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ATTORNEYS AT LAW

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AFDOCS/21266015.2 

Andrew I. Silfen (pro hac vice) 

Beth M. Brownstein (pro hac vice) 

ARENT FOX LLP 

1301 Avenue of the Americas, 42nd Floor 

New York, New York 10019 

Telephone: (212) 484-3900 

Facsimile: (212) 484-3990 

Email: andrew.silfen@arentfox.com 

 beth.brownstein@arentfox.com 

 

Aram Ordubegian (SBN 185142) 

ARENT FOX LLP 

55 Second Street, 21st Floor 

San Francisco, CA 94105 

Telephone: (415) 757-5500 

Facsimile: (415) 757-5501 

Email: aram.ordubegian@arentfox.com 

Counsel for BOKF, NA, solely in its capacity as 

Indenture Trustee

UNITED STATES BANKRUPTCY COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

In re: 

PG&E CORPORATION, 

 – and – 

PACIFIC GAS AND ELECTRIC 

COMPANY, 

 Debtors. 

 Affects PG&E Corporation 

 Affects Pacific Gas and Electric 

Company 

☑ Affects both Debtors 

* All papers shall be filed in the Lead 

Case, No. 19-30088 (DM).

Case No. 19-30088 (DM) 

Chapter 11 

(Lead Case) 

(Jointly Administered) 

SUPPLEMENTAL AND UPDATED 

OBJECTION OF BOKF, NA, INDENTURE 

TRUSTEE, TO DEBTORS’ MOTION 

PURSUANT TO 11 U.S.C. §§ 363(b) & 105(a), 

FED. R. BANKR. P. 6004 & 9019 FOR 

ENTRY OF AN ORDER (I) AUTHORIZING 

THE DEBTORS TO ENTER INTO 

RESTRUCTURING SUPPORT 

AGREEMENT WITH CONSENTING 

SUBROGATION CLAIMHOLDERS, (II) 

APPROVING TERMS OF SETTLEMENT 

WITH CONSENTING SUBROGATION 

CLAIMHOLDERS, INCLUDING ALLOWED 

SUBROGATION CLAIM AMOUNT, AND 

(III) GRANTING RELATED RELIEF 

Case: 19-30088 Doc# 4657 Filed: 11/11/19 Entered: 11/11/19 15:19:14 Page 1 of

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AFDOCS/21266015.2 - 2 - 

Hearing 

Date: November 13, 2019 

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

Place: United States Bankruptcy Court 

 Courtroom 17, 16th Floor 

 San Francisco, CA 94102 

BOKF, NA (“BOKF”), in its capacity as successor indenture trustee (the “Trustee”) 

under the Indentures dated as of (i) April 22, 2005 Supplementing, Amending and Restating the 

Indenture of Mortgage Dated March 11, 2004 (ii) November 29, 2017 and (iii) August 6, 2018, 

each as supplemented or amended, pursuant to which Pacific Gas and Electric Company issued 

the senior notes (the “Senior Notes”), by and through its counsel, Arent Fox LLP, hereby submits 

this Supplemental and Updated Objection to the Debtors’ Motion Pursuant to 11 U.S.C. §§ 

363(b) and 105(a) and Fed. R. Bankr. P. 6004 and 9019 for Entry of an Order (I) Authorizing 

the Debtors to Enter Into Restructuring Support Agreement with the Consenting Subrogation 

Claimholders, (II) Approving the Terms of the Settlement with Such Consenting Subrogation 

Claimholders, including the Allowed Subrogation Claim Amount, and (III) Granting Related 

Relief [Docket No. 3992] (the “RSA Lock-Up Motion”).1 BOKF submits this Supplemental and 

Updated Objection in light of the Notice of Filing of Amended and Restated Restructuring 

Support Agreement [Docket No. 4554] (the “Restated RSA”). In support of its Supplemental and 

Updated Objection, BOKF states as follows: 

SUPPLEMENTAL OBJECTION 

Unfortunately, the Restated RSA fails to address the core defects of the original RSA. 

The RSA and its revisions also ignore the current state of these cases, which are in flux, 

changing and uncertain. The Restated RSA continues to undermine the goals of the dual plan 

process established by this Court, transforms a potentially productive $11 billion settlement into 

an impediment to a global consensual resolution, and creates a substantial risk of a potentially 

$20 billion claim in the event it is terminated for certain reasons, such as confirmation of an 

alternative plan. The RSA Lock Up Motion should be denied or the hearing continued to no 

earlier than the commencement of the confirmation hearing of the Debtors’ Plan 

 

1 Capitalized terms used, but not defined, herein shall have the meanings ascribed to them in the Motion. 

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AFDOCS/21266015.2 - 3 - 

The Restated RSA requires Subrogation Claimholders to vote against any plan other than 

the Debtors’ Plan. Restated RSA, § 2(a)(iii). This is both unproductive and unsupported by 

caselaw from the Ninth Circuit. The sole case from the Ninth Circuit primarily relied upon by the 

Debtors in their original Motion was this Court’s decision in the Utility’s prior chapter 11 case. 

