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LABATON SUCHAROW LLP 

Thomas A. Dubbs 

Louis Gottlieb 

Carol C. Villegas 

Jeffrey A. Dubbin (SBN 287199) 

140 Broadway 

New York, New York 10005 

LOWENSTEIN SANDLER LLP 

Michael S. Etkin (pro hac vice) 

Andrew Behlmann (pro hac vice) 

One Lowenstein Drive 

Roseland, New Jersey 07068

Lead Counsel to Lead Plaintiff and the Class Bankruptcy Counsel to Lead Plaintiff 

and the Class 

MICHELSON LAW GROUP 

Randy Michelson (SBN 114095) 

220 Montgomery Street, Suite 2100 

San Francisco, California 94104 (additional counsel on Exhibit A) 

Bankruptcy Counsel to Lead Plaintiff 

and the Class 

UNITED STATES BANKRUPTCY COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

In re: 

PG&E CORPORATION 

 - and – 

PACIFIC GAS AND ELECTRIC 

COMPANY, 

 Debtors. 

☒ Affects Both Debtors 

☐ Affects PG&E Corporation 

☐ Affects Pacific Gas and Electric Company 

Case No. 19-30088 (DM) (Lead Case) 

Chapter 11 

(Jointly Administered) 

SECURITIES LEAD PLAINTIFF’S MOTION 

TO APPLY BANKRUPTCY RULE 7023 TO 

CLASS PROOF OF CLAIM

Date: January 14, 2020 

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

Before: Hon. Dennis Montali, 

 United States Bankruptcy Court 

 Courtroom 17, 16th Floor 

 450 Golden Gate Avenue 

 San Francisco, California 94102 

Objection Deadline: December 23, 2019 at 4:00 

p.m. (Pacific Time) 

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TABLE OF CONTENTS 

TABLE OF AUTHORITIES ...........................................................................................................4 

PRELIMINARY STATEMENT .....................................................................................................8

BACKGROUND .............................................................................................................................9

A. The Securities Litigation ................................................................................................9

B. The Chapter 11 Cases ....................................................................................................9

C. Consolidation with the York County action ...................................................................9

D. The Third Amended Complaint ...................................................................................10

1. Exchange Act Claims ..........................................................................................10

2. Securities Act Claims ..........................................................................................10

3. The Class .............................................................................................................11

4. Motions to Dismiss the TAC ..............................................................................11

E. The Bar Date and Bar Date Notices .............................................................................11

1. Mailed Bar Date Notices .....................................................................................13

2. Publication Notice ...............................................................................................13

F. The Class Claims .........................................................................................................14

ARGUMENT .................................................................................................................................15

I. THE COURT SHOULD EXERCISE ITS DISCRETION TO APPLY 

BANKRUPTCY RULE 7023 TO THE CLASS CLAIMS. ...................................................15

A. Class proofs of claim are permitted in Chapter 11 bankruptcy proceedings. ..............15

B. Standard for application of Bankruptcy Rule 7023 to class proofs of claim ...............16

C. The relevant Musicland Factors weigh strongly in favor of applying 

Bankruptcy Rule 7023 to the Class Claims. ................................................................17

1. The fact that the Class was not certified before the Petition Date does not 

preclude application of Bankruptcy Rule 7023 (Musicland Factor No. 1). ........17

2. Members of the Class did not receive constitutionally mandated actual 

notice of the Bar Date (Musicland Factor No. 2)................................................18

(a) Known creditors were entitled to actual notice of the Bar Date. .............18

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(b) Members of the Class are known creditors and thus were entitled

to actual notice of the Bar Date. ...............................................................20

(c) The Debtors did not provide adequate notice of the Bar Date to 

the Class. ..................................................................................................21

3. Certification of the Class will not adversely affect the administration of 

the Debtors’ estates (Musicland Factor No. 3). ..................................................22

CONCLUSION ..............................................................................................................................23

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TABLE OF AUTHORITIES 

 Page(s) 

Cases 

In re Am. Apparel Shareholder Litig., 

2014 U.S. Dist. LEXIS 184548 (C.D. Cal. July 28, 2014) ......................................................20 

In re Amdura Corp., 

170 B.R. 445 (D. Col. 1994) ....................................................................................................21 

In re American Reserve Corp., 

840 F.2d 487 (7th Cir. 1988) .............................................................................................15, 22 

In re Argonaut Fin. Servs., Inc., 

164 B.R. 107 (N.D. Cal. 1994) ....................................................................................19, 20, 21 

In re ATD Corp., 

278 B.R. 758 (Bankr. N.D. Ohio 2002) ...................................................................................18 

Birting Fisheries v. Lane (In re Birting Fisheries), 

92 F.3d 939 (9th Cir. 1996) .....................................................................................................15 

In re Chaparral Energy, Inc., 

571 B.R. 642 (Bankr. D. Del. 2017) ............................................................................16, 17, 18 

Chemetron Corp. v. Jones, 

72 F.3d 341 (3d Cir. 1995).................................................................................................19, 21 

City of New York v. New York, N.H. & H.R. Co., 

344 U.S. 293 (1953) ...........................................................................................................18, 20 

Destefano v. Zynga, Inc., 

2016 U.S. Dist. LEXIS (N.D. Cal. Dec. 11, 2016) ..................................................................20 

Eisen v. Carlisle & Jacquelin et al., 

417 U.S. 156 (1974) .................................................................................................................20 

In re First Alliance Mortgage Co., 

269 B.R. 428 (C.D. Cal. 2001) ................................................................................................17 

In re Freedom Commc’ns Holdings, Inc., 

472 B.R. 257 (Bankr. D. Del. 2012) ........................................................................................19 

Gentry v. Siegel, 

668 F.3d 83 (4th Cir. 2012) ...............................................................................................16, 17 

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In re Kaiser Group Int’l, Inc., 

278 B.R. 58 (Bankr. D. Del. 2002) ....................................................................................15, 16 

Levin v. Maya Constr. Co. (In re Maya Constr. Co.), 

78 F.3d 1395 (9th Cir. 1996) ...................................................................................................19 

In re MF Global Inc., 

512 B.R. 757 (Bankr. S.D.N.Y. 2014) ...................................................................16, 17, 18, 22 

Mortland v. Certified Parking Attendants, LLC (In re Certified Parking 

Attendants, LLC), 

2012 U.S. Dist. LEXIS 19775 (N.D. Cal. Feb. 16, 2012) .......................................................15 

Mullane v. Central Hanover Bank & Trust, Co., 

339 U.S. 306 (1950) ...........................................................................................................20, 21 

