A recent The Recorder story by Xiumei Dong, “PG&E Legal Bills Already Top $84M for Chapter 11 Case,” reports that four outside law firms have billed Pacific Gas and Electric Co. at least $84 million for legal services related to the company’s January bankruptcy filing. The utility company disclosed its legal spend in a series of court filings last month, as it sought approval from U.S. Bankruptcy Judge Dennis Montali to continue employing the law firms. PG&E is seeking to retain Cravath, Swaine & Moore; Weil, Gotshal & Manges; Jenner & Block; and Keller & Benvenutti as its legal advisers for the Chapter 11 proceedings.
PG&E listed more than $50 billion in estimated liabilities when it filed for Chapter 11 protection. According to the court docket, Montali is scheduled to consider PG&E and the firms’ motions at a hearing April 9. The utility giant said it has paid Cravath, which is PG&E’s lead coordinating counsel in wildfire-related matters, roughly $75.7 million leading up to the bankruptcy filing. According to court papers, PG&E’s payments to Cravath included a $10 million retainer from which the firm had drawn only about $3 million.
The firm intends to apply the rest of the retainer to any outstanding amounts for PG&E-related costs that it did not bill for before the filing, or as credit toward any services arising after the filing, the filing said. In addition to representing PG&E in Chapter 11 proceedings, Cravath has advised the utility for over a year on corporate governance, strategic transaction and financing matters, court documents said.
Last year, PG&E hired a team from Cravath, including chairman Evan Chesler and litigation partners Timothy Cameron, Kevin Orsini and Damaris Hernández, as defense counsel in 200-plus suits stemming from fires in Northern California. The company also turned to Wilson Sonsini Goodrich & Rosati and Quinn Emanuel Urquhart & Sullivan to handle those cases.
Cravath worked closely with Weil on PG&E restructuring alternatives, but Weil billed far less. According to another court filing, Weil received over $4.7 million from PG&E in the 90 days leading up to the company’s bankruptcy filing, and also has a remaining balance of $1.5 million on a fee advance from PG&E, which the firm said it will use to pay for the outstanding amounts that it did not bill for before the filing.
PG&E has hired Chicago-based Jenner & Block as special corporate defense counsel for state and federal regulatory matters during the Chapter 11 proceedings. Jenner & Block is also handling a criminal case involving PG&E, connected to a natural gas explosion that occurred in the city of San Bruno, California, in September 2010. According to the court filing, PG&E has paid the firm $3.57 million during the year leading up to the Chapter 11 filing.
San Francisco based Keller & Benvenutti is also representing PG&E in bankruptcy court. Since May 2018, the firm has advised PG&E on legal and financial matters regarding potential liabilities resulting from 2017 and 2018 Northern California wildfires. Court papers said the firm has received $383,635 in the 90 days before the Chapter 11 filing.
In separate court documents supporting PG&E’s motion, the court papers also revealed the hourly rate of the four firms. Cravath attorneys are charging at rates of $415 to $1,500 per hour, while Weil attorneys charge $560 to $1,600 per hour. Jenner & Block attorneys charge PG&E at hourly rates ranging from $400 to $982 and Keller & Benvenutti attorneys are charging at $400 to $800 per hour.