Veritext Reporting Company 212-267-6868 516-608-2400

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VERITEXT REPORTING COMPANY www.veritext.com
UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK Case No. 10-13800-scc - - - - - - - - - - - - - - - - - - - - -x In the Matter of:
INNKEEPERS USA TRUST, ET AL.,
Debtors.
- - - - - - - - - - - - - - - - - - - - -x
U.S. Bankruptcy Court One Bowling Green New York, New York
June 23, 2011 4:05 PM
B E F O R E: HON. SHELLEY C. CHAPMAN U.S. BANKRUPTCY JUDGE
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Page 2 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: Linda Ferrara Debtors Third Motion for Entry of An Order Extending the Exclusive Periods During which Only the Debtor May File a Chapter 11 Plan and Solicit Acceptance Thereof [1619] Debtors Plans of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 1445]
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Page 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 BY: MARTIN J. BIENENSTOCK, ESQ. VINCENT INDELICATO, ESQ. DEWEY & LEBOEUF LLP Attorneys for Ad Hoc Committee of Preferred Shareholders 1301 Avenue of the Americas New York, NY 10019 BY: DANIEL T. DONOVAN, ESQ. KIRKLAND & ELLIS LLP Attorneys for Debtors 655 Fifteenth Street, N.W. Washington, D.C. 20005 BY: BRIAN S. LENNON, ESQ. STEPHEN E. HESSLER, ESQ. A P P E A R A N C E S : KIRKLAND & ELLIS LLP Attorneys for Debtors 601 Lexington Avenue New York, NY 10022
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Page 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 BY: LAUREN SHUMEJDA, ESQ. EVAN R. ZISHOLTZ, ESQ. PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP Attorneys for Apollo Investment Corporation 1285 Avenue of the Americas New York, NY 10019 BY: LORENZO MARINUZZI, ESQ. MORRISON & FOERSTER LLP Attorneys for Official Committee of Unsecured Creditors 1290 Avenue of the Americas New York, NY 10104 BY: JOHN D. PENN, ESQ. LENARD PARKINS, ESQ. HAYNES AND BOONE LLP Attorneys for Midland Loan Services 201 Main Street Suite 2200 Fort Worth, TX 76102
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FRIED, FRANK, HARRIS, SHRIVER & JACOBSON Attorneys for the Independent Committee One New York Plaza New York, New York 10004
BY:
GARY L. KAPLAN, ESQ. MATTHEW M. ROOSE, ESQ.
DECHERT LLP Attorneys for Lehman ALI 1095 Avenue of the Americas New York, NY 10036
BY:
MICHAEL SABE, ESQ. BRIAN E. GREER, ESQ.
PERKINS COIE LLP Attorneys for C-III and CW Capital 131 South Dearborn Street Suite 1700 Chicago, IL 60603
BY:
DAVID M. NEFF, ESQ.
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BRUCE R. ALTER Attorneys for Hilton Worldwide 550 Mamaroneck Avenue Harrison, New York 10528
BY:
BRUCE R. ALTER, ESQ.
BRYAN CAVE LLP Attorneys for Five Mile 1290 Avenue of the Americas New York, New York 10104-3300
BY:
LAWRENCE GOTTESMAN, ESQ. MICHELLE McMAHON, ESQ.
WACHTELL, LIPTON, ROSEN & KATZ Attorneys for Chatham 51 West 52nd Street New York, New York 10019
BY:
SCOTT K. CHARLES, ESQ.
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KILPATRICK, TOWNSEND & STOCKTON LLP Attorneys for Trimont Suite 2800 1100 Peachtree Street Atlanta, GA 30309
BY:
MARK A. FINK, ESQ. (TELEPHONICALLY)
KING & SPALDING Attorneys for One East Capital 1185 Avenue of the Americas New York, New York 10036
BY:
ARTHUR J. STEINBERG, ESQ.
ZEICHNER ELLMAN & KRAUSE LLP Attorneys for Chartis 575 Lexington Avenue New York, New York 10022
BY:
MICHAEL S. DAVIS, ESQ.
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KASOWITZ, BENSON, TORRES & FRIEDMAN, LLP Attorneys for Five Mile 1633 Broadway New York, New York 10019
BY:
ADAM L. SHIFF, ESQ.
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INNKEEPERS USA TRUST, ET AL.

