Gelsey v. PG&E Corporation

• Court: United States Bankruptcy Court, N.D. California
• Decided: August 22, 2025
• Docket: 25-03024
• Status: Unknown

Opinion

U.S. BANKRUPTCY COURT SS NG NORTHERN DISTRICT OF CALIFORNIA □□□□ 1 . . Wig Signed and Filed: August 22, 2025 □□ 2 Mini hi 4 Vin fod 5 DENNIS MONTALI U.S. Bankruptcy Judge 6 7 UNITED STATES BANKRUPTCY COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 In re: ) Bankruptcy Case 10 ) No. 19-30088-DM PG&E CORPORATION, ) 11 ) Chapter 11 12 7 and 7 ) ) Jointly Administered 13 PACIFIC GAS AND KLECTRIC COMPANY, } ) 14 Reorganized Debtors. ) 15 L] Affects PG&E Corporation ) 16 affects Pacific Gas and ) 17 Electric Company ) Affects both Debtors 18 * All papers shall be filed in 19 |lthe Lead Case, No. 19-30088 (DM) . \ 20 ) 21 ) ERICA AMARIE GELSEY, ) Adversary Proceeding 22 ) No. 25-03024-DM Plaintiff, ) 23 ) Vv. ) 24 ) 25 PG&K CORPORATION; PACIFIC GAS AND} ELECTRIC COMPANY; and FIRE VICTIM) 26 ||TRUST, ) ) 27 Defendants. ) gg ff) -l1-

1 MEMORANDUM DECISION REGARDING MOTIONS TO DISMISS 2 I. INTRODUCTION 3 At a hearing on August 19, 2025, the court announced a 4 ruling in this adversary proceeding granting motions to dismiss 5 (“Motions”) filed by defendants PG&E Corporation and Pacific Gas 6 and Electric Company (“Debtors”) and defendant Fire Victim Trust 7 (“FVT”), on behalf of Cathy Yanni, Trustee, and other defendants 8 who are referred to within the term FVT. 9 The purpose of this Memorandum Decision is to expand 10 slightly and explain in some more detail the reasoning behind 11 the court’s oral decision on the two motions for the benefit of 12 plaintiff, Eric Amarie Gelsey (“Gelsey”), defendants and all 13 other parties who may be monitoring this matter. 14 Concurrently with this Memorandum Decision, the court is 15 issuing an order granting the Motions and dismissing the 16 adversary proceeding. 17 II. BACKGROUND 18 As is well known by Gelsey and all parties and anyone else 19 following these complicated bankruptcy cases, Debtors filed 20 Chapter 11 on January 29, 2019, primarily in response to a 21 series of wildfires (the “Wildfires”) that had occurred in 2015, 22 2017 and 2018 causing billions of dollars in damage, injuring or 23 killing thousands of persons and entities injured by the 24 Wildfires or holding claims against Debtors under subrogation or 25 other theories. Further, the California legislature in AB 1054, 26 fixed a deadline of June 30, 2020 for Debtors to obtain 27 confirmation of a Chapter 11 plan in order to qualify for future 28 legislative entitlements for dealing with wildfires in the 1 future. That legislation was prospective only and did not 2 provide relief or deal with the Wildfires dealt with in these 3 bankruptcy cases. 4 On June 20, 2020, the court confirmed Debtors’ and Shareholder Proponents’ Joint Chapter 11 Plan of Reorganization 5 6 Dated June 19, 2020 (Dkt. 8048) (the “Plan”). The court’s 7 Confirmation Order was entered on June 20, 2020 (Dkt. 8053). 8 Pursuant to the Plan, the FVT was created to administer, 9 process, settle, resolve, liquidate, satisfy and pay the claims 10 arising out of the Wildfires (“Wildfire Claims”) (other than 11 claims of public entities of those based upon subrogation 12 wildfire claims against Debtors) Gelsey and tens of thousands 13 of others asserting Wildfire Claims were affected by creation 14 of the FVT, as all of their claims were channeled to the FVT 15 for adjudication and resolution, independent of Debtors, who 16 received broad discharges of all liabilities dealt with under 17 the Plan pursuant to 11 U.S.C. § 1141(a). 18 Debtors funded the FVT by “channeling” cash and securities 19 worth approximately $13.5 billion to it. The Wildfire Claims 20 were the subject of a “channeling injunction” that established 21 the FVT as the sole source of recovery for the holders of those 22 Wildfire Claims; they would have no recourse against the 23 discharged Debtors. Those holders were 24 “permanently and forever stayed, restrained, and enjoined from 25 taking any action for the purpose of directly or indirectly 26 collecting, recovering, or receiving payments, satisfaction or 27 recovery from any Debtor or Reorganized Debtor.” Plan, § 28 10.7(a); Confirmation Order, Para 53(a). 1 It is important to note, again, that any wildfires 2 occurring after January 29, 2019 were not dealt with by the FVT 3 and any wildfires or other claims asserted against Debtors 4 occurring after entry of the Confirmation Order were not 5 affected in any way by these bankruptcy cases or the Plan or the 6 Confirmation Order. 7 III. DISCUSSION 8 In her Adversary Proceeding Complaint (“Complaint”) 9 initiating this adversary proceeding on May 22, 2025 (Dkt. 1), 10 Gelsey named as defendants Debtors and the FVT. In an 11 introductory paragraph, Gelsey stated that she seeks “redress in 12 the form of punitive damages for the harm caused to her and her 13 minor child by Defendants’ Fire Victim Trust.” 