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UNITED STATES DEPARTMENT OF JUSTICE

CIVIL DIVISION

JOSEPH H. HUNT

Assistant Attorney General

RUTH A. HARVEY

Director

KIRK MANHARDT

Deputy Director

MATTHEW J. TROY (GABN 717258)

Senior Trial Counsel

P.O. Box 875

Ben Franklin Station

Washington, DC 20044-0875

Telephone: (202) 514-9038

E-mail: matthew.troy@usdoj.gov

DAVID L. ANDERSON (CABN 149604)

United States Attorney

Attorneys for the United States of America

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).

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Bankruptcy Case

No. 19-30088 (DM)

Chapter 11

(Lead Case)

 (Jointly Administered)

 Date: December 17, 2019

 Time: 10:00 a.m.

 Place: United States Bankruptcy Court

 450 Golden Gate Avenue

 Courtroom 17

 San Francisco, CA 94102

 Judge: Hon. Dennis Montali

 RE: Docket No. 4760

 

STATEMENT OF THE UNITED STATES OF AMERICA IN RESPONSE TO THE 

COURT’S MEMORANDUM REGARDING CONFIRMATION ISSUES

The United States of America, on behalf of various federal agencies, hereby responds to the 

Court’s Memorandum Regarding Confirmation Issues (“Memorandum”) (Dkt. No. 4760) entered 

November 15, 2019. In the Memorandum, the Court, among other things, requested principal counsel

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for the Debtors, the two official committees and the Ad Hoc Noteholders Committee, and the Ad Hoc 

Subrogation Claim Holders to meet and confer on an agreed confirmation timetable that is similar to 

the Debtors’ existing proposed timetable (Dkt. No. 4388-1) but accelerates it as much as possible. 

Memorandum at 3, para. 3. The Court also asked counsel to identify any other confirmation related 

issues that the Court could address through briefing and argument prior to final approval of a 

disclosure statement. Id. at 4, para. 4. Specifically, the Court asked whether it “should fix an early 

deadline for confirmation objections based on the requirements of 11 U.S.C. § 1129(a)(1), (2), (3), (4), 

(5) and (13)?” Id.

The United States is aware that the Debtors have filed their 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 (Dkt. No.

5038) (the “RSA Motion”), in which they seek approval of a restructuring support agreement (the 

“RSA”) between them and, among others, the Official Committee of Tort Claimants (“TCC”). The 

United States reserves all rights with respect to the RSA Motion but notes that the RSA requires the 

Debtors to file an amended plan by December 12, 2019, reflecting the RSA’s terms and conditions. 

As of the filing of this statement, however, the United States has not reviewed such amended plan and 

accordingly, references to the plans herein are to the Noteholders/TCC Plan (Dkt. No. 4257) and the 

Debtors’ Joint Plan (Dkt. No. 4564).1

While not identified in the Memorandum as one of the parties to meet and confer, the United 

States files this statement to alert the Court to potential issues with both plans. Various United States 

agencies have filed wildfire related claims aggregating approximately $4.3 billion and many other 

 

1 The United States’ initial review of the RSA seems to indicate that the issues raised herein will 

also apply to the Debtors’ amended plan to be filed December 12.

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non-wildfire related claims in these cases.

The United States is generally not opposed to the Court setting an early deadline for certain 

confirmation objections. However, in doing so, the Court should account for the fact that each of the 

plans before the Court is missing critical elements.

● Potential Unequal Treatment of Claims. Neither plan explains whether there will be 

one wildfire trust or multiple trusts “to administer, process, settle, resolve, liquidate, satisfy, and pay” 

wildfire claims. Noteholders/TCC Plan, Art. 1, § 1.179; Debtors’ Joint Plan, Art. 1, § 1.128. The 

possibility of more than one trust raises the possibility of wildfire trusts funded in different amounts 

with different wildfire claims channeled to unequally funded trusts with different claims resolution 

procedures. This potential difference in the treatment of wildfire claims implicates several of the 

subsections of section 1129. The plan proponents must clarify whether their plans will create one or 

more wildfire trusts before the Court sets an early plan objection deadline as suggested in its 

Memorandum.

● Trust Governance and Operation. Neither plan attaches nor otherwise provides any 

meaningful description of the trust agreements or the claims resolution procedures that will govern the 

resolution, liquidation, and payment of claims from their respective wildfire trusts. Noteholders/TCC 

Plan, Art. 1, §§ 1.78 and 1.79, and 1.80; Debtors’ Joint Plan, Art. 1, §§ 1.127, 1.128, and 1.130. Nor 

does either plan provide the identities of the trustee(s) for the wildfire trust or the members of the 

committee or board to oversee the trusts. Noteholders/TCC Plan, Art 1, §§ 1.81 and 1.82; Debtors’ 

Joint Plan, Art. 1, §§ 1.129 and 1.131. Under the two plans, the plan proponents will provide this 

critical information just fourteen days before the confirmation objection deadline (when they file their 

respective Plan Supplements). Noteholders/TCC Plan, Art 1, § 1.154; Debtors’ Joint Plan, Art. 1, §

1.139. Such short notice may be justified where a supplement includes only schedules of rejected 

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contracts and debtor-retained causes of action, new organizational documents, and identity of new 

officers. Here, though, that document will contain detailed information regarding the treatment of 

wildfire creditors’ claims, including (i) how creditors assert wildfire claims against the trust(s), (ii) 

procedures for resolving those claims, (iii) who will decide how claims are resolved, and (iv) the form 

of consideration for satisfaction of those claims. Fourteen days is clearly insufficient for purported 

wildfire creditors, like certain United States’ agencies, to review a likely lengthy and detailed trust 

agreement and claims resolution procedures to assess the treatment of its claim and decide whether to 

object to that treatment. In particular, given the size of the its claims, the United States is entitled to

ensure that the trust is governed by neutral and experienced trustees. Accordingly, the Court should 

not impose a plan confirmation objection deadline in the absence of such necessary information. If it 

is nevertheless inclined to set an early objection deadline for those subsections, then it should also 

require the plan proponents to file the trust agreements, claim resolution procedures, and the identities 

of the trustee(s) and members of the oversight committee at least thirty days before that early objection 

deadline.

These issues likely implicate confirmation objections based on the requirements of 11 U.S.C. § 

1129(a)(1), (2), (3), and (5). The United States reserves all rights with regard to objections to 

confirmation of either plan. 

Date: December 12, 2019 Respectfully submitted,

JOSEPH H. HUNT

Assistant Attorney General

DAVID L. ANDERSON (CABN 149604)

United States Attorney

/s/ Matthew J. Troy

RUTH A. HARVEY

Director

KIRK MANHARDT

Deputy Director

MATTHEW J. TROY

Senior Trial Counsel

Attorneys for the United States

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CERTIFICATE OF SERVICE

I hereby certify that on December 12, 2019, I electronically filed the foregoing Statement with the Clerk 

of the Court by using the CM/ECF system, which will send a notice of electronic filing to all CM/ECF 

participants.

/s/ Matthew J. Troy

Matthew J. Troy

Senior Trial Counsel 

Attorney for United States

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