Page 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 THE COURT: MR. SABE: THE COURT: MR. SABE: P R O C E E D I N G S Don't I know you all from somewhere? Yes, Your Honor. Good afternoon, Mr. Sabe. Your Honor, I am pleased to report that I
believe we've resolved all of the objections to all four plans, save one, the LNR objection with respect to the relief. we'll come back to that. THE COURT: MR. SABE: All right. Your Honor, early this morning in our So
typical style, we filed hundreds of pages of paper including an amended plan, confirmation order, various declarations including voting report, Mr. Beilinson, Mr. Pfizner (ph.), Mr. Forentz (ph.) and Ms. Todaro (ph). And Your Honor we have been
working with the parties to resolve the remaining objections of this morning. With respect to our brief, we outlined where we were when we filed. We had basically four and a half objections, of And I think we have eight out of nine now
the nine resolved. resolved.
And as of this morning, the most significant objection clearly that was unresolved was the ad hoc -THE COURT: MR. SABE: Right. -- committee payment. And the work done by
the parties this morning and in court, I think we have now
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Page 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 plans. resolved the ad hoc payment issue and the objections. And
there are no pending objections with respect to that payment, subject to all the terms I'm going to outline in an agreement. Your Honor, with respect to our offer of proof, of course we had submitted the five declarations. questions or issues with respect to those. There's been no
I'm not aware of
any party who is seeking to cross-examine or have any questions with respect to them. Many of the declarants are here. I
believe all of them, in fact, are of course if Your Honor has questions. With respect to the plans themselves, Your Honor, Mr. Osbourne's (ph.) affidavit, the voting affidavit, outlines what is near consensus with respect to our ninety-two plans. And
while there are four different joint plans and four different transactions, we're very pleased with the success of the solicitation which obviously comes off the success of the auction and our efforts to get global peace, I think or have been successful subject to the one last issue which we'll have in front of Your Honor soon. There are, as Your Honor knows, four separate joint All of the classes but for the Grand Prix Holdings Most of the classes
class accepted the plan overwhelmingly.
were in the high nineties with respect to amounts and numbers. And in particular, we were pleased with the participation rate in the Series C preferred share holdings. We had very
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Page 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 significant participation and are very appreciative to our solicitation agent who spent as we discussed in the brief, a significant amount of time tracking down master ballot holders and other holders. Your Honor, part of our solution that I'll be outlining is for Midland and Lehman to change their votes at Grand Prix. THE COURT: MR. SABE: So that you have an acceptance at R4(b)? That's correct, so then every class would
be -- we would have an impaired accepting class now at the Grand Prix level in which case the Grand Prix plan would also be eligible now to be confirmed. We certainly believe we had a
right to do that already, but certainly with the votes being changed, it makes that issue much more straightforward. Your Honor, with respect to the objections, as we outlined in the brief, we had made changes to the release to resolve the U.S. Trustee's objection. In particular, parties
who have affirmatively voted to reject the release have been carved out of the release. objection. York had filed an objection which was withdrawn. Western's objection was resoled pursuant to a stipulation. Best The That resolves the U.S. Trustee's
Carollton-Farmers Branch was resolved by adding some language that's in the confirmation order with respect to their claim. Lehman has, in essence, two objections; one was to the
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Page 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 remaining debtor Key Plan. THE COURT: MR. SABE: Right. That was resolved by a modification in the
allocation of the Key payments and we filed an updated plan supplement document with respect to the Key. So that has been
resolved and, of course, with the global resolution, the second objection which was the ad hoc payment is resolved. We've also resolved, we believe, Midland's objections to the plan, including the ad hoc payment objection and one East Capital Advisors' objection. Chartis, that has been -- I think the resolution of Chartis is in essence to deal with contract issues at a subsequent hearing, I think in July and -THE COURT: MR. SABE: THE COURT: MR. SABE: open objection. There's a placeholder in the order. There's a placeholder for that. Right. Correct. And LNR is the lone remaining
Your Honor with respect to the terms that have
been sketched out today, these are -- this is what the parties have discussed and agreed to. Now, of course, with all the
documents that were filed this morning, everyone still needs to go through, particularly the order. earlier this week. We had circulated an order Also,
We received comments to the plan.
there were some changes including liquidating trust structure and the Ontario plan being modified to deal with C-3's secured
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Page 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 be filed. claim, which now they have voted for. they told you that they wouldn't. As you recall, at point
And I'm glad they did.
With respect to the terms of the Global deal, as we're calling it, I'm just going to outline it and I'm sure others may have other comments. I hope not because we actually shared
this with others and we'll see. First, Lehman and Midland will be withdrawing their objections and changing their votes at the Grand Prix Holdings level to acceptances. With respect to -- and Your Honor may
recall certain of the objections dealt with the guarantee claim issue, which you had heard several times now. of points with respect to that. To the extent that the debtors determine to do so, the debtors will file objections to those guaranteed claims within fourteen days of the entry of an order confirming the plans. THE COURT: So in other words, whether or not the There's a couple
debtor's are going to pursue the waiver. MR. SABE: THE COURT: MR. SABE: That's correct. The alleged waiver of those claims. That's correct. So those objections will
There will be a six month abatement period after the And during that period, no party
filing of those objections.
will be required to take any action to prosecute or oppose any of the guaranteed claims. There'll be no depositions. There will be no discovery. The claims will be on file.
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Page 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 The abatement period will not affect or impact distributions that would otherwise be made to Series C holders, pursuant to the waterfall. At the end of that six month
period, the parties will come back and we'll have a status conference with Your Honor to determine all of the next steps, including the filing of responsive pleadings, and discovery. And that will happen presumably we'll schedule a time, but there will be no activity with respect to the objections during that time. The ad hoc committee's fee will be approved in the full amount of the 3.5 million. And the ad hoc committee has
agreed to pay 100,000 dollars of that payment to Grand Prix which will be the debtor above Innkeepers USA Trust where the guaranteed claims are safe. Our purchaser with respect to the Five Sisters Chatham, will also be paying an additional 100,000 dollars to Grand Prix and there's something -- there will be an exchange with respect to that. Grand Prix then will pay One East the objector, with respect to the -- the remaining objector with respect to the preferred payment, fifty thousand dollars and One East will then be withdrawing its objection. THE COURT: MR. SABE: (Pause.) Hold on a minute. Okay.
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Page 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 THE COURT: Let me make sure I'm following you. So
the ad hoc 3.5 million dollar fee gets approved. Which debtor?
Who pays it?
Is it going to be Innkeepers USA LP? It'll be the debtors that are obligated So it's --
MR. SABE:
under the agreement right now. THE COURT:
Well under the agreement right now, it's
remaining debtors other than Grand Prix, USA Trust, Innkeepers Financial and USA Limited Partnership; right? MR. SABE: THE COURT: That's correct. So there's going to be some sort of an
