ML041600560

Deloitte & Touche Llp'S Cover Sheet Application for Allowance and Payment of Interim Compensation and Reimbursement of Expenses (March 1, 2004 to April 12, 2004)

ML041600560
Person / Time
Site:	Diablo Canyon
Issue date:	05/28/2004
From:	Edmunds M Deloitte & Touche, Pacific Gas & Electric Co
To:	Office of Nuclear Reactor Regulation, Pacific Gas & Electric Co, US Federal Judiciary, Bankruptcy Court, Northern District of California
References
01 30923 DM
Download: ML041600560 (7)

Text

1 Mark A. Edmunds Deloitte & Touche LLP 2 50 Fremont Street San Francisco, CA 94121 3 Telephone: (415) 783-4000 Facsimile: (415) 783-4708 4

Independent Auditor, Accountant, 5 Tax Advisor and Consultant to Debtor and Debtor in Possession 6 Pacific Gas and Electric Company 7

8 UNITED STATES BANKRUPTCY COURT 9 NORTHERN DISTRICT OF CALIFORNIA, SAN FRANCISCO DIVISION 10 In re Case No. 01-30923 DM 11 PACIFIC GAS AND ELECTRIC Chapter 11 COMPANY, a California Corporation, DELOITTE & TOUCHE LLP'S COVER 12 SHEET APPLICATION FOR Debtor. ALLOWANCE AND PAYMENT OF Federal I.D. No. 94-0742640 INTERIM COMPENSATION AND 14 REIMBURSEMENT OF EXPENSES (MARCH 1, 2004, TO APRIL 12,2004) 15 [No Hearing Scheduled]

16 Deloitte & Touche LLP (the "Firm") submits this Cover Sheet Application for Allowance 17 and Payment of Interim Compensation and Reimbursement of Expenses ("Application") for 18 March 1, 2004, to April 12, 2004 ("Application Period"). In support of the Application, the Firm 19 respectfully represents as follows:

20

1. The Firm is Independent Auditor, Accountant, Tax Advisor, and Consultant to Debtor 21 Pacific Gas & Electric Company ("Debtor"). On July 10, 2001, the Firm's retention in this 22 capacity was approved nuncpro tunc, effective April 6, 2001. Subsequent orders, dated April 23 11, 2002 and February 10, 2003, approved the Firm's employment to audit financial statements 24 being prepared for four entities that would have succeeded to Debtor's business assets under 25 Debtor's first proposed reorganization plan ("Supplemental Services"). . By this Application, the 26 Firm is applying to the Court for allowance and payment of interim compensation for (a) 27 28 DELOITTE & TOUCHE LLP'S COVER SHEET APPLICATION FOR ALLOWANCE AND PAYMENT OF INTERIM COMPENSATION AND REIMBURSEMENT OF EXPENSES (MARCH 1,2004, TO APRIL 12, 2004)

I services rendered during the Application Period and (b) certain services provided during t February 2004 but omitted from the Firm's application for that time period.

I 2. The Finn (a) logged $279,703.50 in hourly fees, representing 655.15 hours1.736111e-4 days <br />0.00417 hours <br />2.480159e-5 weeks <br />5.7075e-6 months <br /> expended I during the Application Period and (b) logged $15,212.00 in hourly fees, representing 28.4 hours4.62963e-5 days <br />0.00111 hours <br />6.613757e-6 weeks <br />1.522e-6 months <br /> which were expended during February 2004 but not included in the Firm's previous application IC for that month. The Firm has been advised that Debtor's parent PG&E Corporation will be F responsible for payment of $17,773.30 of the total fees, including $17,288.30 of the fees logged 12 I during the Application Period and $485.00 of the fees logged during February 2004.'

14I Accordingly, the total hourly fees requested from Debtor are shown as follows:

I Period Fees Expenses Totals 1I 3/1/04 to 4/12/04 $262,409.00 $109.00 $262,518.00 2/1/04 to 2/29/04 $14,727.00 0 $14,727.00 I Totals $277,136.00 $109.00 $277,245.00

3. The Firm seeks payment of a total of $235,674.60 at this time2 . This is the sum of (a)

I19 85 % of the hourly fees requested for services rendered from March 1, 2004, through April 12, 12 2004, (b) 85 % of the hourly fees, not previously requested, for services rendered during 213 February 2004, and (c) and 100% of the expenses for the Application Period.

