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Page 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 B E F O R E: HON. SHELLEY C. CHAPMAN U.S. BANKRUPTCY JUDGE

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UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK Main Case No. 10-13800-scc; Adv. Case No. 11-02557-scc - - - - - - - - - - - - - - - - - - - - -x In the Matter of: INNKEEPERS USA TRUST, ET AL., Debtors. - - - - - - - - - - - - - - - - - - - - -x INNKEEPERS USA TRUST, ET AL., Plaintiffs, -againstCERBERUS SERIES FOUR HOLDINGS, LLC, ET AL., Defendants. - - - - - - - - - - - - - - - - - - - - -x United States Bankruptcy Court One Bowling Green New York, New York
October 21, 2011 1:10 PM
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Transcribed by: Devora Kessin Docket No. 2169 Fixed/Floating Debtors' Motion for Entry of an Order (I) Authorizing Fixed/Floating Debtors to Enter into Second Amended Commitment Letter, (II) Approving (A) Modifications to Fixed/Floating Plan and Confirmation Order and (B) Amended New HoldCo/Midland Commitment, and (III) Authorizing Fixed/Floating Debtors to Settle Adversary Proceeding Upon Consummation of Modified Fixed/Floating Plan Filed by Jennifer Marines on Behalf of Innkeepers USA Trust
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A P P E A R A N C E S : KIRKLAND & ELLIS LLP Attorneys for Debtors 300 North LaSalle Chicago, IL 60654
BY:
ANUP SATHY, P.C.
KIRKLAND & ELLIS LLP Attorneys for Debtors 601 Lexington Avenue New York, NY 10022
BY:
BRIAN S. LENNON, ESQ.
SCHULTE ROTH & ZABEL LLP Attorneys for Cerberus Series Four Holdings and INK Acquisition 919 Third Avenue New York, NY 10022
BY:
ADAM C. HARRIS, ESQ.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 BY: DANIEL A. FLIMAN, ESQ. KASOWITZ, BENSON, TORRES & FRIEDMAN LLP Attorneys for Five Mile 1633 Broadway New York, NY 10019 BY: LORENZO MARINUZZI, ESQ. MORRISON & FOERSTER Attorneys for Official Committee of Unsecured Creditors 1290 Avenue of the Americas New York, NY 10104 BY: DAVID C. BRYAN, ESQ. SCOTT CHARLES, ESQ. WACHTELL, LIPTON, ROSEN & KATZ Attorneys for Chatham Lodging Trust 51 West 52nd Street New York, NY 10019
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DECHERT LLP Attorneys for Lehman ALI 1095 Avenue of the Americas New York, NY 10036
BY:
BRIAN E. GREER, ESQ.
PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP Attorneys for Apollo Investment Corp. 1285 Avenue of the Americas New York, NY 10019
BY:
LAUREN SHUMEJDA, ESQ.
HAYNES AND BOONE, LLP Attorneys for Midland Loan Services 30 Rockefeller Plaza New York, NY 10112
BY:
LENARD M. PARKINS, ESQ.
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HAYNES AND BOONE, LLP Attorneys for Midland Loan Services 2323 Victory Avenue Dallas, TX 75219
BY:
MARK ELMORE, ESQ.
BRYAN CAVE LLP Attorneys for Lenders 1290 Avenue of the Americas New York, NY 10104
BY:
LAWRENCE P. GOTTESMAN, ESQ.
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Doc 2183 Filed 10/24/11 INNKEEPERS, ET AL. v. CERBERUS, ET AL. INNKEEPERS, ET AL.; Entered 10/25/11 14:32:27 Main Document Pg 7 of 32
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: MR. SATHY: THE COURT: MR. SATHY: THE COURT:
P R O C E E D I N G S Mr. Sathy, how are you? Good afternoon, Your Honor, thank you. Okay. Ready to go forward, Your Honor, on time. Very well; thank you all for coming down
on a Friday afternoon. MR. SATHY: Your Honor, there's just one pleading on
the agenda for today; it's the debtors' motion seeking authority to enter into the new commitment letter with the Cerberus-Chatham entities, seeking Court's approval with respect to the new and amended Midland financing commitment authority to settle -THE COURT: All right, Mr. Sathy, before you keep
going, I just want to note for the record that there are several of your colleagues from Kirkland & Ellis who are on the telephone on listen only and I also have an indication here that there's somebody from Debtwire on the line. MR. SATHY: THE COURT: MR. SATHY: THE COURT: MR. SATHY: Okay. Okay. Thank you, Your Honor. Go ahead. -- authority to settle the pending
litigation pursuant to the terms of the commitment letter and to prove certain plan modifications.
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Your Honor, there are no objections to the motion. THE COURT: MR. SATHY: Okay. The agreement that we're putting before
the Court is a product of a very intense period of negotiations that started in essence, on August 19th and went in essence, to the weekend before the trial was set to start. There was an
agreement in principal reached the weekend before the trial was set to commence and that agreement is the basis for the commitment letter before Your Honor this afternoon. The framework for the new deal is in essence the same as the transaction that the Court approved in June and it's a similar structure in terms of the commitment letter that was drafted with some very significant changes, which I'll get to. There are only two secured creditors whose distributions are adversely affected under the new commitment letter; both Lehman and Midland. Both parties were part of the negotiation, both
