IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: ALLIED SYSTEMS HOLDINGS, INC.

, Alleged Debtor. Chapter 11 Case No. 12-11564 (CSS)

Re: Docket No. 29

In re: ALLIED SYSTEMS, LTD. (L.P.), Alleged Debtor.

Chapter 11 Case No. 12-11565 (CSS)

Re: Docket No. 29

NOTICE OF FILING OF TRANSCRIPT OF HEARING HELD ON FEBRUARY 23, 2011 BEFORE THE HONORABLE CHRISTOPHER S. SONTCHI IN IN RE: SAAB CARS NORTH AMERICA, INC., CASE NO. 12-10344 (CSS) PLEASE TAKE NOTICE that, for the convenience of the Court and the parties in interest in the above-captioned chapter 11 cases, in connection with the Motion of Alleged Debtors to Transfer Venue of these Cases to the United States Bankruptcy Court for the Northern District of Georgia, Atlanta Division [Docket No. 29 in Case No. 12-11564 (CSS) and Docket No. 29 in Case No. 12-11565 (CSS)], the above-captioned alleged debtors (the Alleged Debtors) hereby file the Transcript of Hearing held on February 23, 2011 before The Honorable Christopher S. Sontchi in In re Saab Cars North America Inc., Case No. 12-10344 (CSS) (the Transcript). A copy of the Transcript is attached hereto as Exhibit A.

RLF1 6072828v. 1

Dated:

May 30, 2012 Wilmington, Delaware Respectfully submitted, /s/ Marisa A. Terranova Mark D. Collins (No. 2981) Christopher M. Samis (No. 4909) Marisa A. Terranova (No. 5396) RICHARDS, LAYTON & FINGER, P.A. One Rodney Square 920 North King Street Wilmington, Delaware 19801 Telephone: (302) 651-7700 Facsimile: (302) 651-7701 E-mail: collins@rlf.com E-mail: samis@rlf.com E-mail: terranova@rlf.com -andJeffrey W. Kelley (GA Bar No. 412296) Ezra H. Cohen (GA Bar No. 173800) TROUTMAN SANDERS LLP Bank of America Plaza 600 Peachtree Street, Suite 5200 Atlanta, Georgia 30308-2216 Telephone No.: (404) 885-3000 Facsimile No.: (404) 885-3900 E-Mail: jeffrey.kelley@troutmansanders.com E-Mail: ezra.cohen@troutmansanders.com Counsel for Alleged Debtors

RLF1 6072828v. 1

Exhibit A

RLF1 6072828v. 1

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 ECRO: 19 20 21 22 23 24 25 IN RE:

UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE ) ) ) ) ) ) ) ) ) Case No. 12-10344 (CSS) Chapter 11 Courtroom No. 6 824 Market Street Wilmington, Delaware 19801 February 23, 2011 2:00 P.M.

SAAB CARS NORTH AMERICA INC., Debtor.

TRANSCRIPT OF HEARING BEFORE HONORABLE CHRISTOPHER S. SONTCHI UNITED STATES BANKRUPTCY JUDGE APPEARANCES: For the Debtors: Stevens & Lee, BY: JOSEPH H. 1105 N. Market Wilmington, DE (302) 425-3310 P.C. HUSTON, JR., ESQ. Street, Suite 700 19801

For Ally Financial:

Cohen & Seglias By: JAMES HARKER, ESQ. Nemours Building 1007 North Orange Street, Suite 1130 Wilmington, Delaware 19801 (302) 425-5089 LESLIE MURIN Reliable 1007 N. Orange Street Wilmington, Delaware 19801 Telephone: (302) 654-8080 E-Mail: gmatthews@reliable-co.com

Transcription Service:

Proceedings recorded by electronic sound recording: transcript produced by transcription service.

2 1 INDEX 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NOTICE OF AGENDA MATTERS: For the Debtors, by Mr. Huston For Ally Financial, Mr. Harker For the Debtors, by Mr. Sendek For Caterpillar, by Mr. Duhig For Creditors, by Mr. Snyder For Ally Financial, Mr. Tatelbaum For U.S. Trustee, by Ms. Leamy For the Debtors, by Mr. Random Page 4 5 5 13 14 18 19 24

3 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 morning. THE CLERK: THE COURT: good morning. MR. HUSTON: the Court, Joseph THE COURT: Good afternoon. Sorry, I said good Good afternoon, Your Honor, may I please All rise. Please be seated. Sorry for the delay,

I promise Im awake, were good. MR. HUSTON: Well good morning, Your Honor, may I

please the Court, Joseph Huston of Stevens & Lee on behalf of Saab Cars North America. And with me, I have Thomas Radom

and Bruce Sendek of Butzel Long, and also Mr. Tim Colbeck, who is the President Chief Operating Officer of Saab Cars North America. Your Honor has scheduled this as a status

conference, and I noticed that that entry is noticeably absent from our agenda, but we have on the agenda, and I dont know if Your Honor wants a status conference on this, but we also have going forward our motion to transfer venue to the Eastern District of Michigan. THE COURT: Well I think I do that with Chapter 7

cases for corporations because if people dont put anything on the docket, I dont know whats going on. MR. HUSTON: THE COURT: Very good. Having read all the venue issues I think

I have a real good clear of this idea of this status of the case.