In re Musicland Holding Corp., 

362 B.R. 644 (Bankr. S.D.N.Y. 2007) .........................................................................17, 18, 22 

Palmdale Hills Prop., LLC v. Lehman Comm’l Paper, Inc. (In re Palmdale Hills 

Prop., LLC), 

457 B.R. 29 (B.A.P. 9th Cir. 2011)..........................................................................................15

Reid v. White Motor Corp., 

886 F.2d 1462 (6th Cir. 1989), cert. denied, 494 U.S. 1080 (1990) ........................................15 

Richmond v. United States, 

172 F.3d 1099 (9th Cir. 1999) .................................................................................................19 

In re Salomon Analyst Litig., 

373 F.Supp.2d 252 (S.D.N.Y. 2005) ........................................................................................18 

Teva Pharm. USA, Inc. v. Abbott Labs., 

252 F.R.D. 213 (D. Del. 2008) ..................................................................................................8 

The Certified Class in the Chartered Securities Litig. v. The Charter Co. (In re 

The Charter Co.), 

876 F.2d 866 (11th Cir. 1989), pet. for cert. dismissed, 496 U.S. 944 (1990) ................ passim

In re Verity Health Sys. Of Cal., 

2019 Bankr. LEXIS 1818 (Bankr. C.D. Cal. June 11, 2019) ..................................................17 

Statutes 

11 U.S.C. § 510(b) .........................................................................................................................23 

15 U.S.C. § 78u-4(b)(3)(B) ............................................................................................................18 

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Other Authorities 

Fed. R. Bankr. P. 7023 ........................................................................................................... passim

Fed. R. Bankr. P. 9014 .........................................................................................................7, 15, 16 

Fed. R. Civ. P. 23 .....................................................................................................8, 14, 15, 16, 22 

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Public Employees Retirement Association of New Mexico (“Lead Plaintiff” or 

“PERA”), the court-appointed lead plaintiff in the securities class action captioned as In re 

PG&E Corporation Securities Litigation, Case No. 18-03509 (the “Securities Litigation”) 

pending in the U.S. District Court for the Northern District of California (the “District Court”) 

on behalf of itself and the proposed class it represents in the Securities Litigation (the “Class”), 

together with York County on behalf of the County of York Retirement Fund, City of Warren 

Police and Fire Retirement System, and Mid-Jersey Trucking Industry & Local No. 701 Pension 

Fund (collectively, the “Securities Act Plaintiffs” and together with Lead Plaintiff, the 

“Securities Plaintiffs”), hereby submit this motion (the “Motion”) for entry of an order, 

pursuant to Rules 9014(a) and (c) of the Federal Rules of Bankruptcy Procedure (the 

“Bankruptcy Rules”), substantially in the form submitted herewith (the “Proposed Order”) as 

Exhibit A: 

 directing that Bankruptcy Rule 7023 applies to the class proofs of claim filed by 

Lead Plaintiff on behalf of itself and the Class against each of the Debtors (the 

“Class Claims”) [Claim Nos. 72193, 72273] and, 

 if the Court directs that Bankruptcy Rule 7023 applies to the Class Claims, 

establishing a briefing schedule for and scheduling a hearing, if necessary, on 

certification of the Class for all purposes in the chapter 11 bankruptcy cases (the 

“Chapter 11 Cases”) of the above-captioned debtors in possession (the 

“Debtors” or “PG&E”), including but not limited to (a) voting on and, if 

applicable, opting out of and/or objecting to any releases contained in, any chapter 

11 plan or plans filed in the Chapter 11 Cases, (b) allowance of the Class Claims, 

and (c) receiving any distributions on account of the Class Claims on behalf of the 

entire Class, subject to allocation and distribution as may be ordered by the 

District Court in the Securities Litigation. 

For the reasons set forth below, the Motion should be granted. 

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PRELIMINARY STATEMENT1

“The Supreme Court has noted that the dominant purpose behind certifying Rule 23(b)(3) 

cases is to vindicate the rights of people who individually would be without the strength 

to bring their opponents into court; it overcomes the problem of small recoveries, which 

do not provide enough incentive for individual actions to be prosecuted.” 2

Known creditors of a chapter 11 debtor, such as the members of the Class, are entitled, as 

a matter of Constitutional Due Process, to actual notice of a claims bar date. Attempting to reach 

known creditors through publication or other forms of constructive notice is tantamount to giving 

them no notice at all. Such is the case here. The identities and potential claims of Class 

members were readily and reasonably ascertainable by the Debtors using well-established 

procedures commonly used by claims administrators in all securities class action cases, yet the 

Debtors made no effort whatsoever to provide members of the Class with the constitutionally 

mandated actual notice of the Bar Date. 

The Debtors’ efforts, however extensive, to provide constructive notice of the Bar Date to 

their unknown creditors – efforts that, in any event, primarily targeted wildfire victims – were 

fundamentally insufficient and of no effect whatsoever with respect to the Class. Constructive 

notice (through publication or otherwise) is constitutionally inadequate with respect to known

creditors such as the Class. Moreover, the Debtors’ publication notice, even if any Class 

members happened to see or read it, was completely inadequate to give Class members notice of 

the Bar Date or the fact that they hold claims against the Debtors based on violations of the 

federal securities laws. The most effective and efficient remedy for the Debtors’ failure to 

provide actual notice of the Bar Date to the Class is through the application of Bankruptcy Rule 

7023 to the Class Claims and certification of the Class for purposes of these Chapter 11 Cases 

pursuant to Fed. R. Civ. P. 23. Application of Bankruptcy Rule 7023 and certification of the 

Class will protect and preserve the rights and claims of thousands of absent Class members, 

while saving the estate potentially millions of dollars of noticing costs and sparing the Court and 

 

1

 Capitalized terms used in this Preliminary Statement but not previously defined have the 

meanings given thereto below. 

2

 Teva Pharm. USA, Inc. v. Abbott Labs., 252 F.R.D. 213, 224 (D. Del. 2008) (citing Amchem 

Prods., Inc. v. Windsor, 521 U.S. 591, 617 (1997)). 

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the estate the monumental administrative burden of administering tens of thousands of individual 

Class members’ claims. That is the very reason the class action device was created and 

Bankruptcy Rule 7023 exists. 