parties have signed the commitment letter and support the transaction that the debtors bring to you today. Your Honor, noticeably, no other creditor or other party is affected adversely with respect to the new transaction, other than SASCO, who again -THE COURT: MR. SATHY: THE COURT: MR. SATHY: SASCO, which ---who again, SASCO --- right. -- is also approving and has signed the
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commitment letter.
And so Your Honor, we submit there is no
need for any re-solicitation or additional disclosure under Section 1127. Your Honor, we also note that the buyers remain liable for the administrative costs, as it was in the original structure, under the plan of the commitment letter. Your Honor, there are some changes -THE COURT: All right, so let me pause on that point
and I want to make sure that we're all absolutely on the same page. My take away was that that is true, so that that means that the litigation cost vis-a-vis the estate is being born by the planned sponsor purchaser. Harris specifically for that. MR. HARRIS: Your Honor, the fixed/floating debtors Correct? I'm looking at Mr.
after we acquire them, will be responsible for paying the admin expenses. We're putting money into our acquisition vehicle,
that money is being used to fund working capital as well as pay administrative expenses and everybody's understanding based on the numbers we've seen to date, is that there will be more than adequate funds there to cover all the admin expenses; we're working through them now, but per to Your Honor's direct question, yes -THE COURT: MR. HARRIS: Yes. -- the litigation cost to the extent
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they're allowed -THE COURT: MR. HARRIS: Okay. -- by the Court will be picked up as
administrative expenses; yes. THE COURT: MR. SATHY: THE COURT: MR. SATHY: Okay. Yes, Your Honor. All right. And in particular, the expert fees, the
costs, my firm's fees, those are all being -THE COURT: MR. SATHY: Okay. -- put into the financial -- into the
professional fee escrow through the date of the closing -anticipated closing. THE COURT: questions. MR. SATHY: Yes, Your Honor. Okay; all right. That was one of my
Your Honor, with respect to the commitment letter, there are other changes which I think are notable. One, we've
stripped out the termination events that existed in the original commitment letter, including the existence of an MAE or a lack of provision -THE COURT: Let me -- let's pause and let's go through
it because the way I'm reading the commitment letter -- and as you might imagine I have a particular focus on the paragraphs that deal with the possibility that the effective date doesn't
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occur -- so there are four options that are set forth in terms of the remedies that would be available to the debtors, right? Under Section 5, the heading is "Deposits and Remedies". But
it seems to me that it all fundamentally boils down to little four in the hole, so to speak. That if there's a termination
or a failure to close by the termination date, the debtors have the option of resuming the adversary; that seems to be the paramount, if you will, remedy. MR. SATHY: And I reading it correctly?
That is the paramount remedy in a sense
that, Your Honor, one of the negotiated terms was what would happen to the adversary if we entered into this new agreement. What the debtor is insistent on is that the adversary not be resolved when this agreement is entered into or even approved by the Court, but it is preserved until the closing of the transaction. THE COURT: Right. But I guess I'm coming at it from
a slightly different perspective and I don't mean to sound pessimistic or skeptical in any way; I just want to be sure on this record that everyone is crystal clear as to what happens -MR. SATHY: THE COURT: MR. SATHY: THE COURT: Right. -- under any scenario. Yes. So hypothetically, if the market were to
go down to 7,000 or for whatever other reasons Cerberus and
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Chatham declined to close. MR. SATHY: THE COURT: prosecution. Right. And you exercised option 4, resuming
That comes at in the way that it exists right
now, at this moment, including with the issue of whether or not the liquidated damages provision kicks in and caps damages at twenty million dollars, right? MR. SATHY: THE COURT: That's exactly right. Okay. So if I were going to be a cynic, I
would say that Cerberus now has another option to do this deal or not. MR. SATHY: THE COURT: Well, Your Honor -And that there's no -- and that, for
example, if that happened -- and again I'm not at all suggesting that I have any reason to believe or fear that it will, but I just want to be clear -- so for example, if that were to occur, and option 4 were how the debtors elected to proceed, all the fees would be in play again. In other words
there's no agreement here that anything is off the table so all the fees would be in play and we would be litigating over the applicability of a liquidated damages cap and everything else. MR. SATHY: Yeah, Your Honor, I think that's right.
