ML042100427

Notice of Motion and the California Power Exchange Corporation Motion for Authority to Amend Prepetition Claim, Memorandum of Points and Authorities, Declaration of Marc S. Cohen in Support Thereof

ML042100427
Person / Time
Site:	Diablo Canyon
Issue date:	07/21/2004
From:	Miriam Cohen Kaye Scholer, LLP, Reorganized California Power Exchange Corp
To:	Office of Nuclear Reactor Regulation, US Federal Judiciary, Bankruptcy Court, Northern District of California
References
01-30923-DM, 94-0742640
Download: ML042100427 (5)

Text

TO THE HONORABLE DENNIS J. MONTAAJIJNrTED STATES BANKRUPTCY 1 Marc S. Cohen, Eaq. (CASB 065486)

Ashleigh A. Danker, Esq. (CAS1 138419) JUDGE, REORGANIZED DEBTOR PACIFIC GAS AND ELECTRIC COMPANY, THE 2 KAYB SCHOLER LLP 2 1999 Avenue of the Stars, Suite 1700 3 Los Angeles, California 90067-6048 3 OFFICIAL UNSECURED CREDITORS COMM1TTEE, THE UNITED STATES TRUSTEE, Telephone: (310) 758-1000 ALL PARTIES REQUESTING SPECIAL NOTICE, AND OTHER PARTIES IN INTEREST:

4 Telecopiera (310) 788-1200 4 5 Attorneys for Creditor, Reorganized 5 PLEASE TAKE NOTICE that on September 20,2004 at 1:30 pm., or as soon thereafter as California Power Exchange Corporation counsel may be heard by the Honorable Dennis 6 6 3. Montali, United States Banlkuptcy Judge, in 7 713 Courtroom 22, located at 235 Pine Stteet, 22nd Floor, San Francisco, California, the Reorganized UNITED STATES BANKRUPTCY COURT 8 8 California PowerExchamge Corporation (CaIPX.) shall move, and hereby does move (the NORTHER DISTRICT OF CALIFORNIA 9 9 'Motion"), the Court for an Order pursuant to Federal Rule of Bankruptcy Procedure C(FRBP')

SAN FRANCISCO DIVISION 10 10 7015, Federal Rule of Civil Procedure ('FRCP") 15(c), and FRBP 9014(c): (i) authorizing CaIPX to In re ) Case No. 01-30923-DM file an amendment to its prepetition proof of claim in the form attached hereto as Exhibit "C" to It, 11 In re PACIFIC GAS AND ELCTRIC Chapter 11 12 .'J 1 DMJA1 - fU sl.I.

M -W WflAUCUUM 12 liquidate the amnount of attorneys fees requested the and (n) finding that such amendment is Er 13.~ Reorganized Debtor. Statts Confcrence:

213 timely filed by virtue of its relation back to the filing of CaIPX's original prepetition claim against Date: Septenber 20,2004 0 14 Federal Id. No. 94-0742640 Time: 1:30p.m. r 14 Pacific Gas and Electric Company CPG or the 'Debtoe").

Place: 235 Pine Street, 22nd Floor

.15 San Francisco, CA 1) 15 The Motion is brought pursuant to the Court's direction on June 9,2004 and is based upon Lii 16 >- 16 this Notice of Motion and Motion; the attached Memorandu of Points and Authorities, Declaration 17 V 17 of Mar S. Cohen, and exhibits; the records and files in this case; and such additional evidence and NOTICE OF MOTION AND TEE CALIFORNIA POWER EXCHANGE CORPORATION'S MOTION FOR AUTHORITY TO AMEND PREPETITION CLAIM; .18 argument as may be presented at or before the bearing on the Motion.

MEMORANDUM OF POINTS AND AUTHORITIES; DECLARATION OF 19 MARC S. COHEN IN SUPPORT THEREOF 19 PLEASE TAKE FURTHER NOTICE that the hearing on September 20,2004 on the 20 20 Motion shall be a status conference only. In addition, by agreement between CalPX and PG&E.

