IN THE DISTRICT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION In re: COLLINS

& AIKMAN CORPORATION, et al., Debtors, vs. (Jointly Administered) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ HEARING July 29, 2008 9:33 a.m. U.S. Bankruptcy Court 211 West Fort Street Detroit, Michigan Kathy Adkins, CSR-4697, RMR, RPR, B.A. Chapter 11 Case No. 05-55927 (SWR) Hon. Steven W. Rhodes

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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
. . .

APPEARANCES:

APPEARING ON BEHALF OF THE FEE APPLICANT KZC SERVICES, LLC, AND JOHN BOKEN. PAUL R. DEFILIPPO, ESQUIRE WOLLMUTH, MAHER & DEUTSCH, L.L.P. 500 Fifth Avenue New York, New York 10110 (212) 382-3300

APPEARING ON BEHALF OF THE FEE APPLICANT KZC SERVICES, LLC, AND JOHN BOKEN. KENNETH A. NATHAN, ESQUIRE NATHAN ZOUSMER, P.C. 260 Franklin Center 29100 Northwestern Highway Southfield, Michigan 48034 (248) 351-0099

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
. . .

APPEARANCES CONTINUED:

IN-HOUSE COUNSEL FOR KROLL ZOLFO COOPER. ELIZABETH KARDOS, ESQUIRE GENERAL COUNSEL, ESQUIRE KROLL ZOLFO COOPER 101 Eisenhower Parkway Roseland, New Jersey 07068 (973) 618-5172

APPEARING ON BEHALF OF THE POST-CONSUMMATION TRUST. SAMUEL C. DAMREN, ESQUIRE JONG-JU CHANG, ESQUIRE DYKEMA GOSSETT, P.L.L.C. 400 Renaissance Center Detroit, Michigan 48243-1668 (313) 568-6519

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
. .

APPEARANCES CONTINUED:

APPEARING ON BEHALF OF THE POST-CONSUMMATION TRUST. RONALD L. ROSE, ESQUIRE DYKEMA GOSSETT, P.L.L.C. 55 East Monroe Street Suite 3050 Chicago, Illinois 60603-5709 (312) 551-4931

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 and that. January places the in address start. Honor's a session. Aikman COURT Case Hearing July 29, 2008 Court 05-55927, is now in &

CLERK: number

Collins

Corporation. MR. DeFILIPPO: Maybe I could we Your

housekeeping we at were the

issue

before by

Frankly, concern with

concerned end to of the in the

day of the

yesterday

respect were

nature

disclosures with went the back

that

made

connection so we

standalone to the

plan

alternative, last night,

record

looked

through

the I

docket. would like in that to identify the a few of

the

docket plan

which Mr. to

nature

standalone was

Cooper the Court if

described that's

identified

okay. THE Talking 5th and COURT: about -May 11th. 12th, 2005 Actually the already of did

transcripts

MR. THE January

DeFILIPPO: COURT: 2006.

September

5th,

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 minute? MR. DAMREN: I'm fine. Honor. Honor Cooper how that, 22nd. THE he with to COURT: I plan what to he ask Mr. Your about that about the of MR. May Mr. DeFILIPPO: 11th, Kost 29th 2006 of I'm also talking the

transcript,

proffer and the

Lazard's for a

testimony bridge 26th, 2006

March

motion the

order motion

for for

exclusivity, exclusivity. THE COURT: frame, in

April

I'm

most

concerned Mr. Cooper

time it was he

because fall the 2005. I it

testified winter he did

the to in

or

early that

when

came

conclusion

communicate MR.

DeFILIPPO: I think

appreciate was December

Honor,

reconciles the the so

testified that the Mr.

yesterday Cieri made

representations Court we on --

about

reorganization, MR. We're is. THE

will

cover Thank

that. you, if Your

DeFILIPPO: to

prepared

resume

Your

COURT:

Do

you

need

another

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 had the at to THE CONTINUED COURT: DIRECT Let's proceed then.

EXAMINATION

BY-MR.DeFILIPPO: Q. Cooper. A. Q. the be Yes. Were Collins you & involved in discussions about of who the was You're still under oath, Mr.

Aikman for

board

responsible business

development

2006

plan?

A. Q. those A. around had the the

Yes. And what do you remember about

discussions? The discussions really centered Macher as

requirements for he his was,

that

Frank on

laid CEO

out where

coming felt

board very for

very,

strongly 2006 and

about beyond the

being

the

architect plans, the cost

the

operating tactics, on. a to result be the the

the reduction

strategies, programs,

and So

so as

of

that,

Frank or is, for

mandate

architect phrase

developer, the

whatever plan

right

business

and

Boken

and

Kroll

Zolfo

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 able Cooper to the extent play Mr. needed a required role. in your

necessary Q. presence members ability EBITDA A. Q. regard A. to as

would Did and

supporting express of the

Macher

the

presence his

other his in

of to in

the

board

views $300

about

deliver 2006? Yes, And he what

over

million

did. were to his views in that

expressed He was a

the

board? he would of be $300

adamant 2006

that

deliver

EBITDA

north

million. Q. skepticism A. skepticism, of a risk, that I Did you ever hear anyone to if do it express that? was

about Well,

his I

ability know the

don't or

concern, but in

identification category that I think recall which about that I

that

general

know

John

Boken

had that

expressed concern, I my can't head hard

concern, other

expressed members, off the

board

albeit top very, of

specifically ones, the he pressed

Frank his

very

numbers could

and

unequivocal

view

deliver.

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 it was at So I think from there the was a view that

least an

board's plan and it had

perspective risks Q. expressions concern $300

ambitious with was you his it.

associated What by

Mr. and

Macher's others to

reaction -on

to

about deliver

about

ability

million A. He that

EBITDA? was extremely agitated and

upset

the

board express

members, doubt and or he

particularly concern made made it it of about very

myself, his

could to it

ability that clear

deliver, was he made back his was it

clear very

plan, more very

he

that he

than clear a

capable that bit

delivering, desire to

the was

carve

the

number

completely

unrequested, and the in

unwanted, at one he

undesired point prepared support

interference indicated to for resign his Q. didn't A. Q. get to if

actually board fact

that

was

there

wasn't

plan. So he threatened to quit if he

his Yeah. What

way?

was

the

board's

reaction

to

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 tied, plan, JP his his the threat budget? A. concerned. proverbial a, at Well, We rock the were and board was very the had to quit over the concoction of

somewhat a hard due

between

place.

We the

least had

from a

the

diligence respected track

board

done

highly a an good

operating of a CEO

manager success, who good

that we

had had had

record manager, very,

operating a very, the late That for

frankly job at

done

very production

resolving the

Mexican summer was of the

operations of '05 as

during I

and

fall

recall.

Hermosillo platforms.

operation

one

Ford's

new

He

had

--

he tied

had his

tied,

we

had

Morgan

had

incentive plan and to I if that his the

incentive of I I business mentioned seen would to a

compensation plan results

delivery think ever he as have

yesterday, create a

rarely plan

CEO

believed

diminish generate a

substantially bonus and

opportunities incentive

comp. So, you know, the board in

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 you our this had back know, entire is, the talented plan was general was, you know, now looking at the very in a new

operating people bright Tim

management, he had you

incidentally, in were

that

brought know, a He was he

people,

had

brought

Trenary,

who

was

very, had a

very

talented in a

financial Marianne marketing think

manager. Wright and who

brought very In

talented fact, I

salesperson. the CEO of

she's

now

Johnson unit, and

Controls, Trenary's manager of

their gone

entire on to

automotive the chief

be

financial

another So he

organization. in these bright, that was this --

brought He was You

people.

adamant know, me he

achievable. his comments about,

actually

about

were what

pretty did I

unflattering know auto about parts.

you

know, you

automotive

and,

know,

making

And the

so

at

the said, team

end

of

the do we we the

day, we lose

board

gees, or do

operating know, fro 300

support, had plan or

you to

this about to

is

after

and plus

cutting

from

the

mid-200's,

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 threat? A. being threat? A. I'm THE The It issued the sorry? COURT: threat was to to When was that given his, you the the or know, work fact persistence, he had he done had his at begun to

confidence, Hermosillo, reinvigorate

that

regenerate board given we in

the its

plastics best judgment

organization, said, all

the

right, view

operating we this was should plan. that

management's authorize the

think of

issuance COURT:

THE

When

quit. to the 2006 plan the

prior

the

secured

lenders,

vendors, so it

unsecured have been of

creditors probably

committee, in the early

would of

part

January MR.

