzo Motion, the 

Debtors’ “robust noticing” of potential claimants “justif[ies] denial.” See Alonzo Ruling.

As Movant acknowledges, the touchstone of the notice analysis is reasonableness: Notice must 

“be fundamentally fair and reasonably calculated to apprise interested parties.” Mot. at 18 (quoting In 

re ATD Corp., 278 B.R. 758, 763 (Bankr. N.D. Ohio 2002)). In the Bankruptcy Rule 7023 context, the 

“proper inquiry” is not whether each and every claimant received actual notice. In re Jamesway Corp., 

1997 WL 327105, at *8. Actual notice is “irrelevant as a matter of due process.” Id. Rather, the only 

question is whether the debtor “acted reasonably in selecting means likely to inform persons affected 

by the Bar Date and these chapter 11 proceedings.” Id.; see, e.g., In re Bally, 402 B.R. at 620 (mailing 

formal bar date notices and publishing notice in nationally circulated periodicals “was reasonably 

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calculated . . . to apprise interested parties of the bankruptcy case and was of such nature as to convey 

the required information”) (internal citations omitted). 

Movants argue that the notice approved by the Court was inadequate as it relates to absent class 

members because these absent class members (even though no class was certified pre-petition) are 

known creditors who should have been served with actual notice. Mot. at 18. This argument fails for 

two reasons. First, absent class members are not “known” creditors for purposes of this analysis. If it 

were otherwise, then all Bankruptcy Rule 7023 motions would require that notice be actual and that 

constructive notice would never suffice—which is directly contrary to the standard set forth in 

Musicland and other cases expressly permitting that absent class members can be served with 

constructive notice in appropriate circumstances. Second, if Movant—who was actively participating 

in the bankruptcy—truly had concerns about the adequacy of the Bar Date Notice, they should have 

been raised at the time of the Bar Date notice hearing. The Court should not allow a collateral attack 

on its Bar Date Order and approved Notice Procedures by a party who had actual notice of the Bar Date 

Motion and consciously chose not to raise these issues, perhaps for tactical reasons. 

While “[k]nown creditors must be provided with actual written notice of a debtor’s bankruptcy 

filing and bar claims date,” Courts define this group narrowly. Chemetron Corp. v. Jones, 72 F.3d 341, 

346 (3d Cir. 1995). A debtor “does not have a ‘duty to search out each conceivable or possible creditor 

and urge that person or entity to make a claim against it.’” Id. Rather, a known creditor is only one 

“whose identity is either known” to the debtor or “can be identified through reasonably diligent efforts.” 

Id. (quotation omitted). And reasonable diligence does not require “a vast, open-ended investigation.” 

Id. Instead, “[t]he requisite search instead focuses on the debtor’s own books and records” and requires 

nothing beyond “a careful examination of these documents.” Id. at 347. An unknown creditor, by 

contrast, is “one whose ‘interests are either conjectural or future or, although they could be discovered 

upon investigation, do not in due course of business come to knowledge [of the debtor].’” Id. at 346 

(alteration in original) (quoting Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 317 

(1950)). For such creditors, actual notice is not required and, as Movant acknowledges, notice by 

publication can suffice. Mot. at 20. 

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 Far from being readily ascertainable from the Debtors’ own books and records, Debtors’ 

records could not identify all members of the putative class. See Chemetron, 72 F.3d at 347–46 

(requiring actual notice only to those creditors who can be identified through “a careful examination” 

of the “debtor’s own books and records”). The Debtors would have to rely on the voluntary 

participation and records-management practices of the nominees holding securities on behalf of 

beneficial owners and the transfer agent responsible for maintaining the register of direct holders, not 

a search of the Debtors’ own records. Pullo Decl. ¶ 6. Such putative class members are thus unknown 

creditors, whose names and addresses “do not in due course of business come to [the Debtors’] 

knowledge.” Chemetron, 72 F.3d at 346. Given the impossibility of identifying all putative class 

members, the Debtors engaged in industry-standard practice in providing actual notice to current 

holders of the Debtors’ securities. Pullo Decl. ¶ 6. Any attempt to engage nominees in the process of 

noticing former securities holders would have delayed Debtors’ noticing procedures and would have 

been costly and incomplete. See id. ¶ 19. As the Seventh Circuit has explained, “[n]otice by publication 

may thus be entirely appropriate when potential claimants are numerous, unknown, or have small 

claims.” Fogel v. Zell, 221 F.3d 955, 963 (7th Cir. 2000). 