4 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 Radom. Harker. MR. HUSTON: THE COURT: motion -MR. HUSTON: With your permission, Your Honor, Mr. Okay, very good. You can go right into the motions, a

Sendek will conduct the merits of the motion to transfer. THE COURT: MR. HUTSON: MR. HARKER: Very good. Thanks. Your Honor, may I just speaking James

I am local counsel for Ally Bank, and I would like Hes

to introduce to the Court Mr. Charles Tatelbaum.

appeared in this District on a number of occasions, but he has not had the honor of appearing before you. been admitted pro hac vice in this case. THE COURT: MR. SENDEK: Very good; welcome, sir. Good morning, Your Honor, Bruce Sendek I am pleased to And he has

from the firm of Butzel Long from Detroit. be here.

First time I have ever been in the Bankruptcy Court

in Delaware, and its a privilege. THE COURT: MR. SENDEK: Okay. Im here today with my partner, Tom

Hes the chief bankruptcy counsel for Saab Cars North And also with me

America who is also with Butzel Long Firm. today is Tim Colbeck.

He is the President and Chief

Operating Officer for Saab Cars North America. Both Mr. Radom and Mr. Colbeck submitted affidavits

5 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 in connection with the motion for the Court which is a motion to transfer venue, of course, to the Eastern District of Michigan, the Bankruptcy Court there. Under Rule 1014(a)

which Im sure the Court is well familiar with the standard which should be allowed if in the sound discretion of the Court, the convenience of the parties, or the interest of justice sole provide. And in this situation, we clearly feel

that both prongs, although one or the other may be met. Theyre both met here, Your Honor. This is a situation that I think is well suited for the transfer. first of all. In the interest of justice, Ill speak to that Saab Cars North America, sometimes referred to

as SCNA, S-c-n-a, is a wholly owned subsidiary of Saab Automobile AB, a Swedish Company. Saab AB filed for the I believe the

Swedish version of a Chapter 7 in December. date was December 19th. brand automobiles.

Saab AB was the manufacturer of Saab

And, of course, when that occurred there

was no more supply coming to Saab Cars North America which is in the business of distributing cars in North America, attending to warranty needs, service needs, and marketing needs and interacting with the dealers among many others. So at that point, SCNA began looking toward liquidating the company. And they, on December 20th, entered

into a trust mortgage with McTevia Associates to conduct the liquidation, and that proceeded, and it was actually going

6 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 fairly well. The point that had to be crossed in order to Ally Financial, formerly

continue was to deal with Ally.

GMAC, asserted a lien and sought to foreclose on the lien on vehicles that were held in ports across the country; three ports, actually: New Jersey, Georgia and California. started three separate actions. They

And, at first, we began to

defend those actions and as critical dates in the nature of claimant delivery, replevin in some states. And as those dates appeared closer, it appeared as though we would either have to work out an arrangement with Ally, or we would have to file a bankruptcy proceeding. At

all times, as reflected in the affidavit of Tom Radom, the counsel for dealers who represents the petitioner which is a part, which is a portion of the dealer group, was advised of what was proceeding. Ally. And we did try to reach an accord with

That fell through and, of course, the dealer group was With that in mind, there was, We were going to file for

immediately notified of that.

the road ahead was rather clear.

bankruptcy in the Eastern District of Michigan. And, in fact, we had already had the board resolution from SCNAs board to do just that. Radoms affidavit. Its attached to Mr.