21 21 memorialized in a letter dated June 21, 2004 to Virginia Belli, Courtroom Deputy to Judge 22 22 /I-23 23 i11 24 24 111 25 25 'I' 26 26 111 27 27 111 28 28 11/

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-carl Motion for Aulf-mtylo Aroand PmpbdonC6nn 3D141469.WI con Motion for Authority to Aromi pron amin,

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I. Montafi. and accepted by Judge Monali. n modified birleflng.ebedule with respect to the Motion is 1 MEMORANDUM OYFroNs = sAUHIORTTEs 2 in effect as followvs: (i) oppositions, if any, shall be filed and served on ot before August 24,2004 2 3 end 0ii) Ca]PX' reply(ies), if any, shell be filed and served on or before September 13,2004. 3 L 4 4 STATEMIT OF FACTS 5 Dated: July 4, 2004 5 Purant to the Case Management Order (Revsed Jun 14,2001) entered on June 14,2001 6 KAYB SCHOLER LLP 6 (docket #873), the Court set September 5,2001 for the filing ofnon-governmental prepetition claims Marc S. Cohen 7 Ashleigh A. Danker 7 (the 'BarDate"). CalPX filed Claim No. 7411 on August 31, 2001 in the amount of i

8 S Sl,729,688,561.23 (the "Original Prepetition Claim") and Claimn o. 13282, amending the Original 9 9 Claim, on jime 6,2002 in the amount ofSI.778,979,543.96 (the "Amended Prepetition Claim" and,

-- rl . Cohen 10 Attorneys for Creditor, the 10 collectively with the Original Prepetition Claim, the "Prepetitlon Claim" against PG&E claming, Reorganized California Power Exchange Corporation 11 II among other things, amounts owed to CadPX, but ultimately due to the Participants, by PG&E based 312 )12 on its activities in CalPX's markets. Copies of the Original Prepetition Claim and the Amended k 13 lii Prepetition Claim are attached hereto as Exhibits "A" and "B," respectively.

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14 Paragraph 10 of the Original Prepetition Claim, beginning at lIne 19, provides:

Q 16 U 1 ...CadPX has a CLAIM in the amount of $1,712,688,561.23 m1 IS (the "Claim"), as more specifically detailed in the account

. 16 16 summary attached hereto as Exhibit I,plu prepetition and posapetition casts (fncludigattornts'fecs, mliquidated Y 17 2t7 claims for CalPX's retention of collateral and/or credit support arising out of PG&E's defaults, and such other amounts to 18 18 which CalPX is entitled under applicable law and the Tariff.

22 (italics added]

19 19 See Exhibit 'A" hereto.

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Paragraph 10 of the Amended Prepetition Claim, beginning at line 23, provides:

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...CalPX bas a CLAIM in die amount of 51,778,979,543.96 22 22 (the "Clamn"), as more specifically detailed in the account summary attached hereto as Exhlbit lplus prepedton and 23 23 posbtptioncosts (Including auorneyf )ec,unliquidated claims for CaIPX's retention of collateral and/or credit support 24 24 arising out of PO&E's defaults, and such other amounts to which COPX is entitled under applicable law and the Tariff.

25 25 [italics added) 26 26 See Exhlbit B" heretot.

27 27 During the status conference held on June 9,2004 on CalPX's Administrative Claim, the 28 28 3 4_

. 231414".WP CaIPX's Motmiofor Au~oriety to Amend Prepetition drni n1414"gA" CaIPX's Motion fot Aulhorfty to Amen~dPrapatition Claim

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Court directed CaIPX to file the Motion prior to filing the further amended Prepetition Claim. I Here, the proposed amendment merely seeokto describe the Prepetition Claim with greater 2 Accordingly, by the Motion, CaIPX seeks (i) atorization from the Court to further amend the 2 particularity. There is no prejudice to PG&E or, since the estate is solvent, creditors of the estate 3 Prepetition Claim to liquidate the amount of prepetition and postpetition attorneys fees claimed 3 from the proposed amendment Moreover, CaIPX has acted in good faith and could not liquidate the 4 therein and (ii) a finding by the Court that such amendment is timely by virtue of its relation back to 4 amount of its attorneys fees prior to the effective date of PG&E's Plan. Thus, the equities 5 the August 31, 2001 filing date of the Original Prepetition Claim. A copy of CaIPX's proposed 5 conclusively weigh infavor of allowing the amendment as a timely filed clarification of the 6 further amended Prepetition Claim is attached hereto as Exhibit 'C" The Motion does not seek a 6 Prepetition Claim.