Examining the notice the Debtors provided to members of the putative class—a combination 

of actual notice and constructive notice—confirms that it was robust and more than reasonable. 

The Debtors provided actual notice to all record holders of the Debtors’ securities based on the 

Record Date, July 1, 2019. See Pullo Decl. ¶ 5. This included all banks, brokers, dealers, and other 

financial institutions that hold securities on behalf of beneficial holders, as well as all of the registered 

holders of the Debtors’ securities. Id. ¶¶ 6–17. This likely included most of the record holders of the 

Debtors’ securities in the putative class, id. ¶ 21—as Movant explains, the putative class “include[s] 

investors who purchased [the Debtors’] stock during the Class Period and still hold that stock.” Mot. 

at 12. The Debtors also had the Bar Date Notice published on the electronic notification system of the 

Depository Trust Company, allowing holders of the Debtors’ securities to readily access it. Pullo Decl. 

¶ 16. 

Any remaining putative class members received constructive notice as approved by the Court. 

The Debtors implemented perhaps the most robust noticing campaign in any chapter 11 case. 

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Specifically, the Debtors published notice of the Bar Date in (i) three nationally distributed magazines, 

(ii) two nationally circulated newspapers, and (iii) three times in twenty-seven local newspapers. See 

Finegan Decl. ¶¶ 13–14. In addition, the Debtors generated geo-targeted online advertisements across 

4,000 different websites, pushed notifications through social media, engaged social influencers to post 

and share information about the Bar Date on Instagram and Facebook, sponsored advertisements on 

Google for related keyword searches, purchased billboards, streaming video rights, and airtime on 

television (including nationwide cable television) and radio (terrestrial and satellite), among other 

things, to inform as many potential claimants as possible of the pending Bar Date. See id. ¶¶ 15–23. 

These comprehensive efforts resulted in more than 730,000,000 opportunities to see the Bar Date 

Notice. See id. ¶¶ 4–8. 

This combination of 6.5 million Bar Date Notices directly mailed to potential claimants and a 

robust Supplemental Noticing Campaign was reasonably calculated to provide notice of the Bar Date 

to both known and unknown creditors, like the members of the putative class. Courts, including this 

Court, have found that constructive notice to absent class members is sufficient to satisfy the second 

prong of the Musicland factors. See In re Bally, 402 B.R. at 620; In re Blockbuster Inc., 441 B.R. at 

242. Indeed, as this Court explained in denying Alonzo’s similar motion where claimant argued that 

not all absent “known” class members were served with actual notice—after considering these same 

noticing procedures—this “robust noticing” campaign “justif[ies] denial” of the Motion. See Alonzo 

Ruling. 

In In re GAC Corp., 681 F.2d 1295 (11th Cir. 1982), the Eleventh Circuit confronted a situation 

just like this one and rejected the very argument Movant makes here. There, a debtor provided actual 

notice of the claims bar date to all holders of its debentures as of a certain date and constructive notice 

by publication to all prior holders of the debentures. Id. at 1300. The appellant—who had filed a claim 

on behalf of purchasers of the debentures in a four-year period leading up to the debtor’s chapter 11 

case—contended that notice to prior holders by publication was insufficient and denied members of 

the class due process. Id. at 1297, 1300. The Eleventh Circuit rejected this argument. The Court 

started from the proposition that actual notice is required only “where the trustee has actual knowledge 

of the existence of a claim and the name and address of the claimant is easily ascertainable.” Id. at 

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1300. And it added that “it would have been extremely burdensome and costly to determine the names 

and addresses of all persons who had purchased but no longer held debentures.” Id. The court 

concluded that “[u]nder the circumstances of this case . . . the publication notice . . . was reasonably 

calculated to apprise non-holding debenture purchasers of the necessity to file individual proofs of 

claim . . . and thus the notice complied with the requirements of due process.” Id. So too here. 

