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Bruce S. Bennett (SBN 105430) 

Joshua M. Mester (SBN 194783) 

James O. Johnston (SBN 167330) 

JONES DAY 

555 South Flower Street 

Fiftieth Floor 

Los Angeles, CA 90071.2300 

Telephone: (213) 489-3939 

Facsimile: (213) 243-2539 

E-mail: bbennett@jonesday.com 

 jmester@jonesday.com 

 jjohnston@jonesday.com 

Attorneys for PG&E Shareholders 

UNITED STATES BANKRUPTCY COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

In re: 

PG&E CORPORATION 

- and - 

PACIFIC GAS AND ELECTRIC 

COMPANY, 

Debtors. 

Bankruptcy Case 

No. 19-30088 (DM) 

Chapter 11 

(Lead Case) 

(Jointly Administered) 

STATEMENT OF CERTAIN PG&E 

SHAREHOLDERS IN SUPPORT OF 

DEBTORS’ MOTION FOR THE 

ESTABLISHMENT OF WILDFIRE 

CLAIMS ESTIMATION PROCEDURES

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).

Date: August 14, 2019 

Time: 9:30 a.m. (Pacific Time) 

Place: United States Bankruptcy Court 

 Courtroom 17, 16th Floor 

 450 Golden Gate Avenue 

 San Francisco, CA 94102 

Re: Docket No. 3091 

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Certain owners of common stock of PG&E Corporation (the “PG&E Shareholders”)1

hereby file this statement of support for the Debtors’ Motion Pursuant To 11 U.S.C. §§ 105(a) 

And 502(c) For The Establishment Of Wildfire Claims Estimation Procedures [ECF 3091] (the 

“Motion”). 

STATEMENT OF SUPPORT 

Out of all the discord and divergent views in this case, one clear consensus emerges: the 

unliquidated wildfire claims against PG&E – especially those relating to the Tubbs fire – must be 

quantified as rapidly and comprehensively as possible. 

PG&E says that “[t]he fundamental issue that needs to be resolved in order for the Debtors 

to emerge from Chapter 11 is the value of the tens of thousands of unadjudicated, unliquidated 

Wildfire Claims to be addressed in a Chapter 11 plan.” Motion at 1. The Tort Claimants 

Committee (the “TCC”) agrees that “the parties cannot adequately capitalize a Trust, negotiate a 

consensual plan, or litigate a contested plan confirmation without resolving PG&E’s liability for 

the Tubbs Fire Claims.” [ECF 2855 at 7] (“TCC Motion”). The Ad Hoc Committee of 

Subrogation Claim Holders (the “Subrogation Group”) asserts that a determination of liability for 

the Tubbs fire “is a gating issue for any consensual resolution of the wildfire claims against 

PG&E” and, hence, a necessary predicate for “mov[ing] these bankruptcy cases toward a 

confirmable plan of reorganization expeditiously and efficiently.” [ECF 2863-1 at 1] 

(“Subrogation Motion”). 

From that point of consensus, however, the parties have suggested two diametrically 

opposite paths. By the Motion, PG&E proposes a comprehensive three-stage process for 

estimating all of its wildfire liabilities in a timely manner, thereby enabling stakeholders to 

 

1

 The PG&E Shareholders are the entities identified on Exhibit A to the Second Amended 

Verified Statement Of Jones Day Pursuant To Federal Rule Of Bankruptcy Procedure 2019

[ECF 3158], excluding Abrams Capital Management, LP, on behalf of certain funds and 

accounts, and Knighthead Capital Management, LLC, on behalf of certain funds and 

accounts. The PG&E Shareholders are acting in their individual capacities but authorized the 

filing of this single submission for the purpose of administrative efficiency. Each of the 

PG&E Shareholders is expressing its independent views, and counsel does not have the actual 

or apparent authority to obligate any one entity to act in concert with any other entity with 

respect to PG&E equity securities. The PG&E Shareholders have not agreed to act in concert 

with respect to their respective interests in PG&E equity securities. 

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negotiate a plan and resolve these cases by the critical June 30, 2020 deadline. By their 

companion motions for relief from stay, in contrast, the TCC and Subrogation Group propose to 

litigate in state court a handful of the thousands of claims arising from the Tubbs fire, leaving the 

balance of Tubbs claims and all claims relating to other fires to be addressed at some unspecified 

future date. 

The Court has recognized that the issues presented by these pending requests are 

“inexorably linked.” [ECF 3121 at 2]. Simply put, the parties cannot proceed down both 

suggested paths simultaneously. For wildfire claims, there must be centralized estimation or 

piecemeal litigation; there cannot be both. The Motion conclusively demonstrates that 

estimation, not litigation, is the legal and practical answer on the facts now before the Court. The 

PG&E Shareholders therefore strongly support the Motion and ask the Court to grant the relief 

requested. 

First and foremost, Congress has spoken on this precise issue. Section 502(c) of the 

Bankruptcy Code commands that the Court “shall” estimate any and all unliquidated claims, “the 

fixing or liquidation of which . . . would unduly delay the administration of the case.” 11 U.S.C. 