7 substantive deteanination of CaIPX's entitlement to payment of the requested attorneys fees - such 7 However, even if the Court were to find that CalPX's proposed amendment constitutes an 8 determination being appropriate only in response to a duly noticed objection to the Prepetition Claim 8 attempt to add a new claim, the requirements for relation back of the proposed amendment under which PG&E has not, as yet, filed. 9 FRCP 15(c) are satisfied. The Court previously analyzed the relation back of an amended proof of 9

10 claim to the filing of the original proof of claim under FRCP 15(c) in its Memorandumr Decision 10 11 RegardingObjection to Late FiledClaims (the "Memorandum Decision") (docket # 15,282) issued 11 T QSED AMENDMENT WOULD RELATE BACK TO THE FILING OF THE 12 on May 14, 2004 with respect to two amended proofs of claim filed by Enro Energy Marketing 12 Id

, 13 ORIGINAL PRQIIES tlAQIAM 2J 13 Corp. and Enron Energy Services, Inc. (collectively, -Enron-). The Memorandum Decision is 0

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14 incorporated herein by reference. nhe case law cited by the Court, Martell, Santan2, Perc, and

t 14 FRBP 7015 incorporates FRCP 15(c) and maybe applied to the Motion as a contested matter pursuant to FRBP 9014(c). FRCP 15(c) addresses the relation back of an amended complaint to the Dominguez4, generally stands for the proposition that a new claim must be based on the same v/) 15 biJ 6W-;16 filing date of the original complaint depending on whether the amended complaint seeks to add new > 216 commton core ofoperative facts for relation back to occur.' The court must decide whether the claim 17 claims or new parties. Here, CaIPX merely seeks to amend the Prepetition Claim to liquidate the V 17 to be added will likely be proven by the same kind of evidence offqred in support of the original amount of its attorneys' fees alreadv claimed therein in an umliquidated amount in both the Original 18 pleading. IX,"Under these well-settled principles there must be facts alleged in the Original Claims 19 Prepetition Claim and the Amended Prepetition Claim. Since CaIPX's proposed amendment would 19 that would reasonably alert Debtor to the possibility of assertion of new theories based upon those 20 not add new claim or new parties to the Prepetition Claim, CalPX believes that the relation back of 20 2)5 facts to support the Amended Claims, whether or not those acts or events were foreseeable."

21 its proposed amendment to the Original Prepetition Claim is appropriate and not subject to the 21 22 requirements o! CP 15(c). See MaiueUlMacIMilan RBalirationLiquidating hmst etal. v. Aboff 22 MarellV.Trilogy t, 872 F.2d 322, 324-25 (9th Cir. 1989).

23 I 23 (In re uA&WilanInc., eatal, 186 B.R 35, 49 (Bauhr. S.D.N.Y. 1995):

Santanav. HolidayInn, Inc., 686 F.2d 736, 739 (9th Cir. 1982).

24 [a]lthongh amendments to proofs of claim should in the 24 I absence of contrary equitable considerations or prejudice to the Perayv. San FranciscoGeneralHospital, 841 F.2d 975, 978 (9th Cir. 1988).

25 oppos" party be permitted, such amendments are not 25 4I automatic but are allowed, 'where the purpose is to cure a Dominguez v. Miller (Y reaDom s w), 51 F.3d 1502, 1510 (9th Cir. 1995).

defect in the claim as originally filed, to desa-ibe the claim with 26 26 greaterpartkularitor to plead a new theory of recovery on S 27 the facts set forth in the orginal claim."). [emphasis added.] 27 Although Boron has appealed the Memorandum Decision, both BMon and PG&B relied on the same cases in arguing their respective positions. Accordingly, the relevant case law does 28 28 not appear to be in dispute.

