October 2, 2019
A recent Law 360 story by Rick Archer, “PG&E Case Attorneys Blast Fee Application Protocol,” reports that counsel for Pacific Gas and Electric Co. (PG&E), the utility’s board of directors and the unsecured creditors in its bankruptcy case have jointly claimed the court-appointed fee examiner is seeking to impose excessively strict caps and unnecessary barriers to their fee applications.
In a filing with a California bankruptcy court, the parties said the fee examiners' proposal would unreasonably put a flat cap on compensation for time spent preparing fee applications, bar compensation for travel time and place other “unwarranted” barriers to fee applications. “The protocol and motion together contain a litany of requirements that have no basis in the Bankruptcy Code, rules or guidelines,” they said.
The filing is a response to a September filing by Bruce Markell, the fee examiner appointed by the court in the case, proposing guidelines and procedures to evaluate applications to approve legal fees. According to the filing, 23 firms had submitted appearances in the bankruptcy case as of Sept. 16, although only eight had filed fee applications.
Markell argued he should be allowed to bar redacted time entries and applications for nonworking travel time, which he said made up about $1 million of the then-current fee applications. He also sought a cap on payable hours for time preparing employment and fee applications. “The fee examiner has been impressed by the amount charged for obtaining court approval of employment. In one interim application, these fees approached $200,000,” he said.
In the filing, counsel for PG&E and the unsecured creditors argued the proposed guidelines are too strict, saying the general local guidelines call for fee application preparation to be capped at 5% of total fees, and that standard guidelines call for attorneys be compensated for up to two hours of non-working travel time. They noted a number of attorneys in the case who are based in New York and others are required to travel around California in connection with wildfire litigation. They also argued the procedures would unnecessarily penalize late applications and impose other “unwarranted barriers.”
“The protocol and motion should not impose requirements beyond what Congress has commanded,” they argued. PG&E filed for Chapter 11 bankruptcy in January after racking up over $30 billion in liabilities related to its alleged role in sparking wildfires that charred vast swaths of California and killed 130 people.