4. For the post-petition period, the Firm has been paid to date as follows:

24 I The fees being billed to Debtor's parent are 20% of the total hourly fees logged for work related to 25 compliance with the Sarbanes-Oxley Act of 2002. During the Application Period, the Firm logged a total of $86,472.50 in hourly fees for this work and $2,425.00 in hourly fees for this work were logged during 26 February 2004 but omitted from the Finn's previous application for February. In addition to 80 % of the Sarbanes-Oxley fees, the compensation requested by this Application includes (a) $182,106.00 in hourly fees for services related to new debt securities issued by Debtor under the reorganization plan filed on July 31, 2003 and (b) $23,912.00 in hourly fees for procedures perfomed at Debtor's request in connection with the provision of a "net earnings certificate" to the trustee for the new debt securities 27 offering.

2 Payment of this amount would result in a fees "holdback" of 41,570.40.

28 DELOITTE & TOUCHE LLP'S COVER SHEET APPLICATION FOR 2 ALLOWANCE AND PAYMENT OF INTERIM COMPENSATION AND REIMBURSEMENT OF EXPENSES (MARCH 1,2004, TO APRIL 12, 2004)

1 Application Period Amount Applied For Description Amount Paid 2

First (4/7/01 to $62,263.50 in hourly fees $39,987.404 3 2/28/02) $62,333.903 and $70.40 in expenses, less $22,346.50, which 4 was withdrawn from the Firm's request in its June 5 25, 2002, reply to the United State's Trustee's 6 objection to the Firm's First Interim Application 7 Second (10/1/01 to $1,643,315.50 in hourly $1,638,815.50 3/31/02)5 $1,643,315.50 fees, less $4,500 8 disallowed by the court at the July 2, 2002, hearing 9 on the Firm's First Interim Application 10 Third (4/1/02 to $232,523.00 $232,523 in hourly fees $232,523.00 11 4/30/02)

Fourth (5/1/02 to $147,016.50 $147,016.50 in hourly $147,016.50 12 5/31/02) fees 13 Fifth (6/1/02 to $115,006.00 $115,006 in hourly fees $115,006.00 6/30/02) 14 Sixth (7/1/02 to $128,834.50 $128,834.50 in hourly $125,770.00 7/31/02) fees less $3,064.50, 15 which was withdrawn from the Firm's request 16 in its November 22, 2002 Memorandum re 17 Supplemental Time Diaries, Etc.

18 Seventh (8/1/02 to $156,475.00 $156,475 in hourly fees $156,475.00 19 8/31/02)

Eighth (9/1/02 to $127,836.006 $127,836 in hourly fees $127,836.00 20 9/30/02) 21 3 The relevant cover sheet application requested a total of $62,573.90 in fees and costs, but the Firm 22 later reduced the amount requested to $62,333.90 due to a $240 error in the initial billing.

4 Debtor initially paid the Firm $54,331.45 on account of its first cover sheet application, but the $240 23 and $22,346.50 reductions, discussed above, were later netted against other amounts owing to the Firm, reducing the amount paid for the first application period to $39,987.40.

24 5 The Application Periods for the Firm's first two "cover sheet" applications overlapped because the Firm did not seek compensation for any of the Supplemental Services until after the court's April 11, 25 2002, "nunc pro tunc" order specifically authorizing that work.

26 27 DELOITTE &TOUCHE LLP'S COVER SHEET APPLICATION FOR 3 28 ALLOWANCE AND PAYMENT OF INTERIM COWENSATION AND REIMBURSEMENT OF EXPENSES (MARCH 1,2004, TO APRIL 12, 2004)

1 Ninth (10/1/02 to $426,408.75 $426,408.75 in hourly $426,408.75 2 10/31/02) fees Tenth (11/1/02 to $183,805.19 $170,783.25 in hourly $183,805.19 3 11/30/02) fees and $13,021.94 in expenses 4