14 After invoking the court’s jurisdiction and venue, and 15 setting forth a bit of background about what she was subjected 16 to during the fire in Sonoma County in 2017 that caused her 17 injuries, Gelsey sets forth several paragraphs dealing not only 18 with Debtors' criminal convictions but also her displeasure with 19 the treatment of her and other Wildfires victims’ rights in what 20 she describes as a “troubling disregard” by the FVT of basic 21 rights afforded to them. 22 Her Complaint then continues to set forth eight separate 23 causes of action, summarized and discussed below. 24 Cause of Action 1 – BDO Firm Use 25 In this cause of action, Gelsey contends that the FVT 26 utilized the accounting firm, BDO, described by her as a “known 27 felony firm” to perpetuate fraud and potentially violating 28 numerous laws and regulations. In short, she complains that the 1 FVT contracted with BDO notwithstanding eight enumerated 2 instances that she contends establish the unsuitability of BDO 3 to be engaged by the FVT. 4 She complains that “broader accountability is called for. 5 The bankruptcy courts must conduct a comprehensive audit of the 6 [FVT]’s financials for all years in operation.” 7 The court points out that the FVT had complete discretion 8 and did not need this court’s authority to select BDO. The Plan 9 quite explicitly refers to the FVT’s discretion on matters such 10 as this, without further judicial oversight. The court cannot 11 examine the FVT’s selection of BDO or other similar matters 12 dealing with its administration of the claims process. 13 For the same reason, the court cannot now second guess the 14 FVT’s decision nor delve into any specifics about BDO. 15 The first cause of action must be dismissed as to the FVT. 16 It makes no allegations attributable to Debtors and therefore it 17 must also be dismissed in favor of Debtors. 18 Cause of Action 2 - Wilmington Trustee Duplicative Trustee 19 is a Criminal Entity 20 Gelsey’s dissatisfaction regarding FVT’s selection of 21 Wilmington Trust is similar. It enumerates ten instances that 22 Gelsey believes are violations of laws attributable to 23 Wilmington Trust. The court’s inability to deal with matters 24 pertaining to Wilmington are the same. 25 As with the BDO, the second cause of action must be 26 dismissed as to all defendants. 27 28 1 Cause of Action 3 - Trustee Violations Unlawful Excess 2 Withholding of Medical Liens 3 This cause of action appears to be a summary of Gelsey’s 4 complaints about how some of her claims were not administered in 5 accordance with specific laws and guidelines that the FVT should 6 have followed. No elaboration is necessary here because all of 7 those allegations pertain to the administration of claims by 8 the FVT that are not within this court’s jurisdiction. All of 9 those responsibilities and duties were delegated to the FVT 10 without judicial oversight. 11 The third cause of action must be dismissed as to all 12 defendants. 13 Cause of Action 4 - Defendant Violations of Felony Parole 14 This entire cause of action is quite broad but appears to 15 encompass events attributable to Debtors and focuses on their 16 obligations under California Public Utilities Code Section 451 17 that continue to victimize those affected by the fires and 18 caused subsequent fires in 2019, 2020 and 2021. To the extent 19 Gelsey is focusing on damages she suffered during the 2017 fire, 20 those claims were subject to the FVT. To the extent that there 21 are any residual liabilities that arose from fires after the 22 Confirmation Order, the court has no jurisdiction to deal with 23 them. The same is true with her allegations about events in 24 March 2025 regarding a billboard she describes as a “tone-deaf 25 company [that] subjected plaintiff and other fire victims to 26 what can only be considered an insidious slap in the face to 27 fire victims.” While the court understands Gelsey’s displeasure 28 1 with that conduct, there is no jurisdiction in this court to 2 afford her any relief. 3 For these reasons, the fourth cause of action must also be 4 dismissed as to all defendants. 5 Cause of Action 5 - Trustees and Fiduciary Victimization of 6 Fire Victims 7 In this cause of action, Gelsey recites a litany of 8 grievances regarding various parties including the presiding 9 judge, the U.S. Bankruptcy Court in general, her prior counsel, 10 and also the decision by the FVT to work with Brown Greer, an 11 entity that assisted in the claims review process. 12 While the court regrets Gelsey’s dissatisfaction with it 13 and the judicial system, an adversary proceeding against the 14 Debtors and the FVT is not an appropriate vehicle. 15 The same can be said with her dissatisfaction of the 16 conduct of her attorney and her concern for another wildfire 17 survivor, William B. Abrams, whom she mentions more than once. 18 Finally, she takes issue with the FVT’s decision to hire 19 Brown Greer and what she perceives to be a contributing factor 20 to the non-payment of amounts she believes are due and owing to 21 other claimants. 