allocation among -- at one place it says that Innkeepers USA Limited Partnership is going to pay it. MR. SABE: THE COURT: MR. SABE: THE COURT: MR. SABE: THE COURT: MR. SABE: THE COURT: MR. SABE: THE COURT: MR. SABE: THE COURT: No, it will be -Is that not -It will be the entities below. It will be the entities below. Correct. Okay. Where the assets -Where the assets -Correct. Where the value was created, so-to-speak. That's absolutely correct. Okay. So they are going to get the
payment and then they're going to give 100,000 dollars back to
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Page 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 Grand Prix. MR. SABE: THE COURT: Correct. And then the purchaser is going to give
another 100,000 dollars. MR. SABE: THE COURT: To Grand Prix. To Grand Prix. And Grand Prix's going to
give fifty of that to One East. MR. SABE: THE COURT: Correct. So after the payment is made, then the
rest of the consideration bubbles up so-to-speak, and then it's going to go -MR. SABE: THE COURT: MR. SABE: THE COURT: is going to happen. MR. SABE: Correct. So whatever remaining Right. -- sixty-forty to the C's and the A's. Correct. And then whatever happens up at Grand Prix
consideration will come to effectively pay LP claims -THE COURT: MR. SABE: THE COURT: MR. SABE: THE COURT: MR. SABE: rough but -Right. -- financial claims -Right. -- that bubbles up to USA. Right. And then -- and we've done the math. It's
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Page 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 THE COURT: MR. SABE: It's rough but -So sixty percent will then go to the Series
C, Mr. Bienenstock's group. THE COURT: Right. But, in essence what this has the
effect of doing net net is to top up the pot at Grand Prix by 150,000 dollars. MR. SABE: That's correct. And in essence, that's the
resolution of Lehman and Midland's objection. THE COURT: Because they're potentially would -- if
they prevail on their guaranty claims they will have been -would have been diluted by the payment. MR. SABE: That's correct. So as we sort of outlined
the math, if the claim -- if the fees and expenses of Mr. Bienenstock's group, call it 2.2 million, then 1.3 million would be borne by both sides; forty percent of it by the Grand Prix side. So this is in essence mitigating the forty percent
that they would otherwise be paying. THE COURT: MR. SABE: Okay. Okay. Keep going. We had at one point discussed in the
plan, the potential need for transition services agreement and given the buyers and the sellers now, we don't think there's anything formal that needs to be done. But there is going to
be some additional transition services, as well as some additional miscellaneous assets that are going to be sold to Chatham again, in exchange for the consideration that they're
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Page 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 providing. And these are assets that are held, in essence at USA or Grand Prix that were not sellers of assets under the Chatham APA but because this is an integrated entity, there are the name and there's some furniture and some office equipment, things like that. There's a whole list of miscellaneous assets
that the buyer and Innkeepers have agreed will be sold and given that it's effectively all in the same building and a buyer and a seller share the office space, I think we're going to work through this with Chatham. But the assets that would be transferred to Chatham, sold to Chatham, would include the intellectual property, including the Innkeepers name, websites and domains, some furniture, fixtures, equipment, some IT, records, historical records and artwork. And that there may be some additional
assets but again, this is all within -THE COURT: So is that going to generate additional
consideration or that's what they're getting in return for the 100,000 dollars? MR. SABE: THE COURT: MR. SABE: THE COURT: MR. SABE: That's -- your second, the second. The latter? Yes. Okay. So they're getting these assets, in
essence, for 100,000 which is then funding the settlements.
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Page 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 Okay. In exchange though, Chatham is going to provide the debtors with some additional transition services which includes access for a period of not to exceed twelve months for the building and the premises, access to the systems, to the employees of Island. In essence, for purposes of winding down
the remaining assets to the extent there's claims or records, those kinds of things will be, in essence, an informal relationship for that twelve months where, in essence, the winding down of the estate will be assisted by Island for that period of not to exceed twelve months. And then for a period
of six months, some of the offices -- three offices and one secretary. So there's basically a sharing of the services.
And obviously there could have been more formal transition services but given Island and Innkeepers share the same space, it's more of an informal relationship. So with that, that is the last of the terms. Now I
think our expectation is that given the documents that were filed this morning, I think people are still looking at them. There may be some questions or comments. We've been getting
comments as we typically do from lots of parties and we still need to incorporate some. And so our expectation is we work
through that today and then presumably be able to submit a -assuming that Your Honor's will indulge us, an order. THE COURT: All right.
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Page 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 filed. MR. SABE: Tomorrow would be our -- certainly our hope
but parties will work as hard as they can to work through that. So that I think is the full resolution. I don't know if anyone
else will want to speak to it but obviously with the resolution of all of those objections, we certainly would request confirmation of all four plans and all ninety-two debtors pursuant to the plans that we've submitted. And, of course, we Mr.
can walk through the changes to the orders to the plans.
London would probably take -- be better to do that than I would but we're happy to walk through that if Your Honor would or answer any questions, otherwise I think the other issues, again just the LNR issue. THE COURT: All right. Well, we read everything you And I think I followed
So we're caught up with you.
the contours of the deal. Mile issue? MR. SABE: THE COURT: MR. PENN:
Do you want to go through the Five
The LNR? The LNR issue. Very briefly, Your Honor, John Penn on
behalf of Midland Loan Services. THE COURT: MR. PENN: Yes. One of our objections was a preservation of
our consent rights that deal with both the plan and the confirmation order. And so we're still preserving our consent And there's still lots of cleanup
rights and not waiving that.
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Page 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 better. MR. GOTTESMAN: THE COURT: releasing Five Mile. MR. GOTTESMAN: That's correct, Your Honor. We had We had Oh, sure. I'm sorry. Once again -are you? MR. GOTTESMAN: THE COURT: Couldn't be better, Your Honor. You could be that needs to be done. THE COURT: Understood. Hello, Mr. Gottesman. How
Well that's not true.
So we're talking about your objection to
hoped that we would be able to obviate that objection. filed frankly thinking that it was more in the nature of precautionary objection.
We have been engaged with the debtors
and with Five Mile to try and resolve these issues before the hearing on the disclosure statement. You know, we were not successful back then. We
concluded that they were plan issues and not disclosure statement issues and obviously did not have an issue with respect to the disclosure statement. We arrived in court thinking that this issue had been substantially resolved. There had been language that we had
been working on with the debtors over the last few days that would have alleviated our concerns. THE COURT: What is your concern? The concern is at a couple levels,
MR. GOTTESMAN:
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Page 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 Your Honor, which is first of all, it's probably worth talking about what we're okay with and what we're not okay with. We
certainly have no objection to releases by LNR or by the LNR service trust that hold the five loans with respect to Five Mile as DIP lender or DIP agent and we've made that clear from the beginning. inappropriate. We don't think that there's anything And obviously, the exculpation would follow in And we don't have a problem with respect to
tandem with that. that.