The Debtors here provided actual notice to current securities holders and robust constructive 

notice to former holders. This notice was “reasonably calculated to apprise non-holding [securities] 

purchasers of the necessity to file individual proofs of claim.” Id. Nothing more is required. Courts 

have routinely held that a combination of actual and constructive notice is sufficient to satisfy the bar 

date requirements that are sufficient to support the rejection of a class proof of claim. See In re Bally, 

402 B.R. at 620 (approving the “[a]ctual or constructive notice” given to a putative class comprising 

“any former employees” where actual notice was provided only to former employees within five years 

of the petition date); see In re Jamesway Corp., 1997 WL 327105, at *8 (claim packages mailed to 

thousands of potential claimants and publication notice appeared in multiple widely circulated 

periodicals); In re Blockbuster Inc., 441 B.R. at 242 (finding publication in several newspapers and 

service on the movants adequate to provide notice to a putative class comprising all “customers of the 

Debtors’ who were unlawfully charged penalties when they breached oral rental agreements”); In re 

Motors Liquidation Co., 447 B.R. 150, 168 (Bankr. S.D.N.Y. 2011) (“[N]o class has ever been certified 

in a bankruptcy court by reason of deficiencies in notice to prospective members of the putative class.”).

The cases that Movant cites are not to the contrary. Movant principally relies on In re Amdura 

Corp., 170 B.R. 445 (D. Colo. 1994), to argue that “actual notice to absent securities fraud class 

members” was required. Mot. at 21. But Amdura involved a class that had already been certified. 

Here, in the absence of a certified class, putative class members lacked such representation, and there 

was no straightforward way for the Debtors to obtain their names and addresses. As the Court in 

Amdura acknowledged, “[c]onstructive notice would suffice” for “members of the group whose 

identity and whereabouts could not be so easily ascertained.” Id. at 452. Movant’s reliance on In re 

Chaparral Energy, Inc., 571 B.R. 642 (Bankr. D. Del. 2017), is likewise misplaced. There, the putative 

class comprised royalty interest holders whose actual identities were known to the debtors based on its 

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own internal records, see id. at 647 n.15 (describing the debtors’ own records of putative class 

members), making the debtors’ decision to notify only some of those holders unreasonable, id. at 648. 

Similarly, Movant cannot rely on cases addressing procedures employed to provide notice in securities 

class actions. See Mot. at 20–21 (collecting cases). Critically, Movant’s cases all concern notice to 

members of a class already certified under Civil Rule 23, not the reasonableness of notice to unknown 

putative class members in the context of a Bankruptcy Rule 7023 motion in a chapter 11 case. 

Finally, Movant objects in passing that the Bar Date Notices “made no mention of the Securities 

Litigation or the need for members of the Class to file proofs of claim.” Mot. at 22. But Courts 

consistently reject any requirement of claim-specific notice. See, e.g., In re Placid Oil Co., 753 F.3d 

151, 158 (5th Cir. 2014) (“We have never required bar date notices to contain information about 

specific potential claims. . . . Furthermore, neither the Bankruptcy Code nor Rules require bar date 

notices to apprise creditors of potential claims.”). The Notices, which this Court approved, apprised 

all individuals that they needed to file proofs of claim by the Bar Date. As the portion quoted by 

Movant explains: “[I]f any [security] holder asserts a claim (as opposed to an ownership interest) 

against the Debtors (including a claim relating to an equity interest or the purchase or sale of such 

equity interest), a Standard Proof of Claim must be filed on or before the Bar Date.” Mot. at 12 (quoting 

Standard Bar Date Notice at 8). This language unambiguously informs potential claimants of the need 

to file a Proof of Claim. 

