EXHIBIT C

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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) 

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) 

Chapter 11 

Bankr. Case No. 19-30088 (DM) 

(Jointly Administered)

MOTION OF THE AD HOC GROUP OF 

SUBROGATION CLAIM HOLDERS TO 

TERMINATE THE DEBTORS’ EXCLUSIVE 

PERIODS PURSUANT TO SECTION 

1121(d)(1) OF THE BANKRUPTCY CODE 

Hearing Date and Time: August 13, 2019 at 9:30 

a.m. (PT)

Objection Deadline: August 6, 2019 at 4:00 p.m. 

(PT)

Hearing Location: 450 Golden Gate Ave., San 

Francisco, CA, Courtroom 17

Judge: Hon. Dennis Montali

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TABLE OF CONTENTS 

Page 

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

BACKGROUND ................................................................................................................................. 6 

A. General Background .......................................................................................................... 6 

B. Background to the Motion ................................................................................................. 6 

ARGUMENT ...................................................................................................................................... 7 

I. Termination of Exclusivity is Appropriate in These Cases ................................................... 7 

NOTICE ............................................................................................................................................ 11 

CONCLUSION ................................................................................................................................. 12

 

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TABLE OF AUTHORITIES 

Cases Page(s) 

In re Adelphia Commc’ns Corp., 

352 B.R. 578 (Bankr. S.D.N.Y. 2006) .............................................................................7, 8 

In re Adelphia Commc’ns Corp., 

336 B.R. 610 (Bankr. S.D.N.Y. 2006) .................................................................................8 

In re Dow Corning Corp., 

208 B.R. 661 (Bankr. E.D. Mich. 1997) ..............................................................................8 

In re Gibson & Cushman Dredging Corp., 

101 B.R. 405 (E.D.N.Y. 1989) ............................................................................................7 

United Sav. Ass’n of Tex. v. Timbers of Inwood Forest Assocs., Ltd. (In re Timbers of Inwood 

Forest Assocs., Ltd.), 

808 F.2d 363 (5th Cir. 1987), aff’d, 484 U.S. 365 (1988) ...................................................7 

Statutes 

11 U.S.C. § 1121(d)(1) ...................................................................................................................7 

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The Ad Hoc Group of Subrogation Claim Holders (the “Ad Hoc Subrogation Group”) in 

the above-captioned chapter 11 cases of PG&E Corporation and Pacific Gas and Electric Company 

(together, “PG&E” or the “Debtors”), by its attorneys Willkie Farr & Gallagher LLP and Diemer 

& Wei, LLP, hereby submits this motion (the “Motion”) pursuant to section 1121(d)(1) of title 11 

of the United States Code (the “Bankruptcy Code”) for entry of an order, substantially in the form 

attached hereto as Exhibit A, terminating the Debtors’ exclusive periods to file and solicit 

acceptances of a proposed plan of reorganization (the “Exclusive Periods”). In support of the 

Motion, the Ad Hoc Subrogation Group1 respectfully represents as follows: 

PRELIMINARY STATEMENT 

1. At the May 22 hearing on the Debtors’ motion to extend the Exclusive Periods, the 

Court invited parties that were committed to advancing these chapter 11 cases to submit proposed 

plans of reorganization. Specifically, the Court said, “[t]he door is half open to the ad hoc 

committee, the tort claimant committee, or any other party who believes there’s a way to come up 

with a credible, potentially confirmable plan, other than what the debtors’ counsel may have.” May 

22, 2019 Hr’g Tr. at 76:9-13. Since that hearing, the Ad Hoc Subrogation Group has worked 

tirelessly to present the Court with a credible, confirmable plan (the “Subrogation Plan”), the key 

terms of which are reflected in the term sheet attached hereto as Exhibit A. In light of the 

Subrogation Plan’s numerous benefits discussed below, and the inability of the Debtors to 

effectively use the Exclusive Periods to build consensus around a plan structure, the Ad Hoc 

Subrogation Group submits that the Debtors’ Exclusive Periods should be terminated immediately 

in order to enable the Ad Hoc Subrogation Group to file the Subrogation Plan. 

2. These cases were filed to address and resolve Wildfire Claims (as defined below). 

This point is underscored by the fact that (except for the Bondholder Plan’s (as defined below) 

contrived “impairment” of long term bond claims) both the Bondholder Plan and the Subrogation 

 

1

 The Ad Hoc Subrogation Group is governed by a steering committee, which supports the relief requested 

herein. The steering committee of the Ad Hoc Subrogation Group collectively holds more than 85% of the 

group’s aggregate Subrogation Claims (as defined below). 

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Plan propose to leave all other creditor classes unimpaired. Further, the Debtors have publicly 

acknowledged that such claims could exceed $30 billion.2

 Holders of Subrogation Claims3 alone—

the overwhelming majority of which are members of the Ad Hoc Subrogation Group—hold in 

excess of $20 billion of Wildfire Claims.4

 By far, the two largest groups of creditors holding 

Wildfire Claims are the Ad Hoc Subrogation Group and the Official Committee of Tort Claimants 

(the “Tort Claimants Committee”). The Subrogation Plan is the only path forward that has 

garnered the support of at least one of these two critical constituencies, and the Ad Hoc 

Subrogation Group has spent considerable time and effort negotiating with the Tort Claimants 

Committee to push forward a joint plan (and will continue to do so). 

3. The Subrogation Plan not only incorporates a reasonable settlement of the total value 

of all Subrogation Claims, but also preserves the ability of individual fire victims to assert their 

claims against a well-funded trust and realize a full recovery on their claims.5

 Admittedly, the 

 

2

 Declaration of Jason P. Wells in Support of First Day Motions and Related Relief [Docket No. 28], at p. 1. 

(“PG&E’s potential liability with respect to the 2017 and 2018 Northern California wildfires could exceed $30 

billion, without taking into account potential punitive damages, fines and penalties or damages with respect to 

‘future claims.’”).

3

 “Subrogation Claims” are Wildfire Claims that include, but are not limited to, claims that arise from 

subrogation (whether such subrogation is contractual, equitable or statutory), assignment (whether such 

assignment is contractual, equitable or statutory), or otherwise in connection with payments made or to be made 

by the applicable insurer to insured tort victims, and whether arising as a matter of state or federal law, 

including, without limitation, Section 509 of the Bankruptcy Code. Insurers seek to recover the cost associated 

with claims it has paid to its affected customers, which in many cases results in the reimbursement of customer 

paid deductibles associated with the loss. Subrogation helps keep rates low for customers and controls insurer 

claim costs. 

4

 Holders of Subrogation Claims have reported approximately $18.5 billion of payments and policy reserves to 

the California Department of Insurance, which amount does not include estimated but not yet reserved future 

payments, estimated or accrued interest and attorneys’ fees, all of which are recoverable under applicable law. 

As of September 2018, holders of Subrogation Claims had reported approximately $10 billion in direct incurred 

losses resulting from the 2017 Northern California Wildfires. See http://www.insurance.ca.gov/0400-

news/0100-press-releases/2018/upload/nr106Insuredlosses090618.pdf (reporting losses for Lake, Mendocino, 

Napa, Nevada, Solano, Sonoma and Yuba). As of April 30, 2019, holders of Subrogation Claims had reported 

approximately $8.5 billion in direct incurred losses resulting from the 2018 Northern California Wildfires. See

http://www.insurance.ca.gov/0400-news/0100-press-releases/2019/upload/nr041-

19InsuredLosses2018Wildfires050819.pdf (reporting losses for November 2018 wildfires). 

5

 The Subrogation Plan contemplates that each individual fire victim will have the opportunity to realize a full 

recovery on his or her provable and compensable claim subject to the trust funding amount (including, for the 

avoidance of doubt, reimbursement of any deductibles paid prior to receipt of insurance policy proceeds). The 

Ad Hoc Subrogation Group intends to continue to work with the representatives of the Tort Claimants 

Committee and expects to file an amended term sheet that, in the judgment of the Ad Hoc Subrogation Group, 

provides for sufficient funding for a settlement trust in order to achieve this goal. While the Ad Hoc 

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major open issue in the Subrogation Plan is the total funding required for the individual fire 

victims’ trust, which will be resolved following further negotiations, or (only if necessary) a 

targeted estimation process that will address only the individual Wildfire Claims. 

4. The Court is currently scheduled to hear this Motion concurrently with the two 

motions of the Ad Hoc Subrogation Group and Tort Claimants Committee to lift the stay. 

Terminating exclusivity to permit pursuit of the Subrogation Plan and lifting the stay to allow 

determination of the Debtors’ liability on account of the Tubbs fire in state court can work in 

tandem, on parallel paths, to resolve these cases on a fair, equitable and timely basis.6 In and of 

itself, lifting the stay to permit the prompt adjudication of liability for the Tubbs fire will remove a 

major impediment to a negotiated, consensual resolution of these cases, whether or not exclusivity 

is terminated. Similarly, if only exclusivity is terminated, the Subrogation Plan proposes a 

reasonable settlement of Tubbs liability that could be approved through the plan confirmation 

process. But lifting the stay and terminating exclusivity together will provide the best opportunity 

to have these cases successfully resolved by the June 2020 deadline for participating in the 

insurance wildfire fund and within a time frame that will expedite distributions to individual 

wildfire victims.7

 

Subrogation Group continues to negotiate with the Tort Claimants Committee, the Subrogation Plan described 

herein is expected to provide recoveries up to a higher level than the Bondholder Plan. To the extent the 

funding required for the settlement trust in order to pay victims impacts the plan’s feasibility, additional 

legislative or regulatory solutions may need to be explored and pursued. 

6

 See Motion of the Ad Hoc Subrogation Group for Relief from the Automatic Stay [Docket No. 2863]. Various 

parties that filed responses to the Bondholders’ Motion (defined below) were supportive of terminating 

exclusivity for a truly credible and potentially confirmable plan. Statement of the Official Committee of 

Unsecured Creditors Regarding the Ad Hoc Committee of Senior Unsecured Noteholders’ Motion to Terminate 

the Debtors’ Exclusive Periods Pursuant to Section 1121(d)(1) of the Bankruptcy Code [Docket No. 3064], at 

p. 3-4 (“The Official Committee suggests that any other party that may wish to propose a plan for the Debtors 

be granted similar relief if the Court determines, following notice and a hearing, that such party’s proposal 

constitutes a credible plan...”); Statement of BOKF, N.A. in Support of the Motion of the Ad Hoc Committee of 

Senior Unsecured Noteholders to Terminate the Debtors’ Exclusivity Period [Docket No. 3061], at p. 4 (“In the 

event any other non-Debtor party wishes to file and propose a chapter 11 plan, it should only be permitted to do 

so if it too can demonstrate that its proposed plan is real, credible and viable...”).

