Relevant Document:Motion to Dismiss
The PG&E debtors on Monday evening filed a motion to dismiss the class action
adversary complaint filed in the debtors’ chapter 11 cases concerning the November 2018 Camp Fire and which alleges, among other counts, negligence and inverse condemnation in seeking redress of injuries from that fire related to economic, real property, personal property and evacuation damages. In seeking to dismiss the complaint, the debtors argue that the adversary proceeding is an “improper attempt to circumvent the claims administration process” and violates the protections afforded to a debtor under section 362 of the Bankruptcy Code. Specifically, the debtors contend that the lawsuit seeks to litigate previously stayed prepetition claims that are “nearly identical” to prepetition claims filed in California state courts that are subject to the automatic stay.
A hearing on the motion to dismiss is
scheduled for April 24 at 12:30 p.m. ET, with objections due April 10 and replies due April 17.
According to the motion, the plaintiffs’ prepetition claims may not be the subject of an adversary proceeding and should instead be asserted through the claims administration process by filing a proof of claim. The debtors stress that allowing the adversary proceeding to proceed “would open the floodgates for all holders of prepetition claims against the Debtors to file complaints and commence adversary proceedings rather than proofs of claim, thereby undermining the entire Chapter 11 process and the fundamental protection of the automatic stay.”
The debtors further argue that the filing of the complaint constituted a violation of the automatic stay because the adversary proceeding “is nothing more than an action to collect prepetition claims that would be stayed if filed and pursued outside the Bankruptcy Court - and which, in fact, have been stayed in California State Courts.”
In the alternative, if the court declines to dismiss the adversary proceeding, the debtors ask that the court, pursuant to section 105 of the Bankruptcy Code and “its inherent powers to manage its docket,” stay the adversary proceeding given the early stage of the chapter 11 cases.
In support of the motion to dismiss, the debtors filed a
motion asking the court to take judicial notice of two complaints filed prepetition in California state court.