It was also, I think, on December 20th, And it gave McTevia the

2011, executed by the Board.

authority to do so if it became necessary in his judgment. So we were going to do that, and Tom Radom advised, counsel

7 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 for the dealer for the petitioners, that the following week, likely Tuesday, we would file the petition, and asked them to keep that confidential, and asked them - well that was asked the point, asked them to keep that confidential, and thats what the plan was. And then, of course, as reflected in the affidavit in our papers, counsel for the dealer acted on that confidential communication and brought the proceeding here, which is why we are here today. If it hadnt been for the involuntary

petition filed on January 30th, Monday morning early following the conversation on Friday with Tom Radom, we would have been in the Eastern District of Michigan, because the plan was as exactly as stated to file that Tuesday. So here we are, and

it is a classic dash to the Courthouse by a counsel for petitioners. And when Tom Radom, as reflected in this declaration, called the counsel for the petitioners on Monday, or I think it was the other way around because the petitioners counsel called Tom Radom to tell him what he had done, and said sorry but its a closer train ride for me to be here in Delaware from my office in New York then to fly to Detroit. And no doubt it is more convenient for petitioners

counsel, but thats not a factor that the Court should weigh, or ought to weigh in determining convenience. It happens to be, I think, the only factor that the

8 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 petitioners can point to that really weighs in favor of keeping the case here as opposed to the many factors that are outlined in our motion and in the declarations. In Michigan,

there is a significant number of contacts, events that will relate to the bankruptcy proceeding. there. SCNAs headquarters is

Petitioners make a point of saying that were going

to close that office, which is true, to save the rent on it. Were moving operations, most likely, to the offices of McTevia and Associates. SCNAs employees which numbered about 50 are all Detroit area residents, except for -- excuse me, SCNAs employees who worked in the offices in the Detroit area, there were some field employees, they are all residents of Michigan except for Mr. Colbeck who is a resident of New Jersey and commuted to Detroit. Detroit. Our books and records are in

Significant creditors of SCNA are in Detroit.

There is one marketing consultant who has made a claim for a half a million dollars. Theres other marketing type

consultants who have made claims, substantial claims also here in Detroit. The secured, one of the principal secured

Debtor who claims that they are owed $61 million dollars from SCNA is Ally. And Allys headquartered in Detroit. Ally can go anywhere. Im sorry. Ally can go anywhere. I see Ally all the

THE COURT: MR. SENDEK: THE COURT:

9 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 time. Theyre a national concern. MR. SENDEK: THE COURT: Right. Wheres the workout guy thats working on

the case, where is he? MR. SENDEK: The individuals that SCNA dealt with in

terms of financing, I believe, are all in the Detroit area. THE COURT: MR. SENDEK: Okay. And I dont know who the workout guy, if The other Theyre

they assigned a workout guy to it as well.

principal secured creditor is Caterpillar Logistics. headquartered outside of Chicago. motion.

They actually support this

And the reason, again, has to do with the interest

of justice. SCNA does not have a lot of cash to work through what its doing now as part of its liquidation and bankruptcy proceeding. It has very limited funds, but it is doing work

thats very important, and work that will benefit the entire creditor group including the dealers, including customers of Saab vehicles. At this very time, I mean, today, yesterday

and ongoing, Mr. Colbeck is trying to work out arrangements to provide customers with the ability to get warranty coverage on the vehicles that they purchased from the dealers -- excuse me, from dealers that were the Saab AB automobiles. They are covered by General Motors. General Motors

covers warranties for pre, for 2009 model year cars and

10 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 before, but not for after. So its a big issue, and Mr.

Colbeck is trying to accomplish something there for the benefit of all the creditors. benefit of all creditors. Assets are being sold for the

Theres an important work being

done by Mr. McTevia right now in terms of securing parts for the benefit of all creditors and enhancing the value of the vehicles and into the benefit of the customers as well. One asset that SCNA has is, are a ship of parts. Theyre held by Caterpillar Logistics, but there are parts. And SCNA has made arrangements to sell those parts to dealers so that they can service their customers, and thats some of the work thats being done right now. And there needs to be

longer term solutions in place which theyre trying to do in order to secure an ongoing source of parts, which will in order to the benefit of many. It will bring additional cash

and assets to the estate and value to the estate, and thats an important thing and with more value, and more assets, and more cash which we are realizing right now by virtue of this arrangement with Caterpillar. We have an arrangement right now that were receiving $68,000.00 a week from Caterpillar through our sales, which ultimately will enter into the benefit of all creditors. That work is being done in Detroit by McTevia and Associates, and will be ongoing. Those are just a few examples, but

again, to the extent that this action continues there will be

11 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 a likely confrontation with General Motors. There is a 20

plus million dollar receivable on SCNA books for warranty reimbursement which GM is denying. pay. It has an obligation to

The dealers have a definite interest in seeing that

pursued and will probably be part of any subsequent litigation. General Motors and all the people that SCNA dealt with at General Motors are in Detroit area, in Renaissance Center in Detroit. The SCNA people who worked on the

warranty issues are employees, ex-employees of SCNA, maybe a couple of them have been maintained for now, but they are Michigan residents all in the Detroit area. And, well I

think thats, I think theres just a host of reasons, Your Honor, why in the interest of justice it should be transferred, and for the convenience of the party. And yes

they won the race to the Courthouse, but they shouldnt have. There was no good reason to bring this action in Delaware. Had counsel allowed things to progress as told to

him by Mr. Radom, we would be in Detroit, and everyone could pursue their claims and rights. The dealer groups that are

represented that makes up the petitioner group, theyre scattered. Sure, there are some in this - theyre some

within driving range to Delaware, but theyre across the country. There are dealers in Texas, California, Indiana, Interestingly,

Michigan, Illinois, throughout the country.