The issue is, quite frankly, the releases with respect to the fixed floating rate debtors and the roader exculpation and the exculpation to put it in context is bonded on all entities which is obviously goes way beyond creditors and equity security holders in the case. THE COURT: But this is where I lose you because
you're not a fixed floating releasing party. MR. GOTTESMAN: Well, you know, the problem is that
there are arguments both pro and con in terms of that question the way the plan is drafted. And there's certainly an argument
that you could read the language narrowly but if you look at the catchall, and I'd be glad to walk Your Honor through the definitions if that's necessary or appropriate but if you look at the catchall that picks up agents and special servicers and affiliates and all that kind of stuff, we wind up at least arguably -- and I don't want -- and part of this is what --
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Page 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 unlike some of the other issues, Your Honor, is to make sure that we're not trying to figure out what was meant by these releases and exculpations months after the fact. We're striving towards clarity and what we don't want to have is catchalls that -THE COURT: But if we put in a provision that says for
the avoidance of doubt -MR. GOTTESMAN: trying to do, Your Honor. Well that's in fact what we've been And the -- what we've -- and I would
be glad to read into the record what we've suggested and what I thought had been agreed to which is that notwithstanding any other provision in the plan, the plan supplement or the confirmation order -- neither the plan, the plan supplement nor the confirmation order shall release, settle, waive, discharge, exculpate or enjoin any claims, interest, so and so forth of LNR Partners, LLC, or certificate holders. certificate holders should not be -THE COURT: Right. -- released and since they're -- as Remember,
MR. GOTTESMAN:
Your Honor held in the earlier context, didn't have standing, so it wouldn't be -- they don't have that equilibrium there, if you will, or the holders or their successors and assigns, that kind of stuff against the C6 or C7 Trust, Presidio, CRES, Five Mile or any of their respective successors, assigns, predecessors and those kinds of parties, Your Honor, arising
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Page 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 fair. under any applicable pooling. The servicing agreement, co-lender agreement, side letter or otherwise, we carved out from that excluding agreements to which debtors from the parties because we did not want to undercut the releases that go in favor of the debtor and its management. And that's something that we're supportive
of and agreeable to from that exclusion from any claims, that kind of thing, including but not limited to what's asserted in the adversarial or the subject matter of that, Your Honor. And that's all we're trying to do. We think that's
We're happy to add clarifying language that makes clear
that notwithstanding that clarification, we're still releasing Five Mile as DIP lender and as DIP agent. no objection with respect to that. But what we don't want to have is because of the way these definitions work, and they are complex, they have changed multiple times and that's not a criticism but the nature of this case which is bundles and bundles of paper at the last minute, that we have what could amount to a gotcha. don't think -Let's sort of start from the basic premise which is that we don't think what is fair or appropriate or permitted under the case law is to have releases that are non-consensual that would pickup certificate holders and that would pickup LNR Partners, which as Your Honor may recall is the special And so, we As I said, we have
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Page 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 capacity. MR. GOTTESMAN: And to be very clear, we don't object We don't object to case. MR. GOTTESMAN: THE COURT: Correct. servicer entity, other than in its capacity as special servicer with respect to the five hotel loans that are the subject of the Chatham sale, you know, the remaining debtor plan. And there, per the plan that's on file, those releases are limited to Five Mile as DIP lender and DIP agent. have an objection to that. We don't
We think that the notion of having
it broader than that is not something that's -THE COURT: Well what else is Five Mile? I am not sure if I understood the
MR. GOTTESMAN: question, Your Honor. THE COURT:
You're limiting the release or you make a
point of saying that you've no problem releasing them as a DIP lender and DIP agent. MR. GOTTESMAN: THE COURT: Correct.
Five mile has done a lot more in this
And they want to be released in that
to releases that creditors are given. releases -- and that includes -THE COURT:
Why should -- my question is, what is it
about LNR that makes it different from anybody else in terms of to what extent it should release Five Mile?
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Page 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 MR. GOTTESMAN: Because it doesn't have standing. In
other words, Your Honor, it's one thing to say that creditors who had a right to be heard, so the C6 and the C7 Trust, for example, have elected and have decided on a consensual basis, have decided to give Five Mile a release with respect to what it did in connection with the case. And that's something that
when we originally objected and we've withdrawn the objection with respect to that aspect. Unsecured creditors who are represented by an official committee, and clearly had standing to come into this court and be heard by Your Honor are subject to the third-party releases. THE COURT: But you're mixing up pots because yes,
it's true we had a standing issue and a disposition at the disclosure statement hearing, if I'm remembering correctly, but -- before then, but Five Mile played a role in the case. MR. GOTTESMAN: Well they certainly did, Your Honor, One
but there are two issues -- there are two related issues.
is first as a general matter, whether you include within the scope of third-party releases whether you bind to those releases, parties who didn't have standing in the case such as certificate holders, such as LNR Partners, other than in its capacity as servicer for the Five loans because the notion that you should bind people who weren't participants and didn't have the right to participate, I think is offensive to even the limited circumstances, the unusual circumstances in which
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Page 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 third-party releases are permissible. The second issue is a substantive one which I think Your Honor just eluded to which is whether participation in the case in and of itself constitutes the unusual circumstances that the Second Circuit case law requires in order to support a third-party release. And I would respectfully submit, Your Merely being a bidder, merely
Honor, that the answer is no.
participating in the case, at least as I understand the case law, doesn't earn you a release. What Five Mile did earn by participating in the case as a bidder was ultimately an expense reimbursement for three million dollars which as I read the plan is honored and will be paid. They have a pending motion for substantial contribution
which may result, dependent upon Your Honor's ruling on that when its ultimately heard, in additional payment to them and the other bid protections that were set forth in the bid procedures order. So the notion that merely because you participated in the case as a bidder, you were then entitled to releases from all sorts of third-parties. THE COURT: I just don't -- I want you to articulate
an example of a claim that you want to preserve because I just don't get it. I just am not -- I've read it. I've read it
countless time and I just don't get it. MR. GOTTESMAN: As to what the claim is or why they
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Page 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 would be released? THE COURT: As to what the claim is. What is the --
I'm trying to understand what you are preserving and I just don't get it. MR. GOTTESMAN: And part of the concern, Your Honor, I
mean is twofold with respect to that and I think first of all, we're not on the intel. We don't necessarily -- we're
concerned about releasing that which we do not know and I want to be very clear, I am not representing to the Court that there are necessarily other claims out there beyond what's pending in the current adversary proceeding. THE COURT: proceeding -MR. GOTTESMAN: THE COURT: going to continue. MR. GOTTESMAN: THE COURT: Which is out there. Correct. You have claims in the current adversary
