ML021000047
| ML021000047 | |
| Person / Time | |
|---|---|
| Site: | Diablo Canyon  |
| Issue date: | 02/26/2002 |
| From: | Harvey K Howard, Rice, Nemerovski, Canady, Falk & Rabkin, Pacific Gas & Electric Co |
| To: | Office of Nuclear Reactor Regulation, US Federal Judiciary, Bankruptcy Court, Northern District of California |
| References | |
| 01-30923 DM, 94-0742640 | |
| Download: ML021000047 (3) | |
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&RAMa4 15 16 17 18 In re PACIFIC GAS AND ELECTRIC COMPANY, a California corporation, Debtor.
Federal I.D. No. 94-0742640 Case No. 01-30923 DM Chapter 11 HEARING Date:
Time:
Place:
February 26, 2002 9:30 a.m.
235 Pine Street, 22nd Floor San Francisco, California DECLARATION OF KENT HARVEY IN SUPPORT OF DEBTOR'S MOTION FOR ORDER MODIFYING STIPULATION: (I) AUTHORIZING USE OF CASH COLLATERAL PURSUANT TO 11 U.S.C. § 363 AND BANKRUPTCY RULE 4001 AND (II) GRANTING ADEQUATE PROTECTION PURSUANT TO 11 U.S.C. §§ 361 AND 363 I, Kent Harvey, declare as follows:
- 1.
I am the chief financial officer of Pacific Gas and Electric Company, the debtor and debtor in possession in the above-captioned Chapter 11 case (the "Debtor" or "PG&E").
This Declaration is based on my personal knowledge of the Debtor's operations and financial position. If called as a witness, I could and would testify competently to the facts HARVEY DECL. ISO MOTION TO MODIFY STIP. RE USE OF MTG. BONDHOLDERS' CASH COLLATERAL JAMES L. LOPES (No. 63678)
JEFFREY L. SCHAFFER (No. 91404) 6 GARY M. KAPLAN (No. 155530)
HOWARD, RICE, NEMEROVSKI, CANADY, FALK & RABKIN A Professional Corporation Three Embarcadero Center, 7th Floor San Francisco, California 94111-4065 Telephone:
415/434-1600 Facsimile:
415/217-5910 Attorneys for Debtor and Debtor in Possession PACIFIC GAS AND ELECTRIC COMPANY UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION 19 20 21 22 23 24 25 26 27 28
1 stated herein.
2
- 2.
I make this declaration in support of the Debtor's Motion for Order Modifying 3
Stipulation: (I) Authorizing Use of Cash Collateral Pursuant to 11 U.S.C. § 363 and 4
Bankruptcy Rule 4001 and (II) Granting Adequate Protection Pursuant to 11 U.S.C. §§ 361 5
and 363 (the "Motion"). The Motion seeks approval of a certain proposed modification to 6
the Stipulation: (I) Authorizing and Restricting Use of Cash Collateral Pursuant to 11 U.S.C.
7
§ 363 and Bankruptcy Rule 4001 and (II) Granting Adequate Protection Pursuant to 11 8
U.S.C. §§ 361 and 363 (the "Stipulation") between PG&E and BNY Western Trust 9
Company, as successor trustee (the "Indenture Trustee") pursuant to that certain indenture 10 dated December 1, 1920 with respect to certain mortgage bonds issued by the Debtor (the 11 "Bonds"), which has been supplemented by fourteen supplemental indentures (collectively, 12 the "Indenture"). In particular, the proposed modification would provide for the timely HoVAM 13 payment by PG&E of the principal amount of the Bonds (1992 Series A) scheduled to R~I caw 14 mature on March 1, 2002, in the approximate amount of $333 million.1 Attached hereto' as
&RAWNO 15 Exhibit 1 is a true and correct "blacklined" copy of the revised Stipulation, reflecting the 16 proposed revisions thereto (in paragraph 21).2 17
- 3.
On or about May 9, 2001, this Court issued its order approving PG&E's entry 18 into and performance under the Stipulation (the "Order Approving Stipulation"). The 19 Stipulation provides for PG&E's continued use of cash collateral in which the Indenture 20 Trustee has an interest (on behalf of the holders of the Bonds) pursuant to certain conditions 21 and restrictions. Among other things, the Stipulation.provides for the timely payment of 22 interest and sinking fund payments as provided under the Indenture. The annual amount of 23 1 The current amount outstanding of the 1992 Series A Bonds is approximately $340 24 million. Approximately $7 million of these Bonds that are held in treasury by PG&E will be satisfied by a sinking fund payment scheduled to be made on February 1, 2002.
25 2 Exhibit 1 is not attached to the service copies of this Declaration. You may obtain copies of such documents through the "Pacific Gas & Electric Company Chapter 11 Case" 26 link accessible through the Bankruptcy Court's website (www.canb.uscourts.gov), or by written request by mail to Howard, Rice, Nemerovski, Canady, Falk & Rabkin, Attn:
27 Jerome Ferrer, Three Embarcadero Center, 7th Floor, San Francisco, California 94111-4065, 28 or by e-mail request to j ferrer@hrice.com.
HARVEY DECL. ISO MOTION TO MODIFY STIP. RE USE OF MTG. BONDHOLDERS' CASH COLLATERAL 1
interest and sinking fund payments currently accruing on the Bonds is approximately $300 2
million.
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To the best of my knowledge, PG&E and the Indenture Trustee have continued to 4
perform their respective obligations under the Stipulation since the entry of the Order 5
Approving Stipulation.
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I am informed and believe that PG&E's obligations under the Indenture are 7
substantially oversecured. The total unpaid indebtedness under the Bonds is approximately 8
$3.7 billion. Such indebtedness is secured by a first-priority lien on substantially all of 9
PG&E's assets. PG&E reported total assets of approximately $25 billion as of November 30 10 2001 on its most recently filed Operating Report.
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- 6.
The 1992 Series A Bonds, which are scheduled to mature on March 1, 2002, 12 accrue interest at 7.875% per annum. If PG&E is authorized to make the March 2002 13 principal payment on the Bonds, it expects to do so using cash currently held by the estate.
"M 14 As reported on PG&E's most recent Operating Report, PG&E had a cash balance of B~UC
- A*AWN 15 approximately $4.9 billion as of November 30, 2001. In my opinion, such payment will 16 benefit the estate financially because the Bonds accrue interest at a rate significantly in 17 excess of the rates currently being earned by PG&E on its cash balances. By contrast, if 18 PG&E fails to timely make the March 2002 principal payment, it risks being in default under 19 the Indenture, and the negative consequences that may flow from such a default (e.g., the 20 potential acceleration of all series of the Bonds).
21 I declare under penalty of perjury under the laws of the United States of America and 22 the State of California that the foregoing is true and correct. Executed this
- day of 23 February, 2002 at San Francisco, California.
24 25 26 27 WD 013002/1-1419910,972517/v2 28 HARVEY DECL. ISO MOTION TO MODIFY STIP. RE USE OF MTG. BONDHOLDERS' CASH COLLATERAL