'06.

BY Q.

DeFILIPPO: Mr. Cooper, and did cons the of board the risks and

consider the

the

pros

benefits, in

potential the 2006 it? There

opportunities plan in determining

identified whether A. to

issue Yes.

were,

in

the

'06

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 the board, plan there was of at least if in any that plan, at of all, the were my view a clear upside

description was possibly

what

potential hadn't or had

available in the

been not been was

fully

included in the

included an in

plan

and

there

extensive the plan,

review and

downside clearly

risks

those

delineated. It was as also I made very it clear the clear -to

and

recall to

was, it

board to the

directed various plan was

management

make that

constituencies by way of cost

the

that

the

reduction and that that by -on it

benefits in way put the and of

back-end was

loaded a

of the

itself

recognized because if you as

risk the will

business or of

plan, strain the got will

more

stress half

latter

year

the and up higher, slowly at at

performance so the back the plan

hurdles if you and the

higher built

front end

end and

more board

aggressively took note of

the

that aware it of

operating it, they to

management, built take it some

you

know,

was

like

that if

because you

was to

going

time,

will,

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 you put in a number but of the cost was to a reduction particular board programs risk

place, was

that

that

highlighted

the

amongst

others. Q. Boken and on Did the the work board that hear KZC from in Mr. examining

did

diligencing A. Q. Yes, And

the the at

plan? board end did. of the plan and you day was vetting? know, when I I got the were

the the

satisfied to

that

2006

subject A. also, it,

adequate Yes, I I

diligence and I,

was,

you I

know, had

can't

remember

but

gotten

some it

feedback was

that

secured and the

lenders

thought

aggressive, it two plan as was

unsecured so

creditors we not had, you

thought know, the

conservative; groups for that

were

happy and

with I

different

reasons,

took

that

further

confirmation from also

that their

the own at

other particular the plan

constituencies perspective after it had

looked and

was my

issued view

that the

further approach, the

reinforced vetting,

that

the

description,

the

articulation

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 and of the potential of upsides the are and the downsides that had

articulation been were views Q. clear able

potential crisp

and to

enough own

people

come the

to

their

particular

about

plan. company place so have it processes could the keep

Did

the in

procedures of its

track

progress

against

projections? A. Q. company's in 2006? A. monthly reports Yes. basis but We would not typically only on a Yes, Did the the company board did. track of the

keep the

progress

against

projections

receive

financial which of business its plan, by

management typically

reports by line

articulated where and way the

company the plan

stood was

vis-a-vis or or wasn't

where of

working

either

positive

negative variances was

variances, occurred doing to or

typically

why

those

and was

typically going to

what do to

management either or So

continue to that

promote

the

positive

variances

mitigate

the

negative

variances.

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 special was one of the things that happened. were the us frequent board with of -the into

Secondly, presentations that would

there that

requested additional status the the of

provide the

updates certain plan;

on core so

status

programs by way of

built

business status of

example, the

interactions respect to

with

customers contracts, getting

with

extending contracts,

getting

refurbishing there

new

contracts, on cost

were status,

presentations there were

reduction on

presentations so there to

purchasing on a regular

economy basis,

status, in

were the

addition reporting,

just

standard, the a board fairly to

standard go into

requests areas

by on

depth

in

other

frequent Q. variances take those taken A. actually to

basis. And from to when the the plan, board what the steps noticed steps did it

try

understand and what

reasons were

for

variances to correct Well, did a

being

that? typically Tim Trenary nice job of

very,

very,

very

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 somewhat variances came from the articulating variances, volume or the baseline by rationale of for

you by

know, of

way

example

way

example

manufacturing. obviously than know, we

Now, company so had by

certain less of

variances over you

control example, these they the

others; would

way

get

these, and

either I think from

quarterly called them and,

projections, quarterly you know, the

releases almost line

customers at some

inevitably customers say, you

point have

along major

the and or

would

hiccups this

know, that,

we're so on and

reducing so forth.

reducing

So

the

volume

variance

typically hadn't or

customer been

contractions by J.D.

that

originally some other

foreseen

Powers the

projection and/or those of our in

service by the

that

company

used, So out

customers. that Other plant and when and it were

were

issues

control. control, and so

were or

our

productivity there Macher were

scrap that the

on,

issues to

both

Trenary

brought

board's

attention,

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 time was what typically followed was with a description respect to of

management with the

doing

with

dealing

issues

and

hopefully

correcting Q. elements what's

the You

variances. are aware that one plan the was away

of

the

2006

business

been

called

the

Chrysler

take

business? A. Q. Chrysler A. Q. on Yes. Did take No, Did the the away it you company business didn't. ever why learn that during your was not ever in get 2006? the

board

business

obtained? A. Q. A. business business company that Yes, Tell Well, was, that called as was the was I us did. what you learned. take away it, a a

the the

Chrysler board to

understood be taken

going Lear going and I

from and

Corporation, to be

business &

resourced it an

to

Collins

Aikman, in the

believe year on

represented basis about

first

annual

$300

million.

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 purchasing speak to probably finally the call the that was Frank adamant This was was a transfer of business He and

negotiating handling to ever or

personally. it personally any get other

about

actually members and take away the

refused of

let KZC

management finally was

involved, that a the day if why more

board

concluded always

away and

business we was

about that

couldn't so

understand with

Chrysler that

displeased

Lear, on a

business

wasn't

forthcoming

accelerated

timetable. So at to some point, I in don't '06 that I I give a know,

early

midsummer to the

suggested

board at

senior to get

purchasing a of So I better the I

people

Chrysler as to

understanding take the away

status

Lear

business.

called at he the quid I

head

of arranged on that to

guess and

Chrysler, informed Lear pro

him,

me

conversation business million was

that the

take quo of

away a $40

for an

cleanup

believe that &

administrative they had with

claim

Chrysler Aikman and

thought Frank

Collins

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 as a A. BY Q. Chrysler next MR. A. midsummer, my had the promised take Q. heard A. about clear was, it to not away Was about that payment in exchange for

business. that the first quo? time I heard it was only time you had

the

quid the

pro

That's and me I

first

was

shocked

because

that did make to

that

commitment not in have fact a to

not the it

only to

Frank it,

authority pretty that to

but it

was

clear

me

that not

was

commitment be able

the

company on. THE I

was

going

move

COURT: it

When was

was

this, to the

sir?

think

early

Your

Honor.

That's

best

of

recollection. THE Yes, COURT: sir. Of 2006?

DeFILIPPO: As a result of that did the of the

take

away of the I

business business

drop

out

version A. board

plan? findings I to

Well, and to

reported management

my

and

believed risk

result

that

opportunity

and/or

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 of that as in had the that been I think but identified initially not the a you have a you a plan.

plan, it I of

not,

certainly from to if

lock, Q.

was

eliminated like sale In to

would the

move

discussion would, had part Mr.

process your

Cooper. to

career as

occasion of the to a

participate

either or

company the

management in the

financial of

advisor selling A. Q. engaged A. Q. what A. Q.

company in

process

company Yes. About

distress?

how

many

times

have

you

in

that Dozens You

function? of times. you in have that a good sense

think

is

important Yes. What of in

process?

your

view

is

the plan to

importance a buyer A. plan, some view you in

the

company's

business

that I

process? a company's the as business you know,

think

know, of the

gives insight

buyer, to

degree about

management's the and I think

capabilities the

of

organization

and

business,

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 they bit often of Q. generally without A. embrace is a times consider it an interesting

data. In the process rely upon do buyers business plan

simply

the

conducting I have

their never

own seen

diligence? a buyer, say ever, this

company's let's they sign do

business the

plan,

great,

deal.