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• 21141W.VMD CPIPX's Modw for Auffierity to Amend Prelmddan claim 7II40..W D ECalPX's Medo for Audeaity to Aued Prepatition COuia

I Memorandum Decision (docket #1S,282), p. 7, Ins. 14-18. DECLARATION OF MARC S. COHEN 2 Here, in contrast to the Bnron claims considered in the Memorandum. Decision, the Original 2 3 Prepetition Claim and the Amended Prepetitlon Claim clearly assert CaIPX's claim to its prepebtiton 3 1, Marc S. Cohen, declare:

4 and postpetition attorneys fees, albeit In an unliquidated amount, arising out of PG&E's defaults. 4 I. I an a member of Kaye Scholer LIP ("Caye Scholer'). I am the bankruptcy attorney 5 llus, the evidence necessy to pMVV CalPX's pmposed amendtent, Le., the actual amoumt of the 5 prina lreponsible for the Tepreletation ofthe Reorganized California Pouer Exchange 6 attorneys fees Incurred by CatPX as a result of PO&E's defaults, is well within the core ofoperative 6 Corporation (tbe "Reorganized Debtor" or 'CaIPX') ,with respect to certain matters, including this 7 facts supporting the Original Prqpetition Claim. PG&B cannot legitimately claim that the Original 7 matter. Except as otherwise stated hetein, I have personal knowledge of the facts set fboh herein 8 Prepetition Claim did not put it on notice that CaIPX claimed entitlement to its prepetition and t and, if called as a witness, could and would testify competently thereto. Capitalized terms not 9 poatpetition attorneys fees incurred as a result of PG&E's defaults and would later seek to amnend the 9 otherwise defined herein have the same meamnins ascribed to them in the pleading to which this 10 Prepetitdon Clabn to liquidate the amount of attorneys fees claimed. Since the proposed further 10 declaration is attached II amended Prepetition Claim attached hereto as Exhibit 'C" is based on the same evidence which 11 2. Copies of the Original Prepetition Claim and the Amended Prepetition Claim are 12 supports the Original Prepetition Claim, the timing of the proposed amended claim would relate back 12 attached hereto as ExhIbits 'A" and "B," respectively.

213 to the filing of the Original Prepetition Claim on August 31, 2001. W 13 3. A copy of CaIPX's proposed further amended Prepetition Claim is attached hereto as 0 Exhibit 'C" 214 X 14 0

1 U) 15 I declare under penalty of perjury under the laws of the United States of America that the (fl 5 m.

CONCLUSION >. 16 foregoing is true and correcL 216 27 Based on the foregoing, CalPX respectfully requests the Court to (I) authorize Ca1PX to file V 17 18 the proposed further amended Prepetition Claim attached hereto as Exhibit "C," (ii) find the timing 18 Dated. July 211 2004

'9 of the filing of such further amended Prepetition Claim relates back to the filing of the Original 19 S.C nMarc 20 Prepetition Claim, and (iii) grant such other and further relief as is just and appropriate under the 20 21 ciremmstances. 21 22 Dated: July 4_ 2004 22 23 KAYE SCHOLER LUI 23 Marc S. Cohen 24 Ashlegh A. anker 24 25 25 26 26 Marc S. Cohen 27 Attorneys for Creditor, the 27 Reorganized California Power Exchange Corporation 28 21 I 8 -

2114140.11FI 2214t~~i9.WPO CaWlX'a M oadan for A uthority to AmandPrepetitiri ClaimnD449W 731414ff.Vr I Ca]PX's Motion for Auffiorfty to Amend Prepefition Clain I .. I ,

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3 4 Pursuant to the Case Management Order of June 14, 2001, the exhibits will be 5 made available ou the Bankruptcy Court websile at www.canb.uscourts.gov (under "Pacific Gas & Electric Company Clhpter 11 Case"), or will be made 6 available In hard copy fonu upon request by calling Ashleigh Dauker of Kaye 7 Scholer LLP, or her assistant Ciudice Spoon, at (310) 788-1000.

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