BACKGROUND 

A. The Securities Litigation 

The initial complaint in the Securities Litigation was filed on June 12, 2018 [DC ECF 

No. 1]. On September 10, 2018, the District Court consolidated the Securities Litigation and 

appointed PERA as Lead Plaintiff and Labaton Sucharow LLP as lead counsel for the Class [DC 

ECF No. 62]. Pursuant to that order, Lead Plaintiff filed a second amended complaint [DC ECF 

No. 95] on December 14, 2018. 

B. The Chapter 11 Cases 

On January 29, 2019, the Debtors filed these Chapter 11 Cases. As a result, the 

Securities Litigation was, and currently remains, automatically stayed solely with respect to the 

Debtors pursuant to 11 U.S.C. § 362(a). On February 15, 2019, the Debtors filed an adversary 

proceeding, Adv. Pro. No. 19-03006, seeking to enjoin continued prosecution of the Securities 

Litigation and other lawsuits against various non-Debtor defendants. The Court entered an 

agreed order on May 1, 2019 (the “May 1 Consent Order”), dismissing Lead Plaintiff from that 

adversary proceeding and establishing a timeline for the Debtors to file a new adversary 

proceeding solely against the Securities Plaintiffs and renew their request to enjoin the continued 

prosecution of the Securities Litigation against the non-Debtor defendants therein after Lead 

Plaintiff filed its Third Amended Complaint (the “TAC”). 

C. Consolidation with the York County action 

On February 22, 2019, the Securities Act Plaintiffs filed a class action styled as York 

County v. Rambo, Case No. 19-994 (N.D. Cal.) (the “York County Action”), asserting claims 

under the Securities Act of 1933 (the “Securities Act”) against certain of the Debtors’ current 

and former directors and officers, as well as the underwriters of certain of the Debtors’ notes 

offerings. On May 7, 2019, the District Court consolidated the York County Action with the 

Securities Litigation and authorized Lead Plaintiff to file the TAC [DC ECF No. 117]. 

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D. The Third Amended Complaint 

On May 28, 2019, Lead Plaintiff, with the Securities Act Plaintiffs, filed the TAC [DC 

ECF No. 121]. The TAC asserts claims against eighteen of the Debtors’ current and former 

directors and officers (the “Individual Defendants”) and twenty-four investment banks that 

underwrote the Notes Offerings (the “Underwriter Defendants” and together with the 

Individual Defendants, the “Non-Debtor Defendants”). But for the imposition of the automatic 

stay in these Chapter 11 Cases, the Securities Litigation would proceed against the Debtors, 

alongside the Non-Debtor Defendants, with respect to both the Exchange Act Claims and the 

Securities Act Claims (as defined below). The Class Claims are based solely on the allegations 

in the TAC. 

1. Exchange Act Claims 

The TAC asserts claims under Section 10(b) of the Exchange Act, SEC Rule 10b-5 

promulgated thereunder, and Section 20(a) of the Exchange Act (the “Exchange Act Claims”). 

Among other things, the TAC alleges that from April 29, 2015 through November 15, 2018 (the 

“Class Period”), the Debtors and the Non-Debtor Defendants intentionally or recklessly misled 

investors about the Debtors’ wildfire safety practices, including representations that the Debtors 

were in full legal compliance and continuing to invest in safety (as a prudent manager), 

notwithstanding their numerous and widespread violations of safety regulations and inadequate 

safety practices. . As information regarding the impact of the Debtors’ deficient safety practices 

emerged between October 12, 2017 and November 15, 2018, investors were surprised, given the 

Debtors’ and Non-Debtor Defendants’ numerous public statements during the Class Period 

touting the Debtors’ compliance, safety measures, and intertwined financial health. As a result, 

the Debtors’ artificially inflated share price dropped significantly. Thus, as a result of the 

Debtors’ and Non-Debtor Defendants’ fraudulent statements and material omissions set forth in 

detail in the TAC, Lead Plaintiff and other Class members have suffered significant damages. 

2. Securities Act Claims 

The TAC also asserts claims under Sections 11 and 15 of the Securities Act (the 

“Securities Act Claims”), arising from the Debtors’ four public senior notes offerings on March 

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1, 2016, December 1, 2016, March 10, 2017, and April 2, 2018 (the “Notes Offerings”), in 

which the Debtors offered and sold approximately $4.35 billion of registered senior notes (the 

“Senior Notes”). The TAC alleges that the offering documents for the Notes Offerings 

contained thirty-four materially misleading statements. 

3. The Class 

As the true nature and extent of PG&E’s responsibility for the Northern California 

wildfires materialized, investors holding PG&E’s publicly traded securities suffered significant 

compensable losses under the federal securities laws. The Class is comprised of investors who 

acquired the Debtors’ securities during the Class Period (unlike the speculators that have 

purchased PG&E stock immediately prior to and during the bankruptcy) and suffered losses as a 

result of the Debtors’ and the Non-Debtor Defendants’ alleged false statements and omissions 

and other conduct, which inflated the price of the Debtors’ securities. The Class is not defined 

as, or with any reference to, persons who were physically injured or whose property was 

damaged or destroyed by the Northern California wildfires. 

4. Motions to Dismiss the TAC 

On October 4, 2019, after this Court denied the Debtors’ motion to extend the automatic 

stay to the Non-Debtor Defendants [Adv. Pro. No. 19-03039, ECF No. 23], the Non-Debtor 

Defendants filed motions to dismiss the TAC [DC ECF No. 148, 155]. Lead Plaintiff’s 

opposition is due on December 6, 2019, the Non-Debtor Defendants’ reply, if any, is due on 

January 10, 2020, and oral argument is scheduled in the District Court for February 6, 2020. 

E. The Bar Date and Bar Date Notices 

On July 1, 2019, the Court entered an order (the “Bar Date Order”) [ECF No. 2806] 

that, among other things, (a) established October 21, 2019 at 5:00 p.m. (Pacific Time) as the last 

date for holders of claims against the Debtors to file proofs of claim in respect thereof (the “Bar 

Date”), (b) approved various forms of notice of the Bar Date (collectively, the “Bar Date 

Notices”), including the “Standard Bar Date Notice” [ECF No. 2806 Ex. B-1] for creditors 

other than customers and wildfire victims, along with specialized notices for wildfire victims and 

customers [ECF No. 2806 Exs. B-2 and B-3]. The Bar Date Order directed the Debtors to mail 

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the Bar Date Notices to the categories of creditors listed in paragraphs 8, 9, and 10 of the Bar 

Date Order and to post each of the Bar Date Notices on the Debtors’ website. Bar Date Order, ¶¶ 

8-11. Members of the Class were not among the categories of creditors who were to receive the 

Bar Date Notices pursuant to the Bar Date Order. Id. Indeed, although Class Members include 

investors who purchased PG&E stock during the Class Period and still hold that stock, the Bar 

Date Order expressly excluded “any person or entity that holds an equity security interest in the 

Debtors” from the categories of individuals and entities to whom the Debtors were required to 

mail the Standard Bar Date Notice. Id. ¶ 8(b). 