More of their

typically own due

extensive and when

amounts I say months

diligence, I mean

extensive, months always of of

months due

upon

upon

their have

own

diligence, their

almost team

they

assembled including

own

professionals,

financial bankers, molecular

advisors, lawyers level to

accountants, review

investment at a

literally

the

company's their

business, to

their to and I've ever sell,

resources, to have an

ability cost

market,

economic

structure, that

almost dealt view their that

inevitably with ends

every

buyer

up

constructing or said for

their

own

of

the

world,

differently, the company a bid for.

own

business

plan

they're Q. Do

entertaining buyers'

making of

views

the

world

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 WLR, offer a tell show is, often value A. Q. you that right? A. Q. equity A. Q. assets a of value $675 of Yes. They're shop? Yes. They the made an offer July for the that a had a sophisticated private include of the a different view as to the at?

assets

they're

looking

Absolutely. So that in this case I'm in going to

the

documents you know

evidence Cerberus

Cerberus,

who

company to

in

2006 69 you in

according to $725

Exhibit are

range of

million,

aware

that? A. offer sound Q. or WL and I know that they had made you an

those

numbers

sound,

know,

right. And then & Wilbur Ross's also company, made an

Ross

Associates the

for

essentially $900

same are

assets you

with of

value

over

million,

aware

that? A. Yes.

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 that to same that Q. A. Q. two At the same time?

Yes. How do you think it came to be a

sophisticated different assets? Well, that I'm

purchasers of the

had

such of

radically the same A. suspect what the

view

value

only

speculating, views

but of were a

they

had and

different the

company of, and I as

organization that they they would

capable

assume to how

had

different those Q. set

plan

utilize

businesses Both of

for of

those

assets. looking the at the

them

were

business

plans

from

company, A. I

weren't Well,

they? that was a bit at of data respect

suspect due In were

they

looked

with

their Q.

diligence. the sale process in this or the you

case, less later knew? A.

the

2006 to

projections the buyers as far

more than as

significant years'

projections

don't were

think

the

2006 germane to the

projections

particularly

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 Detroit potential to It sales Q. A. is process. Why is that? the 2006 was a well sale would underway. would have

Well, highly

unlikely in 2006, an

that so

have ended

closed up

2006

being but

interesting not

historical to the

footnote,

certainly it

germane have been

transaction the fact. I

since

would

after

think

far

more

importantly to the were a pier. future

buyers

were

looking or not were

determine a

whether or

they

buying Q. A. know, still

bridge What's Well,

they

buying

the a

difference? actually, where to a water. & The you you're

bridge

leads on

to

a a

destination pier leads

land;

destination problem future the to with at

where the

you're -with

under

Collins in fact an

Aikman's one of

that why A,

point, there the

and was

reasons either,

such

urgency or do a

sell was old

business, following the

standalone

plan The

the

reasons. old

domestics, GM, Ford

domestics,

and

Chrysler,

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 not or the any a they pier out which the say both publicly we have new 11, and a privately policy of out that to not to --

company or in

that

extending companies the so the in or

letting Chapter of

contracts and what on

implication to speak,

not

being

the

docket, as

for

new

business ran it off, was

was

that

current the '10,

contracts whether think

there '08 or

would '09 the don't

future, and year to I

we

believed be '09,

that but

crunch hold me

was that,

going that

to the

existing and had the on the

contracts company dance have years '06, was

would

have

run

off,

not

emerged for new

quickly business,

and

been

card this out, while

they two

would or three

gaping and it

revenue a

hole

from might

buyer's been

perspective, interesting,

have

in

large The were

part real

irrelevant. issue a was whether to or

buying to were

bridge deep more In

somewhere, and to so

just

being far

sixed,

years

important I can't

potential many think of

buyer. the

fact, and

recall but I

terms

conditions, and WL Ross

that

both

Cerberus

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 condition acquirers Q. formulated turning as part and and parcel as part of them looking of at the due

company

and

parcel meeting and I

their the

diligence company's the

insisted major

upon

with

customers all

believe the

that

meetings

were

geared ways the

towards to

future that

relationship hole

and

mitigate was

revenue

that

company

facing. Q. condition reach A. certainly with Ross, So did all potential on the if the buyers ability to

their

proposals with

accommodations I don't

customers? all, a but I

recall that was a

recall I It

that it

was a

condition with

think was

condition

Cerberus. in fact I

later

condition our to

with,

think

that and

without talked

permission the in

Third

Avenue

went

customers making a

when bid. So or I

they

were

interested

think

it

was

either the

something on the

that their

potential

undertook And when

own. lenders after

pre-petition of a plan was

their the

version Ross

down

offer,

customer

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 but with buy an the Ross accommodations required A. Q. as one aspect of what they

well? I recall of in it 2006 was. the company and Mr.

As In

July

lenders over A. Q.

engaged offer, I you

negotiations aware

with

his Yes, Did

you're

of

that?

am. know Mr. Ross before

those A. Q. A.

negotiations? Yes. How did you know Ross him? used to head we

Well,

Wilbur at

advisory

practice

Rothschild in the same

and

were

regularly

involved

matters,

albeit and so

representing between I

different between have

constituents, knowing Wilbur him Ross

that,

socially for 20 Q. him the A. I

probably or

known

plus

minus did you

years, have with of

maybe

more.

And in

conversations his 2006? exact him dates, offer to

connection in July

company I

don't

recall

the

had

conversations the company. try to

with

about

acquiring Q.

Let's

set

the

stage.

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 plus the an with had it the think the documents this, an but in evidence 69 pretty is an July much

establish includes 2006 there around the that and was

Exhibit him have

offer, 6th, that

offer

from

dated

other a

parties

testified after and that Ellis

meeting 12th to at

shortly Kirkland that

July

with

lenders sound A.

discuss right? it

offer,

does

about I

think if it

was

in

July. 12th,

I but I

can't think Q.

recall that

was

July about

that And

sounds

right. meeting company that

before and

that Mr.

mid-July Ross, the to the

the told

lenders both Mr.

Ross to be

and able

lenders

was

not

going

accomplish correct?

four A.

plus To

eight the

reforecasts, of my

best

recollection

that's Q.

correct. With to the that knowledge Mr. Ross made

offer A. Q. an

banks?

Yes. And that was 80 cents would in pay cash more if

earnout

note

that

acquired A.

assets

performed I think

well? it was, you

Right,

and

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 run at to know, to there were some conditions you know, attendant would

that

offer

which,

one

expect. Q. the A. offer Ross. Q. involved A. Q. A. mistake. a deal. And in after that meeting you got and And that offer was not acceptable

lenders, As I

right? recall they rejected with that Mr.

terminated

discussions

the

process

personally?

Yes. Why did I was you get involved? it was a huge in doing

Well, Ross He

thought very

interested Collins assets, South a & so

had

acquired American

Aikman's he had

European, begun to

South build He in

European, acquired

American

platform. interest parts

had

meaningful in their it was auto

Oxford

Industries I

business. a

Again,

think

primarily

European had for

platform. begun their he to make a I

He Lear he had which

publicly pieces of

business. and

think

announced is a

that

Franklin I

Mutual,

mutual

fund

manager,

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 Ross's that the not banks a think they of probably dollars, manage had several hundred they parts; were so

billions going this of to was

announced in auto

make

investments with

particularly & Aikman's was shared

the

acquisition operation

Collins there

European

where

intellectual shared this, shared was

property, that for for Ross

shared a a

design, of

number very fit. So I

common

customers and

good

strategic

operational

think it, So their in the

when it I

the, was

you it

know, was the

rejected move. and

-down

smart banker

sat

with I

agent

counsel

and

encouraged way and less they upset you good to

them

strongest

possible Ross, was

reopen were

the

negotiations that was that held that

with

they than were for

concerned the debt that

his

offer

where

trading would the was a

and create

concerned the I people

that

paper, very

know,

didn't to stop were

think

reason

negotiating. also concerned and I that

They offer also

was not

not a

firm, very

thought for

was

smart

reason

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 a -are for terminating if the discussions. before due Offers

rarely,

ever,

firm

one diligence

completes and one

and

finalizes and

their

completes

finalizes

the

negotiations. But substantially available know, and to what they were doing was

reducing the to

the

optionality by, you Ross, were

secured play hard

lenders ball

trying you to

with

by,

know, do

announcing own

that

they

prepared actually because at the I

their

standalone a

plan

provided think of a

Ross

with

windfall, rightly so,

he

assumed, day they

and

end on

the

wouldn't and for

carry he

through was he

standalone to pay top

plan, dollar

what in in

willing could get

July, the

for

fractions

later

year. Q. directly whether with Did about or not you the he speak bank's was to Mr. Ross and negotiate

concerns to

willing

them? A. Q. Yes. What of perspectives did you gain him? as

result

those

discussions

with

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 an do A. everything, been his Q. about not set the Wilbur and was prepared that to has negotiate always

frankly,

style. Did he have a particular concern it was

company's to adhere

announcement to its four

that plus

going of A. Q. A. his own his

eight

projections? No. Why not? as I said, he was going to

Well, due own

diligence, plan, he or

he

was going

going to

to

create it the

was

fit into You

either

tactically he big new

strategically already made.

investments Wilbur's and and

had

know,

concerns business of

were from

ongoing the old

acceptance domestics, with them

because his

his

relationship and steel the

through

acquisition

subsequent he old had

operation very and

of

international relations view the with '06

very,

good in my

domestics

performance him. Q. exhibit

was

not

particularly

relevant

to

I'm if

going you

to

ask

you

to

look

at

would.