7

 The Subrogation Plan is designed to work on a parallel path with Tubbs litigation (without being contingent on 

its outcome), because it proposes a reasonable settlement of Tubbs liability. Nevertheless, it is critical to 

commence litigating the Tubbs issues now so that these cases do not return to square one in the event the 

Subrogation Plan is not confirmed. 

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5. Customer safety is a paramount concern for members of the Ad Hoc Subrogation 

Group. The Subrogation Plan term sheet includes specific provisions to ensure wildfire prevention 

and mitigation are a top priority for the reorganized PG&E. A majority of the directors will be 

appointed to help safeguard that appropriate investments are made in upgrades to PG&E’s 

transmission system, forest management and other efforts to reduce the risk and severity of future 

wildfires. In summary, the Subrogation Plan also: 

x Provides for payment of Individual Wildfire Claims from a well-funded settlement 

trust; 

x Includes an expedited and efficient claim process for individuals to be paid based 

either on individual claim settlements with the trust or contingent upon proving their 

claims, to enable the individual wildfire victims to rebuild and move forward in their 

recovery; 

x Resolves Wildfire Subrogation Claims at an amount significantly less than full 

recovery to help expedite the bankruptcy proceedings;8

x Converts a significant portion of all Wildfire Subrogation Claims into equity to 

strengthen the reorganized Debtors’ balance sheet and reduce the amount of new 

money (and substantial related costs) necessary for the Debtors to exit chapter 11; 

x Creates a strong balance sheet for the reorganized Debtors that allows the company to 

maintain an investment grade rating and positions the reorganized utility to 

(a) maintain compliance with state renewable energy standards, and (b) invest in 

requisite grid improvement and safety enhancement initiatives; 

 

8

 The aggregate recovery on account of Subrogation Claims is a settlement and compromise solely for purposes 

of the Subrogation Plan. If the allowed amount of all Subrogation Claims were litigated, holders of 

Subrogation Claims could and would assert claims in a substantially higher amount than the compromise 

amount proposed in the Subrogation Plan. Approximately $18.5 billion of payments and policy reserves have 

been reported to the California Department of Insurance, which amount does not include estimated but not yet 

reserved future payments, estimated or accrued interest and attorneys’ fees, all of which are recoverable under 

applicable law, and would raise the total amount of Subrogation Claims to over $20 billion. Upon confirmation 

of the Subrogation Plan, the compromised aggregate allowed claim will be binding on each individual class 

member and a binding allocation of the recovery among class members will be set forth in the Subrogation Plan 

or a supplement thereto. 

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x Maintains rate neutrality for all of the Debtors’ customers; 

x Contributes approximately $5 billion to the proposed wildfire recovery fund for 

future wildfire claims; 

x Strengthens and extends the relationship with the reorganized Debtors’ active 

workforce; 

x Assumes the Debtors’ current retirement plan; and

x Allocates more value to existing equity holders than any other option presently on 

file. 

6. The motion of the Ad Hoc Group of Senior Unsecured Noteholders to terminate 

exclusivity, and their proposed term sheet, do nothing to move the needle on the key issue in this 

case—the resolution of Wildfire Claims—because their plan, and satisfaction of a key condition 

precedent to its confirmation, has no support from either of the two major Wildfire Claim 

constituencies and depends on an unrealistically low cap for all Wildfire Claims.9

 Further, that 

plan (the “Bondholder Plan”) is deficient for all the reasons set forth in the Ad Hoc Subrogation 

Group’s objection and response to the related motion.10 Moreover, the Subrogation Plan is superior 

to the Bondholder Plan in many key areas. A chart comparing the two plans is below: 

Issue Bondholder Plan Subrogation Plan 

Subrogation 

Claims Amount 

Up to $7.795 billion11 $15.8 billion 

Individual Claims 

Amount 

Up to $6.045 billion12 Paid in full up to the trust funding 

amount 

Municipal Claims 

Amount 

$1 billion $1 billion 

 

9

 Motion of the Ad Hoc Committee of Senior Unsecured Noteholders to Terminate the Debtors Exclusive Periods 

Pursuant to Section 1121(d)(1) of the Bankruptcy Code [Docket No. 2741] (the “Bondholders’ Motion”).

10 See Objection and Response of the Ad Hoc Group of Subrogation Claim Holders to the Motion of the Ad Hoc 

Committee of Senior Unsecured Noteholders to Terminate the Debtors’ Exclusive Periods Pursuant to Section 

1121(d)(1) of the Bankruptcy Code [Docket No. 3062]. 

11 Excluding the potential 15% adjustment. 

12 Excluding the potential 15% adjustment and legal fees. 

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Treatment of 

Existing Funded 

Debt

Long term unsecured notes 

exchanged for replacement 

secured notes with claim priority 

over future wildfire victims and 

other unsecured creditors

Reinstated or refinanced (without 

security or priority over future 

wildfire victims and other 

unsecured creditors) 

Contribution to the 

Wildfire Recovery 

Fund 

$5 billion $5 billion 

7. Accordingly, the Ad Hoc Subrogation Group respectfully requests that the Court 

terminate exclusivity in its favor and enter the order attached hereto as Exhibit B, so that the Ad 

Hoc Subrogation Group may prosecute the Subrogation Plan. 

BACKGROUND 

A. General Background 

8. On January 29, 2019, PG&E Corporation and Pacific Gas and Electric Company (the 

“Utility”), as debtors and debtors in possession, commenced these voluntary cases under chapter 11 

of the Bankruptcy Code. 

9. The Ad Hoc Subrogation Group’s membership and collective holdings of claims and 

interests are disclosed in the Third Amended Verified Statement of the Ad Hoc Group of 

Subrogation Claim Holders Pursuant to Bankruptcy Rule 2019 [Docket No. 3020], as may be 

amended from time to time. 

B. Background to the Motion 

10. On May 1, 2019, the Debtors filed a motion seeking their first extension of the 

exclusive period to file a plan of reorganization to November 29, 2019 and the exclusive period to 

solicit acceptances of their plan to January 28, 2020 [Docket No. 1797] (the “Exclusivity 

Extension Motion”). On May 22, 2019, this Court held a hearing on the Exclusivity Extension 

Motion and over certain objections, granted the Debtors an extension of the exclusive right to file a 

plan until September 26, 2019 and the exclusive right to seek acceptances for such plan until 

November 26, 2019. 

11. On June 25, 2019, the Ad Hoc Group of Senior Unsecured Noteholders filed the 

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Bondholders’ Motion. On July 18, the Ad Hoc Subrogation Group filed an objection to that 

motion. There, the Ad Hoc Subrogation Group explained why the Bondholder Plan is neither 

credible nor confirmable, and noted that it was working towards presenting its own plan which 

would satisfy this Court’s “credible and potentially confirmable” standard and would “(a) allow 

individual wildfire victims to elect to settle their claims promptly or proceed to litigate and 

ultimately recover the compensable value of their claims from a well-funded trust; (b) settle 

Subrogation Claims at a reasonable level; and (c) provide existing equity with the exclusive 

opportunity to participate in a rights offering to recapitalize the Debtors.”13 

ARGUMENT 

I. Termination of Exclusivity is Appropriate in These Cases 

12. The time has come for this Court to terminate exclusivity for a viable plan. Section 

1121 of the Bankruptcy Code provides that the court “may for cause reduce or increase” periods 

during which the Debtors enjoy the exclusive right to file and solicit acceptances of a plan. 11 

U.S.C. § 1121(d)(1); In re Gibson & Cushman Dredging Corp., 101 B.R. 405, 409 (E.D.N.Y. 

1989) (intention of section 1121 is to “cure the prior practice that gave debtors undue bargaining 

leverage to delay and thereby force a settlement out of otherwise unwilling creditors” (internal 

quotations omitted)); United Sav. Ass’n of Tex. v. Timbers of Inwood Forest Assocs., Ltd. (In re 

Timbers of Inwood Forest Assocs., Ltd.), 808 F.2d 363, 372 (5th Cir. 1987) (“Section 1121 was 

designed, and should be faithfully interpreted, to limit the delay that makes creditors the hostages 

of Chapter 11 debtors”), aff’d, 484 U.S. 365 (1988). 

13. The Bankruptcy Code does not define “cause,” and the determination of cause is a 

fact-specific inquiry. In re Adelphia Commc’ns Corp., 352 B.R. 578, 586-87 (Bankr. S.D.N.Y. 

2006). While the Bankruptcy Code is silent as to what constitutes cause for extending or 

terminating exclusivity, the courts have identified nine factors for consideration: (1) the size and 

 

13 See Objection and Response of the Ad Hoc Group of Subrogation Claim Holders to the Motion of the Ad Hoc 

Committee of Senior Unsecured Noteholders to Terminate the Debtors’ Exclusive Periods Pursuant to Section 

1121(d)(1) of the Bankruptcy Code [Docket No. 3062], at p. 3. 

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complexity of the case; (2) the necessity for sufficient time to permit the debtor to negotiate a plan 

of reorganization and prepare adequate information; (3) the existence of good faith progress toward 

reorganization; (4) the fact that the debtor is paying its bills as they become due; (5) whether the 

debtor has demonstrated reasonable prospects for filing a viable plan; (6) whether the debtor has 

made progress in negotiations with its creditors; (7) the amount of time which has elapsed in the 

case; (8) whether the debtor is seeking an extension of exclusivity in order to pressure creditors to 

submit to the debtor’s reorganization demands; and (9) whether an unresolved contingency exists. 

Adelphia, 352 B.R. at 586-87 (citing In re Dow Corning Corp., 208 B.R. 661, 664-65 (Bankr. E.D. 

Mich. 1997); In re Adelphia Commc’ns Corp., 336 B.R. 610, 674 (Bankr. S.D.N.Y. 2006) (Gerber, 

J.), aff’d, 342 B.R. 122 (S.D.N.Y. 2006) (Scheindlin, J.)). 