The Standard Bar Date Notice did not mention the Securities Litigation, the Class, or the 

Class Period at all, nor did it provide any indication that members of the Class might hold claims 

against the Debtors and therefore need to file proofs of claim (although doing so would have had 

little if any effect because, as discussed below, the Debtors did not mail the Standard Bar Date 

Notice to members of the Class). The only language in the Standard Bar Date Notice that even 

tangentially suggested a need for members of the Class to file proofs of claim was the ambiguous 

statement – under the boldfaced heading of “WHO NEED NOT FILE A PROOF OF 

CLAIM” – that 

You do not need to file a Proof of Claim on or before the bar date 

if you are: 

. . . 

any person or entity that holds an equity security interest in the 

Debtors, which interest is based exclusively upon the ownership of 

common or preferred stock, membership interests, partnership 

interests, or warrants, options, or rights to purchase, sell, or 

subscribe to such a security or interest; provided, however, that if 

any such holder asserts a claim (as opposed to an ownership 

interest) against the Debtors (including a claim relating to an

equity interest or the purchase or sale of such equity interest), a 

Standard Proof of Claim must be filed on or before the Bar Date

. . . . 

Standard Bar Date Notice at 7-8. Even the proviso at the end of that statement is vague and 

potentially misleading, because it refers only to current holders of equity interests, not prior 

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purchasers such as the members of the Class, many of whom had likely sold their securities 

before the Debtors mailed the Bar Date Notices. 

1. Mailed Bar Date Notices 

The Bar Date Order directed the Debtors to mail the Standard Bar Date Notice to, among 

other categories of creditors, “all parties actually known to the Debtors as having claims or 

potential claims against either of the Debtors (but excluding holders of Fire Claims) which, for 

the avoidance of doubt, excludes any person or entity that holds an equity security interest in 

the Debtors. . . .” and “all parties to pending litigation against the Debtors as of the date of entry 

of this Order (other than holders of Fire Claims) . . . .” Id. ¶¶ 8(b), (e) (emphasis added). 

Although Lead Plaintiff and the Class were known prepetition creditors of the Debtors, the Bar 

Date Order did not direct the Debtors to undertake, nor does it appear the Debtors ever 

undertook, any efforts whatsoever to identify the members of the Class and provide the Standard 

Bar Date Notice (or any other Bar Date Notice) to them. Moreover, as to members of the Class 

who were current holders of the Debtors’ equity securities at the time the Bar Date Notices were 

mailed, but had no other prepetition claims against the Debtors, the Bar Date Order expressly 

provided that the Debtors were not required to serve the Standard Bar Date Notice on them. 

2. Publication Notice 

The Bar Date Order also approved a “Supplemental Notice Plan” pursuant to which the 

Debtors sought to provide notice to unknown creditors via newspaper publication, digital 

advertising, television and radio advertising, e-mail, and claim service centers. See Bar Date 

Order, ¶¶ 2, 12-14; Bar Date Motion [ECF No. 1784] at 23-26; Reply [ECF No. 2646] at 15-20. 

The Debtors admit that the Supplemental Notice Plan was, as with any publication notice, 

effective at most only as to unknown creditors, primarily wildfire victims. See, e.g.: 

 Reply [ECF No. 2646] at 15 (“The Debtors’ Supplemental Notice Plan is 

reasonably calculated to provide adequate notice of the Bar Date to unknown 

claimants, including Unknown Wildfire Claimants . . . .”) (emphasis added); 

 Declaration of Shai Y. Waisman [ECF No. 1786], at 5 (“In addition to serving the 

Bar Date Notices, the Debtors intend to provide supplemental notice of the Bar 

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Date [through the Supplemental Notice Plan] to unknown creditors, including 

Unknown Wildfire Claimants. . . .”) (emphasis added); 

 Declaration of Benjamin P.D. Schrag [ECF No. 1787], at 5 (same); 

 Declaration of Jeanne C. Finnegan [ECF No. 2642], at 3 (referring to the “multifaceted and robust Supplemental Notice Plan to provide notice of the Bar Date to 

unknown creditors”) (emphasis added); and 

 Bar Date Motion [ECF No. 1784] at 23 (describing the Supplemental Notice Plan 

as a “noticing strategy that aims to reach individuals impacted by the Northern 

California Wildfires in . . . all of the counties impacted by the Northern 

California Wildfires”) (emphasis added). 

In addition to acknowledging that the Supplemental Notice Program was intended to 

reach only unknown creditors, the Debtors’ motion to establish the Bar Date and their reply in 

further support thereof, and the various supporting declarations filed in connection therewith 

[ECF Nos. 1786, 1787, 2642, 2643] say absolutely nothing about (i) the Securities Litigation, 

(ii) mailing the Bar Date Notices to the members of the Class, or (iii) any other efforts by the 

Debtors, their claims and noticing agent, or anyone else to provide notice of the Bar Date to the 

members of the Class – because there were none. 

F. The Class Claims 

The Securities Plaintiffs timely filed proofs of claim asserting the Class Claims on behalf 

of themselves and the Class [Claim Nos. 72193, 72273] on October 21, 2019. The Class Claims 

incorporate by reference, and assert claims against each of the Debtors based upon, the 

allegations in the TAC. Through this Motion, Lead Plaintiff respectfully requests that the Court 

(a) exercise its discretion to apply Bankruptcy Rule 7023 to the Class Claims and, if the Court 

does so, (b) establish a briefing and hearing schedule in connection with certification of the Class 

pursuant to Fed. R. Civ. P. 23 for all purposes in the Chapter 11 Cases. 

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ARGUMENT 

I. THE COURT SHOULD EXERCISE ITS DISCRETION TO APPLY 

BANKRUPTCY RULE 7023 TO THE CLASS CLAIMS. 