-- which for better or worse apparently is
Which is out there. Which is out there.
MR. GOTTESMAN: THE COURT: carved out; correct? MR. GOTTESMAN: THE COURT:
And those are absolutely preserved and
Correct, Your Honor.
Okay. I don't think there's any substantive
MR. GOTTESMAN: dispute about that.
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Page 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 THE COURT: Then what else? MR. GOTTESMAN: And so then the question is are there All right. So that's out of the way.
unknown claims that we have against Five Mile, CRES or any of its affiliated entities that are out there? And what the we
answer is standing here today, Your Honor, we don't know. don't know. But the point that I -- I don't think that Your
Honor's decision on whether to grant or not grant, approve or disapprove of third-party releases is dependent upon an analysis of what those potential claims are because at some level that then becomes very circular because if you conclude there are no claims and therefore it's appropriate to grant the release, at some level what you've then done is dodge the issue. Release are to protect against potential claims and
conversely, you know -THE COURT: So you're not worried about releasing
claims as a certificate holder, in your capacity as a certificate holder. MR. GOTTESMAN: Well, I am actually worried that they
might get released inadvertently by the result of the catchall language in the definition of fixed floating. THE COURT: But -And I've asked for a clarification and
MR. GOTTESMAN: have been unsuccessful.
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Page 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 THE COURT: All right. My reading of the plan is that
as a certificate holder and as the plaintiff in LNR v. CRES, you're not releasing Five Mile under the plan. reading. MR. GOTTESMAN: THE COURT: Correct. That's my
Am I correct? And -So we're clear on that. So
MR. GOTTESMAN: THE COURT:
All right.
we're not going to talk about that anymore. MR. GOTTESMAN: Correct. And then the question is
whether there are unasserted claims that LNR Partners -THE COURT: In its capacity as a special servicer, a
certificate holder, as what? MR. GOTTESMAN: Remember, there are different entities
but LNR Partners which is a special servicer entity or any certificate holder, other than what's asserted in that pending adversary whether those should be released. THE COURT: Right. And the answer is I don't know whether
MR. GOTTESMAN:
or not there are such claims but I don't want to release them by virtue of what Your Honor does -THE COURT: Well you're not going to be releasing
anything unrelated to this case because I don't have jurisdiction to do that. MR. GOTTESMAN: To be precise --
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Page 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 THE COURT: Right. Let me be more precise. I don't know
MR. GOTTESMAN:
if there are other claims that relate to this case or the debtors generally -THE COURT: But that's --- that would not --
MR. GOTTESMAN: THE COURT: going to be done.
But that's the whole point, is that we're We've been at this for almost a year. They, in addition to their role
You've been actively engaged.
in the capital structure, had a role in the auction and the bidding process. It's time for it to be over. And I do think
that they satisfy Metromedia. I am just having a really hard time understanding what all the tussling is all about. MR. GOTTESMAN: THE COURT: You on the one hand say it's --
Why we --
-- you're worried about inadvertence but
we're clarifying here on the record that what is and is not within the purview of the definitions and some yet to be identified thing that occurred in the case that you don't want to release them for, this is the moment. with this. MR. GOTTESMAN: Well but, Your Honor, with all due I am just struggling
respect, I don't think it is the moment because once again, you're dealing with parties that are secondary, that do not have standing in the case per Your Honor's earlier order and
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Page 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 we're concerned about the implications going forward which is merely because you show up as a bidder, you are exculpated and released from anything that you might have done in connection with the case. That I think is troublesome, Your Honor. And I
think it's troublesome -THE COURT: I think that it's troublesome potentially
for parties who then are going to look at the situation and say why am I going to stick my neck out if I'm not going to get released? MR. GOTTESMAN: the bid procedures. And that's something that goes into
I mean that's the -- if that's the
requirement, to become a bidder, then I think as a due process matter that should have been -THE COURT: Where's Bojmel with his baseball bat? I
mean -- let me hear from Mr. Shiff? MR. SHIFF: THE COURT: MR. SHIFF: Good afternoon, Your Honor. Good afternoon. For the record, Adam Shiff, Kasowitz, Your Honor, I
Benson Torres & Friedman on behalf of Five Mile.
think Your Honor raised a number of the points I was going to raise here. I will say at the outset, just very briefly, I
mean this has been a great case with a fantastic result and I say that not as the winning bidder. item. Your Honor, I think the items really fall into, if you And that's not a common
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Page 33 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 want to put it very simply, two buckets right now. There is at
the remaining debtor's plan, the Five, just so we're clear, Five Mile doesn't get any releases, you know, capital R releases at the remaining debtor's plan. The only thing that's
made available to Five Mile -- when I say made available, I mean made available after having it negotiated back at the original committee letter and now carrying through the debtors, you know, filings of last night, is an exculpation which as the debtors I think aptly point out in their papers really sets more forth a standard of liability than anything else. And I think they also cite a number of cases including Enron and Captain that talk about the role that that played through the case and the role that the party played through the case. There is no release there. We weren't as engaged there
but obviously we took actions that the Court has seen that impacted those estates, almost as much as perhaps the fixed floating estates, whether it was back -- and the Court has our papers and our 503(b), so I won't run through the litany. As to the release, the release so we're clear is only at the fixed floating debtors, as opposed to the remaining debtors and as I think the Court has pointed out, it's limited to certain parties and those parties are all in their respective capacities. And not only are they in their
respective capacities, when you actually turn to the release itself, it then goes on and talks about effectively, you know,
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Page 34 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 anyway related to the debtors, the plan, the Chapter 11 case, et cetera. I think so we're clear, the certificate holder thing is carved out, I think three or four times, both amongst each other, claims amongst certificate holders. And in addition to
that, the creditors, the CRES litigation is specifically carved out. THE COURT: MR. SHIFF: statement -THE COURT: And LNR as a special servicer is not in Right. And I think if you look at the disclosure
the definition, right, of a fixed floating releasing party? MR. SHIFF: I don't believe so, Your Honor. I thought
the concern that they had was that somehow they could maybe get picked up if they were -- I mean it's a little inconsistent with the argument about not having standing since they filed pleadings, but that maybe somehow they were a creditor and maybe they become a creditor, I don't know. claim. Maybe they buy a
Maybe the, I don't know, one day win the CRES
litigation or something happens and they come back into this court and say you know what, those C6, C7 Trusts shouldn't be releasing Five Mile for what they did. So I think, Your Honor, though really when you cut through it and I know you probably want to stick to the documents and the facts and the colloquy, it is a little
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Page 35 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 interesting to note that the only third-party release that we find objectionable is Five Mile. The Court has some knowledge