14. Importantly, as noted by the court in Dow Corning, “[w]hen the Court is determining 

whether to terminate a debtor’s exclusivity, the primary consideration should be whether or not 

doing so would facilitate moving the case forward.” 208 B.R. at 670 (emphasis added). Notably, 

this determination is one of practicality, which can override a mere “toting up of the factors.” Id. 

Terminating exclusivity to move the case forward is the overriding factor here, both because of the 

June 2020 deadline for participating in the wildfire fund, and the inability of wildfire victims to 

receive adequate compensation until a plan is confirmed. 

15. Here, other factors also weigh in favor of terminating exclusivity to accelerate 

progress towards plan consummation before the June 2020 deadline. While the case is complex, 

these cases have unique and significant time exigencies. After over six months, the Debtors have 

reached a settlement with only a relatively small subset of all wildfire claimants, and no meaningful 

progress toward settlement or resolution with the remaining creditors in these cases whose claims 

need to be impaired. It is precisely this lack of progress and engagement that has necessitated the 

Ad Hoc Subrogation Group to seek the relief proposed herein. Without significant cooperation 

with the Wildfire Claim holders, any plan proposed by the Debtors would be illusory. Furthermore, 

termination of exclusivity is required because the Debtors failed to demonstrate urgency in utilizing 

their exclusive periods to negotiate a plan in earnest (factors 2, 3 and 6), and to this point the 

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Debtors have failed to demonstrate a reasonable prospect for filing a viable plan (factor 5). 

16. The Ad Hoc Subrogation Group has designed a plan that holders of Subrogation 

Claims will support, and constructively proposes a procedure whereby individuals with Wildfire 

Claims have the opportunity to realize a full recovery on their compensable claims. It is fully 

expected that the trust funding amount in the Subrogation Plan will significantly exceed the 

distributable amount for individual Wildfire Claims in the Bondholder Plan, which makes it more 

likely that the relevant condition to confirmation will be satisfied in the case of the Subrogation 

Plan. Moreover, through equitizing a significant portion of the Subrogation Claims, the Ad Hoc 

Subrogation Group has the resources to provide the necessary financing to render the Subrogation 

Plan both credible and confirmable. 

17. Features of the Subrogation Plan include (a) reinstatement or refinancing of all 

funded debt claims; (b) establishment of a sufficiently funded claims resolution trust to satisfy the 

claims of individual wildfire claimants; (c) equitization of 90% of the aggregate allowed 

Subrogation Claims; (d) the option for existing equity holders, if they timely choose to support the 

plan, to invest in the reorganized company through a rights offering;14 (e) payment in full, or 

reinstatement of, general unsecured claims; (f) a balance sheet upon emergence that allows the 

reorganized Debtors to maintain an investment grade rating, and will position the reorganized 

Utility to continue its compliance with state renewable energy standards and invest in requisite grid 

improvement and safety enhancement initiatives; (g) the assumption of the Debtors’ existing 

retirement plan; and (h) rate neutrality for the reorganized Debtors’ customers.

18. All stakeholders stand to benefit from the Subrogation Plan, which gives these 

chapter 11 cases a viable path towards confirmation and emergence. Specifically: 

x Current individual holders of Wildfire Claims will be able to recover quickly 

from a settlement trust funded with sufficient consideration to pay such 

 

14 If existing equity holders decline to participate in the rights offering, the Ad Hoc Subrogation Group is 

confident it will either (a) find other parties willing to participate, including existing stakeholders and/or outside 

parties, or (b) eliminate the need for further capital through additional sources of funding. 

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claims; 

x Future victims of wildfires will be able to look to the new proposed wildfire 

recovery fund and take advantage of the $5 billion contributed under the 

Subrogation Plan; 

x Current holders of funded debt against the company will be reinstated against 

an investment grade issuer; 

x The Utility’s customers will not suffer a net rate increase, and will benefit 

from a safer and more reliable network in line with the state’s renewable 

energy standards; and 

x The Debtors’ employees’ and retirees’ jobs and benefits will be preserved. 

19. The cornerstone of the Subrogation Plan is the willingness of holders of Subrogation 

Wildfire Claims to equitize their voluntarily reduced claims in exchange for mandatory convertible 

preferred equity (“MCP”).

15 The MCP structure ensures the Subrogation Plan’s feasibility, as it 

minimizes the Debtors’ need to raise significant amounts of cash to emerge from chapter 11. 

Another chief benefit of the MCP structure is that objections to the plan based on enterprise value 

will be blunted because the Court will have the benefit of the market, not just experts, to help 

determine the value of the MCP issued under the Subrogation Plan. 

20. This Motion is being filed on a date of great uncertainty in these cases. The 

Bondholders’ Motion, the two lift stay motions relating to the Tubbs fire, and the Debtors’ motion 

to estimate are all likely to be heard either before or concurrently with this Motion. In any potential 

set of outcomes, however, granting this Motion so that the Subrogation Plan, the most credible and 

potentially confirmable plan yet proposed, can be pursued will move these cases forward and put 

these cases on a viable path to an early resolution. For the reasons set forth herein, the Ad Hoc 

Subrogation Group respectfully requests that this Court enter the order attached hereto as Exhibit B 

 

15 The MCP in the Subrogation Plan has been successfully implemented before. It was inspired by preferred 

equity with similar features in the 2013 bankruptcy of American Airlines. See Disclosure Statement for 

Debtors’ Second Amended Join Chapter 11 Plan, In re AMR Corp., No. 11-15463 (SHL) (Bankr. S.D.N.Y. 

June 5, 2013) [Docket No. 8591], at p. 11-14. 

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and permit the Ad Hoc Subrogation Group to file and solicit acceptances of the Subrogation Plan. 

NOTICE 

21. Notice of this Response will be provided to (a) counsel to the Debtors; (b) the Office 

of the U.S. Trustee for Region 17 (Attn: Andrew R. Vara, Esq. and Timothy Laffredi, Esq.); 

(c) counsel to the Official Committee of Unsecured Creditors (d) counsel to the Tort Claimants 

Committee; (e) the Securities and Exchange Commission; (f) the Internal Revenue Service; (g) the 

Office of the California Attorney General; (h) the California Public Utilities Commission; (i) the 

Nuclear Regulatory Commission; (j) the Federal Regulatory Commission; (k) the Office of the 

United States Attorney for the Northern District of California; (l) counsel for the agent under the 

Debtors’ debtor in possession financing facility; and (m) those persons who have formally appeared 

in these chapter 11 cases and requested service pursuant to Bankruptcy Rule 2002. The Ad Hoc 

Subrogation Group respectfully submits that no further notice is required. 

 

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CONCLUSION 

WHEREFORE, the Ad Hoc Subrogation Group requests that the Court grant the 

relief set forth in the proposed order attached as Exhibit B, or otherwise as is just and proper. 

Dated: July 23, 2019 

Counsel for Ad Hoc Group of Subrogation Claim Holders

WILLKIE FARR & GALLAGHER LLP

/s/ Matthew A. Feldman 

Matthew A. Feldman (pro hac vice) 

Joseph G. Minias (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 

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 

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Exhibit A 

Term Sheet

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PG&E CORP., ET AL. 

RESTRUCTURING TERM SHEET

July 23, 2019 

This term sheet (the “Term Sheet”) is proposed by the Ad Hoc Group of Subrogation Claim Holders (the “Ad 

Hoc Subrogation Group”) and sets forth the principal terms of a comprehensive restructuring (the 

“Restructuring”) of the existing debt and other obligations of the Debtors (as defined below) each of which 

commenced cases (the “Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code (the 

“Bankruptcy Code”) in the United States Bankruptcy Court for the Northern District of California (the 

“Bankruptcy Court”), on January 29, 2019 (the “Petition Date”). The Restructuring contemplated herein shall be 

implemented pursuant to a proposed joint chapter 11 plan of reorganization (the “Plan”). 

THIS TERM SHEET DOES NOT CONSTITUTE (NOR SHALL IT BE CONSTRUED AS) AN OFFER WITH 

RESPECT TO ANY SECURITIES OR A SOLICITATION OF ACCEPTANCES OR REJECTIONS AS TO 

ANY CHAPTER 11 PLAN OF REORGANIZATION, IT BEING UNDERSTOOD THAT SUCH A 

SOLICITATION, IF ANY, ONLY WILL BE MADE IN COMPLIANCE WITH APPLICABLE PROVISIONS 

OF SECURITIES, BANKRUPTCY AND/OR OTHER APPLICABLE LAW. THIS TERM SHEET DOES NOT 

ADDRESS ALL TERMS THAT WOULD BE REQUIRED IN CONNECTION WITH ANY POTENTIAL 

TRANSACTION REFERENCED HEREIN, AND THE ENTRY INTO OR THE CREATION OF ANY 

BINDING AGREEMENT IS SUBJECT TO THE EXECUTION OF DEFINITIVE DOCUMENTATION IN 

FORM AND SUBSTANCE CONSISTENT WITH THIS TERM SHEET AND OTHERWISE ACCEPTABLE 

TO THE AD HOC SUBROGATION GROUP. 

Plan Overview

Term Description 

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

“Utility,” and collectively with PG&E Corp., the “Debtors”). Following the 

occurrence of the effective date of the Plan (“Effective Date”), PG&E Corp. and the 

Utility will be referred to herein as “Reorganized PG&E Corp.” and the “Reorganized 

Utility,” respectively, and collectively as the “Reorganized Debtors.”

Transaction Overview As set forth in greater detail herein, the Plan shall provide for

x A resolution of all allowed claims (as such term is defined in section 101(5) 

of the Bankruptcy Code) related to or in any way arising from the wildfires 

that occurred in Northern California prior to the Petition Date (each a 

“Wildfire Claim”) through (a) honoring municipalities’ settlements with the 

Debtors; (b) a settlement of all subrogation Wildfire Claims in exchange for 

a distribution of $15.8 billion of consideration split between 90% in new 

mandatory convertible preferred equity (the “Mandatory Convertible 

Preferred”) and 10% in cash; and (c) the funding and creation of the 

Settlement Trust (defined below) for Individual Wildfire Claimants (defined 

below) with up to $[z] billion1

 for the purposes of paying Wildfire Claims 

 

1

 This Term Sheet contemplates that each individual fire victim will have the opportunity to realize a full 

recovery on his or her provable and compensable claim up to the Trust Funding Amount (defined below) 

(including, for the avoidance of doubt, reimbursement of any deductibles paid prior to receipt of insurance 

policy proceeds). The Ad Hoc Subrogation Group intends to continue to work with the representatives of 

the Tort Claimants Committee and expects to file an amended Term Sheet that, in the judgment of the Ad 

Hoc Subrogation Group, provides for sufficient funding for a Settlement Trust in order to achieve this goal. 