12 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 motion? MR. DUHIG: Good afternoon, Your Honor, Peter Duhig theres one Saab dealer in the state of Delaware who is not a part of the petitioner group. here. So what we have is no assets

We do have assets in Detroit. There was a statement made in the response that there

are no assets here.

The assets are in Pennsylvania held by Theyre our assets,

Caterpillar or held in the warehouse. but thats not entirely correct. maintained in Detroit area. THE COURT: MR. SENDEK: Bank accounts?

There are accounts

Theyre bank accounts.

There are

vehicles in the Detroit area.

Theres something in the

neighborhood of 60 vehicles in Detroit and personal property in Detroit; again, weighed against nothing in Delaware. Thank you, Your Honor. THE COURT: Okay, anyone else in support of the

of Buchanan Ingersoll & Rooney on behalf of Caterpillar Logistics Services. secured creditor. Your Honor, Caterpillar Logistics is a It filed a response in support of SCNAs Basically to highlight that, if

motion to transfer venue.

this case stays here, the administrative costs are likely to be much higher. It would require long distance travel for

the Debtors, McTevia who is the mortgage Trustee, officers and witnesses. Its also going to require local counsel.

13 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 And, Your Honor, this is a liquidating case. There arent a

lot of assets that are going to be available to distribute to creditors. So its our position that the most efficient,

cost effective venue for this case is the Eastern District in Michigan. motion. THE COURT: Where are the parts inventory that your So with that we ask that the Court approve SCNAs

client is in possession of? MR. DUHIG: THE COURT: MR. DUHIG: THE COURT: MR. DUHIG: THE COURT: They are in a warehouse in Pennsylvania. Where in Pennsylvania? It is in Allentown; thank you. All right, thank you. Thank you. Well hear from the movants, or excuse

me, the petitioning creditors. MR. SNYDER: Thank you, Your Honor. Good afternoon,

Eric Snyder of Wilk Auslander for the 82 petitioning creditors, and the opposition was filed on behalf of the dealer network which is 165 dealers. Your Honor for moving this hearing up. I would like to thank It was originally

schedule for next Friday so that it could be heard today. After hearing counsel and reviewing the reply, Your Honor, I believe there are certain facts and evidence that remain undisputed. One, that the dealers, 165 of them in 39 states with

14 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 potential claims in excess of $30 million dollars favor venue here. Two, that only one potential creditor Caterpillar

whose claim is least related, and who the Debtor admits in the liquidation analysis that was in next to our opposition is owed no more than $662,000.00. And the reason, Your

Honor, I point out that its least related is if, in fact, the Debtor is successful in its objective of selling the parts distribution business, than that claim which is secured might be nothing more than a lease cure claim, that would be cured upon assumption and assignment of the lease. Three, Ally, who the Debtor suggested in his motion supported the transfer of venue, filed two motions the next day in this Court seeking substantive relief does not support transfer, and does not come out in favor in of transfer. I would suggest that silence speaks volumes. And

Substantially,

all the new vehicles undisputed, Your Honor, and the parts are located in this Circuit. Theyre not located in

Michigan, and there are no assets other than this cash weve heard about, and some used cars that counsel referred to that are located in Michigan. The Debtors CEO, as weve heard, resides in New Jersey and is here today on behalf of the movant, not Mr. McTevia. And a little bit about the filing, Your Honor. In

the motion they state that they had the authority since December 20th to seek bankruptcy relief. That was their

15 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 choice, business judgment or, otherwise, to do nothing for the intervening six week period. shouldnt be in bankruptcy. SCNA doesnt suggest it

In fact, it annexes a petition

to its motion saying that if the Court grants its motion to transfer venue, then it will file right away in Detroit. So

the issue isnt whether venue is convenient or inconvenient, its simply that SCNA doesnt want to be here. Theyve now pointed to any factors relying on convenience of the parties. Theyve said whoops. They filed

here before we could file in Detroit, and just let us out, and thats not the appropriate test. With respect to the

fact is, Your Honor, I believe the opposition, as I set forth above, remains undisputed. Just one point that I believe was omitted from the opposition, and thats with respect to what law applies. While it is true that the dealers sales and service agreements contemplate that Michigan law applies to interpretations of the dealers sales and service agreement, theres little doubt at this stage of SCNAs life that the issue is going to be about the termination of these franchise agreements. As weve heard the Debtor is liquidating. no warranty support. are new vehicles. There is

