1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

19-30088 – 1 – US_ACTIVE-145415676

RESERVATION OF RIGHTS BY BP ENERGY COMPANY AND BP PRODUCTS 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware

Jonathan R. Doolittle (SBN 290638) 

Email: jdoolittle@reedsmith.com 

REED SMITH LLP 

101 Second Street, Suite 1800 

San Francisco, CA 94105-3659 

Telephone: +1 415 543 8700 

Facsimile: +1 415 391 8269 

Attorneys for BP Energy Company and BP 

Products North America Inc. 

UNITED STATES BANKRUPTCY COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

In re 

PG&E CORPORATION 

 and 

PACIFIC GAS AND ELECTRIC COMPANY, 

Debtors. 

 No.: 19-30088 DM 

Chapter 11 

Lead Case, Jointly Administered 

 Date: February 27, 2019 

Time: 9:30 a.m. 

Place: 450 Golden Gate Ave., Ctrm 17 

 

Honorable Hon. Dennis Montali 

 ☐ Affects PG&E Corporation 

 ☒ Affects Pacific Gas and Electric 

 Company 

☐ Affects both Debtors 

 

RESERVATION OF RIGHTS BY BP ENERGY COMPANY AND BP PRODUCTS 

NORTH AMERICA INC. TO THE MOTION OF DEBTORS PURSUANT TO 

11 U.S.C. §§ 105, 362, 363, AND 364 AND FED. R. BANKR. P. 6003 AND 6004 TO 

(A) HONOR PREPETITION OBLIGATIONS TO NATURAL GAS AND ELECTRICITY 

EXCHANGE OPERATORS, (B) GRANT ADMINISTRATIVE EXPENSE CLAIMS 

AND AUTHORIZE POSTING OF COLLATERAL TO EXCHANGE OPERATORS 

TRADING COUNTERPARTIES, AND FUTURE COMMISSION MERCHANTS, (C) 

MODIFY THE AUTOMATIC STAY, AND (D) GRANT RELATED RELIEF 

[DOCKET NO. 15] 

Case: 19-30088 Doc# 544 Filed: 02/21/19 Entered: 02/21/19 15:02:34 Page 1 of 3
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

19-30088 – 2 – US_ACTIVE-145415676

RESERVATION OF RIGHTS BY BP ENERGY COMPANY AND BP PRODUCTS. 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware

BP Energy Company (“BPEC”) and BP Products North America Inc. (“BPNA” and, 

collectively with BPEC, “BP”), by their undersigned attorneys, submit this response to the motion 

(“Motion”) of the Debtors pursuant to 11 U.S.C. §§ 105, 362, 363, and 364 and Fed. R. Bankr. P. 

6003 and 6004 to (a) honor prepetition obligations to natural gas and electricity exchange operators, 

(b) grant administrative expense claims and authorize posting of collateral to exchange operators 

trading counterparties, and future commission merchants, (c) modify the automatic stay, and (d) 

grant related relief [ECF No. 15] and respectfully represents as follows: 

1. BPEC and BPNA are each counterparties to commodities supply contracts 

(“Contracts”) with Pacific Gas & Electric Company (the “Utility”) that are subject to the 

Bankruptcy Code’s safe harbor provisions for financial-markets contracts.1

 Pursuant to the safe 

harbor provisions of the Bankruptcy Code, BP may terminate the Contracts terminate the transaction 

based on the Utility’s bankruptcy petition, insolvency, or financial condition and offset and net out 

the parties’ obligations (including enforcement against collateral held by BP) free of the restraints of 

the automatic stay. 

2. On the Petition Date, the Utility filed the Motion, inter alia, to permit Trading 

Counterparties (as defined therein) to apply existing cash collateral to their prepetition obligations 

and authorize the Utility to provide cash collateral for post-petition obligations to Trading 

Counterparties. 

3. BPEC and BPNA believe that they are each intended to be Trading Counterparties 

within the definition of the Motion. However, the language used in the Motion is not clear and BP is 

 

1

 BPEC is counterparty to a contract for the Sale and Purchase of Natural Gas pursuant to which it supplies 

natural gas to the Utility. BPNA is counterparty to a Master Allowance/Offset Credit Purchase Agreement pursuant to 

which it sells carbon offset credits to the Utility. 

Case: 19-30088 Doc# 544 Filed: 02/21/19 Entered: 02/21/19 15:02:34 Page 2 of 3
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

19-30088 – 3 – US_ACTIVE-145415676

RESERVATION OF RIGHTS BY BP ENERGY COMPANY AND BP PRODUCTS. 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware

unsure whether any order that may be entered if the Motion is granted will provide BP with 

protections it will need to continue to deliver commodities to the Utility during the Chapter 11 case. 

4. BP has raised its concerns with counsel for the Debtors and is hopeful that the 

language of any proposed final order might provide BP with the assurances it needs to continue to 

make deliveries to the Utility. Since the Debtor has not yet proposed a form of final order, BP 

reserves its right to object to the form and present its concerns to the Court at the hearing on the 

Motion. 

5. Neither this reservation of rights nor any subsequent appearance, pleading, proof of 

claim or suit is intended or shall be deemed or construed as a waiver of any or all rights, claims, 

actions, defenses, and recoupments to which BPEC and BNPA are or may be entitled to under any 

agreements with the Utility, in law or in equity, all of which rights, claims actions, defenses, setoffs 

and recoupments are expressly reserved hereby. 

Dated: February 21, 2019 

DATED: February 21, 2019 

REED SMITH LLP

By: /s/ Jonathan R. Doolittle 

Jonathan R. Doolittle 

Attorneys for BP Energy Company and 

BP Products North America Inc. 

Case: 19-30088 Doc# 544 Filed: 02/21/19 Entered: 02/21/19 15:02:34 Page 3 of 3