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asserted by Individual Wildfire Claimants (defined below), each on the 

terms provided below; 

x The issuance of $14.2 billion Mandatory Convertible Preferred by 

Reorganized PG&E Corp. as the primary source of distributions on 

Subrogation Claims;2

x The refinancing of short-term funded debt, reinstatement of long-term 

funded debt and the issuance of incremental debt capital at levels that 

maintain an investment grade rating; 

x The exclusive opportunity for holders of PG&E Corp. Common Interests to 

participate in the recapitalization of the Debtors via a $[z] billion new 

money investment in exchange for new common equity of Reorganized 

PG&E Corp. (the “New Common Equity”);

x The Debtors cash on hand at emergence, proceeds of the new money 

investments and the issuance of the Mandatory Convertible Preferred shall 

be used to (a) pay in full in cash all DIP Financing Facility Claims (as 

defined below), (b) pay in full in cash all funded debt that is not reinstated 

on the Effective Date, (c) pay in full in cash all allowed administrative and 

priority claims, (d) fund the creation of the Settlement Trust for Individual 

Wildfire Claimants, and (e) fund the Debtors’ contribution of $5.0 billion to 

a long-term California statewide wildfire fund created for purposes of paying 

claims arising from future utility-related wildfires in California (the 

“California Wildfire Insurance Fund”); and 

x Payment of all trade claims in the ordinary course of business and 

assumption and/or continuation of pension-related obligations. 

Treatment of Claims and Interests Under the Chapter 11 Plan 

Unclassified Claims 

Claim Treatment 

DIP Financing Facility 

Claims

Each holder of a claim under the Senior Secured Superpriority Debtor-in-Possession 

Credit, Guaranty and Security Agreement, dated as of February 1, 2019 (the “DIP 

Financing Facility,” and the claims arising thereunder, the “DIP Financing Facility 

Claims”) shall receive, in full and final satisfaction, compromise, settlement, release, 

and discharge of such DIP Financing Facility Claim, payment in full in cash on the 

Effective Date.

Administrative Expense 

Claims

Each holder of an allowed administrative expense claim against the Debtors under 

section 507(a)(2) of the Bankruptcy Code (other than DIP Financing Facility Claims) 

(the “Administrative Expense Claims”) shall receive, in full and final satisfaction,

compromise, settlement, release, and discharge of such allowed Administrative

Expense Claim, cash equal to the allowed amount of such Administrative Expense 

Claim on the later of (i) the Effective Date or as soon thereafter as is reasonably 

practicable, and (ii) the date such Administrative Expense Claim becomes an allowed 

 

While the Ad Hoc Subrogation Group continues to negotiate with the Tort Claimants Committee, the Plan 

described herein is expected to provide recoveries up to a higher level than the plan proposed by the Ad 

Hoc Bondholder Group. 

2

 The issuance of Mandatory Convertible Preferred may be increased if the Settlement Trust is funded (at 

least in part) with Mandatory Convertible Preferred. 

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Administrative Expense Claim or as soon thereafter as is reasonably practicable. 

Priority Tax Claims Each holder of an allowed claim of a governmental unit (as defined in section 

101(27) of the Bankruptcy Code) of the type specified in section 507(a)(8) of the 

Bankruptcy Code against any Debtor (the “Priority Tax Claims”) shall receive, in full 

and final satisfaction, compromise, settlement, release, and discharge of such allowed 

Priority Tax Claim, (a) cash equal to the amount of such allowed Priority Tax Claim 

on the later of (i) the Effective Date or as soon thereafter as is reasonably practicable 

and (ii) the date such Priority Tax Claim becomes an allowed Priority Tax Claim or 

as soon thereafter as is reasonably practicable, or (b) such other treatment consistent 

with the provisions of section l 129(a)(9) of the Bankruptcy Code.

Wildfire Claims Against PG&E Corp. and Utility3

Claim Classification/Treatment/Voting Estimated 

Recovery 

Estimated 

% 

Recovery 

of Total 

Claims 

Class 1A: Subrogation 

Claims 

Classification: Holders of Wildfire Claims that arise 

from subrogation (whether such subrogation is 

contractual, equitable or statutory), assignment 

(whether such assignment is contractual, equitable or 

statutory), or otherwise in connection with payments 

made or to be made by the applicable insurer to insured 

tort victims, and whether arising as a matter of state or 

federal law, including, without limitation, Section 509 

of the Bankruptcy Code (including attorneys’ fees and 

interest, collectively the “Subrogation Claims”). 

Treatment: On the Effective Date, each holder of an 

allowed Subrogation Claim (a “Subrogation Claim 

Holder”) shall receive, in full and final satisfaction, 

compromise, settlement, release, and discharge of such 

allowed Subrogation Claim, the holder’s share of $1.6 

billion cash, and $14.2 billion Mandatory Convertible 

Preferred, provided that any such recoveries on account 

of amounts reserved by such Subrogation Claim Holder 

representing amounts to be paid to underlying insureds 

may be held in trust for the benefit of such Subrogation 

Claim Holder (on terms acceptable to the Ad Hoc 

$15.8 

billion4

~70%

 

3

 If required, the Plan will provide for separate classes of Wildfire Claims against each entity. 

4

 The aggregate recovery on account of Subrogation Claims is a settlement and compromise solely for 

purposes of the Plan described herein. If the allowed amount of all Subrogation Claims were litigated, 

holders of Subrogation Claims could and would assert claims in a substantially higher amount than the 

compromise amount proposed in this Term Sheet. Approximately $18.5 billion of payments and policy 

reserves have been reported to the California Department of Insurance, which amount does not include 

estimated but not yet reserved future payments, estimated or accrued interest and attorneys’ fees, all of 

which are recoverable under applicable law, and would raise the total amount of Subrogation Claims to 

over $20 billion. Upon confirmation of the Plan, the compromised aggregate allowed claim will be binding 

on each individual class member and a binding allocation of the recovery among class members will be set 

forth in the Plan or a supplement thereto. 

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Subrogation Group) until such insurance policy 

payments are made, at which point such recoveries 

shall be released.

Voting: Impaired - entitled to vote.

Class 2A: Municipal 

Claims

Classification: Wildfire Claims held by a Municipality 

(as defined in section 101(40) of the Bankruptcy Code) 

(“Municipal Claims”). 

Treatment: On the Effective Date, holders of allowed 

Municipal Claims will receive, in full and final 

satisfaction, compromise, settlement, release, and 

discharge of such allowed Municipal Claims, $1.0 

billion in cash to be allocated in accordance with the 

existing Plan Support Agreements between the Debtors 

and certain municipalities (the “Municipalities”), 

provided, that, such Plan Support Agreements may not 

be amended in any manner that affects the Debtors’

aggregate liability to the Municipalities without the 

consent of the Ad Hoc Subrogation Group.

Voting: [TBD]

$1.0 billion [TBD]% 

Class 3A: Individual 

Wildfire Claims

Classification: Holders (“Individual Wildfire 

Claimants”) of Wildfire Claims other than Subrogation 

Claims and Municipal Claims (“Individual Wildfire 

Claims”).

Treatment: Individual Wildfire Claims will be 

channeled to a trust to be established on the Effective 

Date (the “Settlement Trust”). The Settlement Trust 

will assume all of the Debtors’ liability with respect to 

Individual Wildfire Claims, and Individual Wildfire 

Claimants will be the beneficiaries of the Settlement 

Trust. The Settlement Trust will be funded as set forth 

below. The right to assert Individual Wildfire Claims 

against the Settlement Trust shall be deemed payment 

in full of all Individual Wildfire Claims. The order 

confirming the Plan (the “Confirmation Order”) shall 

provide that all claims shall be released and forever 

barred and the Individual Wildfire Claimants shall be 

deemed to have been made whole with respect to the 

subrogation claims of the members of Class 1A. 

Voting: Impaired - entitled to vote.

$[z] up 

front and up 

to a 

maximum 

of $[z] 

over time 

100%, 

subject to 

the Trust 

Funding 

Amount 

PG&E Corp. Claims

Claim Classification/Treatment/Voting Estimated 

Allowed 

Claims 

Estimated 

% 

Recovery 

Class 1B: Other PG&E 

Corp. Priority Claims 

Classification: Holders of allowed claims against 

PG&E Corp. entitled to priority under section 507(a) of 

the Bankruptcy Code (other than DIP Claims, 

Administrative Expense Claims and Priority Tax 

[TBD] 100%

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Claims) (the “Other PG&E Corp. Priority Claims”). 

Treatment: Each holder of an allowed Other PG&E

Corp. Priority Claim against PG&E Corp. shall receive, 

in full and final satisfaction, compromise, settlement, 

release, and discharge of such allowed Other PG&E

Corp. Priority Claim, (i) cash in an amount equal to 

such allowed claim on the Effective Date or as soon 

thereafter as is reasonably practicable, or (ii) such other 

treatment consistent with the provisions of section

l129(a)(9) of the Bankruptcy Code. 

Voting: Unimpaired - deemed to accept. 

Class 2B: Other PG&E 

Corp. Secured Claims 

Classification: Holders of claims (other than DIP 

Financing Facility Claims) that are secured by valid, 

perfected and enforceable liens on property in which 

PG&E Corp. has an interest or that are subject to setoff 

pursuant to section 553 of the Bankruptcy Code (the 

“Other PG&E Corp. Secured Claims”). 

Treatment: Each holder of an allowed Other PG&E

Corp. Secured Claim shall receive, in full and final 

satisfaction, compromise, settlement, release, and

discharge of such allowed Other PG&E Corp. Secured 

Claim, (i) retention of its Other PG&E Corp. Secured 

Claim and any properly perfected and valid liens; (ii) 

payment in full in cash, including the payment of any 

interest allowed and payable under section 506(b) of 

the Bankruptcy Code, on the Effective Date or as soon 

thereafter as is reasonably practicable, or (iii) treatment 

of such allowed Other PG&E Corp. Secured Claim in 

any other manner that renders the claim unimpaired, 

including reinstatement under section 1124(2) of the 

Bankruptcy Code. 