There is no parts support, and there

And as Im sure the Court is well aware,

the rights of each of the dealers upon termination of their

16 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 franchises are determined under the applicable law of the state where the franchise is located. So we believe that

although Michigan law is stated to be with respect to interpretations of the dealers sales and service agreement, that the ultimate rights -- and what I mean rights, I mean the claims of each of the dealers -- are going to be relying on applicable state law regarding the ultimate rejection and termination of their franchise agreements. I understand the Debtor is in a bit of a box because, on one hand, they say they dont really have the assets to come to Detroit and, the other hand, then the reply in paragraph six they point to in what I quote is substantial legal liquid assets in Michigan, and refer to over $3 million dollars in cash sitting in Michigan accounts. They also

state in there liquidation analysis that Allys claims is about $300,000.00, but, of course, now they claim that Allys claims is potentially $61 million dollars. The test itself is fairly clear, and Im aware that Your Honor recently applied the test in Visteon to a similar situation. The opposition goes through the points, and in

light of the number of creditors and the amount of creditors that comprise of both the dealer network, in general, and the petitioning creditors, in particular, we believe that SCNA has not met its heavy burden to demonstrate convenience of the parties that would warrant transfer. Thank you, Your

17 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 Honor. THE COURT: Youre welcome; hear from Ally. Thank you, Your Honor. I guess in 45

MR. TATELBAUM:

years in practicing bankruptcy law Ive never had a case where Ive taken no position where my client has been referenced so much. We did not file anything on purpose. To answer Your Honors We

take no position on the motion.

question if your Court is interested, there are two workout people. One divides his time between the United Kingdom and So

Sweden, and one is in Detroit, counsel is in Florida. its a big triangle.

Because there have been some statements made, and this is a status conference as well, I would just like to make a couple of positions clear. THE COURT: Please. There is no question that Ally has a

MR. TATELBAUM:

first priority perfected security interest in the vehicles in the ports. There is no question that we have not only a

first priority perfected security interest, we have an assignment of the $20 million dollar account that GM purportedly owes. So those two assets are subject. We do

not have a security interest in the parts. and vehicle related receivables.

We have vehicles

We have a cross collateralization agreement, cross guaranties with the Swedish Company, and the UK Company and

18 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 France Company, and all. And our debt is currently about I just

$61 million dollars, all across collateral-wise.

wanted to make that clear to the Court, so that the Court understands the global because theres a lot of - I feel like the orphan child, and everybody uses us to their advantage, fine. decision. THE COURT: still in the port? MR. TATELBAUM: Majority of them are in Port Newark. Where are the vehicles now? Theyre You know, Your Honors going to make the

There is a much smaller group in Savannah Georgia, and then a little bit larger than Savannah in Oxnard Ventura California, just north of Los Angeles. THE COURT: Okay. And we did have replevin proceedings

MR. TATELBAUM:

pending against because its in (indiscernible), each one of those three states, pending which were stayed by the bankruptcy filing. THE COURT: Okay. Thank you, sir.

MR. TATELBAUM: THE COURT: MR. SENDEK: THE COURT: MS. LEAMY: States Trustee.

Youre welcome. May I reply briefly, Your Honor? Ms. Leamy do you wish to take a position? Your Honor, Jane Leamy for the United

Our office does not have a position on the

19 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 motion, and were just here to see the outcome. THE COURT: MR. SENDEK: Okay, yes Ill hear a reply. Thank you, Your Honor. First, Your

Honor, the reason we said Ally was in support of this motion because that was our understanding at the time that weve filed, and now weve learned that they take no position. And

I heard reference to the Visteon case, and Im familiar with the factors that the Court applied in that case, which I think weigh in our favor because those factors where we pointed to a number of factors that demonstrate that the Eastern District of Michigan is a more convenient venue. I dont see those factors existing here, nor have I heard any, nor have I heard any dispute from counsel, or in their papers for the affidavit signed by Tom Radom and Mr. Colbeck. And theyre both here if the Court would like to They are available to do so,

take any testimony from them.

but I have heard no disagreement with those positions. Now Ive heard, and in the Visteon case who also say a significant difference. There is that that was the Debtor.

