FW: PGE Bankruptcy motions

FYI. Today's update.

---------------------- Forwarded by James D Steffes/NA/Enron on 04/09/2001
05:55 PM ---------------------------
From: Michael Tribolet/ENRON@enronXgate on 04/09/2001 05:25 PM
To: Vicki Sharp/HOU/EES@EES, Mike D Smith/HOU/EES@EES, Travis
McCullough/HOU/ECT@ECT, Elizabeth Sager/HOU/ECT@ECT, Richard B
Sanders/HOU/ECT@ECT, James D Steffes/NA/Enron@Enron, Richard
Shapiro/NA/Enron@Enron, Greg Whalley/HOU/ECT@ECT, John J
Lavorato/ENRON@enronXgate, Susan J Mara/NA/Enron@ENRON, Jeff
Dasovich/NA/Enron@Enron
cc:

Subject: FW: PGE Bankruptcy motions

fyi
-----Original Message-----
From: "JOHN G KLAUBERG" <JKLAUBER@LLGM.COM<@ENRON
[mailto:IMCEANOTES-+22JOHN+20G+20KLAUBERG+22+20+3CJKLAUBER+40LLGM+2ECOM+3E+40E
NRON@ENRON.com]
Sent: Monday, April 09, 2001 5:01 PM
To: Tribolet, Michael
Cc: CARL A. EKLUND; JAMES L. HUEMOELLER
Subject: Fwd: PGE

Michael: as you know, one of my SF bankruptcy partners, Ben Young, attended
the PG&E hearing today. Here is a quick synopsis. Could you please
distribute as appropriate. John

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Date: Mon, 09 Apr 2001 15:46:25 -0400
From: "BENNETT G. YOUNG" <BYOUNG@LLGM.COM<
To: ceklund@llgm.com, "JOHN G KLAUBERG" <JKLAUBER@LLGM.COM<, "JAMES L.
HUEMOELLER" <JLHUEMOE@LLGM.COM<
Subject: PGE
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I attended the hearings on PGE's two cash collateral motions today. Both
were granted on an interim basis. The court set a final hearing for May 9 at
9:30 am. PGE is to file its pleadings by April 20 and any opposition is due
by May 4.

The bondholder cash collateral motion was heard first. There was no
opposition and the bond trustee (Bank of New York) consented to the relief.
BONY and PGE are working on a final cash collateral stipulation.

Next was the gas supplier motion. PGE mentioned in its presentation that the
basis of the pre-petition agreement was the waiver of termination rights in
the event of bankruptcy by the suppliers in return for a security interest in
the receivables. Jim Lopes, PGE's lawyer, mentioned that he had learned a
great deal about Bankruptcy Code section 556 in the last few months. Judge
Montali nodded his head at that comment. Montali also asked whether PGE
conceded that 556 applied. Lopes answered that he did not concede that it
applied, but he was "very concerned."

I asked whether the post-petition security interest was available to
suppliers that were not parties to the pre-petition agreements. The Court
said that was up to PGE; Lopes said they were willing to talk about it, but
they did not want to grant liens to all of their creditors and hoped
creditors would rely on their administrative claims, which PGE believes will
be paid in the ordinary course. Procedurally, the Court said it would not
authorize any new security interests on the basis of the interim order
resulting from today's hearing. Instead, that would have to be the subject
of a separate motion with notice, and perhaps coujld be taken up at the final
hearing.
P
GE also indicated that it is filing today a lawsuit against the CPUC seeking
a TRO regarding a deadline of April 11 for the filing of certain advice
letters. A hearing is tentatively scheduled on the TRO for 3 pm tomorrow,
April 10.

There was also discussion of various administrative matters, like scheduling
hearings, entering a case management order, etc.

A representative of a consumer group, the Coalition for Public Power, read a
statement asking Judge Montali to rollback rates and to force PGE's parent to
pay the utility's debts. The Judge let them speak, but made it clear that it
was not an action item, and seemed generally to ignore them.

The courtroom was packed with attorneys, journalists and members of the
public. After the hearing, the reporters all descended upon the attorneys
for PGE and the CPUC. The courtroom is in an office building in SF's
financial district; there were probably ten TV cameras set up on the sidewalk
as well as several protesters carrying signs.

Please call me if you have any questions.

Bennett G. Young
One Embarcadero Center, Suite 400
San Francisco, California 94111
(415) 951-1167
byoung@llgm.com