The clarity of the Court-approved Bar Date Notices coupled with their broad distribution 

confirms that the Debtors’ robust noticing was “reasonably calculated, under all the circumstances, to 

apprise interested parties of the pendency of the action and afford them an opportunity to present their 

objections.” Mullane, 339 U.S. at 314. The second “critical” Musicland factor—“whether the 

members of the putative class received notice of the bar date”—thus likewise supports denying the 

Motion. In re Musicland, 362 B.R. at 654–55. 

Ultimately, Movant mounts a late-in-the-day attack on the Bar Date Notice, but Movant’s 

opportunity to do so has long since passed. Given that Movant’s dispute is with the adequacy of the 

Bar Date Notice, Movant could have and should have objected to the Debtors’ Noticing Procedures or 

the Bar Date Motion after being served in July of 2019. See Certificate of Service of Herb Baer [Dkt. 

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No. 3159], Ex. A at 7, 13 (certifying service by e-mail); id. Ex. D at 706 (certifying service by first 

class mail); id. Ex. Q at 8 (certifying service by first class mail). Movant has been an active and 

continued participant in this bankruptcy proceeding from the very beginning.4 Any delay—and 

especially one this long—in challenging the adequacy of the notice provided should not be permitted. 

C. Granting the Motion Would Adversely Affect the Administration of these Estates 

and Class Actions Are Not Superior to the Proof of Claim Process

Movant has failed to establish either of the two “critical” Musicland factors. This failure 

requires rejection of the Motion and the Court need not even consider the third factor. 

But even if the Court were to consider the third factor—effect on the administration of the 

estates—the third factor strongly supports denial of the Motion. See In re Musicland, 362 B.R. at 654. 

“The [third factor] often centers on (a) the timing of the motion for certification” and “(b) whether a 

plan has been negotiated, voted on or confirmed.” Id. (collecting cases) (internal citations omitted). 

Rather than address the considerations articulated in Musicland, Movant simply asserts, in a conclusory 

fashion, that applying Civil Rule 23 will not “gum up the works” of the Debtors’ Chapter 11 Cases; 

therefore, the Court should deny the Motion. Mot. at 22.

First, Movant filed the Motion on December 9, 2019—nearly two months after the October 21, 

2019 Bar Date and more than five months after the Court entered the Bar Date Order. In the Alonzo 

Ruling, the Court found that although Mr. Alonzo filed his motion on the Bar Date, in part, 

4

 Movant has been an active participant in these Chapter 11 Cases from February 2019 through the 

present. Movant is the named defendant in two adversary proceedings in these Chapter 11 Cases. 

See Adv. Pro. No. 19-03006; Adv. Pro. No. 19-03039. The Debtors filed the Complaint in the first 

adversary proceeding on February 15, 2019, a mere 17 days into these Chapter 11 Cases. The Debtors 

and Movant entered into a stipulation in the first adversary proceeding on April 3, 2019, see Adv. 

Pro. No. 19-03006 [Dkt. No. 34], Request for Judicial Notice Ex. D, which this Court so-ordered the 

following day. See id. [Dkt. No. 37], Request for Judicial Notice Ex. E. On May 1, 2019 the parties 

further agreed to dismiss Movant with leave for the Debtors to initiate a second adversary proceeding 

seeking injunctive relief, which this Court approved on May 3, 2019. See id. [Dkt. No. 42], Request 

for Judicial Notice Ex. F (stipulation); id. [Dkt. No. 44], Request for Judicial Notice Ex. G (order). 

The Debtors initiated the second adversary proceeding seeking injunctive relief against the Movant 

on June 18, 2019. See Adv. Pro. No. 19-03039 [Dkt. Nos. 1–3], Request for Judicial Notice Ex. H, 

I, J. Movant opposed on July 18, 2019, see id. [Dkt. No. 12], Request for Judicial Notice Ex. K, 

participated in the preliminary injunction hearing on August 27, 2019, and successfully defeated the 

Debtors’ motion on August 28, 2019. See id. [Dkt. No. 23], Request for Judicial Notice Ex. C. 