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 are a.m.) BY Q. Exhibit E-mail that MR. DeFILIPPO: Mr. 27, from Cooper, referring the you to break. (Recess (Back on taken the at 10:21 at a.m.) 10:26 you BY Q. could A. MR. Your MR. Honor? THE COURT: Yes. DeFILIPPO: May I approach,

DeFILIPPO: It's just volume turn to one, Exhibit 27, if

that.

Right. THE COURT: We'll take a quick

record

and HS

specifically Novikoff at at

imbedded is

WLRK.com,

Hal A. Q. A. Q.

Novikoff Oh, Yes. Yes. And he you

Wachtell? the one down below?

mean

was

counsel

to

the

pre-petition A. Q.

agent? he the the was. recipients steering of that E-mail as

Yes, And of

members

committee

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 the is, well as the other agent? to all be the were, honest with of you, the advisors, I advisors to the

pre-petition A. don't know

Well, who

members or

steering but it Q.

committee of

their it. Mr.

kind

looks you

like who

And

know

Peter

Nurge

right? A. Q. Yes. He's from Capstone? Weil? he's now with Dewey You know

Martin A. Labeouf Q.

Bienenstock Yes, as I Did of

from

albeit

recall. you have a chance to look at

text A. Q.

Mr.

Novikoff's I just the

E-mail? it. in the

Right, Do you

read

see

reference to in a

first with

paragraph Mr.

of

that and

E-mail agent

call which he

LoBiondo that this

the

stressed duty at

C&A/KCZ point as

viewed

their to

fiduciary the

running

pre-petition A. Q. testified

lenders? I do. relate about to what you

Yes, Does to

that

yesterday

the

lenders

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 that Mr. the top, page, hand? A. Q. Yep. Does Yes. that relate to was advice giving that to being A. testified testifying secured Q. the fulcrum I to security? think I don't in John Boken me

actually that. it, were you

recall fact

about

but the

the

lenders And

pivot

point. at the of the their

see that

the at

quote the

shortly the

after

top

lenders

should

not

overplay

LoBiondo, lenders? A. Q.

your

partner,

Yes. What's your understanding of what

meant? A. Well, it's is, as I think it's, you know, the -I

think that with leave

straight opposed Ross and

forward, to

that

playing

hard it

ball or to

Wilbur it,

saying should

take

that and away The

they not from

continue

negotiate acquirer Q. E-mail

drive the

this table.

potential

second

paragraph

of

the a

from

Mr.

Novikoff

relates

to

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 that think with breakfast Kurinskas? A. Q. A. Q. you Yes. From Yes. That and of he and Ms. Kurinskas on the had JP Morgan? that he and Ann, is that Ms.

Leonard 13th,

LoBiondo 2006?

morning A. Q.

July Right. Does of

that

accurately

state

the place

substance at that A. I

the

discussions

that

took

breakfast? Yeah, recall I think came the up only which thing I is didn't what I

that

was

very

good was

rationale that they, were

mentioned Kurinskas that level didn't good in to an the

before, and debt Hal was than

Ann concerned at I a

Novikoff, currently Wilbur's a, you

trading offer,

higher see

and a

that at

as all,

know, because you

very

reason

just

something's decide not

artificial with

orbit the

that

continue

negotiations people that are

because bought to

you're or

worried at a

that

had

traded

higher

level

going

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 object and the to with Mr. a be me see mad to at be a you. very That good in just didn't seem I to don't

rationale here. as set the

and

that Q.

included Did you

again

forth view

in that was

Novikoff's to

E-mail

stress is

sale

Wilbur, a

that

Mr.

Ross, the

better

than

standalone

from

lender's

perspective? A. Q. favor of a Yes, And I did to did. you Mr. argue Ross, strongly rather in than a

sale

standalone? A. Q. lenders with Mr. as Yes. And were Ross you at the to end of the day the

unable on a

reach

accommodations for what

standalone it? to

reason A.

understand you

Well, I I I never

know,

be

honest the secured -would banks

you

really the

understood or the

reasons. lenders

mean,

banks

guess MR. him

believed

that Your

if

they I the

DAMREN: guessing

Honor, what

as

to

lenders MR.

believed.

It's Let

speculation. rephrase

DeFILIPPO:

me

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 work was the an objection BY Q. MR. the question, THE is Your Honor. All right. The

COURT:

sustained.

DeFILIPPO: Mr. Cooper, do on 90 you think that cash in

lenders' amount was in a

insistence at least

receiving cents on why

the a

dollar

significant Mr. Ross

reason did

transaction A. Q. that

with Yes. You

not

proceed?

have done in the

described and the

in

detail

the

was

analysis with

that

undertaken of

connection 2006

preparation we all know the

business

plan

and

that

the

company it

failed

to what's

achieve your

results why

that

forecast, were

view

of

those

results

not

achieved? A. actually were Well, two I think of that there were One

sets

conditionals. the that

conditionals and

outside

company's were of within their by the the

control the

conditionals control. volumes number

company's was

Outside

control OEMs,

the was

projected where

that

one,

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 company's on the cost of company quickly one. Number material either users was of two in was the escalating Collins or one & of the in had to very little OEM ability volumes, to so respond that was

falling

general. largest

Aikman largest the

the

petroleum and the

based company to

resins was on

United

States

able

within small

fairly amounts but

narrow of in raw

limits

pass price

material

increases, behind

general

continued their a

to

lag

price

increases the the it

from was

suppliers.

And part of

third

reluctance when the

secured

lenders to one the

company more of

thought

appropriate against to with level

take or

much more

aggressive OEMs if in

stands order

the

playing

field, the

you

will,

certain I

contracts,

secured

lenders is

actually the

guess word the I can

prohibited use from to

probably it, of

best

describe some

prohibited those more

company

taking

aggressive

stands. So those were all on out one of the of

control.

That's

side

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 was the the ledger. you On the it other was side at of the some the of

ledger, the

know, price able not

least which a

baseline was but '06

increases generate that I were

company amount in few the the the

to

meaningful

all

contemplated they recall respect the were and to a

plan. dollars if

think short will,

that as I

million success, cost

you

with on

reduction

programs by

original management

timetable ended Q. Boken have up

established falling Are

operating

short. aware that of KZC and Mr.

you

been work

accused in

performing with in the 2006?

substandard projections A. Q. nutshell A. completely. Q. A. an

connection by the

issued Yes. And what

company

is

your

response

in

to I

those

allegations? with those allegations

disagree

Can

you I

explain think

why? one, done there around

Well, enormous

that, work

amount by by not John

of

projections but

only Boken

operating as the CRO and

management

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 fact banks was or there is the KZC team, and I think that the the them.

projections assumptions I think

clearly and the

delineated analyses

behind

that

the I

upsides think

were

clearly were

identified clearly

and

the

downsides

identified. I no only think, right as or I said yesterday,

wrong or

projection. unreasonable.