These are a number of unsecured creditors trying to change the landscape, and I cite to the Court to the case we cited in our reply brief the Hunt vs. Bankers Trust case. It says

unsecured creditors whoever have no right to dictate venue, although they do have the right to be heard on issues of propriety of transfer.

20 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 business judgment of the Debtor, I think, is entitled to a significant amount of weight here. Theres

been a number of numbers tossed around by counsel for the Debtors, but the fact is that -- excuse me, the fact is that the dealer group is only represented of unsecured creditors and only a small part of them. Our schedules show that are

$12 million dollars of unsecured claims made by various parties. dollars. And, of course, then theres the secured creditors which are Ally which makes a significant claim. there is Caterpillar. And then Of that group, the dealers represent $4 million

And the fact Caterpillar has made

known to SCNA that it has a contingent claim of $3.5 million dollars for its, for the obligations under its agreements with Caterpillar. THE COURT: (indiscernible) here is the purported

Debtor has to do here is 1) resolve the issue with the cars; 2) resolve the issue on any accounts receivable; 3) resolve the issue with the dealers; I guess 4) resolve the issue with the parts. bankruptcy. MR. SENDEK: And try to make an accommodation for Thats pretty much what youre going to do in

ongoing warranty service for the vehicles, thats another important aspect. THE COURT: Okay, so very good. Okay, thank you.

21 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 you. Yes warranty service, all right. through it. you. Well, let me just run

Caterpillar which is the parts issue supports The

Ally which is the car issue takes no position.

warranty claimants, obviously, want to stay here, and the people who got the assignment for the accounts receivable from GM, which is Ally, take no position. You know, Im a little unclear on what, and maybe you could flush out to me what the status of or how you intend to proceed with the attempt to get warranty service for the post 2009 cars. MR. SENDEK: Okay, yes as to warranty if I may just

add this, Your Honor, the customers, the ultimate buyers of the Saab vehicles have an interest in the warranty claims and, of course, in a warranty disposition. theyre scattered all across the country. Of course, And weve heard

from a number of Attorney Generals in various states asking about how cars are going to be serviced. THE COURT: got some evidence. MR. SENDEK: No, Your Honor, thats not in front of Thats not in front of me unless youve

And as far dealing with the warranty -- first of all,

thats going to be handled through McTevia Associates, and probably relying on Mr. Colbeck, as well and his assistants. And I do need to correct something. McTevia Associates is

the management of the company now, not Mr. Colbeck under the,

22 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 well under agreements that were made. Well I dont know. How will that be done?

Hopefully, its going to be a negotiated

arrangement with General Motors that theyll cover the - so that they will cover warranty obligations under new Saab vehicles or Saab vehicles sold since they sold the company. We do believe that there is some leverage and, as I say, we have a 20 plus million dollar receivable from General Motors. So can that be negotiated? THE COURT: MR. SENDEK: THE COURT: go ahead. MR. SENDEK: Okay and as I say, Your Honor, theres I dont know yet, but --

[indiscernible] negotiation. -- it could be. Okay. Sorry I interrupted you. You can

no assets in Delaware, but there are assets, albeit accounts. There are assets in Michigan. We have an operating account We have limited

$400,000.00, and that was my point earlier. funds in which to run this.

We have more funds coming in

through our arrangements that we have with Caterpillar, but theyre limited, and we have to use them wisely. Its

expensive; extremely expensive for us to hire local counsel, to make trips back and forth to Delaware to bring people into this Court as may be needed. administration. Its just an expensive

Thats why the plan was always to move Again, we would be there except for the

forward in Detroit.

race to the Courthouse which I dont think ought to be

23 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 rewarded. Thank you, Your Honor. Youre welcome; yes sir. Hi, Your Honor, Tom Radom for SCNA. Im

THE COURT: MR. RADOM:

not going to repeat what Mr. Sendek said. Ally motions are -THE COURT: MR. RADOM: THE COURT: MR. RADOM:

Its just that the

Are you with the same firm? Yes. All right. The Ally motions are basically on my

docket, and I just didnt want the record to reflect that there was no response to statements made by Mr. Tatelbaum, this counsel to Ally in connection with the validity of their security interest, the nature of their claims against this GM receivables and so forth. Those items are in dispute, and I

just want the record to reflect that. THE COURT: MR. SNYDER: THE COURT: Im sorry, anyone else; anything further? No, Your Honor, thank you. Okay, Ill take a short recess.

(Recess 2:49:03 to 3:17:23) THE COURT: Again, sorry for the delay. Okay, we

have before the Court a motion to transfer venue of a Chapter 11 case. The facts are important, I think, to put on the This was

record for the support of the Courts reasoning. filed as an involuntary case.