Eleventh (12/1/02 to $91,393.03 $91,221.00 in hourly fees $91,393.03 5 12/31/02) and $172.03 in expenses Twelfth (1/1/03 to $344,214.80 $343,873.50 in hourly $344,214.80 6 1/31/03) fees and $341.30 in 7 expenses Thirteenth (2/1/03 to $103,782.58 $103,442.00 in hourly $103,782.58 8 2/28/03) fees and $340.58 in expenses 9 Fourteenth (3/1/03 to $162,406.16 $141,608.50 in hourly $142,679.16 10 3/31/03) fees7 and $1,070.66 in 10_ expenses 11 Fifteenth (4/1/03 to $309,688.32 $305,721.50 in hourly $309,688.32 4/30/03) fees and $3,966.82 in 12 expenses 13 Sixteenth (5/1/03 to $260,644.24 $258,002.00 in hourly $260,644.24 5/31/03) fees and $2,642.24 in 14 expenses Seventeenth (6/1/03 to $123,909.00 $123,120.00 in hourly $123,909.00 15 6/30/03) fees and $789.00 in expenses 16 Eighteenth (7/1/03 to $91,607.20 $91,571.00 in hourly fees $91,607.20 17 7/31/03) and $36.20 in expenses Nineteenth (8/1/03 to $33,994.31 $33,963.00 in hourly fees $33,994.31 18 8/31/03) and $31.31 in expenses 19 Twentieth (9/1/03 to $73,716.63 $73,621.50 in hourly fees $73,716.63 9/30/03) , and $95.13 in expenses 20 Twenty-first (10/1/03 $116,104.70 $116,104.70 in hourly $116,104.70 to 11/30/03) fees 21 Twenty- $140,904.80 85 % of $140,160.80 in $119,306.68 22 secondl2/1/03 to hourly fees8 , and $170.00 1/31/04) in expenses 23 (Footnote Continuedfrom Previous Page.)

24 6 The relevant cover sheet application requested a total of $130,353.50 in fees, but the Firm and Debtor later agreed that the amount would be reduced by $2,517.50.

25 7 The relevant cover sheet application requested a total of $161,335.50 in hourly fees, all of which was approved by the court in its July 7, 2003, Order Awarding Interim Compensation to Deloitte & Touche 26 LLP. However, the Firm and Debtor have since agreed that Debtor need not pay $19,727.00 of the amount awarded.

27 28DELOITTE & TOUCHE LLP'S COVER SHEET APPLICATION FOR 4 28 ALLOWANCE AND PAYMENT OF INTERIM COMPENSATION AND REIMBURSEMENT OF EXPENSES (MARCH 1, 2004, TO APRIL 12, 2004)

1 Twenty-third (2/1/04- $90,579.43 85 % of $80,110.60 in $68,309.84 2 2/29/04) hourly fees 9 , and $215.83 in expenses 3

The Firm has also received (1) $855,000 as the Firm's base fee for auditing and reporting 4 on Debtor's consolidated financial statements and reviewing interim financial information for the 5 2001 fiscal year, (2) $1,132,000 as the base fee for auditing and reporting on Debtor's 6 consolidated financial statements and reviewing interim financial information for the 2002 fiscal 7 year and (3) $1,257,500 as the base fee for auditing and reporting on Debtor's consolidated 8 financial statements and reviewing interim financial information for the 2003 fiscal year. (The 9 July 10, 2001, order approving the Firm's employment, together with the November 5, 2002, 10 order approving the 2002 base audit fee and the September 29, 2003, order approving the 2003 11 base audit fee, authorized Debtor to pay these fees upon receipt of invoices from the Firm.)

12 Including hourly fees and expenses and the 2001, 2002 and 2003 Base Audit Fees, the total paid 13 to the Firm to date is $8,395,365.38.

14 5. To date, the Firm is owed as follows (excluding amounts owed pursuant to this 15 Application):

16 17 18 19 (Footnote Continuedfrom PreviousPage) 20 8Debtor's payment to the Finn was based upon total hourly fees of $140,160.80, rather than the

$140,734.80 cited in the cover sheet application, because there was an error in the application. The actual 21 hourly fees logged from 12/1/03 to 1/31/04 were $140,160.80, the amount shown on Exhibit 2 to the application. The application itself erroneously requested $140,734.80, $574 more than the actual amount.