If we were to choose option 4; there is the menu -THE COURT: MR. SATHY: There's the menu. -- there's the menu, and so the three
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other options that we could chose.
One would be to take the
fifty million dollars as the liquidated damages; that's provision 1. Provision 2 is to actually seek specific -Fifty or thirty? It's fifty total. Thirty? It's thirty on top of
THE COURT: MR. SATHY: the twenty. THE COURT: MR. SATHY: option 1.
Okay. Okay, so it's fifty total; so that's
Option 2 would be to seek specific performance on
this deal, the second deal; we can do that. THE COURT: MR. SATHY: Right. Option 3 would be to seek money damages on
this deal; so we have the rights to enforce this deal or to get the liquidated damages. And option 4, if we chose to just go
back as if this deal in essence was never done -THE COURT: MR. SATHY: Right. -- and go back to the litigation then we
can choose option four. THE COURT: So option 1, the fifty trumps the ability
of the planned sponsors to argue that it can only be twenty? MR. SATHY: THE COURT: MR. SATHY: THE COURT: That's exactly right. Right. And that's why -It's fifty under this --- the language in -- at the bottom of
page 4, that the planned sponsors in New HoldCo waive any right
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to assert that any other remedies are unavailable as a matter of law or contract provided for, for the avoidance of doubt, such waiver shall not apply to the adversary. MR. SATHY: THE COURT: MR. SATHY: THE COURT: MR. SATHY: Exactly. Okay. So that's --
That's exactly right. -- encapsulated there. Okay.
So Section 5 deals with the escrow there.
It first acknowledges that there's a twenty million dollar, then there's an additional thirty -THE COURT: MR. SATHY: Okay. -- at the bottom of that first full
paragraph, it makes it clear that the escrow shall hold no less than fifty million. THE COURT: MR. SATHY: Okay. So the escrow, with respect to the second
deal, is fifty million -THE COURT: MR. SATHY: All right. -- is liquidated damages. If we chose to
go back to the original deal then there's a provision for the extra thirty, in essence, to be released. THE COURT: MR. SATHY: Okay. The twenty stays and it says that the
litigation starts again. THE COURT: Okay.
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Mr. Charles, did you have a different view or concern? MR. CHARLES: THE COURT: MR. CHARLES: THE COURT: MR. CHARLES: one of the sponsors. It's confusing because you started off with item 4 -THE COURT: MR. CHARLES: Pull the microphone towards you. -- with respect to item -- with respect No, that's correct -Or did we walk past what you were --- what I was --- reacting to? -- Scott Charles on behalf of Chatham,
to clause 4, which is the twenty million -THE COURT: MR. CHARLES: Right. -- that's a choice if we don't close.
But to the extent we don't close because we have a legitimate basis not to close, then you go back to the litigation. If we
don't close because we just decided we don't like the deal anymore and we breach, then I don't think you would in the real world, ever go back to this litigation; you would rely on the fifty million or the specific performance. So it's really the twenty million going back to the old litigation would only occur if we have a legitimate basis not to close i.e. Midland doesn't provide the financing. Otherwise you're really going to be an alternative, I think is a practical matter 1, 2 and 3 although it doesn't say that. Because I think 1, 2 and 3 mathematically is better than going
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back to -- you would never litigate over the twenty if you can get fifty. MR. SATHY: THE COURT: MR. SATHY: I have a different view of the -I was with you --- I have a different view of the
litigation, Mr. Charles -THE COURT: MR. SATHY: -- I was with you until the last bit. -- but actually to be honest with you --
yeah, he's making a judgment about the quality of the litigation -THE COURT: MR. SATHY: MR. CHARLES: About the merits of the litigation. -- that's what he's doing. No, no; I was just doing math. In other
words, if the sponsors don't close and we default they have four choices. One of the choices they take the fifty million;
another choice is to do the specific performance; another choice they have is to litigate over the litigation but they would have had the fifty million or the specific performance choice, which seems like it's more attractive. million -MR. SATHY: So he's making a judgment about which The twenty
option would be better of the debtors -THE COURT: MR. SATHY: Right. -- if they were to breach the second deal.
And our view is we have all four options.
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MR. CHARLES: MR. SATHY: THE COURT: MR. SATHY: THE COURT: MR. CHARLES:
You have all four -And we'll -- and it's our election -They have --- and we'll decide. Right. That's --
We're not disputing they have all four.
