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Dennis F. Dunne (admitted pro hac vice) 

Samuel A. Khalil (admitted pro hac vice)

MILBANK LLP 

55 Hudson Yards

New York, New York 10001-2163

Telephone: (212) 530-5000

Facsimile: (212) 530-5219

and 

Gregory A. Bray (SBN 115367)

Thomas R. Kreller (SBN 161922) 

MILBANK LLP 

2029 Century Park East, 33rd Floor

Los Angeles, CA 90067

Telephone: (424) 386-4000

Facsimile: (213) 629-5063

Counsel for the Official Committee

of Unsecured Creditors

UNITED STATES BANKRUPTCY COURT

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION

In re: 

PG&E CORPORATION

- and -

PACIFIC GAS AND ELECTRIC 

COMPANY,

Debtors.

Case No. 19-30088 (DM)

Chapter 11

(Lead Case)

(Jointly Administered)

OBJECTION OF THE OFFICIAL 

COMMITTEE OF UNSECURED 

CREDITORS REGARDING DEBTORS’ 

MOTION FOR APPROVAL OF 

RESTRUCTURING SUPPORT AGREEMENT 

WITH TCC, CONSENTING FIRE 

CLAIMANT PROFESSIONALS AND 

SHAREHOLDER PROPONENTS

Date: December 17, 2019

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

Place: United States Bankruptcy Court

Courtroom 17, 16th Floor

450 Golden Gate Avenue

San Francisco, CA 94102

Re: Docket No. 5038 

 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).

The Official Committee of Unsecured Creditors (the “UCC”) appointed in the chapter 11 

cases of the above-captioned debtors in possession (the “Debtors”) respectfully submits this 

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44553.00001

objection (this “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 and TCC 

to Enter into Restructuring Support Agreement with the TCC, Consenting Fire Claimant 

Professionals, and Shareholder Proponents, and (II) Granting Related Relief [Docket No. 5038] 

(the “TCC RSA Motion”).

1

OBJECTION

1. The TCC RSA Motion seeks approval of a restructuring support agreement (the 

“TCC RSA”) that would obligate the Debtors, the Official Committee of Tort Claimants (the 

“TCC”), the Consenting Fire Claim Professionals and the Shareholder Proponents to work together 

to pursue confirmation of a plan of reorganization, the terms of which are described in the TCC 

RSA (the “Amended Plan”). 

2. Section 3(a)(iii) of the TCC RSA provides that the TCC RSA shall automatically 

terminate if Governor Newsom advises the Debtors on or before December 13, 2019 that:

(A) the Amended Plan and the restructuring transactions provided therein do not in 

his sole judgment comply with AB1054 and (B) describes with particularity how 

the Amended Plan and the restructuring transactions provided therein do not 

comply with AB1054; provided, that such termination shall not occur if the Debtors 

have modified the Amended Plan in a manner acceptable to the Governor in his 

sole discretion by a date that is the earlier of (Y) the commencement of the hearing 

on the RSA Approval Motion or (Z) December 17, 2019

TCC RSA § 3(a)(iii).

3. By letter dated December 13, 2019 (the “Governor’s Letter,” a copy of which is 

attached hereto as Exhibit A), the Governor explained, with particularity, why he does not believe 

the Amended Plan complies with AB 1054. Given the nature and extent of the Governor’s critique 

of the Amended Plan, it does not appear that the Debtors will have the ability to cure the identified 

deficiencies in time to avoid automatic termination. Moreover, even if the TCC RSA Parties were 

 

1 Terms not otherwise defined herein have the meaning ascribed to them in the TCC RSA Motion. 

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44553.00001

to waive the requirements described above, the Governor’s determination that the Amended Plan 

does not comply with AB 1054, and therefore does not qualify to participate in the Wildfire Fund, 

renders the Amended Plan not feasible. 

4. In light of both the likely automatic termination of the TCC RSA by its terms and 

the fact that the Governor’s Letter makes clear that the Amended Plan is not viable, pursuit of the 

Amended Plan via the TCC RSA, including the attempt to contractually obligate parties to support 

it and no other plan, is futile and not in the best interests of the estates or unsecured 

creditors. Moreover, even if the Amended Plan were still somehow viable and worth further 

consideration, the TCC RSA contains the same problematic anticompetitive and other provisions 

that the UCC objected to in the Restructuring Support Agreement between the Debtors and the Ad 

Hoc Group of Subrogation Claim Holders (the “Subrogation RSA”).2 

5. These provisions are as follows: the $13.5 billion settlement (the “TCC 

Settlement”) may be consummated only through the Amended Plan co-sponsored by the Debtors 

and certain of their shareholders; voting lock-ups;

3 and the lack of an “insolvency out.”4

 

2 See UCC’s Objection to the Debtors’ Subrogation Settlement and RSA Motion [Docket No. 4236] and 

Supplemental Objection to the Debtors’ Subrogation Settlement and RSA Motion [Docket No. 4643].