In that case, the Utility removed similar voting restrictions after numerous objections before it 

obtained approval of its plan support agreement. A true and correct copy of the amendment 

removing those restrictions is attached hereto as Exhibit A. The circumstances of the present 

case weigh even more heavily against the proliferation of such harmful and prejudicial anticooperation clauses. 

The Debtors had no substantive response to these points in their Reply. Instead, they 

simply acknowledged the distinction in a footnote and cited to other cases that are likewise 

inapposite. For example, although In re SeraCare Life Sciences, Case No. 06-00510 LA11 

(Bankr. S.D. Cal. Dec. 21, 2006), involved a plan support agreement with a lock-up provision, it 

pertained to a restriction on joint plan proponents opposing their own joint plan. In its Order, the 

court specifically found that this provision did not impinge on the termination of exclusivity 

because it did not impose an undue burden on the filing of a plan by any other party in interest. 

Indeed, there were no other competing plans in SeraCare Life Sciences. 

Here, the facts are quite different. The Subrogation Claimholders are not filing a joint 

plan with the Debtors. They are being locked in to supporting the Debtors’ Plan in a way that 

does unduly burden the efforts of the TCC and Ad Hoc Noteholder Committee to confirm their 

Alternative Plan. The Debtors’ proposal to ameliorate the lock-up provision is to allow the 

Subrogation Claimholders to negotiate with other parties—so long as they remain loyally 

tethered to the Debtors. That is not a meaningful stride towards cooperation and compromise. 

Rather, it simply reinforces that the Subrogation Claimholders will be locked down by the 

Debtors in any mediation, precluding them from engaging in meaningful negotiations with other 

parties. 

The Debtors also have, under the pretense of preserving a fair and balanced dual plan 

process, repeatedly opposed and objected to any so-called attempts by the TCC and Ad Hoc 

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AFDOCS/21266015.2 - 4 - 

Noteholder Committee to gain an advantage over the Debtors. Yet the Debtors have no 

compunction about their own attempt to gain a highly prejudicial, unfair and destructive 

advantage over the TCC, Ad Hoc Noteholder Committee, and other constituencies thereby 

precluding all parties in interest the opportunity to consider alternative plans. The Debtors should 

not be permitted to insist on equality in the dual plan process, while using the Restated RSA to 

place their thumbs on the scale. 

The Court has already determined that the termination of exclusivity, dual plan process 

and mediation are in the best interests of the estates. The Debtors’ approach to circumvent those 

decisions cannot be in the best interest of the estates and should not be countenanced by this 

Court. The parties need the flexibility to negotiate and amend their plans to account for changing 

circumstances and the achievement of compromise. The Restated RSA constrains this flexibility 

and thereby short-circuits the dual-track plan process and undermines the ability of the Court to 

“consider the preferences of creditors and equity security holders in determining which plan to 

confirm.” 11 U.S.C. § 1129(c). There is no basis or reason to grant the relief requested by the 

RSA Lock Up Motion. 

In the event mediation and a global compromise fails, and the Debtors’ Plan is not 

confirmed, the Restated RSA poses the additional problem that Subrogation Claimholders cannot 

be held to $11 billion claim amount in the event the Alternative Plan proposes the same 

treatment as the Debtor Plan. In other words, even if the treatment among plans is identical, the 

Subrogation Claimholders may still assert a $20+ billion claim, which will require restarting the 

estimation process next year and delay emergence. This provision provides no benefit to the 

estates. 

For these and the other reasons stated in their Objection, BOKF respectfully requests that 

the RSA Lock Up Motion and request to approve the Restated RSA be denied, or in the 

alternative, that the RSA Lock Up Motion be continued and heard no earlier than the 

commencement of the confirmation hearing of the Debtors’ Plan. 

[signature on next page] 

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AFDOCS/21266015.2 - 5 - 

Dated: November 11, 2019 ARENT FOX LLP 

 By: /s/ Aram Ordubegian 

 Aram Ordubegian (SBN 185142) 

 Andrew I. Silfen (pro hac vice) 

 Beth M. Brownstein (pro hac vice) 

Counsel for BOKF, NA, solely in its capacity as 

Indenture Trustee 

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EXHIBIT A 

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