All I was saying as a practical matter with respect to the going back to where we are now it would most likely come into play if we were not to close because we had a bona fide basis not to close. THE COURT: Right, but the pick -- I'm just trying to
come up with and encapsulate what the pickup is from the estate standpoint besides not having to do the litigation, right? From the planned sponsor standpoint, we've had a reduction -MR. SATHY: THE COURT: MR. SATHY: THE COURT: Right. -- in the purchase price. Right. From the debtors' standpoint, we have -- I
guess we have the fifty -MR. SATHY: THE COURT: MR. SATHY: THE COURT: MR. SATHY: THE COURT: We have the fifty. Right. We have the ability -So that --- for fifty ---we have ability to have the fifty and go
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home -MR. SATHY: -- we have the ability to do the fifty; we
have the ability to not have to litigate about specific performance on the second deal -THE COURT: Right, but if you take the fifty then the
estate or the stakeholders are going to eat the cost of what everyone was doing between August 19th and today. MR. SATHY: THE COURT: MR. SATHY: Presumably, yeah, right. So the fifty is not really fifty, it's -It's something -- it would presumably be And that's why part
something less; that's right, Your Honor.
of our election will be in consultation with our constituents to determine which choice the estate believes -- with all due respect to Mr. Charles -- which choice the estate believes is going to create the most value. Now -- but he's correct in the sense that the menu is based on a breach by them, so -THE COURT: MR. SATHY: Right. -- the market goes down, they decide not
to close; that's a breach. THE COURT: MR. SATHY: THE COURT: Right. And then we get the options. Right in the sense that right, I hear that
you're saying that, yes. MR. SATHY: Okay. If there is -- if the breach is not
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caused -- if they don't close for any other reason, other than there is no breach, Midland doesn't provide the financing or some other event, then you do basically -- the option for us is to just go back to the old litigation is effectively the way the decision tree works. So if you go down past subnote 4 and then the next paragraph and then the next paragraph that starts "if the effective date does not occur due to any reason other than a breach" then you just go back. THE COURT: MR. SATHY: THE COURT: MR. SATHY: is a breach. THE COURT: Okay. All right, I'm going to ask if Right. So that's if there is not breach -Right. -- everything else is if there basically
there's anybody sitting here today that has a different understanding from what was just discussed, any additional understandings? Questions? I know that you all know exactly
the place that I'm coming from when I'm asking these questions. MR. SATHY: We do, Your Honor, trying to be as clear
as possible in this document and I don't believe there's any dispute about it. THE COURT: the million dollars. MR. SATHY: Okay. All right. Let's talk a little bit about
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THE COURT: MR. SATHY: THE COURT:
All right? Okay. So --
If you would just walk through that
MR. SATHY:
I sure can, Your Honor.
And this is paragraph 6 of the commitment letter; there's an understanding and an agreement with respect to excess cash collateral and payments that need to be made to close the transaction. There's two separate sets of payments.
The first is a payment to Five Mile which would be paid upon the entry of this motion; if there's an order approving this. It's not conditioned on the closing, it's upon And it's a
the entry of an order approving this motion.
payment of a million dollars and it comes out of the excess cash -- it comes out of the cash collateral -- excess cash collateral -- that the debtors currently hold -- we do hold it -- to pay Five Mile a million dollars. And in exchange,
Five Mile has agreed to do certain things; principally consent to the transaction in its role as a special servicer, agree not to -- agree to release parties with respect to the transaction and agree to extend its existing DIP through the closing -principally. The conditions are set forth in the subnote 1
with respect in paragraph 6 in terms of the consideration that is being given by Five Mile in exchange for the million dollars.
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Now, there's in addition to the million dollars there's another payment where the special servicer payment if you recall was 2.5 million; that's going up to 3 million under this document. And that extra 500,000, there's an agreement
between Midland and Five Mile to divide up that extra 500,000 between the two of them and they have an understanding with respect to that amount which is set forth in the Midland commitment letter. Five Mile. I think it's 225,000 to Midland, 275,000 to
I think that's the allocation of the extra 500 on