The time to contest entry of

order for relief has past, so I dont think technically an

24 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 order is on the docket yet, but the response was due by the 23rd which is, is that today? go. So its due today; there you

Ill assume youre not going to contest entry of an

order for relief, is that correct? MR. RADOM: We were certainly hoping that the Eastern

District of Michigan would be the Court to have order of relief, but -THE COURT: MR. RADOM: Well I know that. But, no. I mean, our intentions all

along was to pursue a Chapter 11. THE COURT: significant. here. Okay, well I think that fact is

Obviously, there was a race to the Courthouse

I dont think there anything pejorative about racing It happens all over the country every

to the Courthouse. day. stop.

And thats one of the things bankruptcys designed to The filing is certainly part of a race to the So, obviously, there was a filing on Monday, and

Courthouse.

there was going to be a subsequent filing a day or so later by the Debtor. But, the Debtor has acknowledged its going to be in bankruptcy. And I think thats important in the context of

the weight that the Court would give to the desire of the filing creditors or the plaintiff; however, you want to think about it. bankruptcy. Its not a question of whether there will be a Its a question of where. And, I think, that

25 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 does a lot to alleviate the weight of the choice of the petitioning creditors because, ultimately, generally, the choice is of the Debtor whether to file and where to file bankruptcy. There is nothing on the record here that indicates they werent going to file, and it was just a question of timing and location. So for purposes of deciding the motion,

I think the issue of great weight of choice of the first filer is, basically, neutral. I acknowledge very much that

the involuntary creditors have a strong position, and they were the first to the Courthouse, but I think thats alleviated enough by the fact that the Debtor acknowledges it will be in bankruptcy wherever it will be; that that really becomes a neutral factor for the Court. I could go through the various factors that the Courts have applied, the (indiscernible), of course, in Visteon which was more in the case of a traditional adversary proceeding; the six factor case then applied in the bankruptcy venue -- excuse me, in the actual bankruptcy case, transfers more generally. But in my mind in this case goes

really to competing factors. One is where are the Debtors, and whats going to be going on in connection with the Debtors operations. first of all, its a liquidation. Well,

So traditional issues of

willing to have the bankruptcy in a convenient forum for

26 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 management, for instance, just dont really apply. Its not

like you have a 150 people in the corporate headquarters running a company. Youve got a liquidation. There are

certainly limited fixed assets.

Theyre going to be run

through some of these conference rooms in Detroit or in the Detroit Metro area. Its not particularly moving in the

context of where should the bankruptcy be filed. And talk about what the Debtor has to do; whats on its plate. And I think it is significant that Ally Financial They are a very large creditor, We dont know what it

does not take a position.

secured and some value of collateral.

is, but at least for purposes of today its nine hundred and something new vehicles. And its a $20 million dollar

account receivable from GM. Two huge pieces of the assets of the Debtor, and the party that has the best interest in them doesnt really care whether its here or Detroit. You all right? Okay. The And

parts; well the parts are in Pennsylvania, in Allentown. when you look at a liquidation of a case, you really look

more at where the asset is then where the asset may be being managed. So, for example, in a real estate, single asset real estate case, you know, the management company may be in Dallas, but the tract of land is in New Mexico. That case

should be in New Mexico because land is something really

27 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 unique. Obviously, clearly land is unique. And the

strongest interest for a piece of property is where that property is. The property were talking about is up in Allentown, not in this District, some other Circuit, and about a two hour drive, if not less. keeping it here. So that gives some weight to

Now at the same time, the party that is in So I dont

charge of the parts wants to transfer venue.

really think of that as a wash too, but the actual assets are closer here. The person managing the assets is, you know,

wants it to be in Michigan, really kind of makes it a neutral issue. So weve got the accounts receivable, the cars and

the parts all neutral; future warranties is in negotiation. That can happen in a conference room anywhere from (indiscernible) to keep its gain. matter where it is. Now I have the dealers, and thats what it really comes to down to, I think. Youve got the dealers versus It doesnt necessarily

management, and he gets to control, in effect, where the case will go forward. The dealers are all over the country,

obviously, but the unsecured creditors, they only have power if they are able, somehow, to form together and act as one. And theyve dont that, and theyve done that with counsel in the State of New York. case here in Delaware. And that counsel supports keeping the Management wants it in Michigan

28 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 primarily to make it convenient for its CRO. real assets in Michigan. Theres a lease thats going to be rejected. are a few employees. Theres a CRO, and theres cash. There None They are no

of that is really substantial for purposes of having to be in Detroit. The president of the company is in New Jersey, hes The CRO is in Michigan, I dont Since this is such

the guy you brought today. see him here.