There's

reasonable

Reasonable descriptive the the were action risks laid

typically, of the

you

know,

is the

highly tactics,

strategies, the

steps, and out the so

underlying all

analyses, which be and people about of

upsides, that they

of

could

effectively could it come

evaluated, to all a and I their it

challenged

own

conclusions a

because

was

was

forecast what at the after that

projection, management

guideline, the board as by I

given knew

time. the

also

told the

you

comforted the it

fact

the

secured too

lenders, which

rather, was easily

thought

was

high,

predictable, thought it

and

the

unsecured which

creditors also could

was

too

low,

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 that Cooper. Honor. CROSS-EXAMINATION BY-MR.DAMREN: Q. testimony, learned that it You Mr. indicated Cooper, the in your when of a direct you first I have been predicted. that about was a since it That both at of the led me to were of the given

conclude carping day what it we

them end

that

reasonable at the

representation

knew MR.

time. Thank you, Mr. Your

DeFILIPPO: no further

have

questions,

that

about was up you

condition close on to a

the 10

company on the one to

pretty

screwed ten, do A. Q. later faced on at

situation, recall

scale

of

that?

Yes. Do that that you the time recall also testifying company to, "an

situation was as as you

the

close could

unmitigated A. Q. the

disaster Yes. Do you of

get"?

also

recall

testifying Collins &

board top

directors

at

Aikman

was

notch?

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 that of and a they that A. Q. situations, yet an the Yes. How do you the finds square board is those top in a can two notch close get? that? and to

that

company

itself as mean

unmitigated A. Q. know it A. senior CEO, What Was what

disaster do the was get as you

you by

square

board going in it

asleep? on in

Didn't the company,

could

such

shape? out, a number chairman for

Well,

turns

management, had of, been on a as

including I recall of

the

indicted

number

number false

issues,

including

providing so I a

financial is and a situation their last

information, where line them. Q. found cash, A. Q. you of

think great which

this board is

have

defense,

management,

failed

Did itself isn't

the is

situation it

the

company had no

in that

virtually

correct?

Yes. And or yet the board was didn't going see to

coming

know

that

happen?

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 did A. before one of the the by Well, I don't know I what happened that --

bankruptcy, other of

but

believe was

lawsuits the bond

that

fired had

filed

one

holders the

who

purchased had been

debt

shortly again that for it

before by the the would it, was

bankruptcy

assured, and CEO,

the

then had

chairman adequate future, as to you

company

liquidity and albeit

foreseeable just be I I guess have the

would

categorize the board

hearsay, being

assume

that

told

same

thing. Q. Now, a member you of testified this also is that that you

became

board,

correct? A. Q. they A. counsel had Yes. Since need I they were top notch, why

you? what that I said albeit is that board to

think

recommended

the

tremendous

talent

with

respect

plastics, governance that with

automotive, and some so on,

automotive that

parts,

supplementing restructuring and

additional experience

reorganization

would

be

good

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 that idea. Q. knowledge you? A. Q. director? A. whatever Q. total A. honest Q. I was I paid put my in. you agree that the hourly rate times I don't much know. were you paid as a And that there's the no one else to your

board

considered

except

How

hours And

would

amount I with

was

close know

to

$800,000? it was to be

don't you.

what

Okay.

The from Why

board one was

might

need why did the

supplementation board hired? A. the For need two?

person, Mr.

LoBiondo

the

same in

reason, the

that of

given a better when

company and

was

midst

restructuring to have a

reorganization opinions, be

that

couple

particularly from

those to

opinions so

may

different board

time the

time,

that of any

the

could

have

full

flavor to

any

alpha or

and

omega

with they were

respect

choice

decision

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 open door being Q. asked to make. know if if there aim to was get was to a get

Do

you of,

consideration different that

the to

opinions,

try with

somebody

wasn't A. Q. I

associated have no

Kroll?

idea. about what would how you you that

You've to as how the you

talked

refer

transparency, envisioned

describe process A.

and

worked? Well, it In we I can how tell I you how it I was meant relative the and we basis

envisioned working. that when

and my

thought

mind

transparency the

knew would What

something, know at or

constituents same time. so

about and we

information and so on forth a

data had,

analyses, would to make

on

available of

very

timely

representatives

and/or

those

constituent

members. We had relatively virtually group full of speaking every people if camping not 11 for an

policy, had a

constituent out all, at the

company of the

time,

most

entire

Chapter

process.

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 the this prior to It's the also my understanding were a that of

filing and

there

number very

constituencies actively including lenders, others, because to the

their with and

advisors

involved GM, their and we we Ford

the

company, the and policy access the secured

Chrysler, Capstone

advisors, just

continued if

that had

thought

everybody the

same

information, that the albeit melody,

same

data, might

same

analyses with same So

people at

disagree had the Q.

least

everybody

notes. it's could Collins your call & testimony up any at that these any

constituents employee and have at a

manager, any

Aikman with

time the

discussion

them

about

company? A. Q. No, that's Then not my contention. were limits on

Okay.

there

transparency? A. No, there as was organization to just So well my around random view you

transparency, and random you

opposed

chaos is

intervention. organize making it

that a

when

and

have

process

for

people

available,

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 I in whether on, what it be for don't these calls need or is meetings 30 or 40 or or so 50

you from at

advisors sitting

various

constituencies random in calls, fact the

the

company

making

scheduling company Q. was

random up to if

meetings, its in had ears

when in

alligators. was this to it, of

And

fact an

there

transparency how would

that

organization GM,

you

prevent

Capstone, calling

any

these

stakeholders directly? I think

from

employees,

managers, A. Q. fact

we Were

had you a

an

honor of

code. -that so the

Okay. there had

aware

been not

directive speak with

stakeholders unless A. used the is a it

were

to

managers

was

cleared you

first

with

Kroll? cleared, think You or that make

Well, word

used

the

word I

organized,

and

there it

meaningful we would

difference. decide letting or yes

sound we and

like had a

no, people

like talk

stake not

in

some

others or

talk, not

some

people That's

making not how

calls it

others

call.

was. We had a stake in organizing it,

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 or that that taken A. Q. fair what so that operating by or management wasn't calls, so when

overwhelmed redundancies you say Q.

either just I

repetitive foolishness;

cleared, Okay.

say

organized. you describe the

Could

organization A. Boken Q. you A.

then? you would have to ask Mr.

No, about

those

specifics. you as I know the about honor that code? a is

All

that

referred Well,

to

yeah,

think

that's

statement. Q. was was Now, the financial in information that was

available on a

documents site or

computer my Do

something?

That's Okay.

understanding. you know what was it on

computer

site

and

how

timely

got

there? A. Q. information A. Q. other No. Do you on know that if plant level site? Mr. Boken.

was You Do

computer to ask or if

would you

have

know of

when

Capstone were

members

other

constituents

51 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 like no, permitted A. visited involved vetting know to visit I plants? don't know when if they were I guess I don't

Well, any

pre-petition the secured for then, post plant went

they

with the

lenders, DIP, it's if

company did

the but

so my

what

they

understanding wanted were to

that a

petition those and

they

visit and

arrangements a

made

they

visited

plant. Q. Capstone Do was you know how to many visit, issuance plants the in

permitted prior to

plastics of the

particular, 2006

the

operating A. I

plan? know how B, many that we plants, they A,

don't to

Capstone requested organized Q. A. we and

wanted to

visit, and C,

visit,

that no. no?

their So You

visits

for,

the

answer's the

used just

word

permitted yes

again or

would I I keep

decide the

randomly word

using

organized, it out of

because context. Q.

think

you're

taking

Do

you

know

how

many

plant

52 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 CRO fact with do managers through issuance A. Capstone this of was allowed to speak to the with

organization the 2006 I nor had did

prior

plan? really I have work nothing to do to

No.

