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COURT: Northern District of California Bankruptcy Court, Oakland Division APPOINTED: 1988, by Ninth Circuit U.S. Court of Appeals DATE OF BIRTH: July 13, 1950 LAW SCHOOL: University of Cincinnati College of Law, 1975 PREVIOUS JUDICIAL EXPERIENCE: Bankruptcy judge, Southern District of Ohio, 1982-88 For a bankruptcy judge, Randall Newsome can garner the kind of attention that is usually reserved for his colleagues on the federal trial and appeals courts. In December, he took an arrow from Commissioner Carl Wood of the California Public Utilities Commission who issued a statement denouncing one of Newsome’s actions as “injudicious.” Newsome’s gag order in settlement talks involving the Pacific Gas & Electric Co. bankruptcy, Wood said, “has for months obstructed my ability to understand the parameters at work in the negotiations.” The public barb owes as much to the high-profile and controversial nature of the PG&E case as to anything else. But the incident also underscores the extent to which Newsome’s approach to judging and his 22-year career on the bench have hardly followed the ordinary script of a bankruptcy jurist. Appointed to the Southern District of Ohio bankruptcy court at age 32, Newsome began as one of the youngest figures on the bench. And with a mere five years of private practice experience doing labor work and insurance litigation, he was hardly in his element. Eleven months into the job, the green judge landed what was then the largest Chapter 11 case in the country’s history. With more than $9 billion in debt, the bankrupt Baldwin-United Corp. was a massive corporate wreck, enmeshed in a tangle of mysterious inter-company transfers and special-purpose financial vehicles. “I kind of got initiated by fire,” says Newsome. “Let’s put it this way,” he adds, “the people involved in the case were scared and so was I.” But Newsome managed to work his way through the complex case and to reconcile rival factions that were threatening to embroil the case in litigation. In the end, says Newsome, creditors who initially would have taken 10 cents on the dollar ended up with 70 cents on the dollar. Newsome’s quick grasp of complex financial matters and his skill as a settler are still evident today, say attorneys who appear in the Oakland courtroom where Newsome has sat since 1988 (when he successfully applied for an open slot in the Northern District of California). “He’s very smart and very prepared for hearings,” says William Weintraub, of Los Angeles bankruptcy firm Pachulski, Stang, Ziehl, Young, Jones & Weintraub. Newsome also lets attorneys know how he feels about a particular matter from the outset and is vigilant about keeping proceedings focused and on track. He doesn’t hesitate to reel in attorneys who stray too far afield from what he considers to be the relevant issues. On some occasions, attorneys say, Newsome will even abrogate a lawyer’s examination of a witness and step in to take charge of the questioning himself. “I want people to get to the point,” explains Newsome. “To that extent I don’t put up with much foolishness.” This interventionist approach, combined with what at times comes off as a gruff demeanor, can ruffle some feathers. “He speaks plainly and he calls them like he sees them. And that doesn’t always make people happy,” says Peter Benvenutti, the head of Heller Ehrman White & McAuliffe’s bankruptcy group. Newsome is not afraid to rock the boat, as he demonstrated last month in Delaware where, as a visiting judge, he spiked the pre-packaged reorganization plan of Acands Inc., an insulation company facing $3 billion in asbestos claims. While pre-packaged plans are often rubber-stamped by bankruptcy judges, Newsome denied confirmation, concluding that a committee of plaintiffs lawyers had too much influence in crafting a plan that suited their own interests, to the detriment of other potential claimants. “The court is informed that other judges have confirmed plans with such discriminatory classifications,” wrote Newsome in his proposed findings of fact. “This judge cannot do so in good conscience.” Newsome also stands out from his fellow bankruptcy judges for his skills as a mediator, a reputation that was cemented in the summer of 2003 when he brokered a truce between rival factions in the PG&E Chapter 11 case. Attorneys say Newsome has a keen understanding of how disputes fit into the overall bankruptcy process, and he can see through unreasonable positions adopted by parties. Not surprisingly, he is also very hands-on. “He quickly develops his own strategy for where he wants the settlement to get to, and he forces people down that path,” says Weintraub. “He starts at point A, knows he wants to get to point B, and he marches there and brings you along by the scruff of your neck.” In an average year, Newsome estimates he receives about four or five requests from judges to mediate disputes that are bogging down their bankruptcy cases. Judge Dennis Montali, who was overseeing the PG&E Chapter 11, tapped Newsome after the utility and the CPUC had been locked in bitter litigation for months. Though the PG&E settlement has won Newsome plaudits as a master mediator, it has also put him in the line of fire. Critics have assailed the settlement as a giveaway to PG&E and its shareholders, and have criticized Newsome’s gag order on settlement negotiations. Newsome says he stands by the settlement and the gag order. “It was very important that people not go out and work at cross-purposes with the negotiation process,” he says. Nor is he surprised or spooked by the critics. When you’ve got something as public as the PG&E case, says Newsome, you can’t expect everyone to be thrilled.

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