22 9 Although the cover sheet application for February 2004 requested $90,363.60 in hourly fees, Debtor's payment ($68,309.84) was based upon total fees of only $80,110.60. This reflects the Firm's agreement 23 to (a) reduce its 12/1/03 to 1/31/04 charges to Debtor for Sarbanes-Oxley work by $1,660 and (b) discount its 12/l/03 to 2/29/04 charges for additional audit services related to the impact of Debtor's 24 settlement with the CPUC by 20 %, or $8,593. The sum of these adjustments--$10,253-was agreed to be credited against the $90,363.60 fees requested by the February cover sheet application, leaving net 25 hourly fees of $80,110.60. Debtor's payment to the Firm was 85 % of $80,110.60, plus $215.83 in expenses.

26 27 DELOITTE & TOUCHE LLP'S COVER SHEET APPLICATION FOR 5 28 ALLOWANCE AND PAYMENT OF INTERIM COMPENSATION AND REIMBURSEMENT OF EXPENSES (MARCH 1, 2004, TO APRIL 12, 2004)

I I Application Period Amount Description Twenty-second $21,024.12 Fees and expenses requested by the I (12/31/03 to 1/31/04) ,041Firm's twenty-second "cover sheet" application filed on March 1, 2004.

I Twenty-third (2/1/04 $12,016.59 Fees and expenses requested by the 4

to 2/29/04) Firn's twenty-third "cover sheet" application filed on March 30, 2004 i Total Owed to the $33,040.71 Firm to Date

6. Attached as Exhibits I and 2, respectively, to the copies of this Application served on counsel for the Official Committee of Unsecured Creditors, counsel for Debtor, and the Office of the United States Trustee are (i) a list of the names and hourly billing rates of each professional 11( who performed services for which compensation is sought by this Application and (ii) detailed time and expense statements that comply with all Northern District of California Bankruptcy 12 Local Rules and Compensation Guidelines and the Guidelines of the Office of the United States 1l Trustee.

7. The Firm has served a copy of this Application on each person shown on the Special Notice List for this case. (Only the parties referred to in paragraph 6 received Exhibits 1 and 2; the copies served on other parties did not include the exhibits.)

8. Pursuant to this Court's Second Amended Order Establishing Interim Fee Application 21 and Expense Reimbursement Procedure, filed on March 18, 2002, the Debtor will be authorized to make the payment requested herein without firther hearing or order unless an objection to this Application is filed with the court by the Debtor, the Committee, or the United States Trustee and served by the fifteenth day of the month following the service of this Application. If such an 25 objection is filed, Debtor will be authorized to pay the amounts, if any, not subject to the 21 objection. The Firm is informed and believes that this Application was mailed to all persons 22 shown on the Special Notice List by first class mail, postage prepaid, on May 28, 2004.

9. The interim compensation and reimbursement sought by this Application is on account and not final. At the conclusion of this case, the Firm will seek fees and reimbursement DELOITTE &TOUCHE LLP'S COVER SHEET APPLICATION FOR 6 28 ALLOWANCE AND PAYMENT OF INTERIM COMPENSATION AND REIMBURSEMENT OF EXPENSES (MARCH 1,2004, TO APRIL 12, 2004)

I of expenses incurred for the totality of its employment in thi s case. Any interim fees or 2 reimbursement of expenses approved by the court and receiNred by the Firm (along with any 3 retainer paid to the Firm) will be credited against such final ifees and expenses as may be allowed 4 by the court.

5 10. The Firm represents and warrants that to the best; of its knowledge its billing 6 practices comply with all Northern District of California Barikruptcy Local Rules and 7 Compensation Guidelines and the Guidelines of the Office o f the United States Trustee. The 8 Firm has no agreement to share any portion of the fees or ex]penses awarded to the Firm for this 9 engagement with any non-affiliated person or entity.

10 WHEREFORE, the Firm respectfully requests that IDebtor pay compensation to the Firm 11 as requested herein pursuant to and in accordance with the teerms of the Second Amended Order 12 Establishing Interim Fee Application and Expense Reimburs ement Procedure.

13 Dated: May 28, 2004

,OITTE & TOUCHE LLP 14 DE]

15 16 17 By Mark A. Edmunds, Partner 18 Independen t Auditor, Accountant, Tax Advisor and Ccmsultant to Debtor Pacific Gas 19 and Electric Company 20 21 22 23 24 25 26 27 28 DELOITIE & TOUCHE LLP'S COVER SHEET APPLICATION FOR 7 ALLOWANCE AND PAYMENT OF INTERIM COMPENSATION AND REIMBURSEMENT OF EXPENSES (MARCH 1,2004, TO APRIL 12, 2004)