Voting: Unimpaired - deemed to accept. 

[TBD] 100%

Class 3B: PG&E Corp. 

Unsecured Revolving 

Credit Facility Claims 

Classification: Holders of claims arising under the 

Second Amended and Restated Credit Agreement, 

dated as of April 27, 2015, by and between PG&E 

Corp. and Citibank, N.A., as administrative agent (the 

“PG&E Corp. Unsecured Revolving Credit 

Agreement”), in the aggregate principal amount of up 

to $300 million (the “PG&E Corp. Unsecured 

Revolving Credit Facility Claims”). 

Treatment: On the Effective Date or as soon thereafter 

as is reasonably practicable, each holder of an allowed 

PG&E Corp. Unsecured Revolving Credit Facility

Claim shall receive, in full and final satisfaction, 

compromise, settlement, release, and discharge of such 

allowed PG&E Corp. Unsecured Revolving Credit

Facility Claim, cash in an amount equal to (i) the

outstanding principal and accrued and unpaid interest 

as of the Petition Date under the PG&E Corp. 

Unsecured Credit Agreement and (ii) accrued and 

unpaid interest from the Petition Date through the 

~ $300 

million 

100%

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Effective Date at the contract rate, to the extent 

enforceable under applicable law. 

Voting: Unimpaired - deemed to accept. 

Class 4B: PG&E Corp. 

Unsecured Term Loan 

Claims

Classification: Holders of claims arising under the 

Term Loan Agreement, dated as of April 16, 2018, by 

and between PG&E Corp. and Mizuho Bank, Ltd., as 

administrative agent (the “PG&E Corp. Unsecured 

Term Loan Credit Agreement”) in the aggregate 

principal amount of $350 million (the “PG&E Corp. 

Unsecured Term Loan Claims”). 

Treatment: On the Effective Date or as soon thereafter 

as is reasonably practicable, each holder of an allowed 

PG&E Corp. Unsecured Term Loan Claim shall 

receive, in full and final satisfaction, compromise, 

settlement, release, and discharge of such allowed 

PG&E Corp. Unsecured Term Loan Claim, cash in an 

amount equal to (i) the outstanding principal and 

accrued and unpaid interest as of the Petition Date 

under the PG&E Corp. Unsecured Term Loan Credit

Agreement and (ii) accrued and unpaid interest from 

the Petition Date through the Effective Date at the 

contract rate, to the extent enforceable under applicable 

law. 

Voting: Unimpaired - deemed to accept.

~ $350 

million 

100%

Class 5B: PG&E Corp. 

General Unsecured 

Claims

Classification: Holders of general unsecured claims 

(other than Other PG&E Corp. Priority Claims, PG&E 

Corp. Unsecured Revolving Credit Facility Claims, and 

PG&E Corp. Unsecured Term Loan Claims) against 

PG&E Corp. (the “PG&E Corp. General Unsecured 

Claims”) 

Treatment: Each holder of an allowed PG&E Corp. 

General Unsecured Claim shall receive, in full and 

final satisfaction, compromise, settlement, release, and 

discharge of such allowed PG&E Corp. General 

Unsecured Claim, cash in an amount equal to the 

allowed PG&E Corp. General Unsecured Claim, 

together with accrued and unpaid interest from the 

Petition Date through the Effective Date at the 

applicable contract rate or, in the absence of a contract 

rate, the federal judgement rate, on the earlier of (i) the 

Effective Date or as soon thereafter as is reasonably 

practicable or (ii) as soon as reasonably practicable 

following the date such PG&E Corp. General 

Unsecured Claim becomes an allowed PG&E Corp. 

General Unsecured Claim.

Voting: Unimpaired - deemed to accept.

[TBD] 100%

Class 6B: PG&E Corp. 

Intercompany Claims 

Classification: Claims held by the Utility or any nonDebtor affiliate of PG&E Corp. against PG&E Corp. 

(the “PG&E Corp. Intercompany Claims”). 

[TBD] 100%

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Treatment: All allowed PG&E Corp. Intercompany 

Claims, if any, shall be reinstated, compromised or 

cancelled at the election of the Debtors (with the 

consent of the Ad Hoc Subrogation Group, not to be 

unreasonably withheld), such that the PG&E Corp. 

Intercompany Claims are treated in a tax-efficient 

manner.

Voting: Unimpaired - not entitled to vote.

Class 8B: PG&E Corp. 

Common Interests

Classification: Holders of outstanding common 

interests in PG&E Corp. (the “PG&E Corp. Common 

Interests”). 

Treatment: Holders of allowed PG&E Corp. Common 

Interests shall retain ownership of all PG&E Corp. 

Common Interests, subject to the issuance of New 

Common Equity pursuant to the Rights Offering and 

the conversion of the Mandatory Convertible Preferred. 

Voting: [TBD]

N/A [TBD]% 

Utility Claims

Claim Classification/Treatment/Voting Estimated 

Allowed 

Claims 

Estimated 

% 

Recovery 

Class 1C: Other Utility 

Priority Claims

Classification: Holders of allowed claims against the 

Utility entitled to priority under section 507(a) of the 

Bankruptcy Code (other than DIP Financing Facility 

Claims, Administrative Expense Claims and Priority 

Tax Claims) (the “Other Utility Priority Claims”).

Treatment: Each holder of an allowed Other Utility 

Priority Claim shall receive, in full and final 

satisfaction, compromise, settlement, release, and 

discharge of such allowed Other Utility Priority Claim, 

(i) cash in an amount equal to such allowed Other 

Utility Priority Claim on the Effective Date or as soon 

as practicable thereafter, or (ii) such other treatment 

consistent with the provisions of section 1129(a)(9) of 

the Bankruptcy Code.

Voting: Unimpaired - deemed to accept.

[TBD] 100%

Class 2C: Other Utility 

Secured Claims

Classification: Holders of claims (other than DIP 

Financing Facility Claims) that are secured by valid,

perfected and enforceable liens on property in which 

the Utility has an interest or that are subject to setoff 

pursuant to section 553 of the Bankruptcy Code (the 

“Other Utility Secured Claims”).

Treatment: Each holder of an allowed Other Utility 

Secured Claim shall receive, in full and final 

satisfaction, compromise, settlement, release, and 

discharge of such allowed Other Utility Secured Claim,

(i) retention of its Other Utility Secured Claim and any 

[TBD] 100%

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properly perfected and valid liens, (ii) payment in full 

in cash, including the payment of any interest allowed 

and payable under section 506(b) of the Bankruptcy 

Code, on the Effective Date or as soon thereafter as is 

reasonably practicable, or (iii) treatment of such 

allowed Other Utility Secured Claim in any other 

manner that renders the Other Utility Secured Claim 

unimpaired, including reinstatement under section 

1124(2) of the Bankruptcy Code. 

Voting: Unimpaired - deemed to accept.

Class 3C: Utility 

Unsecured Revolving 

Credit Facility Claims 

Classification: Holders of claims arising under the 

Second Amended and Restated Credit Agreement, 

dated as of April 27, 2015, by and between the Utility 

and Citibank, N.A., as administrative agent (the 

“Utility Unsecured Revolving Credit Agreement”), in 

the aggregate principal amount of up to $3 billion (the 

“Utility Unsecured Revolving Credit Facility Claims”).

Treatment: On the Effective Date or as soon thereafter 

as is reasonably practicable, each holder of an allowed 

Utility Unsecured Revolving Credit Facility Claim 

shall receive, in full and final satisfaction, compromise,

settlement, release, and discharge of such allowed 

Utility Unsecured Revolving Credit Facility Claim, 

cash in an amount equal to (i) the outstanding principal 

and accrued and unpaid interest as of the Petition Date 

under the Utility Unsecured Revolving Credit 

Agreement and (ii) accrued and unpaid interest from 

the Petition Date through the Effective Date at the 

contract rate, to the extent enforceable under applicable 

law. 

Voting: Unimpaired - deemed to accept.

~ $2.885 

billion 

100%

Class 4C: Utility 

Unsecured Term Loan 

Claims

Classification: Holders of claims arising under the 

Term Loan Credit Agreement, dated as of February 23, 

2018, by and between the Utility and the Bank of 

Tokyo-Mitsubishi UFJ, Ltd., as administrative agent 

(the “Utility Unsecured Term Loan Agreement”) in the 

aggregate principal amount of $250 million (the 

“Utility Unsecured Term Loan Claims”). 

Treatment: On the Effective Date or as soon thereafter 

as is reasonably practicable, each holder of an allowed 

Utility Unsecured Term Loan Claim shall receive, in 

full and final satisfaction, compromise, settlement,

release, and discharge of such allowed Utility 

Unsecured Term Loan Claim, cash in an amount equal 

to (i) the outstanding principal and accrued and unpaid 

interest as of the Petition Date under the Utility 

Unsecured Term Loan Agreement and (ii) accrued and 

unpaid interest from the Petition Date through the 

Effective Date at the contract rate, to the extent 

enforceable under applicable law. 

~ $250 

million 

100%

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Voting: Unimpaired - deemed to accept.

Class 5C: Short-Term 

Utility Unsecured Notes 

Claims

Classification: Holders of claims arising under the 

notes (or the applicable indenture relating thereto) (the 

“Short-Term Utility Unsecured Notes” and the 

indentures, the “Short-Term Utility Unsecured Notes 

Indentures”) maturing on or before December 31, 2022 

(the “Short-Term Utility Unsecured Notes Claims”), 

identified in Schedule 1 hereto.5

Treatment: On the Effective Date or as soon thereafter

as is reasonably practicable, each holder of an allowed 

Short-Term Utility Unsecured Notes Claim shall 

receive, in full and final satisfaction, compromise, 

settlement, release, and discharge of such allowed 

Short-Term Utility Unsecured Notes Claim, cash in an 

amount equal to the sum of (i) outstanding principal 

and accrued and unpaid interest as of the Petition Date 

at the contract rate under the applicable Short-Term 

Utility Unsecured Notes or Short-Term Utility 

Unsecured Notes Indentures, (ii) accrued and unpaid 

interest from the Petition Date through the Effective 

Date at the contract rate under the applicable Short 

Term Utility Unsecured Notes or Short-Term Utility 

Unsecured Notes Indentures, to the extent enforceable 

under applicable law, and (iii) any prepayment 

premium, makewhole or other similar call protection 

under the applicable Short-Term Utility Unsecured 

Notes or Short-Term Utility Unsecured Notes 

Indentures, to the extent enforceable under applicable 

law. 