Counsel for Movant also filed a notice of appearance on the main bankruptcy docket on March 29, 

2019. See [Dkt. No. 1126]. Less than three weeks later, Movant objected to the fee application of 

Simpson Thatcher, counsel to the independent directors, see [Dkt. No. 1479], which Movant has 

continued to do over the subsequent months. See [Dkt. Nos. 4349 & 4822]. 

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Mr. Alonzo’s “lateness” in filing the motion “well-after the bar date notice” justified denying that 

nearly identical motion. See Alonzo Ruling. Crucially, unlike Mr. Alonzo, the Debtors made the 

Movant and the putative class it purports to represent well aware of these Chapter 11 Cases by bringing 

an adversary proceeding on February 15, 2019—i.e., just over two weeks after the Petition Date. Yet, 

despite successfully overcoming the Debtors’ attempt to enjoin the Movant’s claims against nonDebtor defendants, the Movant declined to object to the Bar Date or the Notice Procedures. It is only 

now—months after the Bar Date Notice—that Movant first raised its supposed concerns about the 

adequacy of the notice that it received in July. Movant had plenty of opportunity to seek class treatment 

earlier in the case, or, as noted above, to object to and seek more robust noticing as part of the Bar Date 

motion. Instead, Movant did nothing. This delay alone requires denial of the Motion. In re Comput. 

Learning Ctrs., 344 B.R. 79, 89 (Bankr. E.D. Va. 2006) (“A Rule 7023 motion should be filed as soon 

as practicable and should be denied if it comes so late as to prejudice any party.”); In re Sacred Heart, 

177 B.R. at 23 (“Timing is also significant. The most propitious time for filing a motion for class 

recognition is before a bar date is established, since the bar date is effectively uprooted in part by an 

extension of the bar date for a favored class of creditors.”). 

Second, as set forth above, the Debtors have already made substantial progress in the 

administration of these Chapter 11 Cases and toward the timely and successful confirmation of a 

chapter 11 plan of reorganization. Specifically, the Debtors have obtained the full support of the four 

constituencies that represent all the impaired classes under the Debtors’ Amended Plan. If Movant’s 

proof of claim is allowed to go forward as a class claim, it could undermine the extraordinary efforts 

the various stakeholders have already made to meet the June 2020 deadline. 

Importantly, awarding a class proof of claim will also significantly impact the claims 

reconciliation process and impose substantial burden on the Debtors to address a class claim in the 

context of their proposed Plan. Moreover, allowing a class proof of claim would potentially expand 

the claims pool at this late date to encompass individuals who expressly chose not to file individual 

claims. As the Court in Jamesway held: “[T]his is not a case justifying an exception to the enforcement 

of the Bar Date Order in accordance with its express and unequivocal terms. To do so would be 

unwarranted, unfair, and possibly violate the due process rights of other creditors.” In re Jamesway 

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Corp., 1997 WL 327105, at *10 (internal quotation marks omitted); see also In re Sacred Heart, 177 

B.R. at 24 (“In any event, it is manifestly clear that it would be unwarranted, unfair, and possibly violate 

the due process rights of other creditors of the Debtor to effectively extend the bar date to benefit (1) 

the members of the putative class who failed to exercise vigilance; and (2) the pocketbook of the 

putative class’s counsel, who obviously will seek a contingency fee from all unnamed class members 

who fail to opt out of the putative class.”). 

In fact, allowing these proofs of claim to be treated as class claims under Bankruptcy Rule 7023 

might create precisely the undue delay that Courts have long sought to avoid in resolving the proof of 

claim process. See, e.g., In re Woodward & Lothrop Holdings, Inc., 205 B.R. 365, 376 (Bankr. 

S.D.N.Y. 1997) (“[A] bankruptcy case can proceed no faster than its slowest matter and a class action 

may ‘gum up the works’ because until complete, the bankruptcy court cannot determine the entitlement 

of the other creditors.” (internal citation omitted)). 