A. Class proofs of claim are permitted in Chapter 11 bankruptcy proceedings. 

It is well-settled that class proofs of claim are permitted in bankruptcy proceedings. In re 

Kaiser Group Int’l, Inc., 278 B.R. 58, 62 (Bankr. D. Del. 2002) (“The vast majority of courts 

have concluded that class proofs of claim are permissible in bankruptcy proceedings, pursuant to 

Bankruptcy Rules 7023 and 9014.). The Ninth Circuit has adopted this majority rule. Birting 

Fisheries v. Lane (In re Birting Fisheries), 92 F.3d 939, 939-40 (9th Cir. 1996) (holding that the 

Bankruptcy Code “should be construed to allow class claims” and noting that three other circuits 

had so held as of that time); Palmdale Hills Prop., LLC v. Lehman Comm’l Paper, Inc. (In re 

Palmdale Hills Prop., LLC), 457 B.R. 29 (B.A.P. 9th Cir. 2011) (same); Mortland v. Certified 

Parking Attendants, LLC (In re Certified Parking Attendants, LLC), 2012 U.S. Dist. LEXIS 

19775, at *7 (N.D. Cal. Feb. 16, 2012) (“Class claims, pursuant to FRCP 23, are permissible in 

bankruptcy court.”). Several other circuits have adopted the rule as well. See, e.g., The Certified 

Class in the Chartered Securities Litig. v. The Charter Co. (In re The Charter Co.), 876 F.2d 

866, 873 (11th Cir. 1989) (“[i]n light of Congress’ inclusion of Rule 23 in bankruptcy 

proceedings [and] the clear congressional intent that the Bankruptcy Code encompass every type 

of claim . . . we conclude that class proofs of claim are allowable in bankruptcy”), pet. for cert. 

dismissed, 496 U.S. 944 (1990); Reid v. White Motor Corp., 886 F.2d 1462, 1469 (6th Cir. 1989) 

(allowing class proofs of claim pursuant to Bankruptcy Rules 7023 and 9014 is the more 

“equitable resolution”), cert. denied, 494 U.S. 1080 (1990); In re American Reserve Corp., 840 

F.2d 487 (7th Cir. 1988) (“The class proof of claim may be essential to discover what the 

bankrupt’s entire debts are, and therefore who should be paid what.”). These courts have 

recognized that the class action device is consistent with the fundamental goals and objectives of 

the bankruptcy process: 

[T]he bankruptcy statute has the goal of facilitating creditor 

compensation. It would be incongruous for this bedrock policy to 

be thwarted by reading a procedural limitation into the Code. 

Bankruptcy also seeks to achieve equitable distribution of the 

estate. Persons holding small claims, who absent class procedures 

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might not prosecute them, are no less creditors under the Code than 

someone with a large, easily filed claim. Applying Rule 23 to 

filing procedures will bring all claims forward, as contemplated by 

the Bankruptcy Code. 

Charter Co., 876 F.2d at 871. 

Notwithstanding the majority rule permitting class proofs of claim in bankruptcy cases, 

the decision whether to certify a class claim is “within the discretion of the bankruptcy court.” 

Kaiser Group, 278 B.R. at 62. Courts may decline to apply Rule 23 if doing so would “‘gum up 

the works’ of distributing the estate.” In re MF Global Inc., 512 B.R. 757, 763 (Bankr. S.D.N.Y. 

2014). Here, however, Class treatment of the Class Claims does not in any way threaten to delay 

administration of the Debtors’ estates or “gum up the works,” but rather, will help to inform the 

plan process and facilitate the orderly and efficient administration of the Debtors’ estates by 

“bring[ing] all claims forward, as contemplated by the Bankruptcy Code” without the need to 

expend additional estate funds remedying the Debtors’ failure to provide notice of the Bar Date 

to the Class, or to individually administer potentially tens of thousands of Class members’ 

claims. See Charter Co., 876 F.2d at 871. 

B. Standard for application of Bankruptcy Rule 7023 to class proofs of claim 

Courts apply a two-step analysis to determine whether to certify a class in the context of a 

bankruptcy case. In re Chaparral Energy, Inc., 571 B.R. 642, 646 (Bankr. D. Del. 2017). First, 

the Court must make the threshold decision of whether it is beneficial to apply Rule 7023, via 

Bankruptcy Rule 9014(c), to the claims administration process. Id. at 646. Second, if the Court 

determines in the first step that applying Bankruptcy Rule 7023 is appropriate, the Court then 

must determine whether the class certification requirements of FRCP 23 have been satisfied. Id.; 

see also Gentry v. Siegel, 668 F.3d 83, 93 (4th Cir. 2012) (“Civil Rule 23 factors do not become 

an issue until the bankruptcy court determines that Rule 7023 applies by granting a Rule 9014 

motion.”). 

The first step of the Bankruptcy Rule 7023 analysis is a discretionary decision. 

Chaparral Energy, 571 B.R. at 646. That discretionary analysis focuses on “whether the benefits 

of applying Rule 7023 (and Civil Rule 23) are superior to the benefits of the standard bankruptcy 

claims procedures.” Gentry, 688 F.3d at 93. In making that determination, courts generally 

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consider three factors (the “Musicland Factors”): 

1) whether the class was certified pre-petition; 

2) whether members of the putative class received notice of the bar 

date, and 

3) whether class certification will adversely affect the 

administration of the estate. 

In re Verity Health Sys. Of Cal., 2019 Bankr. LEXIS 1818, at *19-*20 (Bankr. C.D. Cal. June 

11, 2019) (quoting Chaparral, 571 B.R. at 646 and In re Musicland Holding Corp., 362 B.R. 

644, 654 (Bankr. S.D.N.Y. 2007)). The weight of each factor is determined on a case-by-case 

basis. Verity, 2019 Bankr. LEXIS 1818, at *19-*20; Chaparral, 571 B.R. at 646 (“No one factor 

is dispositive; a factor may take on more or less importance in any given case.”). 

C. The relevant Musicland Factors weigh strongly in favor of applying Bankruptcy 

Rule 7023 to the Class Claims.3

1. The fact that the Class was not certified before the Petition Date does not 

preclude application of Bankruptcy Rule 7023 (Musicland Factor No. 1). 

Because the Securities Litigation is still at the motion to dismiss stage, certification of the 

Class prior to the Petition Date was impossible. However, that is not a bar to application of 

Bankruptcy Rule 7023. See, e.g., In re First Alliance Mortgage Co., 269 B.R. 428, 442-43, 447-

48 (C.D. Cal. 2001) (“Charter Co. similarly dispels the notion that class procedures should only

be used where a class was certified in a non-bankruptcy context.”); see also In re MF Global 

Inc., 512 B.R. 757, 763-65 (Bankr. S.D.N.Y. 2014) (where class members’ claims arose in 

tandem with the conduct leading to the debtors’ insolvency proceedings, “the issue of 

prepetition certification loses its relevance, since there will seldom be time to file a class action 

complaint and certify a class before the petition date”) (emphasis added); Gentry, 668 F.3d at 

91 (rejecting argument that application of Bankruptcy Rule 7023 was inappropriate where class 

was not certified prepetition). 