Voting: Unimpaired – deemed to accept.

~ $1.75 

billion 

100%

Class 6C: Long-Term 

Utility Unsecured Notes 

Claims

Classification: Holders of claims arising under any

notes (or the applicable indenture relating thereto) (the 

“Long-Term Utility Unsecured Notes” and the

indentures, the “Long-Term Utility Unsecured Notes 

Indentures”) maturing on or after January 1, 2023 (the 

“Long-Term Utility Unsecured Notes Claims”), 

identified in Schedule 2 hereto.6

Treatment: On the Effective Date, the Long-Term 

Utility Unsecured Notes will be reinstated (including 

any accrued and unpaid interest from the Petition Date 

through the Effective Date at the contract rate under the 

applicable Long-Term Utility Unsecured Notes or 

Long-Term Utility Unsecured Notes Indentures, to the 

extent enforceable under applicable law), and the 

Long-Term Utility Unsecured Notes Claims will be 

unimpaired in accordance with section 1124(2) of the 

~$15.8 

billion 

100%

 

5

 If required, the Plan will provide subclasses for claims arising from each separate issuance of the ShortTerm Utility Unsecured Notes. 

6

 If required, the Plan will provide subclasses for claims arising from each separate issuance of the LongTerm Utility Unsecured Notes. 

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Bankruptcy Code. 

Voting: Unimpaired – deemed to accept.

Class 7C: Utility 

Pollution Control Bond 

Claims

Classification: Holders of claims arising under the 

Pollution Control Bonds issued by the California 

Pollution Control Financing Authority and the 

California Infrastructure and Economic Development 

Bank (the “Utility Pollution Control Bonds”) and 

related reimbursement obligations from certain letter of 

credit facilities in the aggregate outstanding principal 

amount of $863 million (the “Utility Pollution Control 

Bonds Claims”). 

Treatment: On the Effective Date or as soon thereafter 

as is reasonably practicable, each holder of an allowed 

Utility Pollution Control Bonds Claim shall receive, in 

full and final satisfaction, compromise, settlement, 

release, and discharge of such allowed Utility Pollution 

Control Bonds Claim, cash in an amount equal to the 

sum of (i) outstanding principal and accrued and 

unpaid interest as of the Petition Date at the contract 

rate under the applicable Utility Pollution Control 

Bonds and (ii) accrued and unpaid interest from the 

Petition Date through the Effective Date at the contract 

rate under the applicable Utility Pollution Control 

Bonds, to the extent enforceable under applicable law. 

Voting: Unimpaired – deemed to accept.

$863 

million 

100%

Class 8C: Utility 

Intercompany Claims 

Classification: Claims held by the PG&E Corp. or any 

non-Debtor affiliate of PG&E Corp. against the Utility 

(the “Utility Intercompany Claims”). 

Treatment: All allowed Utility Intercompany Claims, 

if any, shall be reinstated, compromised or cancelled at 

the election of the Debtors (with the consent of the Ad 

Hoc Subrogation Group, not to be unreasonably 

withheld), such that the Utility Intercompany Claims 

are treated in a tax-efficient manner. 

Voting: Unimpaired - not entitled to vote.

[TBD] 100%

Class 9C: Other Utility 

General Unsecured 

Claims

Classification: Holders of general unsecured claims 

(other than Other Utility Priority Claims, Utility 

Unsecured Revolving Credit Facility Claims, Utility 

Unsecured Term Loan Claims, Short-Term Utility 

Unsecured Notes Claims, Long-Term Utility 

Unsecured Notes Claims, Wildfire Claims, and Utility 

Workers’ Compensation Claims) against the Utility 

(the “Other Utility General Unsecured Claims”).

Treatment: Each holder of an allowed Other Utility 

General Unsecured Claim shall receive, in full and 

final satisfaction, compromise, settlement, release, and 

discharge of such allowed Other Utility General 

Unsecured Claim, cash in an amount equal to the 

allowed Other Utility General Unsecured Claim,

[TBD] 100%

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together with accrued and unpaid interest from the 

Petition Date through the Effective Date at the 

applicable contract rate or, in the absence of a contract 

rate, the federal judgement rate, on the earlier of (i) the 

Effective Date or as soon thereafter as is reasonably 

practicable or (ii) the date such Other Utility General 

Unsecured Claim becomes an allowed Other Utility 

General Unsecured Claim, or as soon thereafter as is 

reasonably practicable.

Voting: Unimpaired - deemed to accept.

Class 10C: Utility 

Workers’ Compensation 

Claims

Classification: Holders of claims against the Utility by 

employees of the Utility for the payment of workers’

compensation benefits under applicable law (the

“Utility Workers’ Compensation Claims”). 

Treatment: Each allowed Utility Workers’

Compensation Claim shall be satisfied in full in the 

ordinary course of business at such time and in such 

manner as the Utility is obligated to satisfy such Utility 

Workers’ Compensation Claim under applicable law. 

Voting: Unimpaired - deemed to accept.

[TBD] 100%

Class 11C: Utility 

Preferred Interests

Classification: Holders of outstanding preferred 

interests in the Utility (the “Utility Preferred Interests”) 

Treatment: Holders of allowed Utility Preferred 

Interests shall retain ownership of all Utility Preferred 

Interests in the Reorganized Utility (including any 

associated liquidation preference). Accrued but unpaid 

dividends as of the Effective Date shall be paid in cash. 

Voting: Unimpaired - deemed to accept.

$258 

million 

100%

Class 12C: Utility 

Common Interests 

Classification: PG&E Corp. as holder of all 

outstanding common interests in the Utility (the 

“Utility Common Interests”).

Treatment: Reorganized PG&E Corp., as holder of the 

Utility Common Interests, shall retain ownership of all 

Utility Common Interests in the Reorganized Utility. 

Voting: Unimpaired - deemed to accept.

N/A 100%

Chapter 11 Plan Implementation

Estimation Proceeding In the event that Class 3A (Individual Wildfire Claims) votes to reject the Plan, there 

will be an estimation proceeding for the limited purpose of determining whether the 

aggregate amount of Individual Wildfire Claims exceeds $[z] billion. In connection 

with the estimation proceeding the Bankruptcy Court and/or the District Court will 

estimate the Debtors’ liability on all Individual Wildfire Claims for purposes of 

confirming the Plan, in accordance with the Bankruptcy Code and applicable law. 

Such estimation proceeding shall conclude prior to the hearing on Plan confirmation. 

The estimated amount of the aggregate Individual Wildfire Claims as determined by 

Bankruptcy Court and/or District Court order is referred to herein as the “Estimated 

Individual Wildfire Liability.” If Class 3A (Individual Wildfire Claims) rejects the 

Plan, a condition precedent to confirmation shall be that the Estimated Individual 

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Wildfire Liability does not exceed $[z] billion. 

Settlement Trust for 

Individual Wildfire 

Claimants 

The purpose of the Settlement Trust will be to (x) assume liability for all valid 

Individual Wildfire Claims and (y) use the Trust Funding Amount to promptly and 

fairly compensate Individual Wildfire Claimants by establishing an efficient 

mechanism to administer, process, settle, resolve, liquidate and pay all valid 

Individual Wildfire Claims pursuant to the Settlement Trust Distribution Procedures 

(the “TDP”). 

The Settlement Trust shall be funded with $[z] up front and up to a maximum of 

$[z] over time (each of which may be in cash, Mandatory Convertible Preferred, or a 

combination thereof) (the “Trust Funding Amount”) for payment to Individual 

Wildfire Claims as such claims are resolved. 

An agreement (the “Trust Agreement”) shall establish and set forth the provisions of 

the Settlement Trust and shall be consistent with the terms attached hereto as Exhibit 

[z], and otherwise in form and substance acceptable to the Ad Hoc Subrogation 

Group.

The Settlement Trust will be administered by three trustees (each such person, a 

“Trustee”). The Debtors, the Official Committee of Tort Claimants (“Tort Claimants 

Committee”) and the Ad Hoc Subrogation Group shall each have the right to appoint 

one trustee, subject to the approval of the Bankruptcy Court in the Confirmation 

Order. The Confirmation Order shall also appoint a trust advisory committee 

(“TAC”). The TAC will be a [z]-member committee to represent the interests of the 

holders of the accrued Individual Wildfire Claims. The TAC will initially consist of 

[z].7

 The Trustees and the TAC shall have the authority to retain any advisors for the 

purpose of carrying out their respective duties under the Trust Agreement. 

Individual Claims Trust 

Distribution Procedures 

Simultaneously with entering into the Trust Agreement, the Trustees, the TAC and 

the Reorganized Debtors will agree on the terms of, and promptly implement, the 

TDP, on substantially the same terms as attached hereto as Exhibit [z], which terms 

shall include the following:

x Holders of unliquidated Individual Wildfire Claims that timely file proofs of 

claim in the Chapter 11 Cases shall be eligible to file a proof of claim and 

supporting documentation with the Settlement Trust. 

x The Settlement Trust shall develop and adopt (with the consent of the 

Reorganized Debtors and the TAC) an expeditious process to liquidate and 

pay valid Individual Wildfire Claims submitted to the Settlement Trust, 

including, but not limited to, by reference to a damages matrix. 

x If, following processing, the Settlement Trust establishes a liquidated value 

for any Individual Wildfire Claim submitted to the Settlement Trust, it shall 

tender to the claimant an offer of payment of the aforementioned determined 

value, together with a form of release adopted by the Settlement Trust with 

the consent of the Reorganized Debtors and the TAC. The form of release 

shall include (but not be limited to) a full release of Wildfire Claims against 

the Debtors, Reorganized Debtors, and the Settlement Trust, and an 

acknowledgement that the claimant shall be deemed to have been made 

whole with respect to the subrogation claims of the members of Class 1A. If 

the claimant accepts the offer of payment and returns the release forms 

 

7

 [Subject to further discussions, it is expected that the TAC shall be comprised of the members of the Tort 

Claimants Committee (or a subset thereof)] 

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properly executed, the claim shall be paid as soon as practicable and 

pursuant to a regular payment schedule to be developed by the Settlement 

Trust with the consent of the Reorganized Debtors and the TAC. 

x The Settlement Trust, with the consent of the Reorganized Debtors and the 

TAC, shall institute binding and non-binding arbitration procedures for 

resolving disputes concerning (a) the Settlement Trust’s denial of a claim 

and/or (b) the liquidated value of a claim. 

x Individual Wildfire Claimants may elect binding or non-binding arbitration 

after receiving a denial or offer from the Settlement Trust. A claimant who 

submits to binding arbitration, or non-binding arbitration and accepts the 

arbitral award, will receive payment in the same manner as a claimant who 

accepts the Settlement Trust’s original offer.

x Individual Wildfire Claimants who elect non-binding arbitration and then 

reject their arbitral awards retain the right to have their claim liquidated 

through the tort system. The Settlement Trust shall defend the claim, and 

the Reorganized Debtors shall have the right to assume responsibility for the 

defense of the lawsuit. Individual Wildfire Claimants shall be eligible for 

payment of a final judgment for monetary damages obtained in the tort 

system from the Settlement Trust. 