3 Specifically, each of the non-Debtor TCC RSA Parties are required not to: (i) object to, delay, 

impede, or take any other action to interfere with acceptance, confirmation, or implementation of 

the Amended Plan, including, without limitation, support any request to terminate the Debtors’ 

exclusive periods to file or solicit a plan of reorganization; (ii) directly or indirectly solicit approval 

or acceptance of, encourage, propose, file, support, participate in the formulation of or vote for, 

any restructuring, sale of assets, merger, workout, or plan of reorganization for the Debtors other 

than the Amended Plan, including, without limitation, the Alternative Plan or any other plan of 

reorganization proposed by the Ad Hoc Committee; or (iii) otherwise take any action that would 

interfere with, delay, impede, or postpone: (a) the solicitation of acceptances, consummation, or 

implementation of the Amended Plan, or (b) the entry or effectiveness of the Approval Orders 

(other than as a result of the failure of the Consenting Fire Claimant Threshold to occur). See TCC 

RSA ¶ 2(o).

4 The TCC RSA also contemplates assigning to the Fire Trust certain causes of action against third 

parties, including the Debtors’ existing vendors, suppliers, third-party contractors, and consultants. 

Such individuals are the very same people that the Debtors will rely on to carry out the various programs 

to make the grid more resilient and to prevent future wildfires. Such an assignment would appear to be

inconsistent with the Debtors’ stated goal of improving the safety of its operations and wildfire 

mitigation capabilities and the UCC reserves all rights to raise this issue as well before the Court.

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6. Moreover, as was the case in the Subrogation RSA, the Debtors and their

Shareholder Proponents only provisionally terminate estimation in order to confirm their plan. See

TCC RSA §§ 2(d), 3(d)(ii)(B). Indeed, if the TCC RSA is terminated, the TCC Settlement is no 

longer effective and estimation proceedings must begin again. See id. § 3(d)(ii)-(iii) (“Upon 

termination of this Agreement . . . the Estimation Matters shall immediately recommence . . . .”). 

In other words, estimation still needs to continue with respect to the competing plan and as a hedge 

against the distinct possibility that the Amended Plan cannot or should not be confirmed, or that 

the Debtors and their shareholders use the last minute threat of termination of the TCC RSA to 

extract additional concessions as the June 30 deadline approaches.

7. When such provisions are viewed in the context of these cases (and not some 

inapposite precedent), it cannot credibly be argued that any such provisions are in the best interests 

of the estates or unsecured creditors. It is particularly disingenuous, to say the least, for the Debtors 

and the Shareholder Proponents to seek to co-opt for themselves on an exclusive basis the terms 

of a settlement that were already agreed upon between the Ad Hoc Committee of Senior Secured 

Noteholders and the TCC and are reflected in the competing plan that has been on file now for 

several months [Docket No. 4257]. If the Amended Plan and the TCC RSA Motion are still 

pursued, the UCC reserves all rights to assert those same objections as well as others before the 

Court.

8. While the TCC RSA Motion should be denied, the UCC nonetheless believes that 

the TCC Settlement has merit. Coupled with the proposed settlement of the subrogation claims 

included in the Subrogation RSA, the allowance of those settlements under Bankruptcy Rule 9019 

could potentially establish two important cornerstones for the development of a comprehensive 

plan of reorganization that complies with AB 1054, including better addressing the issues raised 

in the Governor’s Letter. The UCC believes that the Court should review these two settlements, 

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44553.00001

upon notice and hearing, in the context of a Bankruptcy Rule 9019 motion, rather than being 

tethered to any particular plan or plan proponent.

5

 If those settlements are approved, such approval 

would serve the dual purposes of avoiding the cost and delay of an estimation proceeding, while 

also freeing up the parties in interest to focus their efforts on developing a chapter 11 plan that will 

include appropriate, necessary and feasible financing and otherwise address the issues raised in 

the Governor’s Letter. The Debtors have unequivocally represented that both of these settlements 

are in the best interests of the estates and satisfy Bankruptcy Rule 9019. Requiring the Debtors to 

make the settlements available for all purposes in these cases, including parties who have standing 

to file a competing plan, does not change this conclusion to a true fiduciary. In fact, it only 

validates the argument. 

9. Given the fluidity of the situation the UCC reserves all rights to present additional 

arguments as the situation evolves. 

Dated: December 16, 2019

MILBANK LLP

/s/ Gregory A. Bray .

DENNIS F. DUNNE

SAMUEL A. KHALIL

GREGORY A. BRAY

THOMAS R. KRELLER

Counsel for the Official Committee of

Unsecured Creditors

 

5 The UCC reserves all rights with respect to such settlements.

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EXHIBIT A

Governor’s Letter

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