of the history of the parties and the ongoing litigation, and I think the other thing to bear in mind is that these releases, particularly as you see how the definitions work as releasing parties, they're all set up with a certain sense of mutuality. You give these releases to them. goes to him. If you pull out like one card in the deck, the whole thing kind of comes down because if you hypothesize something that you decided to carve out, let's say, in addition to the certificate holders thing which I think is a different issue, but something that relates to the plan, you know, that would otherwise get picked up, so LNR although they couldn't think of a theory, come up with some theory to sue Five Mile because we did X, Y and Z. Z. All right. Maybe we conspired with someone to do X, Y and I don't think that's a good claim but just They sue Five Mile. So we turn to They give them to you. It
think about what happens.
party X, Y and Z with whom we supposed conspired but now because the way the releases all work because they're designed to do this, they're interlinked, I can't bring them in, whether it was someone I bid with, a board or this or that. So it really is that this release, even a Five Mile, is really essential to the -- and I think the creditor's committee made this point in their papers as did the debtors,
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Page 36 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 to sort of this global, and not only of these 9019 but these releases that really are based on a sense of mutuality that go to the eighth of the plan which is as the Court has said, is we're over. You know, we got a great result. It's good.
Let's move on with life. I think in terms of what the Court was concerned with though, in particular, it's only limited to these cases. certificate holder stuff is all carved out and the CRES litigation is all carved out. Metromedia. Metromedia. I'm happy to speak more to The
I think the Court already made comments on I don't think it's -- and you have our papers. I
don't think it's necessary.
I think the Court probably has the
best vantage point to see what we've done in this case to both justify the exculpation and the release that all the main participants, including LNR quite frankly, are receiving under these documents. So unless the Court has any specific
questions for me -THE COURT: So can you tell me what -- taking Mr.
Gottesman at his word that he's trying to avoid a gotcha, can you comment on what it is about his clarifying language that you don't like? MR. SHIFF: remember what it was. MR. GOTTESMAN: I would be glad to hand Mr. Shiff a Okay. I have to try to parse through and
copy if that would be helpful.
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Page 37 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. SHIFF: Okay. Is it in handwriting?
MR. GOTTESMAN: MR. SHIFF:
No, it's actually typed. Good. And just to sort of reading
Okay.
out loud as I go through -THE COURT: MR. SHIFF: Yes. The first thing is it removes any
exculpation whatsoever and I think as we -- at least as I talked about, I certainly think-- which would apply in both sets of debtors, we certainly believe an exculpation which is on a lower standard than a release -THE COURT: Right. So, Mr. Gottesman, that goes
beyond the gotcha point. You affirmatively don't want to allow them to be exculpated for what occurred during the case. MR. GOTTESMAN: Your Honor. Solely -- we want to be more precise,
We don't want to be included because the
exculpation by its terms, unlike the release provisions apply to any entity as defined in Section 101 of the Code and that would apply to non-releasing parties. And even though there's
language in the exculpation that's unintended to expand the scope of the releases, my concern is by making it binding upon and applicable to any entity in terms of those that are bound by the exculpation, that you are now expanding the scope of the release, Your Honor. That's the concern. That's the concern.
And the other concern with respect to the exculpation is I don't want to have when we get to the merits of the
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Page 38 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 lawsuit. underlying CRES litigation, arguments about what was meritorious there, what was meritorious there. THE COURT: that litigation. MR. GOTTESMAN: So nothing with regard to the There's some --
Everything is preserved with respect to
exculpations can have any bearing, can have any -THE COURT: I'll agree with that. Okay. But that's not what the plan
MR. GOTTESMAN:
currently says, Your Honor. THE COURT: Then for the avoidance -- then do a
section that says to for the avoidance of -MR. SHIFF: I actually think at least the disclosure
statement certainly said that but -THE COURT: And -Well, the disclosure statement
MR. GOTTESMAN: doesn't -MR. SHIFF: THE COURT:
We understand. Look, for better or worse, if LNR v. CRES
is going to continue, nothing we do in the plan, confirmation order or any documents are going to have any bearing on the outcome of that litigation. I'm not going to take any facts as I
issue preclusive or having any collateral estoppel effect. mean if that -MR. GOTTESMAN: Exculpated from liability in a
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Page 39 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 third. THE COURT: Anything. Anything. So if that's what it
takes to get you comfortable, then we can say that three different ways. MR. GOTTESMAN: which is good. THE COURT: Right. And you're welcome to come with a We've said it at least twice so far,
If that's the essence of your concern, I'm with you. It's on this record. You can draft language to
It's preserved.
that effect but I can't conjure what else there is -MR. GOTTESMAN: And that's been part of our concern,
Your Honor, is that litigation is at the extremely early stage, procedurally and we're trying to avoid having to conjure what could or could not happen in terms of arguments, that might be vague with respect to it. THE COURT: We will proceed in that litigation as if Okay? We're
none of this has occurred in the last ten months.
going to do the Men In Black -- in all seriousness -MR. GOTTESMAN: THE COURT: No, I --
-- if that's your concern, then we don't
have an issue because that's the way I was reading these papers. Mr. Shiff, are you all right with that? MR. SHIFF: Sure, Your Honor. His sure gives me a lot of comfort,
MR. GOTTESMAN: Your Honor. MR. SHIFF:
It's the Court -- the Court said it.
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Page 40 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. GOTTESMAN: Your Honor, the other thing that I
wanted to point out in terms of the definition of fixed and floating and this might, you know, once again try and go to why we had concerns. And to the extent we can clarify things on
the record, that's extraordinarily helpful from our perspective. But, you know, I referred to in very general terms, and if you don't mind, I'm going to lean over and look at your copy, there's the -- to the catchall provision. And let me
just sort of give you an example of the things that I'm concerned about. In the catchall which is in item U of the
fixed floating definition, Your Honor, it picks up special service or flow of case undefined. THE COURT: Which definition are you in? I'm in the definition of fixed
MR. GOTTESMAN:
floating releasing parties which is 86 which I believe begins on page -- this may be the wrong pagination but around page 8 or 9 of the plan, I think, Your Honor. THE COURT: Hold on. All right.
MR. GOTTESMAN:
So for example, you'll see in that
catchall in U, there's a litany of other parties including lower case special servicers, Your Honor. Your Honor may
recall that LNR Partners is and there's no dispute about this, is a special servicer with respect to the C7 Trust -THE COURT: Right.
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Page 41 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. GOTTESMAN: -- with respect to every other loan If you read this definition by
other than the fixed rate loan.
its words, which unfortunately we sometimes wind up doing, Your Honor, their special -- it's, U says each of their -- the forgone entities special servicers, one of the fixed floating rate releasing parties in K are the C6 and the C7 Trust. So there are -- obviously our concern is we don't think it's appropriate to have LNR Partners LLC in its capacity as special servicer for everything else in C7 within the scope of this release. that could happen. THE COURT: Okay. But we agree with that; right? We don't think -- you know, I'm not sure how
MR. GOTTESMAN: MR. SHIFF: THE COURT: MR. SHIFF:
I am not --
The release by its terms -But -No, the release by its terms is limited to
the debtors, the plan, the cases. THE COURT: MR. SHIFF: Right. So if on some other real estate deal
somewhere else, we have a fight, great. THE COURT: Great. It's not --
MR. GOTTESMAN:
But the releases -- to be clear,
there's no release by C7 -- by LNR as special servicer for C7 in whatever capacity in favor of Five Mile or any of its affiliates with respect to Innkeepers or these cases, Your