Channeling Injunction The Settlement Trust shall be the sole source of recovery for Individual Wildfire 

Claimants against the Debtors. The Plan and Confirmation Order shall channel all

Wildfire Claims held by Individual Wildfire Claimants against the Debtors to the 

Settlement Trust for payment, and shall bar and enjoin Individual Wildfire Claimants 

from seeking to recover on account of their Wildfire Claims against the Reorganized 

Debtors or any assets of the Reorganized Debtors (the “Channeling Injunction”). 

California Wildfire 

Insurance Fund

On the Effective Date, the Reorganized Debtors shall contribute $5.0 billion to the 

California Wildfire Insurance Fund. 

Sources of Plan Funding Distributions under the Plan shall be funded through a combination of the following 

sources: (a) the issuance of the Mandatory Convertible Preferred, (b) the Debtors’

cash on hand at emergence, (c) insurance proceeds, (d) $5.2 billion of additional 

Reorganized PG&E Corp. debt, $4.3 billion of additional Reorganized Utility debt, 

and $0.2 billion of additional Reorganized Utility Preferred Interests, each to be 

raised in the capital markets, and (e) an optional new money equity investment of up 

to $[z] billion via the Rights Offering (as defined below) if sufficient holders of 

PG&E Corp. Common Interests timely agree to support the Plan as set forth below. 

If holders of PG&E Corp. Common Interests decline to participate in the Rights 

Offering the Ad Hoc Subrogation Group is confident it will either (a) find other 

parties willing to participate in the Rights Offering, including existing stakeholders 

and/or outside parties, or (b) eliminate the need for further capital through additional 

sources of funding. 

Mandatory Convertible 

Preferred

On the Effective Date, PG&E Corp. shall issue $14.2 billion of Mandatory 

Convertible Preferred to holders of Subrogation Claims.8

 

The Mandatory Convertible Preferred shall have ten (10) mandatory conversion 

 

8

 The issuance of Mandatory Convertible Preferred may be increased if the Settlement Trust is funded (at 

least in part) with Mandatory Convertible Preferred. 

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periods, each occurring on the first Business Day after: 

x The three (3) month anniversary of the Effective Date; 

x The six (6) month anniversary of the Effective Date; 

x The nine (9) month anniversary of the Effective Date; 

x The twelve (12) month anniversary of the Effective Date; 

x The fifteen (15) month anniversary of the Effective Date; 

x The eighteen (18) month anniversary of the Effective Date; 

x The twenty-one (21) month anniversary of the Effective Date; 

x The twenty-four (24) month anniversary of the Effective Date 

x The twenty-seven (27) month anniversary of the Effective Date 

x The thirty (30) month anniversary of the Effective Date (collectively, the 

“Conversion Dates”). 

One-tenth (1/10th) of the total issued Mandatory Convertible Preferred (plus all 

accrued dividends outstanding as of each Conversion Date) shall mandatorily convert 

into New Common Equity on each of the Conversation Dates as set forth below: 

x On each of the first and second Conversion Dates, one-tenth (1/10th) of the 

total issued Mandatory Convertible Preferred (plus all accrued dividends 

outstanding through the applicable Conversion Date) shall convert into New 

Common Equity at the New Equity Capital Issuance Value (defined below). 

x On each of the final eight Conversion Dates, one-tenth (1/10th) of the total 

issued Mandatory Convertible Preferred (plus all accrued dividends 

outstanding through the applicable Conversion Date) shall convert into New 

Common Equity at a 15% discount to the trailing 20 New York Stock 

Exchange trading day volume weighted average price of the New Common 

Equity at such time. 

Following the second Conversion Date, holders of Mandatory Convertible Preferred 

shall have the option (commencing 20 New York Stock Exchange trading days after 

the prior Conversion Date and prior to the next Conversion Date) to convert the 

amount of Mandatory Convertible Preferred that will mandatorily convert at the next 

Conversion Date at a 15% discount to the trailing 20 New York Stock Exchange 

trading day volume weighted average price of the New Common Equity at such time. 

For the avoidance of doubt, following the final Conversion Date, all Mandatory 

Convertible Preferred shall have been converted into New Common Equity.

Mandatory Convertible Preferred shall accrue a quarterly dividend which shall be 

paid in kind at a 8.0% annual rate. 

The Mandatory Convertible Preferred shall be registered and/or issued pursuant to 

section 1145 of the Bankruptcy Code (as determined by the Ad Hoc Subrogation 

Group) and tradeable within a timeline consistent with any required regulatory 

approvals. 

Rights Offering Subject to the condition described in the following paragraph, the holders of PG&E 

Corp. Common Interests shall have the exclusive opportunity to participate in the 

recapitalization of the Debtors via a rights offering for up to $[z] billion of New 

Common Equity (the “Rights Offering”), based on a fixed reorganized equity value of 

$[z] billion (the “New Equity Capital Issuance Value”). 

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If holders of at least 66% of the PG&E Corp. Common Interests decide to participate 

and support confirmation of the Plan described herein by signing a plan support 

agreement (in form and substance acceptable to the Ad Hoc Subrogation Group) no 

later than September 30, 2019, the Rights Offering shall be open to all holders of 

existing PG&E Corp. Common Interests. If there is a group of equity holders that is 

willing, and has the ability, to commit to and fund the purchase of the New Common 

Equity offered through the Rights Offering (as determined by the Ad Hoc 

Subrogation Group), that group may be offered the opportunity to backstop the Rights 

Offering. Backstop parties for the Rights Offering shall receive a backstop fee of 

3.0%, paid in New Common Equity. 

If equity holders holding sufficient existing PG&E Corp. Common Interests fail to 

timely support confirmation of the Plan, the right to participate in, and backstop, the 

Rights Offering shall be rescinded (or reallocated in the discretion of the Ad Hoc 

Subrogation Group) and additional sources of funding may be pursued to the extent 

required under the plan.

Other Terms

Wildfire Safety Program The Reorganized Debtors shall adopt a wildfire safety program in amount and scope 

acceptable to the Ad Hoc Subrogation Group (in consultation with subject matter 

experts and stakeholders) (the “Wildfire Safety Program”) that prioritizes investment 

in fire mitigation and loss containment for residents in high risk wildfire areas, and 

executive compensation shall be appropriately linked to the Wildfire Safety Program. 

Regulatory Approval Prior to the Effective Date, and the extent necessary, the Debtors shall obtain all 

necessary regulatory approvals needed to effectuate the Restructuring, including, any 

necessary antitrust approvals and approvals provided by the Federal Energy 

Regulatory Commission, the California Public Utilities Commission, and the Nuclear 

Regulatory Commission. 

Releases and 

Exculpation

The Plan shall provide customary releases (including third party releases to the extent 

permitted under applicable law) and exculpation provisions, in each case, to the 

fullest extent permitted by law and effective as of the Effective Date, for the benefit 

of the Debtors, the reorganized Debtors, the Ad Hoc Subrogation Group and its 

members, any official committees appointed in the Chapter 11 Cases and their 

members, and such entities’ respective current and former affiliates, and such entities’ 

and their current and former affiliates’ current and former directors, managers, 

officers, equity holders (regardless of whether such interests are held directly or 

indirectly), predecessors, successors and assigns, subsidiaries, and each of their 

respective current and former equity holders, officers, directors, managers, principals, 

members, employees, agents, managed accounts or funds, management companies, 

fund advisors, advisory board members, financial advisors, partners, attorneys, 

accountants, investment bankers, consultants, representatives, and other 

professionals, each in their capacity as such. 

The releases shall include (but not be limited to) a full release of Wildfire Claims 

against the Debtors and Reorganized Debtors, and any claims against the members of 

Class 1A alleging that the claimant has not been made whole by consummation of the 

Plan.

Corporate Governance Upon the Effective Date and until the first Business Day after the thirty (30) month 

anniversary of the Effective Date (“Initial Term”), the board of directors (the “New 

PG&E Corp. Board”) of the Reorganized Debtors shall consist of 9 members. The 

Chief Executive Officer of the Reorganized Debtors shall serve on the New PG&E 

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Corp. Board. The remaining directors of the New PG&E Corp. Board shall be 

appointed on the Effective Date and the Ad Hoc Subrogation Group shall work with 

IBEW Local 1245, TURN (on behalf of the ratepayers), and the Tort Claimants 

Committee to develop an appropriate board composition. 

To the extent a vacancy arises on the New PG&E Corp. Board during the Initial 

Term, the remaining members of the New PG&E Corp. Board shall designate a 

replacement director to serve out the remainder of the Initial Term. Following the 

Initial Term, members of the board of directors of Reorganized Debtors shall be 

elected annually. 

The board of directors of the Reorganized Utility (the “New Utility Board” and 

together with the New PG&E Corp. Board, the “New Boards”) will consist of the 

same nine (9) members of the New PG&E Corp. Board. The chairperson of the New 

PG&E Corp. Board shall not be the chairperson of the New Utility Board. 

Utility Rates to 

Consumers

The Plan shall be rate-neutral to end-market consumers in California on a net basis. 