§ 502(c); see, e.g., A.H. Robins Co. v. Piccinin, 788 F.2d 994, 1012 (4th Cir. 1986) (estimation “is 

a mandatory obligation of the bankruptcy court” when claims liquidation would unduly delay the 

case). No one seriously suggests that PG&E could litigate all of the tens of thousands of wildfire 

claims without unduly delaying administration of these cases. Such litigation literally would take 

years to conclude, during which time PG&E’s creditors would remain unpaid and PG&E’s ability 

to participate in the newly created wildfire insurance fund would vanish. Motion at 3-4 

(“Litigating claims individually would take years, impede the successful reorganization of the 

Debtors, delay distributions to wildfire victims and all other creditors and preclude PG&E from 

participating in the wildfire fund.”). The Court therefore has an “affirmative duty” to proceed 

with estimation. 4 COLLIER ON BANKRUPTCY ¶ 502.04[2] (16th ed. 2019) (“The language of 

section 502(c) is mandatory and places upon the court an affirmative duty to estimate 

unliquidated claims when appropriate.”). 

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Second, and independently, estimation clearly is the most practical and logical way to 

proceed. Piecemeal litigation in state court would put the brakes on all forward progress in these 

cases as stakeholders await trials of indeterminate length to be conducted by one or more state 

courts with no concern for this reorganization or PG&E’s prospects for rehabilitation. Litigation 

of individual wildfire claims almost certainly would prevent PG&E from resolving these cases by 

the middle of next year, creating immense risk and potentially destroying value. 

Moreover, the California Legislature has required that, if not settled, all of PG&E’s 

wildfire liabilities be estimated or allowed by this Court by June 30, 2020, as a condition to 

accessing the statewide wildfire insurance fund. CAL. GOV’T CODE § 3292(b)(1)(B) (as a 

condition to accessing the fund, by not later than June 30, 2020, “[t]he bankruptcy court or a court 

of competent jurisdiction, in the insolvency proceeding, 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 pre-insolvency 

proceeding settlement agreements or any post-insolvency settlement agreements, authorized by 

the court through an estimation process or otherwise allowed by the court”) (emphasis added). 

By definition, piecemeal litigation of Tubbs claims in state court would preclude PG&E from 

meeting that condition. 

The TCC’s contrary assertion that, if relief from stay is granted, no litigation will take 

place and PG&E will “settle[] all fire claims before trial,” TCC Motion at 21, is at once cynical, 

speculative, and illogical. PG&E’s alleged “history” of settling fire cases involves litigation over 

a single fire (Butte) with different facts, different claimants, and different claims. [ECF 2845 

¶ 12]. Most notably, unlike the Butte fire, the Tubbs fire was determined by the official state 

investigators at the California Department of Forestry and Fire Protection (also known as “Cal 

Fire”) not to have been caused by PG&E. Motion at 6. There is every reason to expect that 

PG&E will contest Tubbs fire claims vigorously, as it has a fiduciary duty to defend against 

claims for which it has no liability. We cannot imagine how any party in interest or the CPUC or 

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the State of California could see this differently. It is in no one’s interest for PG&E to pay any 

claims arising from fires started by the conduct of others. 

In addition, the TCC similarly cannot explain how a pending trial relating to one fire 

(Tubbs) somehow would cause PG&E to settle all of the claims it now faces relating to two dozen 

different fires that occurred at different times over several years across hundreds of miles of 

PG&E’s service territory. At a minimum, the TCC’s flimsy speculation of settlement is no basis 

for taking these cases out of the control of the Court and placing them in the hands of one or more 

state trial courts. 

In any event, estimation will accomplish exactly what the TCC and the Subrogation 

Group say they want to accomplish – judicial resolution of the threshold “gating” issue of 

PG&E’s liability in respect of the Tubbs fire. See TCC Motion at 19 (“The Tubbs Fire is a gating 

issue in this case. . . . A determination of liability would, ‘in one fell swoop,’ either dispose of 

claims or have a favorable impact on settlement prospects.”); Subrogation Motion at 1 (The goal 

of moving toward confirmation “can best be achieved by answering the question that most 

separates the key parties negotiating a plan: Is PG&E liable for the devastating 2017 Tubbs 

Fire?”). PG&E specifically proposes – as the second phase of a three-phase estimation protocol – 

that the Court “estimate the likelihood of success of Wildfire Claims arising out of the Tubbs 

Fire.” Motion, Ex. A ¶ 4. The determination of that critical issue is and should remain the 

prerogative of the Court. 

CONCLUSION 

In its forthcoming brief addressing the Court’s questions regarding estimation and 

responding to whatever objections will be filed in respect of the Motion, PG&E will establish that 

the Court (possibly with the assistance of the District Court) has the jurisdiction, authority, and 

responsibility to estimate all of the unliquidated wildfire claims asserted in these cases, including 

personal injury claims, for purposes of confirmation, feasibility, and the creation of a capped trust 

from which distributions may be made to wildfire victims as and when their claims are settled or 

liquidated. The PG&E Shareholders join PG&E’s arguments in this regard and, in the interests of 

judicial economy, do not repeat them here. The PG&E Shareholders urge the Court to grant the 

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Motion in order to break the logjam in these cases and maximize the prospects of a successful 

reorganization before June 30, 2020. 

Dated: August 7, 2019 JONES DAY 

By: /s/ James O. Johnston

James O. Johnston 

Attorneys for PG&E Shareholders 

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