top of the million dollar fee. We understand that based on the discussions over the last few days that by having these payments made and these concessions and these agreements that there are no conditions or approvals or any other elements with respect to the certificate holders' consent or approval rights with respect to this transaction and Five Mile's here of course today and presumably will confirm that for Your Honor, that with respect to the outside approval -- meaning the certificate holder approvals -- those issues have been wrapped up and so we're basically ready to move forward with the Midland commitment under these terms. THE COURT: All right.
Is someone here for Five Mile? Good afternoon. MR. FLIMAN: Good afternoon, Your Honor. Daniel
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Fliman with Kasowitz, Benson, Torres & Friedman on behalf of Five Mile Capital. That is correct, Your Honor; the deal that is embodied in the commitment letter reflects the fact that Five Mile as the majority certificate holder, has consented to the transaction and agrees with, you know, Midland's agreements in the commitment letter and in the plan. THE COURT: All right. I take it that in the course
of these discussions -- and I see Mr. Gottesman in the back -there is a somewhat open issue that's been lingering out there with respect to the adversary that had been brought, the LNR v. CRES adversary. I take it that none of these discussions or
agreements at all impacted any of those issues; and if I'm putting you on the spot I apologize. MR. FLIMAN: Honor. Well, I don't believe they do, Your
I think that that litigation remains in the same
position. MR. GOTTESMAN: Your Honor, Lawrence Gottesman of We've not been a party to any of
Bryan Cave on behalf of LNR.
these discussions, so we don't understand how they could impact -THE COURT: Okay. It is what it is then. Okay, all
right; thank you for that. Now let's focus on Midland. This -- the fact that
there's a decrease in the payment to the fixed pool, is going
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to increase the amount that potentially goes up to Grand Pix by way of the guarantee -- the disputed guarantee payment -- if I'm remembering it correctly? MR. PARKINS: Your Honor, Lenard Parkins for Midland.
It may, depends on how things -THE COURT: MR. PARKINS: issue is reserved -THE COURT: MR. PARKINS: THE COURT: MR. PARKINS: know how the claims -THE COURT: MR. PARKINS: Okay. -- process or -- let me also add that I For another day. -- right. Right. So it may or may not; we still don't Shake out. -- we don't know yet. But all that
think our signatures are already in town to close. THE COURT: MR. SATHY: Okay. Right. I think -- I don't believe that
the -- well, certainly nothing here affects the way the guarantee issue is going to get resolved at Grand Pix. The
claims may go up or down based on efficiency claims, I guess -THE COURT: MR. SATHY: Right. -- presumably if a deficiency claim is
higher, but we'll have to work through that. MR. PARKINS: Your Honor, the guarantee issues for us
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as well as Lehman -MR. SATHY: MR. PARKINS: on -THE COURT: MR. PARKINS: depending -MR. SATHY: MR. PARKINS: THE COURT: MR. PARKINS: THE COURT: MR. SATHY: discuss that. THE COURT: Okay. All right; the only other thing There may not. -- if there's what to fight about. Right. We'll do a six-month moratorium. Right. -- there may be a fight or not, We'll work through that. -- I think, are still there, depending
Correct. Right? We'll be back in January to hopefully
that I had was in your order, paragraph 11, which refers to paragraph 235 of the confirmation order; there's a statement smack in the center of that paragraph that says "the Bankruptcy Court shall have jurisdiction over any dispute with respect to the payoff amount of the Lehman cash payment" -- or the Lehman DIP cash payment -- so this of course is one of my favorite topics; yes, I have jurisdiction but do you also intend that I have the authority to enter final order or do you literally just mean that I have jurisdiction? MR. SATHY: I don't think the parties discussed it,
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but I think it is intended to give you authority to enter an order with respect to that position. THE COURT: All right. Well, I really am hesitant to
tinker with the language so I'm just going to flag that -MR. SATHY: THE COURT: Okay. -- as I viewed that as just as a statement
of the way things are. MR. SATHY: THE COURT: Sure. And I just want to be clear, and hopefully
it will never be an issue, but it does not make explicit my authority and whether or not the parties consent. I really
don't think we need to go down that path, but I wanted to make sure that everybody realize that that language does leave that issue open -MR. SATHY: THE COURT: Okay. -- and I think in going back and reviewing
the confirmation order, you know, everything has to be read through the lens of Stern v. Marshall these days -MR. SATHY: THE COURT: Right. -- and for myself, my view is that it is
what it is, and it's mine until somebody takes it away from me. MR. SATHY: THE COURT: MR. SATHY: THE COURT: And this is -- to -So I think we're going to --- this is a claim resolution issue. Understood.
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MR. SATHY:
This is -- you know, Lehman is a creditor