Capstone,

anything plans. had

with Q.

organizing Do to you

their know if

Capstone

access to the A. that. Q.

plant-level of

financial 2006 to

data

prior plan? Boken

issuance You

the

operating ask Mr.

would

have

Now,

you've was to

indicated engaged as &

that the

in

Kroll,

KZC,

financial that true? A. and

advisor

Collins

Aikman,

is

We

were a

retained team to

to

act

as

the

fielded

support

that

effort. Q. sent? A. Q. Exhibit It's go an I believe going I so. to direct that's you to one. if you you will Was there an engagement letter

I'm 17.

suspect of to

volume but B,

application a few pages

debtors, Exhibit

back

53 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 form is it A. standard Q. where KZC your as it an find a A. Q. services Right. Is that pretty much a standard utilizes or agreement?

services

agreement

that

KZC

individual? We have typically a relatively

structure. I direct you the to paragraph hereby Was as an one engage that

indicates

debtors

independent of

contractor. KZC's role

understanding

independent A. agreed

contractor? Yeah, within on, the that context was my of what

to

take

understanding. Q. regard were a A. impair in it was the the Did you regard to -how did when you you

independence of the

exist of

member I

board why or

directors? would

don't

know

that our to

independence It was

disinterest the Court, it

this. was

disclosed to the the

disclosed to

secured

lenders, creditors the board I

disclosed

unsecured minutes of

committee, meetings

obviously been

have

made

available.

don't

54 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 made made were know the why that would impair or any my independence, independent of the

firm's on

independence, the part of

the

thinking firm. Q.

member

Do

you

know

when to

board

minutes

first A. Q.

made No. Did

available

constituents?

you all

think the know the

they

were

being

available A. I

time? why time. be or -they would be

don't all they they what

available Q. A. Q. Why Why So with to

wouldn't would did you be.

think

was they

happening available A. Chapter Q. board and

board

minutes? outside the

Were the

members during

board? of the

Not 11.

course

There you

was

subcommittees on one. There isn't

of

the

were of

were that true?

subcommittees A. Q. A. Q.

the

board,

Yes. And Yes. What was the area of you were on one?

55 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 was responsibility A. We I of that subcommittee? of all, the to is

were, think

first

subcommittee the just whole the

you're

referring and we

restructuring the

committee, if you to

were for the of

gatekeepers, with

will, the

board

respect the the

status the major

reorganization, plans, 11 and

status status

of of

business Chapter Q.

undertakings. And who else was on that

committee? A. the Tim chief Leuliette, executive who at the of the senior time

officer who

Metaldyne; executive south; I

Tony with a

Hartwick, plastics when it

was

operation was

down

believe Mike was on a

initially affiliated Leonard had a

constituted with

Stepp, on

who

is

Hartland was

the

committee; and we

LoBiondo couple ex

committee members Boken, do

officio Macher, And

which and/or mean

were Trenary. by ex

typically Q. officio? A. committee

what

you

Well, and

since

it

was

board members,

they

weren't

board

56 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 of they they couldn't could be be on a board committee, that or every but

unofficial every

members meeting

attended call. Q. the

virtually

Who board or

besides members

you on

and

Mr.

LoBiondo had

that

committee with

expertise

prior

experience

restructurings? A. because Partners as I he Well, had a I assume Mike Stepp with did Hartland

been

affiliated of their

and

number gone

businesses,

recall,

have Tim

through who a was the

restructurings; CEO of

Leuliette, was --

Metaldyne, while he

which was

also his

Hartland had the so be

holding, not been of

not I

career was in

restructurings, a restructuring was you, somewhat I don't

think

midst he at

at

Metaldyne, To

least with had

familiar. know if

honest

Tony

Hartwick Q. attention sentence you the

restructuring going to 2

experience. your first and first ask

I'm to of

direct B,

paragraph the

the

services I'll

agreement, read the

following. in part:

sentence

57 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 this It has A. Q. services other A. Court, Q. resolutions directions so an by the Pursuant terms shall respect of be to to and except as limited and

such

resolution, to make of the

KZCS

Boken with

authorized all

decisions

aspects of

the debtors'

management business.

and

operation

Did

read

that

phrase it but

correctly? --

including Yes, Now, you to

after read

it

correctly. was to this the

your made

knowledge available

agreement

constituents? Well, I it was that aware board board filed it of or or with the

assume you the the

was any

available. subsequent

Are by from to

written the as to what for the

subcommittee tasks to

Kroll, or

KZCS, to

perform

not

perform

company? A. Well, only to the extent by Frank at least some that

agreement

was

modified which

Macher's in of part, the

contract if not of

superseded, the

some this

of

specifics,

spirit

agreement.

58 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 you with the EXHIBIT-6-R /// BY Q. MR. I DAMREN: would I've can direct your attention and ask to marked as not file an as MR. DAMREN: but it Your is by in Honor, the it's

exhibit, it was

Court the of the

approved and

the a

Court, copy

Macher motion

contract, and order. I've the THE the

I've

got

With handed

the

Court's and I a will copy. it

permission, hand it to

Counsel and We

witness COURT: next

provide

should number next

have for

exhibit is

identification. number? MS. THE

What

the

exhibit

CHANG: COURT: FOR

6-R. Okay. IDENTIFICATION:

MARKED

exhibit if you

just

handed it

you

find I

on

the

contract it's

Mr. last

Macher. few

would It's dated you

represent entitled July ever 7,

pages.

employment Do you see

agreement, that?

2005. this

Have

seen

contract

before?

59 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. prior Q. reference or the I drafts, To in may I have don't seen this one, or

recall. is there any

your this

knowledge contract that of Mr. the

to

the

mandate be in and

requirement of

Macher

charge the as P&L one A. duties

preparation all the

forecasts

and of

things

you

referenced

his

requirements? only in the positions he and the and

Well, whereas on see I

indicated the that and chief

yesterday

insisted you can

being what

executive, is with

follows

duties,

functions

responsibilities with such the position, right at at it to

customarily including hire

associated not

but

limited

to

appropriate rates, and one

management in of we fact the

personnel if you look that on

market the was

pleading, requested there to

reasons him

that was

bring

was

because

insufficient in

human operational to the

resources and

engage

difficult

financial a

restructuring enterprise,

necessary which the that was

create

viable

operational that I

restructuring to

was

bailiwick it fell

referred

yesterday

60 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 entire the And to give under, think Q. agreement charge, of on? A. contract Q. you No, that And the 12. Page Of would read nine of his agreement? paragraph would, that you read 12. not I I specifically see. ask a you to look, nine, in the the and I think it that if you -so I

that's So

actually. nothing the in this in

there's him

about

being in

architect or

principally creations of

charge

otherwise and so

the

forecasts

can

would in

page

moment,

page

paragraph A. Q. I

his ask the

agreement, you one if you

please,

just

sentence 12.

constitutes it out A. read? It

paragraph

Could

loud? Do you want to prove 12, that I can

says, the

paragraph

entire are

agreement, underlined.

words

entire

agreement

"This agreement

agreement and

constitutes

the

understanding respect to

between the

parties

hereto

with

61 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 if with matters all referred to herein, and and supersedes

prior

agreements parties referred since

understandings with respect to

between the

the

hereto, to

matters Q. the

herein." more familiar

Now,

you're

services into, is

contract there any

that

Kroll in of role Mr.

entered that

provision part

services 17

agreement

that's that was

Exhibit as

that

indicates contractor

Kroll's to

independent in to his the I

support with

Macher respect A.

efforts,

his

decisions so on? it,

forecasts have that for two

and to

would

reread not

but

you're take Q. public

asserting your So word

it's it.

there,

I'll

these

documents being of as

being no to

in

record

and

there aware

other Mr.

writings Macher's architect Kroll's that,

that

you're

designation in charge as

as of

the the

principal forecasts Mr. Macher and in

role

supporting the

how

were

constituents, supposed to know

stakeholders, about A. this

the

Court

relationship? Well, I actually don't see in

62 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 grant you The the that the the that services agreement of -referring that to it earlier doesn't what say the where it says plan, we're but

architects being Q. said I

business

was

services your

agreement is to to

role is

support

Mr.

Macher, in

Kroll's his

role

support respect the

Mr. to

Macher

decisions A.

with

forecasting. knew.

That's

how

constituents not the

constituents,

actually

constituents, there every

their

representatives day, and so

were the who was The the

day,

every

constituents' driving the

representatives planning

knew

business were Macher

process. of

constituents status were that

regularly and to his the

informed people I

assume plan. and the the I

making

relative I would an

business assumed, that

So

have

it's

assumption, would

constituents' constituents the

advisors that Frank

have was

told

Macher

driving of the

development plan, a

and and

the given

architecture that day they and would

business there out, I on

were day have

daily

basis, that

in

would

assume

they

63 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 that picked Q. up on To that. your of knowledge the Court was there any on a

representative daily A. Q. basis? I To

don't your of to

know. knowledge the pick U.S. up was any there on

representative a daily basis

Trustee on this

relationship? A. Q. at a Not In that your in I'm aware of. you indicated

testimony time Mr.

point to

Macher wanted over

threatened $300

quit in

because for

he

million A. Q. A.

