UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------------------------------------X In re: Chapter 7 THELEN LLP, Debtor.

-------------------------------------------------------------X STIPULATION AND ORDER GRANTING RELIEF FROM THE THE AUTOMATIC STAY AND LIMITING RECOVERY IN STATE COURT ACTION TO AVAILABLE INSURANCE PROCEEDS WHEREAS, on September 18, 2009 (the Petition Date), Thelen LLP, a California limited liability partnership f/k/a Thelen Reid Brown Raysman & Steiner, a California limited liability partnership f/k/a Thelen Reid & Priest, LLP, a California limited liability partnership (the Debtor), filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code; and WHEREAS, on September 18, 2009, Yann Geron, Esq. (the Trustee), was appointed as Chapter 7 Trustee of the Estate pursuant to 11 U.S.C. 702(d); and WHEREAS, R&R Capital LLC, FTP Capital LLC and Ira Russack (collectively, Russack and/or Claimant), put Debtor on notice of Claimants malpractice and related claims against Debtor (the Claims) and served on Debtor a summons with notice of such Claims, filed in Supreme Court of the State of New York, New York County, on or before July 9, 2007, based upon, inter alia, alleged malpractice during the Debtors representation of Russack in connection with a series of real estate investments from 2002 through 2005; and WHEREAS, Claimant and Debtor thereafter entered into a series of tolling agreements that expired on December 31, 2009; and Case No.: 09-15631(ALG)

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WHEREAS, Claimant desires to pursue the Claims in Supreme Court of the State of New York (State Court Action), seeking compensation for any successful claims against Debtor solely from Debtors professional liability insurance provider, which Debtor represents is Lexington Insurance Company (Lexington); and WHEREAS, MPC Insurance, Ltd. (MPC) reinsures Lexington for all amounts paid under its policy; and WHEREAS, Claimant has requested relief from the automatic stay in this Chapter 7 Case (the Automatic Stay) to pursue, inter alia, a liquidation of its Claims through a prosecution and/or settlement of the State Court Action; and WHEREAS, the Claimant has been advised, that the Debtor maintained a self insured retention (SIR) under its professional insurance policy in the amount of $2,000,000 per claim, and the Claimant is fully aware and accepts the risk that, even if Claimants Claims are valid and liquidated, they will not be paid in full; and WHEREAS, the Claimant nonetheless desires to obtain relief from the Automatic Stay and proceed with the prosecution/liquidation of its Claims against Debtor so as to determine, and thereafter collect solely from the Debtors insurance provider any applicable professional liability insurance proceeds, any amount that may be due to the Claimant as a result of the Claims; and WHEREAS, the Chapter 7 Trustee is prepared to consent to relief from the Automatic Stay on the terms and conditions specifically set forth herein and on the condition that any amounts sought to be recovered by the Claimant upon the liquidation of the Claim by a final order or settlement be recovered solely from the proceeds of the Debtors insurance;

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NOW, THEREFORE, subject to the approval of this Court, the Chapter 7 Trustee, Claimant, Lexington and MPC agree as follows: 1. The Automatic Stay is hereby modified solely to permit the Claimant to proceed

with the State Court Action to judgment and/or settlement and collection from the proceeds of the Debtors insurance without further action of this Court; provided however, that any amounts recovered by the Claimant by a final order or settlement as against the Debtor shall be limited to the available proceeds of the Debtors insurance. Claimant agrees that any recovery against the proceeds of the Debtors insurance is net of the applicable SIR amount, taking into account all relevant claim expenses; accordingly, the outstanding unpaid balance of the SIR in connection with the applicable Lexington/MPC policy shall serve to reduce the amount, if any, of any recovery which Claimant would otherwise be entitled to claim from the Debtors insurance whether such recovery is asserted against Debtor or any other party covered by Debtors professional liability insurance. Claimant further agrees to waive in its entirety the applicable SIR amount of any sum recovered (whether by judgment, settlement or other disposition) as a result of Claims asserted in the State Court Action, as against Lexington, MPC and all parties who are covered by Debtors professional liability insurance, including but not limited to the Trustee and the Debtors bankruptcy estate. MPC and Lexington agree that they will not seek to deny coverage under the applicable policy(ies) or seek to deny recovery of the insurance proceeds by Claimant on the grounds that Claimant has agreed to waive the SIR amount. Provided, however, that the foregoing agreement shall not be construed to constitute a waiver of any rights Lexington and MPC may have under any applicable policy to deny coverage or reserve its rights except as expressly stated in the preceding sentence. Claimants agreement to waive the SIR amount is expressly subject to the condition that neither Lexington nor MPC shall