22 For all of these reasons, and as to Brown Greer, the same 23 reasons described regarding the first and second causes of 24 action, Gelsey does not state any basis for relief in this 25 court or these proceedings regarding this claim. The fifth 26 cause of action must also be dismissed as to all defendants. 27 28 1 Cause of Action 6 - HIPAA Data Breach and Privacy 2 Violations 3 This cause of action faults the FVT for non-compliance with 4 data protection laws and its referral of her to Kroll credit 5 monitoring, a subsidiary of Prime Clerk Kroll. She adds to that 6 reference a letter she sent to this court on July 22, 2024 (Dkt. 7 14543) asking the court to direct Kroll to make amendments to 8 its website. 9 Once again, her complaints included in this cause of action 10 largely fall within the immunities described above protecting 11 the FVT and all of its conduct in connection with the claims 12 administration process. 13 The sixth cause of action must also be dismissed as to all 14 defendants. 15 Cause of Action 7 - E-Sign and Tort Right Violations – Made 16 Whole Releases 17 Gelsey has taken issue with language of one of the two 18 releases that were required from her and other Wildfires 19 claimants as a condition to receiving some or all of the 20 payments they were owed by the FVT. At first blush, it appears 21 that she may have had a point. Further inquiry and examination 22 by the court proves that was not the case. 23 The first “release” was entitled “Mutual Made Whole 24 Release”, a document that was originally (Dkt. 6224-2), filed 25 March 9, 2020, three months before confirmation. That document 26 was a three-party agreement, the parties being the FVT Trustee, 27 an individual claimant, and an unnamed entity referred to as 28 “the Insurer”. The various recitals in the document made clear 1 that between an individual claimant and that individual’s 2 insurer who may hold subrogation claims, there needed to be a 3 release between those parties whereby the claimant released 4 claims against that claimant’s insurer under a principle known 5 as the “made whole doctrine”. The application of this 6 principle and the relevance to the Plan and confirmation 7 documents was extensively discussed on the record in early 8 2020. In short, the Mutual Made Whole Release avoided the 9 potential of having insurers compete with their insureds over 10 funds being administered by the FVT. Without that safeguard it 11 is highly unlikely that the final Plan would have ever been 12 promulgated or been widely supported by the holders of Wildfire 13 Claims who later voted in favor of the Plan. 14 In paragraph two of that March 9, 2020 document, there are 15 carveouts whereby the claimant does not release claims it may 16 have against the claimant’s insurer related to thirteen 17 enumerated categories. Those enumerated categories were 18 numbered (1) through (10) and then (12) through (14). There 19 was no number (11). 20 By the time the Plan was confirmed that error had been 21 corrected in the final Mutual Made Whole Release, (Dkt. 8053-1, 22 pages 104-108) filed June 20, 2020. Subparagraph two inserts 23 the correct language that makes clear that claimants are not 24 releasing their insureds from “(11) any rights to recover 25 damages for breach of contract or tort (including punitive 26 damages), penalties or equitable relief.” This problem that 27 Gelsey complained about in the Complaint was resolved in her and 28 1 all Wildfire Claims holders’ favor even before the Plan was 2 filed. 3 The second and more critical release is entitled “Claimant 4 Release and Indemnification in Connection with the Fire Victim 5 Trust Awards”. That document was signed by Gelsey on May 11, 6 2024 and later filed July 22, 2025 (Dkt. 44). It contains no 7 ambiguous carveouts and none of the confusion that arose and was 8 resolved with the Mutual Made Whole Release. Her release of the 9 FVT was neither ambiguous nor unnecessary. It was required, 10 fully authorized and proper. Gelsey’s arguments and concern 11 about this cause of action fail. 12 A final observation about this cause of action is that 13 Gelsey adds a statement that at the time the releases were 14 demanded, she was “neither mentally nor physically well. She 15 was unable to review or comprehend the releases prior to 16 affixing her signature, nor could she discuss the documents with 17 her attorney due to their non-compliance with e-sign 18 regulations.” 19 Her letter of July 22, 2024, referred to in the sixth 20 cause of action, mentions problems with the e-filing but says 21 nothing about her lack of ability to give such a release. 22 Nothing plead or even plausible raises a triable issue of 23 fact that would justify permitting Gelsey to amend her complaint 24 to save this cause of action based upon her alleged inability to 25 sign a release. That is because in the very same paragraph 26 where she raises incapacity, she mentions that she discussed 27 these matters with her attorney after which she fired that 28 attorney. The notion that she was misled by signing the 1 release, and in particular, the Claimant Release rather than the 2 Mutual Made Whole Release, is not credible and does not justify 3 an amendment. 