EBITDA

2006?

Yes. And when I was was said in that? to the best of of my

Well, it

recollection '06. Q. okay, at At

early

January

that time

time,

early

January, already there a

that post

wasn't

there out

revised put the A. Q.

closing at

budget

that

number I

265

million?

don't

recall. recall him threatening

You

don't

64 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 lawyers? A. I'm sure that they were either the to quit before that revised closing budget

came

out? A. He threatened that the to quit when the be a

board bit

concluded

plan Mr. to

should Macher the

more

conservative it should it be, was

than and

believed my it

best

of

recollection was late from view

early but

January, it was in

maybe down

December, a of

when

shifted Frank's

conservative 300 plus to a to

number a less

conservative number very of

number,

more Frank that

conservative was that of he very, was the CEO

the

mid-200's, thought the of

upset.

Frank with

interfering and the

prerogatives the plan and

architect to Who He

threatened Q. A. board

quit. knew did it about at it, of a this? board and the the meeting, so

knew and

about

company's team.

advisors Q. Collins &

members

management

The

company's

advisors,

meaning

Aikman? THE COURT: And the company's

65 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 board A. that if he in to by physically BY Q. Mr. A. Q. anyone MR. or telephonically in attendance.

DAMREN: To your ever not you knowledge conveyed sure. know the if it was that conveyed you just was to this the threat

Macher I'm Do

lenders?

outside

group

identified? A. Q. any I'm Was writing members? I don't know in what Frank and did I may am or I or not not this by sure. threat Mr. ever or memorialized by the

Macher

board A. didn't aware may

memorialize of what have

writing,

other

board

members in

not

memorialized it in

writing.

didn't Q.

memorialize Are you Mr.

writing. of any writing to quit in

aware

references didn't for

Macher's 300

threat

get

the

million

plus

EBITDA A.

2006? I don't know of It any. wasn't in any

THE minutes? I

COURT:

don't

recall

seeing

it

66 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 and you in and memorialized Honor. THE your COURT: lawyers for me? Perhaps could over a break out in the board minutes, Your

check

that

exhibits A. BY Q. he A. number MR.

Sure. DAMREN: And didn't I the number can went you down to 265

quit,

explain on the he

that? head,

think

you

hit

it

went

down

to

365

and

didn't

quit. Q. A. Q. 265. 265 Did and you with told he didn't have about quit. any subsequent

ever him him

conversations A. particular at he the I

that? to that

subsequent that the his

board

meeting and

behavior that

board

meeting at

invective members

directed

certain for if

board and did and

was

completely

uncalled and me I

completely it he again then

inappropriate, he would me Q. see when Was

he mad

get got

wouldn't

like

mad. ever subsequently

EBITDA

67 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 its or to yes. Q. what quit A. number of So would it be Mr. fair to say that, reduced A. Q. isn't A. that for 2006?

Yes. From the That 265 to approximately 180,

first was

reduction? first reforecast,

the

happened, before Well, times

did

Macher

threaten

that he but

happened? did I threaten can't to quit if a

recall the

that to

particular quit

correction

elicited

threat

response. Q. You as as testified being that was and one of his

requirements designation the the the then was

CEO

this in charge but quit to the of

architect and he other

forecasts fact board later really A. that

items, to

doesn't when 267 and

threatened to reduce indicate of

chose to in No.

EBITDA that

180

board

charge I

these the

decisions? exercised and in

think

board

appropriate

oversight

and

overview but

business no way,

judgment shape, or

responsibilities, form was the

board

68 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 was the responsible plan. Q. Was that entirely Mr. Macher's for the creation of the business

responsibility? A. distinction for the Well, here. I'm Mr. of be going to make was a fine

Macher the

accountable

development can't

plan, but he was

accountability not of totally the plan

shared for can the the

responsible because So he you as

development

share senior manager for its

responsibility. of the company

was

accountable the

development,

but

he

shared it. else in

responsibility Q. Was

for

anyone

accountable the various

for

forecasts

contained

business A.

plans? No, at the end of the day Macher

accountable

for to the

making

the and upon the all was or not plan. the board of

recommendation at the the end of

the day

board, based

other

input for

that

it

received

responsible to authorize Q.

determining to --

whether issue

management did the

that as

And

was

Kroll

69 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 they what that or for independent accountable the plan? A. Q. the A. Q. indicates Boken A. pointed they are were No. Was John Boken as CRO in accountable plan? contractor for the and financial advisor in

forecasts

contained

forecasts No. And that is

contained

the

there

any

writing Kroll

that nor

Kroll,

neither for as the

accountable Well, I

forecasts? already says says

think no no

you've that

out and not.

there's there's

writing writing

that

they're Q. the

And

so

how view

would on were the

anyone was,

know that is,

board's and

this not

Boken

Kroll

responsible

not A.

accountable If

for

forecasts? wanted as to I ever the secured or know

someone

really I

could

have

asked. I

think,

mentioned receiving

yesterday, a single

don't from

recall any of

call

constituents' lenders any and

advisors,

including either says

the

Capstone, member

to

myself

other

board

that

something

70 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 the the U.S. is vague, something we the is confusing, like of the you to something clarify is they

isn't for

clear, but

would fact up

us,

the

matter and

could could Q.

have have

picked asked. You

phone

they

never

got did

call

from

the

Trustee A. Q.

either,

you?

No. Now, was your to initial increase or put and suggestion prices into it by 5 5 to

company and cost

percent percent generate first

decrease

effect

reductions million recall of

would in the to that

$250

EBITDA

year,

you

testifying

effect? A. Q. didn't A. I? What I said is -yes, you got That's Okay. not I what I testified numbers to.

got

the

right,

numbers Q.

right. did I get wrong and would

What it?

correct A.

You was X,

said Y

my

recommendation Z. That was to

to

the

company

and I

actually board

inaccurate.

What

described

the

71 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 he or and to the that secured if and I lenders was be by 5 an economic by

model, 5

revenue cost

could

enhanced percent,

percent, that at you

reduced that

given EBITDA zero, do

assumed

the

company's in time was

that

particular if you

point

could, two

could

successfully to a viable

those

things, I

migrate make

economic

model.

didn't

any prices 5

recommendations percent Q. known A. early Q. time? A. was -was Well, I to or

about

increasing 5

reducing When did

costs you

percent. this view

make

the

board? I think in the summer

Sometime fall Was of Mr.

'05. Macher in place at that

he

must on as

have

been

because

wasn't place you

the I

board recall. Mr. in

until

Macher Q. wanted what

in So

knew $300

that

Macher EBITDA, million? any it that

more his I

than

million to your him just

was A.

reaction don't

$250 having to

recall and

particular straight,

reaction, you know,

get was

Macher's

view

72 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, a CEO. Q. again this & You today process also testified fact yesterday early and on in straw think. dog the was company that if by by 5 could in 5 do much better. could My be be given then an view

fact

revenues and if, was

enhanced reduced that in I

percent, percent, there

costs if, zero and

could if,

believed the

EBITDA, from

fact

company

could a

migrate

untenable model.

position

to

viable

economic

So for

wasn't

attempting thought I

to or

be

what

Macher

didn't in but to

You it

know,

fortunately, turn a out CEO who

mean way,

hindsight

didn't there

that who

fortunately be very

was and

appeared not that I

aggressive with the end

was

satisfied thought viable

economic up with a

model

could

reasonably

company. You which know, is he wanted to do much for in

what

you

would

hope

about it

the

that

was not

your pursue do

view a

that

Collins

Aikman

could an

standalone recall that

without

investor,

you

73 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 fact down what mean. A. modified Q. aware months that the to with with Yes, that's why I used the term testimony? A. thought Q. I I Right, said a I said third party. but I --

third-party what you

money,

That's meant by

meant. I took

That's you to

investor,

standalone. And in do you recall or were for what you many was

court

proceedings was pursuing track

company as a

referred forward forward A. both Q. that

dual

with and

going

the

standalone for

going buyers? going

looking I was

potential we were

Yes,

aware

tracks. Didn't going you down a alert the anyone of to a the

track

standalone was futile? A. yesterday, to to the the

without

third-party

investor

Well, we

think

we,

as made

mentioned it it clear clear and sure I we

had and

certainly I know we

board,

made

unsecured recall when

creditors and where

committee, but I'm

can't

74 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 company's focused on BY Q. Court's first on the MR. made this it clear to the secured emerge the lenders on -a that

company

could

not

strictly the

standalone support Q. attention looking referred Do you A. supposed of

basis an I'm to

without

without

investor. going to direct I'm your sorry. that to it? am I we yesterday. I'm

Exhibit the board you

4-R.

for to,

minutes referred finding What

that

need I to

assistance don't be

know.

looking CHANG:

for? Volume 8.

