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In re PG&E Corp.

In re PG&E Corp.

United States Bankruptcy Court for the Northern District of California

September 8, 2021, Decided; September 8, 2021, Entered on Docket

Bankruptcy Case No. 19-30088-DM, Chapter 11

Opinion

MEMORANDUM DECISION REGARDING DEBTORS' OBJECTION [*3]  TO CONSOLIDATED EDISON DEVELOPMENT, INC.'S AMENDED CURE PAYMENT DEMAND

On August 10, 2021, this court held a hearing on the objection by PG&E Corporation and Pacific Gas and Electric Company (the "Utility" and collectively, "Debtors") to the amended cure claim demand of Consolidated Edison Development, Inc. ("ConEd" or "CED") in the amount of $11,844,598.00 (the "Amended Cure Demand").1 The Amended Cure Demand arose out of Debtors' assumption of certain power purchase agreements ("PPAs") and interconnection agreements ("IAs") (collectively, the "CED Agreements") that Utility entered with ConEd or its affiliates. For the reasons set forth below, the court is sustaining Debtors' claim objection (the "Objection").

I. THE UNDERLYING TRANSACTIONS AND THE AMENDED CURE DEMAND

ConEd's subsidiaries or predecessors built, own and operate energy generating facilities and sell the energy and certain attributes generated (including "green attributes" such as Renewable Energy Certificates) to the Utility. This enables the Utility to, among other things, meet its resource adequacy and renewable energy requirements prescribed by the California Public Utilities Commission ("CPUC"). See Amended Cure Demand, [*4]  ECF pgs. 3-4. There is no doubt that the PPAs, the relationship between the Utilities and ConEd, and the related financing obligations undertaken by ConEd in connection with those activities were and are an integral part of the PPAs and the California renewable energy presence as regulated by the CPUC.

There is also no doubt that ConEd made no attempt to terminate or accelerate its rights under the CED agreements at any time before or after confirmation of Debtors' Chapter 11 Plan of Reorganization dated June 19, 2020 (dkt. 8048), confirmed on June 20, 2020 (dkt. 8053) (the "Plan").

Finally, there is no doubt that ConEd is limited to recovery of "direct" damages under those agreements and that the sole stated rationale for its assertion of the Amended Cure Amount is the assertion of damages by its financers specifically caused by Debtors' bankruptcy. No other "trigger" is identified.

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2021 Bankr. LEXIS 2464 *; 70 Bankr. Ct. Dec. 179; 2021 WL 4097271

In re: PG&E CORPORATION, - and - PACIFIC GAS AND ELECTRIC COMPANY, Reorganized 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).

CORE TERMS

default, Cure, Lenders, damages, provisions, cross-default, ipso facto, financing, lease, bankruptcy case, consequential, terminate, event of default, commencement, obligations, contracts, clauses, parties, incidental, pharmacy, trigger, energy, cases

Bankruptcy Law, Administrative Powers, Executory Contracts & Unexpired Leases, Existing Defaults, Termination Clauses, Bankruptcy, Claims, Allowance of Claims, Rejections, Business & Corporate Compliance, Contracts Law, Types of Contracts, Divisible Contracts, Contracts Law, Contract Interpretation, Severability, Assignments, Powers to Assume & Reject, Executory Contracts