4 The seventh cause of action must also be dismissed as to 5 all defendants. 6 Cause of Action 8 - Defendant Not Eligible for Compliance 7 AB 1054 Funds 8 In this cause of action, Gelsey alludes to events that 9 occurred in the District Court a few months prior to 10 confirmation, which originally were to involve an estimation of 11 fire claims for Plan purposes by the District Court. They 12 were later abandoned when the acceptable Plan surfaced. These 13 events occurred well-before the FVT came into existence. 14 In this cause of action, she blames several attorneys with 15 self-dealing and other actions that she thinks were contrary 16 to the interest of the Wildfires victims being dealt with 17 under the Plan. She goes on to repeat again some of her 18 issues with BDO and her belief that the FVT’s present and 19 prior trustees had some sort of a personal relationship with 20 JAMS or otherwise acted inconsistent with the interest of the 21 creditors they were serving. 22 She concludes this cause of action by asking why the 23 Bankruptcy Court did not ask fire victims before releasing AB 24 1054 funds to the defendant. This court, indeed the entire 25 bankruptcy process, had no role to play in the evolution and 26 implementation of AB 1054. There is no relief available to her 27 under this cause of action. 28 1 The eighth cause of action must also be dismissed as to all 2 defendants. 3 While not framed by the specifics of the eight claims for 4 relief in this adversary proceeding, Gelsey has devoted some 5 energy and effort to challenge what she believes are third party 6 releases, as those instruments have been recently disapproved by 7 the United States Supreme Court in the highly publicized Purdue 8 Pharma bankruptcy. Perhaps she was confusing those releases 9 which with the two releases that are discussed above. Perhaps 10 she believes that somehow confirmation of the Plan here violated 11 what is now the law of the land under the Purdue Pharma 12 decision. She is incorrect. 13 In the Ninth Circuit, third party releases have been 14 prohibited for decades. In this very case, the court had 15 extensive discussions with counsel and parties about this issue 16 before confirmation, independently reviewed the Plan and other 17 critical documents, and determined that there were no 18 impermissible third party releases anywhere. Third party 19 releases generally run favor of non-debtors who get the benefit 20 of a discharge in favor their common debtor (such as the Sackler 21 family in Purdue Pharma). None was present here. The only 22 possible confusion would come about by Gelsey’s possible 23 misunderstanding of exculpation clauses. They are provisions 24 that release parties such as the FVT, the Trust Oversight 25 Committee and others who have played a role in the bankruptcy 26 process, and some of whom Gelsey levels her charges. These are 27 specifically permitted in the Ninth Circuit under Blixseth v. 28 Credit Suisse, 961 F.3d 1074 (9th Cir. 2020). They were 1 discussed in some detail in the court’s Order Denying William B. 2 Abrams Motion to Stay, filed May 2, 2024 (Dkt. 14438 in main 3 case). Such clauses are operative to this day, will operate in 4 the future and protect those many parties who played a role in 5 the Debtor’s reorganization, Plan, the Confirmation Order, 6 Debtors’ discharge and the Channeling Injunction. 7 IV. CONCLUSION 8 As stated at the conclusion of the August 19 hearing, the 9 court regrets that Gelsey and thousands of other Wildfires 10 claimants did not recover the thirty percent of their 11 anticipated one hundred percent recovery under the Plan. It 12 also regrets that even getting what was paid to them sooner 13 rather than later would have been preferable. Also, that the 14 expenses of administering the FVT were significant, and less 15 expensively would have been even more desirable. But personal 16 desires and hopes notwithstanding, the rule of law, namely, 17 adherence to iron clad principles such as the finality of orders 18 confirming plans and the broad reach of discharges of corporate 19 entities in Chapter 11 regardless of the nature of their torts, 20 are the guiding principles. Claims of denial of due process are 21 not persuasive when the record reflects extensive process 22 getting to the point where these cases were when the Plan was 23 confirmed and where they are now. 24 The court is concurrently issuing an order dismissing this 25 adversary proceeding of the reasons stated at the recent hearing 26 and in this Memorandum Decision. 27 **END OF MEMORANDUM DECISION** 28 1 COURT SERVICE LIST

2 Erica Amarie Gelsey 590 Farrington Hwy 3 Unit 524 #482 4 Kapolei, HI 96707 5 William B. Abrams 6 625 McDonald Ave. Santa Rosa, CA 95404 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28