Chapter 11 Update: PG&E Asks Court For Preliminary Injunction Against Director Of Office Of Ratepayer Advocates

ORA Seeks to Circumvent Bankruptcy Court Jurisdiction with Request of Documents; Information Should Be Requested Following Normal Bankruptcy Procedures

SAN FRANCISCO - Pacific Gas and Electric Company has asked the U.S. Bankruptcy Court for a preliminary injunction against the director of the California Public Utilities Commission Office of Ratepayers Advocates (ORA), noting the ORA "seeks to circumvent the Bankruptcy Court's jurisdiction over administration of the estate and the plan of reorganization (POR) confirmation process."

The ORA requested the utility produce the documents in a proceeding opened by the CPUC to review the relationship between the utility and its parent, PG&E Corporation. The data request covers documents related to the proposed POR, including information relating to settlement offers with generators, copies of Board of Directors meeting minutes relating to bankruptcy discussions and financial work papers relating to the POR.

In its filing, Pacific Gas and Electric Company noted "such documents would typically be produced, if at all, only in response to a discovery request related to plan confirmation objections. This is information that, if discoverable at all, is properly requested only through discovery in this bankruptcy case and supervised by this Court."

While some of these requests might be allowed, at least in modified form, in discovery supervised by the Bankruptcy Court and subject to timing, rules, relevance and privileges determined by bankruptcy rules, they are inappropriate in a collateral proceeding outside the Court's jurisdiction where entirely different and conflicting interests may be served.

In a letter to the utility, ORA said they "would use the requested information . . . in both the OII and the bankruptcy proceeding." The preliminary injunction seeks to prevent the director of ORA from requesting and obtaining the documents because the data request is an attempt to circumvent the Bankruptcy Court's exclusive jurisdiction to administer the case and control the plan confirmation process.

A hearing on the preliminary injunction request is scheduled for February 4, 2002.


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