and the cash payment relates to the payment on account of their claim in our cases. THE COURT: Right. Which I think would trump any
Stern concerns, but the language just kind of jumped out at me. MR. SATHY: Certainly our view as well, Your Honor.
Your Honor, with that, I'm happy to go through the plan changes if you think that they're necessary; they're mostly -THE COURT: Let's just quickly look at it; it was It was in the treatment of the three
pretty straightforward. pools.
So the Midland is going down and relinquishing the
MR. SATHY: THE COURT: MR. SATHY: THE COURT: MR. SATHY: THE COURT: MR. SATHY:
Right. The Lehman payment is slightly lower -Right. -- and the SASCO treatment's been changed. That's correct. And those are the three areas. That's the pure -- that's the core
economic changes, that's right. THE COURT: MR. SATHY: Okay. And the rest of it relates to the new We took out the -- Your Honor,
letter versus the old letter.
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we removed the outside date concept because we have a -THE COURT: MR. SATHY: Right. -- Court provision in our commitment
letter right now; and we added some additional conditions to the effectiveness including -THE COURT: MR. SATHY: THE COURT: MR. SATHY: Okay. -- Your Honor's approval of this motion. All right. Your Honor, and then with respect to the
closing, I think everyone in this room will share with me the goal, which is to close this transaction. Thursday as the closing. We penciled next
I think everyone in this room is
working as hard as they can to get this transaction closed on Thursday and that is the goal. THE COURT: MR. SATHY: Okay. So there are two dates, I may have
mentioned, that's in the motion; approval of this by -THE COURT: MR. SATHY: THE COURT: MR. SATHY: THE COURT: MR. SATHY: By Monday. -- by Monday -Right. -- and closing by the 1st -Okay. -- we are all working towards next
Thursday as the closing and I don't see anyone nodding their head saying that's not really the goal.
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THE COURT: MR. SATHY: Your Honor. THE COURT:
Okay. So we're all moving in that direction,
All right.
All right, does anyone else with to be heard with respect to the debtors' motion? Mr. Marinuzzi? MR. MARINUZZI: Good afternoon, Your Honor.
One related point; as the Court may remember there's a challenge period in the cash collateral order that expires on the 30th. We hope it's irrelevant and we hope this deal closes
but we've agreed that we'll extend that date through November 15th. We're not going to prepare an order for the Court; if it
becomes relevant we will. THE COURT: All right. So I'll so order the record in
that regard, just as a belt and suspenders for that. MR. MARINUZZI: THE COURT: Thank you.
Okay.
Anyone else wish to add anything? Mr. Bryan? MR. BRYAN: Your Honor. We didn't end up having the trial but I -THE COURT: We didn't? Did I miss that? Only Tampa. Yes; David Bryan from Wachtell, Lipton,
UNIDENTIFIED SPEAKER:
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 today.
MR. BRYAN:
All the parties in the room I'm sure will
join me in thanking the Court and Ms. Eisen and the staff for making yourselves available and arranging the marshals and all the Court staff to be available, including on the holiday for no compensation, and we really appreciate all of the Court -THE COURT: MR. BRYAN: THE COURT: No problem; happy to do it. -- has done and the staff. Well for our part, it's been almost two
months to the day and I know that the schedule that I established caused people to work very hard at peril perhaps to their health and the goodwill of their families and I hope you know that I did that to drive the process to this result -- to a good result -- for all and that I apologize to the extent that you were worn down by the aggressiveness of the calendar. MR. SATHY: Thank you, Your Honor. Again, I echo Mr.
Bryan's comment; that was going to be my last comment of the day, but we do share -THE COURT: MR. SATHY: for the staff -THE COURT: MR. SATHY: All right. Absolutely. Okay. -- all of the appreciation of the group
-- who helped to get us where we are
THE COURT:
All right; well unless anyone else wishes Do
to be heard, I'm going to very happily approve the motion.
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we have the order on a disk or by e-mail? MR. SATHY: THE COURT: We do. Great. All right, we're going to enter it
right away and let you folks leave and go home and get this transaction closed. MR. SATHY: THE COURT: IN UNISON: We will. All right. Thank you, Your Honor. Thank you all very much.
Thank you, Your Honor.
(Whereupon these proceedings were concluded at 1:35 PM)
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Debtors' "Commitment Letter Motion", Approved RULINGS Page 29 Line 25 I N D E X
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Date: October 24, 2011 Veritext 200 Old Country Road Suite 580 Mineola, NY 11501 I, Devora Kessin, certify that the foregoing transcript is a true and accurate record of the proceedings. C E R T I F I C A T I O N
Devora Kessin ______________________________________

