Pacific Gas & Electric Co. v. California ex rel. California Dept of Topic Substances Control

The issue presented in this interlocutory appeal is the extent to which a reorganization plan proposed under 11 U.S.C. § 1123 (a)(5) preempts otherwise applicable nonbankruptcy law. Section 1123(a) was enacted as part of the Bankruptcy Code in 1978. That section specifies what must be included in a reorganization plan under Chapter 11 and closely parallels § 216(10) of the predecessor Bankruptcy Act. Section 1123(a)(5) provides, in part, “[n]ot-withstanding any otherwise applicable non-bankruptcy law a [reorganization] plan shall ... provide adequate means for the plan’s implementation[.]” When § 1123(a) was originally enacted in 1978, it did not contain the clause “notwithstanding any otherwise applicable nonbankruptcy law,” just as § 216(10) of the Bankruptcy Act contained no such clause. The “notwithstanding” clause was added to § 1123(a) by amendment in 1984.

Section 1142(a) was also enacted as part of the Bankruptcy Code in 1978. That section prescribes duties associated with the implementation of an approved reorganization plan under Chapter 11 and closely parallels § 224(2) of the predecessor Bankruptcy Act. Section 1142(a) provides, “[notwithstanding any…