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seek to deny coverage on the ground that Claimant has agreed to waive the SIR amount as stated herein. 2. This Stipulation shall not become effective against the Debtor unless and until it is

so-ordered by the Court. 3. It is agreed between Claimant and Trustee that Claimant hereby waives any

ability to collect upon any claim against the Debtors bankruptcy estate and shall not be entitled to any distribution of estate property made by the Trustee. 4. Claimant waives any discovery from the Debtor or its estate in connection with

the State Court Action, and will not seek estate documents, the Trustees testimony or other discovery from the Trustee or the Debtors bankruptcy estate in connection with such Action, except that the Trustee will turn over to the appropriate party any client files that are covered under the client file retrieval protocol implemented by this Courts order dated December 23, 2009 [DE 60], and provided that Trustee will turn over the Claimants files to Patterson Belknap Webb & Tyler (PBWT), pursuant to an agreement set forth in an April 23, 2010 letter from PBWT to the Trustee. 5. This Stipulation is without prejudice to the Trustees claim against Claimant on

account of any amounts due and owing the Debtors estate as of the Petition Date arising from services performed by Debtor on behalf of Claimant (the Trustee A/R Claim), and without prejudice to any defenses, counter-claims or set offs which Claimant may allege in connection with the Trustee A/R Claim, provided, however, that Claimant hereby agrees to toll and extend any applicable statutes of limitation relating to Trustees ability to collect, sue upon, or allege any claim relating to the Trustee A/R Claim through and including 30 days after Trustees actual receipt of written notice from Claimant of the final resolution or termination of the State Court

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Action; and provided that Claimants defenses, counter-claims or set offs shall not in any way be limited or waived as a result of this Stipulation and Order and Claimants agreement herein to waive any recovery against the Debtor. 6. Except as otherwise provided herein, this Stipulation may not be modified other

than by a signed writing executed by the Trustee and the Claimant and approved by a further order of the Bankruptcy Court. 7. Each party executing this Stipulation represents that such party has the full

authority and legal power to do so. 8. This Stipulation may be executed in counterparts and each such counterpart

together with the others shall constitute one and the same instrument, and it shall constitute sufficient proof of this Stipulation to present any copy, copies or facsimiles signed by the party hereto to be charged.

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9.

The Bankruptcy Court shall retain jurisdiction over the subject matter of this

Stipulation to resolve all disputes relating thereto and to enforce the settlement set forth herein. Dated: New York, New York August 30, 2010 New York, New York August 30, 2010 FOX ROTHSCHILD LLP Attorneys for Yann Geron, Chapter 7 Trustee

CERTILMAN BALIN ADLER & HYMAN, LLP Attorneys for R&R Capital LLC, FTP Capital LLC and Ira Russack

By: /s/Paul Sweeney Richard J. McCord, Esq. Paul B. Sweeney, Esq. 90 Merrick Avenue East Meadow, New York 11554 (516) 296-7000 Dated: New York, New York August 26, 2010

By:

/s/Yann Geron Yann Geron 100 Park Avenue, Suite 1500 New York, New York 10017 (212) 878-7900

New York, New York August 26, 2010 LEXINGTON INSURANCE COMPANY

BINGHAM McCUTCHEN LLP Attorneys for MPC Insurance, Ltd.

By: /s/Joshua Dorchak Joshua Dorchak 399 Park Ave. New York, New York 10022 (212) 705-7000

By:

/s/Stephen J. Paris Stephen J. Paris, Esq. General Counsel 100 Summer Street Boston, Massachusetts 02110 (617) 330-8405

SO ORDERED Dated: New York, New York September 8, 2010 /s/ Allan L. Gropper Honorable Allan L. Gropper United States Bankruptcy Judge

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