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Page 42 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 or period. say but -MR. SHIFF: No, I don't think I said that. I think I I think that's what I just heard Mr. Shiff
said that to the extent there's -- I mean this is an interesting exercise, but to the extent you're concerned about some of this language with these other loans and the like, we certainly agree it's not the case. I think if LNR becomes for Let's
example -- I mean, let's take the hypothetical, right? say they win the CRES litigation; right? THE COURT: MR. SHIFF: Right.
So all of the sudden they become the C7
special servicer; right? THE COURT: MR. SHIFF: Right. They control this. Well, guess what? All
of the sudden, the release that I got from the actual party that we worked with and delivered all the value to -THE COURT: MR. SHIFF: Right. -- it doesn't apply anymore because he's
now the special servicer and in control of the entity. THE COURT: MR. SHIFF: That's right. I mean that's really what we need to
protect against, not the hypothetical of the other -- the next real estate deal. MR. GOTTESMAN: MR. LENNON: But --
Your Honor, if I may interrupt for a
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Page 43 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 second? THE COURT: MR. LENNON: Yes, Mr. Lennon. As a matter of the administration of the
rest of the hearing, certain of the debtors declarants need to leave by I believe it was 4:30. THE COURT: MR. LENNON: questions -THE COURT: MR. LENNON: THE COURT: I apologize. All right. Fair enough. Unless there were going to be any
-- if they were to be excused. Let me quickly then ask Mr. Sabe, did you
want to move those declarations into evidence? MR. SABE: affidavit -THE COURT: We have the declaration of Mr. Beilinson, I do, Your Honor. We filed the
Mr. Derrough, Mr. Brendt, Mr. Kleisner and I think we also have the certification of Mr. Osborne (ph.). MR. SABE: Correct. And actually, Mr. Bojmel
submitted a short affidavit this afternoon. THE COURT: MR. SABE: THE COURT: And Mr. Bojmel, as well. Yes. All right. Any objections to the
admission into evidence of those declarations? (No response.) THE COURT: All right. They're in evidence. Those
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Page 44 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 parties can be excused. (Declarants affidavits admitted into evidence.) THE COURT: Thank you, Your Honor. All right. In the Let's
try to wrap this up because we are losing ground.
spirit of less is more, if we add a statement for the avoidance of doubt, all of LNR and its affiliated entities rights are preserved with respect to the LNR CRES litigation in every possible respect and nothing herein shall have any effect preclusive or otherwise, on that or something to that effect. MR. GOTTESMAN: THE COURT: To the subject matter thereof. And I retain
Then we're done.
jurisdiction, so that if there is some kind of a misunderstanding before we close the case, you can come back and this record speaks to what everybody's intent was. I mean
I'll give you that everybody's probably really tired and maybe you're drafting around each other but I think you need to be satisfied with that because otherwise, I'm prepared to approve what the debtors drafted. I don't see the demons that you do
with the clarification that we have on the record. MR. GOTTESMAN: Your Honor, the clarifications that
have been made on the record are obviously very helpful. THE COURT: All right. You know, we are -- since we're
MR. GOTTESMAN:
wordsmiths, we're concerned about how words can be read with different meanings --
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Page 45 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 again. THE COURT: I think to try to really dive back into THE COURT: Understood. -- and different context. And, you
MR. GOTTESMAN:
know, this kind of clarification is obviously helpful. So we've listened to those. THE COURT: We listened to Your Honor's other remarks. Okay. And I have no doubt that we should be
MR. GOTTESMAN:
able to craft that language which will be included when the order gets submitted. MR. SHIFF: Right. And just so we're clear, Your
Honor, of the language, we're talking about sort of that last sentence you were talking about for the avoidance of doubt, nothing in the case here or there, effects the litigation. THE COURT: MR. SHIFF: I think that -Just so that we don't talk past each other
the definition of the fixed floating releasing party and if you really wanted to make yourself not be able to sleep, you would go back into the pooling and servicing agreement and all the definitions in there and it's really not very pretty. MR. GOTTESMAN: THE COURT: MR. SHIFF: THE COURT: I've read it. So I --
I'm sure you have and I've read parts -As has the Court, I am sure. -- of it, too and therefore, I think
you're probably never -- it's the rabbit hole. You'll probably
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Page 46 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 never come out. So I think it's easier to just draft for
avoidance of doubt, sentence, and then let this record say the rest. MR. GOTTESMAN: THE COURT: That's fine, Your Honor.
All right. Thank you, Your Honor. Back to you, Mr. Sabe or Mr.
MR. GOTTESMAN: THE COURT: Lennon or whomever.
Thank you.
Did anyone have any comment with respect
to Mr. Sabe's outline of the modifications that are going to be reflected in the documents with respect to the ad hoc committee's arrangement with Midland, Lehman and otherwise? (No response.) THE COURT: MR. SABE: All right. Your Honor, again we had walked through --
we could walk through the changes to the plan that were made, confirmation order, questions, Your Honor, otherwise I think what we'd like to do is -THE COURT: MR. SABE: THE COURT: MR. SABE: Go home and draft. Go home -Right. And be in a position where we can submit a
comprehensive global confirmation order. THE COURT: All right. So tell me about your timing
in terms of when if past is prologue, you won't get it to me early tomorrow, so when can --
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Page 47 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 as well. MR. SABE: THE COURT: Thank you. Okay. I appreciate the fact that you entered? MR. SABE: June 30 is the termination event under the MR. SABE: THE COURT: That's certain to be true now. So when do you actually need the order
Chatham transaction, a week from today. THE COURT: Right. So if we slip part of the day
tomorrow and we don't enter it until Monday, then you're okay. MR. SABE: Yes. I mean we will certainly want to get
something done as soon as possible, of course. THE COURT: MR. SABE: Okay. There's no termination event, there's no
drop dead date or anything like that. THE COURT: Okay. All right. I had something else All
that went out of my mind. right. That's what it was.
I can't remember what it was. Thank you.
Ms. Eisen, who can Do I need
read my mind just reminded me that it's exclusivity. to give you an exclusivity extension? MR. SABE: a motion on file. THE COURT: Yes, Your Honor.
We did submit -- we have
There are no objections. All right. So I am going to grant that,
worked as hard as you did to achieve what now truly is global peace because this morning at 6 o'clock in the morning, there
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Page 48 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 wasn't global peace and I think that's very important predicate for some of the unique provisions of this plan. But that
having been said, congratulations to everybody for their hard work and I'll look forward to reviewing the confirmation order and we'll let you know if we have any questions. Otherwise,
we'll enter it as soon as we're done with our review. MR. SABE: THE COURT: MR. SABE: THE COURT: Okay. All right. Thank you, Your Honor. Thank you, folks.
(Whereupon these proceedings were concluded at 4:56 PM)
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Page 49 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 to Extend Exclusivity EXHIBITS Declarants affidavits RULINGS Page 47 Line 19 I N D E X PAGE 44
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Page 50 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: June 24, 2011 Veritext 200 Old Country Road Suite 580 Mineola, NY 11501 I, Linda Ferrara, 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
Linda Ferrara
LINDA FERRARA
______________________________________
Digitally signed by Linda Ferrara DN: cn=Linda Ferrara, c=US, o=Veritext Reason: I am the author of this document Date: 2011.06.24 15:54:41 -04'00'
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VERITEXT REPORTING COMPANY www.veritext.com