The Chaparral court exercised its discretion to apply Bankruptcy Rule 7023 to a class 

 

3

 The Court’s recent denial of a motion seeking application of Bankruptcy Rule 7023 to 

putative class claims filed by certain of the Debtors’ former employees has no bearing on this 

Motion primarily because, among other reasons, and as the Court noted, most or all of those 

claimants were provided with actual notice of the Bar Date. 

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claim even though the class action had been pending for nearly five years before the bankruptcy 

filing without a class being certified. 571 B.R. at 644, 646-47. Here, as in MF Global, the 

Debtors’ path into bankruptcy occurred based on certain of the events underlying the Securities 

Litigation. The Debtors commenced their Chapter 11 Cases less than five months after the 

consolidation of the Securities Litigation and just two and a half months after the end of the class 

period. Under the Private Securities Litigation Reform Act, all discovery and other proceedings 

in the Securities Litigation are stayed until the District Court has denied motions to dismiss. 15 

U.S.C. § 78u-4(b)(3)(B); In re Salomon Analyst Litig., 373 F.Supp.2d 252, 256 (S.D.N.Y. 2005) 

(noting that the PSLRA stay applies broadly “until a complaint has been authoritatively sustained 

by the court.”). Certifying the Class prior to the Petition Date was impossible, but that does not 

impact application of Bankruptcy Rule 7023 to the Class Claim.

2. Members of the Class did not receive constitutionally mandated actual notice 

of the Bar Date (Musicland Factor No. 2). 

The second Musicland factor, whether the members of the Class received notice of the 

Bar Date, is of critical importance here because the Debtors failed to provide constitutionally 

mandated actual notice of the Bar Date to members of the Class. See, e.g., Chaparral, 571 B.R. 

at 646 (“The second Musicland factor weighs in favor of applying Bankruptcy Rule 7023 to the

Class Claims as not all putative class members were served with notice of the Bar Date.”). Here, 

the Debtors made no effort whatsoever to provide actual notice of the Bar Date to members of 

the Class. The Supplemental Notice Program did not cure that failure because members of the 

Class are known creditors who were entitled to actual notice, not merely constructive notice, of 

the Bar Date. 

(a) Known creditors were entitled to actual notice of the Bar Date.

Constitutional Due Process requires that notice of any bankruptcy claims bar date “be 

fundamentally fair and reasonably calculated to apprise interested parties.” In re ATD Corp., 

278 B.R. 758, 763 (Bankr. N.D. Ohio 2002) (collecting cases). A creditor who does not receive 

proper notice of a claims bar date is not bound thereby. See City of New York v. New York, N.H. 

& H.R. Co., 344 U.S. 293, 296 (1953). In the face of a challenge to the receipt of a bar date 

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notice, the burden rests with the debtor to show that it satisfied the notice requirements. See In 

re Freedom Commc'ns Holdings, Inc., 472 B.R. 257, 261 (Bankr. D. Del. 2012) (citing 

Dependable Ins. Co. v. Horton (In re Horton), 149 B.R. 49, 57 (Bankr. S.D.N.Y. 1992)). 

For purposes of notice, bankruptcy law differentiates between “known” and “unknown” 

creditors, each of which is entitled to a different level of notice. In re Argonaut Fin. Servs., Inc., 

164 B.R. 107, 112 (N.D. Cal. 1994). Known creditors are 

creditors that a debtor knew of, or should have known of, when 

serving notice of the bar date. . . . A known claim arises from facts 

that would alert the reasonable debtor to the possibility that a claim 

might reasonably be filed against it. 

. . . 

Because constitutional due process requires that actual notice be 

given a creditor who is "reasonably ascertainable," such a creditor 

must by necessity qualify as a "known" creditor under this line of 

cases. 

Id. (quoting In re Drexel Burnham Lambert Group, Inc., 151 B.R. 674, 681 (Bankr. S.D.N.Y. 

1993)); see also Chemetron Corp. v. Jones, 72 F.3d 341, 346 (3d Cir. 1995) (a known creditor “is 

one whose identity is either known or ‘reasonably ascertainable by the debtor.’”) (quoting Tulsa 

Prof’l Collection Serv., Inc. v. Pope, 485 U.S. 478, 490 (1988)). A creditor’s identity is reasonably 

ascertainable (and thus the creditor is a known creditor) if “that creditor can be identified through 

reasonably diligent efforts[.]”. Chemetron, 72 F.3d at 346-47 (internal quotation marks and 

citations omitted).

By contrast, an unknown creditor “is one whose ‘interests are either conjectural or future 

or, although they could be discovered upon investigation, do not in due course of business come 

to knowledge [of the debtor].’” Chemetron, 72 F.3d at 346 (quoting Mullane v. Central Hanover 

Bank & Trust, Co., 339 U.S. 306, 317 (1950)). 

Known creditors “must be provided with actual written notice of a debtor’s bankruptcy 

filing and [claims bar] date.” Id. at 346; see also Richmond v. United States, 172 F.3d 1099, 1103 

(9th Cir. 1999) (“‘Actual notice is a minimum constitutional precondition to a proceeding 

which will adversely affect the liberty or property interests’ of a creditor in bankruptcy.”) 

(quoting Tulsa Prof’l, 485 U.S. at 485) (emphasis added); Levin v. Maya Constr. Co. (In re Maya 

Constr. Co.), 78 F.3d 1395, 1399 (9th Cir. 1996) (“The burden is on the debtor to cause formal 

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notice to be given; the creditor who is not given notice, even if he has actual knowledge of 

reorganization proceedings, does not have a duty to investigate and inject himself into the 

proceedings.”) (emphasis added); Argonaut, 164 B.R. at 112 (“[I]n bankruptcy cases, courts have 

found that known creditors are deserving of actual notice while unknown creditors are owed only 

publication notice.”). Providing known creditors with only publication notice of a bankruptcy 

claims bar date is akin to giving them no notice at all. See City of New York, 344 U.S. at 296 

(holding that newspaper publication of a bar date order “cannot be considered ‘reasonable 

notice’ to” a known creditor). 

Only for unknown creditors, whose identity and whereabouts cannot be reasonably 

ascertained, can constructive notice by publication ever suffice. Argonaut, 164 B.R. at 112. 