Given this posture and the June 2020 deadline under AB 1054, granting the Motion would 

impose significantly higher costs to conduct, on an expedited timeframe, fact-intensive proceedings—

which Courts have repeatedly recognized as a proper justification for denying relief under Bankruptcy 

Rule 7023. See In re Bally, 402 B.R. at 621 n.5 (“[T]he parties have yet to undertake the significant 

amount of discovery that will be required to litigate a class certification motion. After the completion 

of class certification discovery and the inevitable briefing, the Court will conduct a hearing on class 

certification. If the Court ultimately certifies a class, class members will need to be noticed and given 

an opportunity to ‘opt out’ under [Civil] Rule 23. The parties will then engage in merits discovery, 

which, in turn, will be followed by a complex and lengthy trial.”); In re Ephedra, 329 B.R. at 5 

(“Applying Rule 23 to the class claims now would initiate protracted litigation that might delay 

distribution of the estate for years.”). 

Finally, class actions are not superior to the proof of claim process, chapter 11’s mechanism for 

distributing assets of the estates to creditors and other economic stakeholders. See, e.g., In re 

Blockbuster Inc., 441 B.R. at 241 (“[The] superiority of the class action vanishes when the ‘other 

available method’ is bankruptcy, which consolidates all claims in one forum and allows [Plaintiffs] to 

file proofs of claim without counsel and at virtually no cost.”). The proof of claim process is intended 

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to be a straightforward procedure to permit creditors, including unsophisticated creditors, to obtain a 

chapter 11 distribution without undue costs and delay, thus eliminating the ordinary hurdles that 

individual litigants face in an ordinary lawsuit. See In re Musicland, 362 B.R. at 650–51 n.8 

(“Bankruptcy provides the same procedural advantages as a class action. In fact, it provides more 

advantages. Creditors, even corporate creditors, don’t have to hire a lawyer, and can participate in the 

distribution for the price of a stamp. They need only fill out and return the proof of claim sent with the 

Bar Date Notice.”).

The Bankruptcy proof of claim process is intended to be more efficient and less costly precisely 

by having the estate and claimants address smaller claims that make sense to settle without the need 

for lawyers or litigation. See In re Ephedra, 329 B.R at 5. If the Court were to grant this Motion, the 

primary beneficiaries would not be putative class members, but rather Movant’s attorneys, to the 

detriment of all other stakeholders in the Debtors’ Chapter 11 Cases. See In re Bally, 402 B.R. at 621 

n.4 (“Were [Movants] to prevail, their attorneys could seek payment of their fees from the Debtors’ 

estates, necessarily diminishing the already limited distributions available to other creditors.”); In re 

Ephedra, 329 B.R. at 10 (“The only real beneficiaries of applying Rule 23 would be the lawyers 

representing the class.”); In re Jamesway Corp., 1997 WL 327105, at *6 (effectively extending the bar 

date would only benefit (i) “putative class members who failed to exercise vigilance” and (ii) “the 

pocketbooks of their lawyers, who would obviously seek a contingency fee from all putative class 

members who failed to opt out of the class.” (citing In re Sacred Heart, 177 B.R. at 24)). 

The Court should deny the Motion because the claims administration process is superior to class 

actions and allowing Movant’s proof of claim to proceed as a class would prejudice the Debtors, as 

well as other parties in interest, and adversely affect the administration of these estates. 

II. MOVANT DOES NOT ADDRESS THE BASIC REQUIREMENTS OF CIVIL RULE 23 

Movant’s failure to satisfy any of the Musicland factors alone warrants denial of the Motion. 

Movant does not argue that the requirements of Civil Rule 23 could be satisfied here. Given Movant’s 

failure to address the Civil Rule 23 factors in the Motion and the further delay that would be required 

in doing so at a later date, the Motion should be denied on this separate ground alone. 

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CONCLUSION 

For the foregoing reasons, the Debtors respectfully request that Movant’s Motion under 

Bankruptcy Rule 7023 be denied and that the Court grant the Debtors such other and further relief as 

is just and proper. 

Dated: January 14, 2020 

WEIL, GOTSHAL & MANGES LLP 

KELLER & BENVENUTTI LLP 

By: /s/ Richard W. Slack 

 Richard W. Slack 

Attorneys for Debtors 

and Debtors in Possession 

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