# Gelsey v. PG&E Corporation

> United States Bankruptcy Court, N.D. California · August 22, 2025

URL: https://www.frixlaw.com/law-library/cases/11125547

## Case

- **Court:** United States Bankruptcy Court, N.D. California
- **Decided:** August 22, 2025
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

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**
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1 COURT SERVICE LIST

2 Erica Amarie Gelsey
590 Farrington Hwy
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Unit 524 #482
4 Kapolei, HI 96707
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William B. Abrams
6 625 McDonald Ave.
Santa Rosa, CA 95404
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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11125547. Public record. Not legal advice.