Constructive notice, such as the Supplemental Notice Program, sometimes can be sufficient for 

unknown creditors because, by definition, there is no other feasible alternative means of reaching 

them. Mullane, 339 U.S. at 317; City of New York, 344 U.S. at 296 (1953) (“[W]hen the names, 

interests and addresses of persons are unknown, plain necessity may resort to publication.”). 

However, for known creditors, such as the members of the Class, constructive notice – no matter 

how extensive – is always constitutionally inadequate. 

(b) Members of the Class are known creditors and thus were entitled to 

actual notice of the Bar Date. 

The identities of the members of the Class were reasonably ascertainable by the Debtors. 

No protracted search was necessary to identify investors who purchased the Debtors’ securities 

during the Class Period. All the Debtors needed to do was follow the same straightforward 

procedures that are used to provide actual notice to prior purchasers of publicly traded securities 

in securities class action cases. See, e.g., Eisen v. Carlisle & Jacquelin et al., 417 U.S. 156, 166-

67, 166 n.5 (1974) (describing procedure for providing actual notice to over two million stock 

purchasers by obtaining their names and addresses from their intermediary brokers); Destefano v. 

Zynga, Inc., 2016 U.S. Dist. LEXIS, at *19-*20 (N.D. Cal. Dec. 11, 2016) (describing courtordered process for providing actual notice to absent members of class of securities purchasers 

based on issuer’s transfer records and through “street name” nominee brokers); In re Am. 

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Apparel Shareholder Litig., 2014 U.S. Dist. LEXIS 184548, *19-*20 (C.D. Cal. July 28, 2014) 

(same). 

(c) The Debtors did not provide adequate notice of the Bar Date to the Class.

Rather than providing the constitutionally required actual notice to the Class, the Debtors 

apparently chose to rely exclusively on constructive notice through the Supplemental Notice 

Program. From a Due Process standpoint, that was akin to providing no notice at all. See, e.g., 

Chemetron, 72 F.3d at 346 (“Known creditors must be provided with actual written notice of a 

debtor’s bankruptcy filing and bar claims date.”) (emphasis added); Argonaut, 164 B.R. 107 

(noting that “constitutional due process requires that actual notice be given [to] a creditor who is 

‘reasonably ascertainable’”); see also In re Amdura Corp., 170 B.R. 445, 450-452 (D. Col. 1994). 

The Amdura court rejected a debtor’s argument that actual notice to absent securities fraud class 

members was unduly cumbersome and expensive, holding instead that 

publication alone as to members who no longer held securities[] was 

insufficient to satisfy due process, where representatives had taken 

all necessary steps to file class proof of claim in bankruptcy case, 

both debtor and bankruptcy court were aware of existence of 

individual creditors, and debtor could have obtained list of 

creditors' names and addresses from representatives . . . . 

Amdura, 170 B.R. at 450-52 (emphasis added). As the Supreme Court found in Mullane, 

It would be idle to pretend that publication alone . . . is a reliable 

means of acquainting interested parties of the fact that their rights 

are before the courts. . . . Chance alone brings to the attention of 

even a local resident an advertisement in small type inserted in the 

back pages of a newspaper, and if he makes his home outside the

area of the newspaper's normal circulation the odds that the 

information will never reach him are large indeed. The chance of 

actual notice is further reduced when, as here, the notice 

required does not even name those whose attention it is supposed 

to attract, and does not inform acquaintances who might call it to 

attention.

Mullane 339 U.S. at 315 (emphasis added). 

Despite being well aware of the claims in the Securities Litigation and the Class, the 

Debtors did not undertake reasonably diligent efforts – or any efforts, for that matter – to identify 

members of the Class or provide them with actual written notice of the Bar Date. The 

Supplemental Notice Program was not intended to reach the members of the Class and was 

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constitutionally inadequate with respect to the Class. 

As discussed above, even if a member of the Class happened to receive one of the Bar 

Date Notices or encounter one of the notices published through the Supplemental Notice 

Program, those notices made no mention of the Securities Litigation or the need for members of 

the Class to file proofs of claim. The Standard Bar Date Notice told then-current interest holders 

that they need not file proofs of claim, subject only to a vague exception for a “claim relating to 

an equity interest or the purchase or sale of such equity interest” that made no reference to the 

Securities Litigation, the Class, the Class Period, the Class Claims, or any other information that 

might have informed Class members that they had claims and should assert them. 

Simply put, the Debtors failed to provide any notice of the Bar Date to absent Class 

members, except to the extent any of them happened to hold other, entirely unrelated claims (and 

even in that very narrow and purely fortuitous circumstance, the notice provided was inadequate 

with respect to those Class members’ securities fraud claims). Applying Bankruptcy Rule 7023 

to the Class Claims and, thereafter, certifying the Class for purposes of the Chapter 11 Cases is 

the best – and perhaps only – possible means of protecting the due process rights of absent Class 

members. Matter of Am. Reserve Corp., 840 F.2d 487, 489 (7th Cir. 1988) (particularly where 

individuals may not identify claims as those they are entitled to pursue, “the effort needed to 

decide whether to pursue an identified claim means that for many small claims, it is class 

actions or nothing”) (emphasis added). Thus, this factor weighs heavily in favor of applying 

Bankruptcy Rule 7023. 

3. Certification of the Class will not adversely affect the administration of the 

Debtors’ estates (Musicland Factor No. 3). 

The third Musicland factor, impact of class certification on the administration of the 

estate, also supports applying Bankruptcy Rule 7023 to the Class Claims. Pursuant to this factor, 

courts may decline to apply Rule 23 if doing so would “‘gum up the works’ of distributing the 

estate.” In re MF Global Inc., 512 B.R. 757, 763 (Bankr. S.D.N.Y. 2014). Here, class treatment 

of the Class Claims does not threaten to delay administration of the Debtors’ estates or “gum up 

the works.” To the contrary, class certification will “bring all claims forward, as contemplated 

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by the Bankruptcy Code[,]” see Charter Co., 876 F.2d at 871, informing the plan process and 

helping to facilitate the orderly and efficient administration of potentially tens of thousands of 

Class members’ claims through just two Class Claims without any additional cost to or 

administrative burden on the Debtors’ estates. Moreover, the Class Claims are subordinated 

pursuant to section 510(b) of the Bankruptcy Code and thus will not dilute or otherwise impact 

wildfire victims or any other class of creditors. Accordingly, this factor also weighs strongly in 

favor of applying Bankruptcy Rule 7023. 