Key Employee Matters The Reorganized Debtors shall negotiate with the International Brotherhood of 

Electrical Workers (“IBEW”) and Local Union No. 1245 of the International 

Brotherhood of Electrical Workers (“Local 1245”) with respect to extending the two 

(2) Collective Bargaining Agreements currently in place between Pacific Gas & 

Electric Company and Local 1245 (the IBEW Physical Agreement and the IBEW 

Clerical Agreement, collectively the “IBEW CBAs”) with such negotiations to 

emphasize the Reorganized Debtors’ and Local 1245’s commitment to maintaining a 

spirit of cooperation between labor and management. 

Other Employee Matters Compensation-related agreements between and of the Debtors and any directors, 

officers and employees of the Debtors existing as of the Effective Date, including any 

indemnification and severance obligations, short term incentive plan and other 

incentive plans, with the exception of the revisions set forth herein, existing as of the 

Effective Date, shall be assumed by the Reorganized Debtors. 

The New Boards shall revise the long term incentive compensation programs of the 

Reorganized Debtors by increasing the proportion of LTIP awards subject to 

performance-based vesting criteria. Performance criteria for LTIP awards will be 

modified by increasing/implementing performance weightings that are based on 

achievement of public safety, infrastructure hardening and other related strategic long 

term objectives consistent with the Wildfire Safety Program.

Pension Matters Upon the Effective Date, the Reorganized Debtors shall assume and continue to 

maintain the PG&E Retirement Plan under its current terms, except to the extent any 

amendment is required by law, and shall make any and all contributions necessary to 

satisfy the minimum funding requirements under ERISA Section 302 and Internal 

Revenue Code Section 430.

Executory Contracts and 

Unexpired Leases 

All executory contracts and unexpired leases not expressly listed for rejection on an 

exhibit to the Plan, or previously assumed or rejected by the Debtors pursuant to an 

order of the Bankruptcy Court shall be deemed assumed as of the Effective Date. 

The Debtors or Reorganized Debtors, as applicable, may later, amend, modify, or 

supplement the list of assumed executory contracts an unexpired leases and the 

schedules of executory contracts an unexpired leases with respect to the Debtors or 

Reorganized Debtors, as applicable, at any time, through and including 45 days after 

the Effective Date. 

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Renewable Energy 

Power Purchase 

Agreements

Notwithstanding anything to the contrary in this Term Sheet, the Debtors and 

Reorganized Debtors, as applicable, shall not reject any renewable energy power 

purchase agreement.

Tax Matters The Debtors and the Ad Hoc Subrogation Group will work together in good faith and 

will use commercially reasonable efforts to structure and implement the Restructuring 

in a tax efficient and cost-effective manner for the Reorganized Debtors and creditors. 

Post-Effective Date ownership of PG&E Corp. shall be structured to maximize the 

usage of go-forward tax attributes to the extent consistent with the Plan.

Limitations on 

Additional Debt 

Incurrences and 

Dividends on Common 

Equity 

Following the Effective Date, and until the thirty (30) month anniversary of the 

Effective Date, the Reorganized Debtors shall be subject to limitations on (a) 

borrowing funded debt in excess of $[z] that would have priority of payment over 

any non-converted Mandatory Convertible Preferred, other than to refinance funded 

debt outstanding as of the Effective Date, and (b) issuing dividends on account of 

New Common Equity. 

Conditions Precedent to 

Emergence

The occurrence of the Effective Date shall be subject to the following conditions 

precedent; provided that any condition could be waived with the consent of the Ad 

Hoc Subrogation Group: 

x In the event that Class 3A votes to reject the Plan, the Estimated Individual 

Wildfire Liability shall not exceed $[z] billion. 

x The Confirmation Order shall have been entered by the Court in form and 

substance acceptable to the Ad Hoc Subrogation Group, be in full force and effect 

and not be subject to any stay or injunction and shall have become a final order. 

x All definitive documents relating to the Plan shall be in form and substance 

acceptable to the Ad Hoc Subrogation Group. 

x The Settlement Trust shall have been established, the Trustees shall have been 

appointed, and the TAC shall be constituted, each in accordance with the terms 

provided herein. 

x The Utility retains debt capacity of 47% of its rate base, and PG&E Corp. shall 

have sufficient debt capacity to consummate the Plan based on existing rating 

agency guidance on Investment Grade parameters. 

x Conclusion of the Utility’s 2020 general rate case and 2019 cost of capital 

proceeding before the CPUC satisfactory to the Ad Hoc Subrogation Group, or a 

mutually agreed deferral. 

x CPUC approval, including issuance of a financing order, of the overall financing 

structure, including issuance of new securities under the Plan, if required. 

x No final, unappealable order has been entered by any court of competent 

jurisdiction that determines whether or not (or the extent to which) the Debtors’

are liable for causing the 2017 Tubbs Fire. 

x No occurrence of an additional wildfire or series of wildfires prior to the Effective 

Date that, in the aggregate, is reasonably estimated by the Ad Hoc Subrogation 

Group in good faith to result in more than $[z] of post-petition claims against the 

Reorganized Debtors. 

x All actions, documents, certificates and agreements necessary or appropriate to 

implement the Plan shall have been effected or executed or deemed executed and 

delivered, as the case may be, to the required parties and, to the extent required, 

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filed with the applicable governmental units in accordance with applicable laws. 

x All authorizations, consents, regulatory approvals, rulings or documents that are 

necessary or appropriate to implement and effectuate the Plan shall have been 

received. 

x Following the Effective Date, the Reorganized Debtors will be eligible to access 

funds provided by the California Wildfire Insurance Fund. 

x Following the Effective Date, the common stock of PG&E Corporation will 

continue to be traded on the New York Stock Exchange, or an equivalent major 

stock exchange satisfactory to the Ad Hoc Subrogation Group. 

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Schedule 1

Short-Term Utility Unsecured Notes 

1. $550 million principal amount of 3.50% senior notes due October 1, 2020 

2. $250 million principal amount of 3.50% senior notes due October 1, 2020 

3. $300 million principal amount of 4.25% senior notes due May 15, 2021 

4. $250 million principal amount of 3.25% senior notes due September 15, 2021 

5. $400 million principal amount of 2.45% senior notes due August 15, 2022 

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Schedule 2

Long-Term Utility Unsecured Notes 

1. $3,000 million principal amount of 6.05% senior notes due March 1, 2034

2. $700 million principal amount of 5.80% senior notes due March 1, 2037

3. $400 million principal amount of 6.35% senior notes due February 15, 2038

4. $550 million principal amount of 6.25% senior notes due March 1, 2039

5. $550 million principal amount of 5.40% senior notes due January 15, 2040

6. $250 million principal amount of 5.80% senior notes due March 1, 2037

7. $250 million principal amount of 5.40% senior notes due January 15, 2040

8. $250 million principal amount of 4.50% senior notes due December 15, 2041

9. $400 million principal amount of 4.45% senior notes due April 15, 2042

10. $350 million principal amount of 3. 75% senior notes due August 15, 2042

11. $375 million principal amount of 3.25% senior notes due June 15, 2023

12. $375 million principal amount of 4.60% senior notes due June 15. 2043

13. $300 million principal amount of 3.85% senior notes due November 15, 2023

14. $500 million principal amount of 5.125% senior notes due November 15, 2043

15. $450 million principal amount of 3. 75% senior notes due February 15, 2024

16. $450 million principal amount of 4. 75% senior notes due February 15, 2044

17. $350 million principal amount of 3.40% senior notes due August 15, 2024

18. $225 million principal amount of 4. 75% senior notes due February 15, 2044

19. $500 million principal amount of 4.30% senior notes due March 15, 2045

20. $400 million principal amount of 3.50% senior notes due June 15, 2025

21. $100 million principal amount of 4.30% senior notes due March 15, 2045

22. $200 million principal amount of 3.50% senior notes due June 15, 2025

23. $450 million principal amount of 4.25% senior notes due March 15, 2046

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24. $600 million principal amount of 2.95% senior notes due March 1, 2026

25. $400 million principal amount of 4.00% senior notes due December 1, 2046

26. $400 million principal amount of 3.30% senior notes due March 15, 2027

27. $200 million principal amount of 4.00% senior notes due December 1, 2046

28. $1,150 million principal amount of 3.30% senior notes due December 1, 2027

29. $850 million principal amount of 3.95% of senior notes due 204 7

30. $500 million principal amount of 4.25% senior notes due 2023

31. $300 million principal amount of 4.65% senior notes due 2028

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Exhibit B 

Proposed Order 

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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)

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. 

տ Affects PG&E Corporation 

տ Affects Pacific Gas and Electric Company 

; Affects both Debtors 

* All papers shall be filed in the lead case, 

No. 19-30088 (DM) 

Chapter 11 

Bankr. Case No. 19-30088 (DM) 

(Jointly Administered) 

ORDER TO TERMINATE THE 

DEBTORS’ EXCLUSIVE PERIODS 

WITH RESPECT TO THE AD HOC 

SUBROGATION GROUP 

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Upon consideration of the motion (the “Motion”) of the Ad Hoc Group of 

Subrogation Claim Holders (the “Ad Hoc Subrogation Group”) in the above-captioned 

chapter 11 cases of Pacific Gas and Electric Company and PG&E Corporation for an order, 

pursuant to section 1121(d) of title 11 of the United States Code (the “Bankruptcy Code”),

terminating the Debtors’ exclusive plan filing and solicitation periods (the “Exclusive

Periods”); this Court finds and concludes that the Court has jurisdiction over the subject matter 

of the Motion and the relief requested therein pursuant to 28 U.S.C. §§ 157 and 1334; this is a 

core proceeding pursuant to 28 U.S.C. § 157(b); the legal and factual bases set forth in the 

Motion establish just cause for the relief granted herein; the relief requested in the Motion is in 

the best interests of the Debtors, their estate and their creditors; notice of the Motion was 

sufficient, and no other or further notice need be provided; and after due deliberation and 

sufficient cause appearing therefor, 

IT IS HEREBY ORDERED THAT: 

1. The Motion is granted to the extent set forth herein. 

2. With respect to the Ad Hoc Subrogation Group, the Debtors’ Exclusive 

Periods are terminated pursuant to section 1121(d) of the Bankruptcy Code, and the Ad Hoc 

Subrogation Group may file and solicit a plan of reorganization. 

3. The terms and conditions of this order shall be immediately effective and 

enforceable upon its entry. 

4. This Court shall retain jurisdiction to hear and determine all matters 

arising from or related to the implementation, interpretation, or enforcement of this Order. 

** END OF ORDER ** 

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