Its an important hearing.

an important hearing I think it indicates with some significance what their motivations might be. way of saying its a kind of a coin flip. So its a long

And if its a coin

flip it should stay where its at, you know, they tell me this in Judge school if you dont who should win, then if you move it then both sides loses. I think the choice of the dealers here is got to carry the day, as far as I can tell from this case the primary activity here is really going to be the dealers versus the Debtor. And theres nothing that hurts the The

Debtor, really, coming to Delaware, staying in Delaware. costs arent really very significant. you a fortune.

Mr. Huston wont cost You know, where

Hes a very good attorney.

the lawyers are we generally dont think about that pretty much. Although, again, in a liquidating case where the

assets are much less than in a reorganization it probably has more swing. So long story short I just wanted to go through

29 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 my various factors. In a very close decision, Im sorry, in a very close decision the dealers win in eight rounds to seven, and get or maintain their, maintain where their want to be. going to deny the motion to transfer venue. So Im

Thats all we

have on the agenda for today, but does Ally want to talk about whats coming up, I think its next week? MR. TATELBAUM: Yes, sir. Next Friday we have a

motion to modify the automatic stay with respect to the vehicles only, not on the receivables. And a motion to

prohibit use of cash collateral based upon an anticipation that an order for relief is going to be entered, I wanted to tee that up so that it would be an early issue, if there is going to be an attempt. We believe there is because during

the gap period, the Debtor has sold some vehicles that we believe are our collateral. Counsel has said its in escrow But we hear about

which is fine, I take that representation.

the dire straits so that, well something that needs to be teed up for next Friday I hope. THE COURT: Okay. Are there any traditional first

day, or emergency relief that you really need to get on the Courts docket? MR. TATELBAUM: thing maybe for Friday? THE COURT: Yes. Your Honor, may I raise one more

30 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 MR. TATELBAUM: Having heard what I heard today we

will probably be filing an objection to the McTevia entity as CRO. Under the Michigan procedure which is like an

assignment for the benefit of creditors which we have in the east, they actually do whats called a trust mortgage where the assets are delivered to the Trustee, and the Trustee is given a lien on those assets. Weve been after Mr. McTevia They havent so that

and his company to release their lien.

are a lien creditor, and were going to take the position unless he does something that as a lien creditor hes not a disinterested party that can - because he - if hes running the business, how is he going to move to set aside his own lien, among other things, and investigate the acts and conduct. So I just wanted to - since that would normally be

a first day thing, I wanted to alert the Court that its not a rubber stamp. THE COURT: Okay, well usually, I mean, you can

usually we dont hear the actual retention on the first day. Wed send that out on full notice. MR. TATELBAUM: THE COURT: Okay, thank you. Usually

Attention to professionals, etc.

only a claims agent would be something we would look at if necessary. MR. TATELBAUM: THE COURT: Thank you, sir.

So what I was going to say, and Ill let

31 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 counsel speak, but I was going to say if you need a sort of traditional first day type relief you can tee it up for March 2nd. MR. RADOM: I appreciate that, were going to need in

order for use of cash collateral, but that will be my stipulation between SCNA and Caterpillar Logistics, thats the only cash collateral were using is subject to the lien of Caterpillar Logistics. THE COURT: MR. RADOM: agreement in place. Okay. I dont, I mean, we already have an I dont think that we need emergency And

relief at this point in time, but we will tee that up.

to the extent that we can bring it on for hearing by March 2nd, well do so. But because the operation itself has been

reduced substantially, its not like we need DIP financing, you know, well have the traditional employment applications, but as far as I can tell probably just the cash collateral order. here. Getting that entered is probably the first priority And then with respect to, we will be asking the Court

to approve Mr. McTevias retention as the Chief Restructuring Officer. I will address, I mean, I wasnt expecting to have to address it today, but Mr. Tatelbaums client has already been furnished with a termination statement of a security interest that had been granted under the trust mortgage. The trust

32 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 I certify that the foregoing is a correct transcript from the electronic sound recording of the proceedings in the aboveentitled matter. /s/Mary Zajaczkowski Mary Zajaczkowski, CET**D-531 March 19, 2012 Date mortgage itself has been terminated. To that extent Mr.

McTevias not a secured party here and the trust mortgage itself was just designed to give Mr. McTevia the full authority to wind down and liquidate the business for the benefit of all creditors. The lien itself was really for the

benefit of all creditors, and didnt represent anything more than that, it has been terminated. THE COURT: Okay, all right. Go ahead and prepare an

order and yeah, the Court will prepare an order, sorry, anything else? MR. SNYDER: THE COURT: (Court Adjourned) CERTIFICATE No, Your Honor. All right, thank you. Were adjourned.