CONCLUSION 

Application of Bankruptcy Rule 7023 to the Class Claims will promote the fundamental 

goals of bankruptcy and is the sole method by which a Class comprised of defrauded investors 

can obtain any recovery from these Debtors for their losses. This is truly a case in which, “[i]f 

the class proof of claim process is not utilized, justice may be denied.” In re CommonPoint 

Mortg. Co., 283 B.R. 469, 480 (Bankr. W.D. Mich. 2002). For all of the foregoing reasons, Lead 

Plaintiff respectfully requests that the Court grant this Motion and enter the Proposed Order. 

[ signature page follows ] 

 

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Dated: December 9, 2019 Respectfully submitted, 

LOWENSTEIN SANDLER LLP 

MICHELSON LAW GROUP 

By: /s/ Randy Michelson 

Randy Michelson (SBN 114095) 

Bankruptcy Counsel to Lead Plaintiff and the Class 

- and - 

LABATON SUCHAROW LLP

Lead Counsel to Lead Plaintiff and the Class 

- and - 

WAGSTAFFE, VON LOEWENFELDT, BUSCH 

& RADWICK, LLP 

Liaison Counsel for the Class

- and - 

ROBBINS GELLER RUDMAN & DOWD LLP 

Counsel for the Securities Act Plaintiffs 

- and - 

VANOVERBEKE, MICHAUD & TIMMONY, 

P.C.

Additional Counsel for the Securities Act Plaintiffs

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EXHIBIT A 

COUNSEL 

LOWENSTEIN SANDLER LLP 

Michael S. Etkin (Pro Hac Vice)

Andrew Behlmann 

Scott Cargill 

Gabriel Olivera 

One Lowenstein Drive 

Roseland, New Jersey 07068 

Telephone 973-597-2500 

Facsimile 973-597-2333 

metkin@lowenstein.com 

abehlmann@lowenstein.com 

MICHELSON LAW GROUP 

Randy Michelson, Esq. (SBN 114095) 

220 Montgomery Street, Suite 2100 

San Francisco, CA 94104 

Telephone 415-512-8600 

Facsimile 415-512-8601 

randy.michelson@michelsonlawgroup.com 

Bankruptcy Counsel to Lead Plaintiff and the Class 

LABATON SUCHAROW LLP

Thomas A. Dubbs 

Louis Gottlieb 

Carol C. Villegas 

Jeffrey A. Dubbin (SBN 287199) 

Aram Boghosian 

140 Broadway 

New York, New York 10005 

Telephone 212-907-0700 

tdubbs@labaton.com 

lgottlieb@labaton.com 

cvillegas@labaton.com 

jdubbin@labaton.com 

aboghosian@labaton.com 

Lead Counsel to Lead Plaintiff and the Class 

WAGSTAFFE, VON LOEWENFELDT, 

BUSCH & RADWICK, LLP 

James M. Wagstaffe (SBN 95535) 

Frank Busch (SBN 258288) 

100 Pine Street, Suite 725 

San Francisco, California 94111 

Telephone 415-357-8900 

wagstaffe@wvbrlaw.com 

busch@wvbrlaw.com 

Liaison Counsel for the Class

ROBBINS GELLER RUDMAN & DOWD LLP 

Darren J. Robbins (SBN 168593) 

Brian E. Cochran (SBN 286202) 

655 West Broadway, Suite 1900 

San Diego, California 92101 

Telephone 619-231-1058 

darrenr@rgrdlaw.com 

bcochran@rgrdlaw.com 

ROBBINS GELLER RUDMAN & DOWD LLP 

Willow E. Radcliffe (SBN 200089) 

Kenneth J. Black (SBN 291871) 

Post Montgomery Center 

One Montgomery Street, Suite 1800 

San Francisco, California 94104 

Telephone 415-288-4545 

willowr@rgrdlaw.com 

kennyb@rgrdlaw.com 

VANOVERBEKE, MICHAUD & 

TIMMONY, P.C.

Thomas C. Michaud 

79 Alfred Street 

Detroit, Michigan 48201 

Telephone 313-578-1200 

tmichaud@vmtlaw.com 

Additional Counsel for the Securities Act Plaintiffs 

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EXHIBIT B 

RESERVATION OF RIGHTS 

The Motion and any subsequent pleading, appearance, argument, claim, or suit 

made or filed by Lead Plaintiff, either individually or for the Class or any member thereof, 

do not, shall not, and shall not be deemed to: 

a. constitute a submission by Lead Plaintiff, either individually or for the Class 

or any member thereof, to the jurisdiction of the Bankruptcy Court; 

b. constitute consent by Lead Plaintiff, either individually or for the Class or 

any member thereof, to entry by the Bankruptcy Court of any final order or 

judgment, or any other order having the effect of a final order or judgment, 

in any non-core proceeding, which consent is hereby withheld unless, and 

solely to the extent, expressly granted in the future with respect to a specific 

matter or proceeding; 

c. waive any substantive or procedural rights of Lead Plaintiff or the Class or 

any member thereof, including but not limited to (a) the right to challenge 

the constitutional authority of the Bankruptcy Court to enter a final order or 

judgment, or any other order having the effect of a final order or judgment, 

on any matter; (b) the right to have final orders and judgments, and any 

other order having the effect of a final order or judgment, in non-core 

matters entered only after de novo review by a United States District Court 

judge; (c) the right to trial by jury in any proceedings so triable herein, in the 

Chapter 11 Cases, including all adversary proceedings and other related 

cases and proceedings (collectively, “Related Proceedings”), in the Securities 

Litigation, or in any other case, controversy, or proceeding related to or 

arising from the Debtors, the Chapter 11 Cases, any Related Proceedings, or 

the Securities Litigation; (d) the right to seek withdrawal of the bankruptcy 

reference by a United States District Court in any matter subject to 

mandatory or discretionary withdrawal; or (e) all other rights, claims, 

actions, arguments, counterarguments, defenses, setoffs, or recoupments to 

which Lead Plaintiff or the Class or any member thereof are or may be 

entitled under agreements, at law, in equity, or otherwise, all of which rights, 

claims, actions, arguments, counterarguments, defenses, setoffs, and 

recoupments are expressly reserved. 

For the avoidance of doubt, Lead Plaintiff, on behalf of itself and the Class, does 

not, and will not impliedly, consent to this Court’s adjudication of the claims asserted 

against any Non-Debtor Defendants now or hereafter named in the Securities Litigation. 

Case: 19-30088 Doc# 5042 Filed: 12/09/19 Entered: 12/09/19 19:00:10 Page 26

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