INNKEEPERS USA TRUST, ET AL.,

June 23, 2011 4:05 PM

B E F O R E: HON. SHELLEY C. CHAPMAN U.S. BANKRUPTCY JUDGE

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GARY L. KAPLAN, ESQ. MATTHEW M. ROOSE, ESQ.

MICHAEL SABE, ESQ. BRIAN E. GREER, ESQ.

DAVID M. NEFF, ESQ.

BRUCE R. ALTER, ESQ.

LAWRENCE GOTTESMAN, ESQ. MICHELLE McMAHON, ESQ.

SCOTT K. CHARLES, ESQ.

MARK A. FINK, ESQ. (TELEPHONICALLY)

ARTHUR J. STEINBERG, ESQ.

MICHAEL S. DAVIS, ESQ.

ADAM L. SHIFF, ESQ.

INNKEEPERS USA TRUST, ET AL.

the nine resolved. resolved.

the parties this morning and in court, I think we have now

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INNKEEPERS USA TRUST, ET AL.

I'm not aware of

class accepted the plan overwhelmingly.

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INNKEEPERS USA TRUST, ET AL.

VERITEXT REPORTING COMPANY www.veritext.com

INNKEEPERS USA TRUST, ET AL.

Your Honor with respect to the terms that have

We received comments to the plan.

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INNKEEPERS USA TRUST, ET AL.

And I'm glad they did.

filing of those objections.

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INNKEEPERS USA TRUST, ET AL.

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INNKEEPERS USA TRUST, ET AL.

Who pays it?

under the agreement right now. THE COURT:

Well under the agreement right now, it's

payment and then they're going to give 100,000 dollars back to

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INNKEEPERS USA TRUST, ET AL.

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INNKEEPERS USA TRUST, ET AL.

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INNKEEPERS USA TRUST, ET AL.

essence, for 100,000 which is then funding the settlements.

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INNKEEPERS USA TRUST, ET AL.

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INNKEEPERS USA TRUST, ET AL.

can walk through the changes to the orders to the plans.

So we're caught up with you.

Do you want to go through the Five

rights and not waiving that.

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INNKEEPERS USA TRUST, ET AL.

Well that's not true.

So we're talking about your objection to