Digitally signed by Devora Kessin DN: cn=Devora Kessin, o=Veritext, c=US Date: 2011.10.24 11:34:40 -04'00'
DEVORA KESSIN
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Filed 10/24/11 Entered 10/25/11 14:32:27 Pg 1 of 32

Page 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 B E F O R E: HON. SHELLEY C. CHAPMAN U.S. BANKRUPTCY JUDGE

October 21, 2011 1:10 PM

Filed 10/24/11 Entered 10/25/11 14:32:27 Pg 2 of 32

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Filed 10/24/11 Entered 10/25/11 14:32:27 Pg 3 of 32

ANUP SATHY, P.C.

BRIAN S. LENNON, ESQ.

ADAM C. HARRIS, ESQ.

Filed 10/24/11 Entered 10/25/11 14:32:27 Pg 4 of 32

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Filed 10/24/11 Entered 10/25/11 14:32:27 Pg 5 of 32

BRIAN E. GREER, ESQ.

LAUREN SHUMEJDA, ESQ.

LENARD M. PARKINS, ESQ.

Filed 10/24/11 Entered 10/25/11 14:32:27 Pg 6 of 32

MARK ELMORE, ESQ.

LAWRENCE P. GOTTESMAN, ESQ.

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And so Your Honor, we submit there is no

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That is the paramount remedy in a sense

go down to 7,000 or for whatever other reasons Cerberus and

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That comes at in the way that it exists right

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other options that we could chose.

One would be to take the

Okay. Okay, so it's fifty total; so that's

Option 2 would be to seek specific performance on

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That's exactly right. -- encapsulated there. Okay.

So Section 5 deals with the escrow there.

litigation starts again. THE COURT: Okay.

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And our view is we have all four options.

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We're not disputing they have all four.

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home -MR. SATHY: -- we have the ability to do the fifty; we

something less; that's right, Your Honor.

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THE COURT: MR. SATHY: THE COURT:

All right? Okay. So --

If you would just walk through that

I sure can, Your Honor.

the entry of an order approving this motion.

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I think that's the allocation of the extra 500 on

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I think that that litigation remains in the same

Bryan Cave on behalf of LNR.

there's a decrease in the payment to the fixed pool, is going

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Correct. Right? We'll be back in January to hopefully

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