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JACOB T. BEISWENGER (S.B. #321012) 

jbeiswenger@omm.com 

O’MELVENY & MYERS LLP 

400 South Hope Street 

Los Angeles, California 90071-2899 

Telephone: (213) 430-6000 

Facsimile: (213) 430-6407 

PETER FRIEDMAN (pro hac vice) 

pfriedman@omm.com 

O’MELVENY & MYERS LLP 

1625 Eye Street, NW 

Washington, DC 20006 

Telephone: (202) 383-5300 

Facsimile: (202) 383-5414 

Attorneys for Governor Gavin Newsom 

 

NANCY A. MITCHELL (pro hac vice) 

nmitchell@omm.com 

MATTHEW L. HINKER (pro hac vice) 

mhinker@omm.com 

O’MELVENY & MYERS LLP 

7 Times Square 

New York, New York 10036 

Telephone: (212) 326-2000 

Facsimile: (213) 326-2061 

UNITED STATES BANKRUPTCY COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

In re: 

PG&E CORPORATION, 

-andPACIFIC GAS & ELECTRIC COMPANY, 

Debtors. 

Case No. 19-30088 (DM) 

Chapter 11 Lead Case 

(Jointly Administered) 

 

STATEMENT OF GOVERNOR GAVIN 

NEWSOM REGARDING 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] 

 Affects PG&E Corporation 

 Affects Pacific Gas & Electric 

Company 

 Affects both Debtors 

*All papers shall be filed in the Lead Case, 

No. 19-30088 (DM) 

Date: December 17, 2019 

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

Place: United States Bankruptcy Court 

 Courtroom 17, 16th Floor 

 San Francisco, CA 94102 

Case: 19-30088 Doc# 5138 Filed: 12/16/19 Entered: 12/16/19 12:44:28 Page 1 of

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Governor Gavin Newsom, by and through his counsel, O’Melveny & Myers LLP, 

respectfully submits this statement (the “Statement”) regarding 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 Governor Newsom files this Statement in 

his official capacity as Governor of the State of California, but not on behalf of any agency, 

department, unit or entity of the State of California.2 In support of this Statement, Governor 

Newsom respectfully states as follows: 

1. Catastrophic wildfires fueled by climate change, decades of mismanagement by 

PG&E, and a challenging regulatory environment destabilized the investor-owned utility sector and 

contributed to the filing of these Chapter 11 Cases in January. In Assembly Bill 1054 (Holden, 

Chapter 79, Statutes of 2019) (“AB 1054”), the state stepped in to address those issues and assure 

Californians access to safe, reliable, and affordable power. AB 1054 provided the Debtors with the 

tools to resolve the Chapter 11 Cases, but only if the reorganized company could meet California’s 

goals. AB 1054 is clear that the Debtors can benefit from the wildfire fund only if they also meet 

the obligations to the people of California that come with the right to operate within the state. 

2. The wildfire fund established in AB 1054 is critical to the Debtors having a path to 

a feasible plan. Any resolution of these cases requires not only confirmation of a plan by the 

Bankruptcy Court, but also approval by the California Public Utilities Commission. To that end, 

AB 1054 requires real, durable, and transformational changes to the governance and operation of 

the utility, and a flexible capital structure that allows for billions of dollars in safety investments 

and grid upgrades. These reforms are not optional, but instead are the core of the compact set forth 

in AB 1054. 

 

1

 Capitalized terms used but not defined herein have the meaning given to such terms in the TCC RSA Motion. 

2

 The Attorney General has appeared in these proceedings on behalf of certain agencies and departments of the State 

of California. The Governor does not take a position in this pleading on any issues raised in any filing by the Attorney 

General related to the TCC RSA Motion. 

Case: 19-30088 Doc# 5138 Filed: 12/16/19 Entered: 12/16/19 12:44:28 Page 2 of

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3. On December 13, 2019, Governor Newsom informed the Debtors that the Amended 

Plan and related restructuring transactions provided therein do not, in his judgment, comply with 

AB 1054. The Amended Plan does not result in a reorganized entity positioned to meet the compact 

of providing safe, reliable, and affordable service to its customers. A copy of the December 13, 

2019 letter is attached hereto as Exhibit A. 

4. These concerns are not new. Throughout the fall, the Governor, through his advisors 

and staff, raised concerns that the Debtors’ proposed plan of reorganization did not meet the 

requirements of AB 1054.3 Yet the Debtors have continued to push forward—first with the motion 

to approve the restructuring support agreement entered into with the Consenting Subrogation 

Claimholders (the “Subro RSA”) [Docket No. 3992], and now with the TCC RSA Motion. 

5. Progress toward fair treatment of victims is good. And, in principle, settlements 

between the Debtors and other creditors move these chapter 11 cases toward timely resolution. 

Unfortunately, the Tort Claimants RSA contains provisions limiting competition and precluding 

the TCC and Consenting Fire Claimant Professionals from supporting any other competing plan of 

reorganization—even one that provides identical treatment of the fire victims’ claims. That type of 

“progress” is more about creating an illusion of momentum than it is about advancing the Chapter 

11 Cases. Any feasible plan of reorganization must start with a plan anchored in providing safe, 

reliable, and affordable power to Californians as required by AB 1054. 

6. These Chapter 11 Cases are unique. Without AB 1054, the Debtors have no path to 

a feasible plan. Further, it is unclear whether the Debtors have sufficient value under the Amended 

Plan to pay claims in full, make required payments to participate in the wildfire fund, and exit 

bankruptcy with the necessary fiscal capacity to meet the requirements of AB 1054. As a result, 

the Debtors must meet their fiduciary obligations, allow all potential plan proponents to benefit 

from the various restructuring support agreements proposed in these Chapter 11 Cases, and focus 

on ensuring that the plan that is ultimately presented to this Bankruptcy Court for confirmation 

complies with AB 1054. 

 

3

 To be clear, the Alternative Plan also does not meet AB 1054. 

Case: 19-30088 Doc# 5138 Filed: 12/16/19 Entered: 12/16/19 12:44:28 Page 3 of

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7. Therefore, to the extent the proposed settlement proceeds, the Bankruptcy 

Court should require amendments that allow the TCC and Consenting Fire Claim Professionals to 

support any alternative restructuring, or deem the Fire Victim Claims unimpaired, provided those 

claims receive the value set forth in the Tort Claimants RSA. 

Dated: December 16, 2019 

 

O’MELVENY & MYERS LLP 

By: /s/ Jacob T. Beiswenger

 

JACOB T. BEISWENGER 

By: /s/ Nancy A. Mitchell

 

NANCY A. MITCHELL (pro hac vice) 

PETER FRIEDMAN (pro hac vice) 

MATTHEW HINKER (pro hac vice) 

Attorneys for Governor Gavin Newsom 

Case: 19-30088 Doc# 5138 Filed: 12/16/19 Entered: 12/16/19 12:44:28 Page 4 of

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