MS.

DAMREN: Yesterday you the directed last the the

attention and

to

paragraph,

page

the page

first

complete that

paragraph that in view that

second to

indicating about going

referred of the

your

concern I'm

the, to

standalone. paragraph. Then new the Mr.

read

first

Macher

reported

on

the He

business

opportunities. six largest

company's

customers. Bottom of page two going over to

75 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 page you page three. A. Q. A. reported Q. A. Q. two, You're Yeah, Did on I I on last page two?

paragraph. say -paragraph. page one. you now to that then Mr. Macher

you

just

the had

company's the wrong

think

that's I'm

Right. which the I

referring was

believe Court to

the

page

referred

yesterday,

last

paragraph. A. Q. update on Right. "Next the Mr. Boken provided of the an of

development He

plan the

reorganization. company term and its for a

explained had

that

advisors

developed plan of

sheet

standalone a plan of

reorganization with an equity that makes to

and

reorganization Boken

investor. the a

Mr.

explained situation difficult

company's standalone He

financial plan more the

execute. that for the

discussed and

assumptions advisors stated

company term

its and been

made

draft

sheet had not

that

the

assumptions

76 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 Boken based loan page Court No. Q. A. futile. going Q. to Does No, It be it it say it's futile? the word plan is market tested." Does impossibility, without A. an that the paragraph of refer a to the

futility

standalone

investor? Does it say that it's impossible?

doesn't says a

use

just more the

standalone to

difficult next you

execute. over on

And

paragraph

three, to, it

which

also

directed

the

reads: response that to questions sheet a Mr. was

"In explained on the

the

term that

assumption

revolving to needs. have

would the

provide

sufficient working

capital capital

address He to

company's that this

explained be

assumption the

would

adjusted other

based

on the

estimate in

of, accounts

among

things, and the

increase in

receivable payable

increase

accounts to its more

when

the

company

returns with

normalized customers

credit and

relations

vendors."

77 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 have that all the Does that paragraph or discuss at or

difficulties of a

impossibilities without an

futility investor? A.

standalone

don't to. the I

know

which know

term if a

sheet he's standalone

refers to

don't

referring plan So is or a

term

sheet

of

plan

with to a he

an --

equity I

investor. when one

you

would

have

think

talking

about here,

revolving is, or you

credit conceivably both. But

agreement talking again, use the Q. A. Q.

know, or

about just word Or Or to

one

the

other

answer

your

question,

doesn't

futile. impossible? impossible. really does even it? reference That a

Doesn't

third-party paragraph. A. to

investor,

Well, tell me

that's which

why term if

say

you he's

would

sheet

talking

about,

because a

it's

the investor, to a

standalone, by

without he

third-party be

definition

wouldn't

referring

third-party

investor.

78 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 you the in made Q. attention Do you I'm to going to It's I'm last runs direct in the to your same direct on the you the second. volume. your

4-H. it? the it to to

have to

going

attention first page

paragraph over to that

as made

Reference apparently

comments the

made It

board. Mr. Cooper, processes parallel of that that tracks

indicates, described

--

four on

company the

is

pursuing 18, 2005

August

meeting

the

board. A. Q. development reference being you, a to Right. The of first a track was the and after he,

strategic the

plan,

that,

minutes the a as

state, plan

explained description

that of

would

provide business valuing A. Q. the

standalone the baseline for

model the

to

serve

company.

Right. Is need could there for be an put the any reference in that such a

investor in place?

before

model A.

Well,

standalone

business

79 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 all to Q. paragraph, this other A. Q. stress the do model P&L a is actually whether like the you P&L, do it and on it's the or that of

that

basis

multiple, flow, a total

transactions serves value as

discounted basis of to do

cash for the with or

typically economic It you

the

description has nothing

company. whether

actually have a

third-party

investor

not. The way that at value all gets

distributed, is a plan of

if

it's

distributable, which are typically sole a

reorganization, or not the you

describes proponent,

whether you

the or

being

debtor,

co-proponent. So this an actually investor has or nothing lack on at

with You that

thereof. in the use all

explained, the plan

going

professionals as a

would for

strategic potential

comparison

alternatives.

Right. But in the the one next of thing, you went on in

sentence, this

is

that

fact being

importance to

strategic the plan

plan was

credible

insure

that

80 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 had of Mr. realizable, A. Cooper do you recall it that? says. It says of the that

That's

what

stressed plan being

the

importance to

strategic the plan Q. August that of

credible

insure

was So

realizable. you recognized the earlier on in plan

2005 out it No,

that for

first &

business you

came get

Collins

Aikman,

better A. Q. the A.

right? that's What being actually was the not accurate.

Okay. plan then

importance

credible? had that view, to a since in it

I've to in

always do with

nothing

coming '05, 11 to a a

realization virtually ends up

August

of

that

every

Chapter

business

plan

being

subjected

rigorous business is plan in and

challenge, any I at Chapter

credibility 11 in my for

of view the

important, that

just this Q.

reiterated particular You item

board

view

meeting. indicated were to, that, as the or

also you

third

that the

referencing, that the

referring was

board

company for

analyzing

potential

alternatives

81 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 had third at parties, time? I think at that he time a Wilbur level Ross what third parties were those

that A.

already in

indicated dealing albeit there

had the

of I the a

interest think time

with

company. as to

that frame

I'm were

uncertain

discussions of Collins off with

about &

possible with Lear

accommodation or Lear

Aikman plastic & I

spinning that

its

groups Aikman. just

and

combining may

Collins

There

have

been

others.

can't Q.

recall. Your final in observations to the

board

referenced that

this

paragraph,

you

explained could

the

company's a

restructuring during occur Why a to did the

occur

through but more of

transaction likely would

bankruptcy, through you a

plan

reorganization. if of in fact that's

believe

that,

correct the

reflection

what

you

conveyed

board? A. Well, typically to sell most I find of when the prefer plan to as

you're assets have it

transacting of a

all

business, in

people with

done

accordance

the

82 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 but and to opposed then to a large what is. final sentence that you of the to scale the transaction plan of and

determine

reorganization Q. paragraph the The

indicates that with any

explained would,

company

the its

company major

"negotiate regarding

constituencies or standalone

such

transaction

restructuring." A. Q. reference for an Right. So is isn't that in a correct there that to no need

contained to

the

investor

make

standalone

restructuring A. particular it. Q. meetings A. -Q. today? A. I I don't How Are where In

feasible, August of

credible? 2005 was at no that reference to

meeting

there

you

aware

of

any

other to or that? futile

there's it was

references impossible

That

did

you

describe

it

yesterday

didn't recall

think using

it the

could words

be

done,

83 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 impossible think Q. document you? A. Q. bankruptcy expensive these down dual one A. expense it's No, Now, not off hand. on your is it experience a to to lot be be more pursuing going in it or futile. something And I just said I didn't

was

that are

was

doable. of any by

Okay. that

you

aware that

reflects

that,

opinion

based

proceedings, and time

consuming than just

tracks

track? Well, and time if in I don't know about I the

consuming, you a don't

but go

think

imprudent tracks of I

down If you so to

multiple put all

bankruptcy. in one

your

eggs think

basket, a

speak, to

don't a

that's or a

prudent 11.

way

manage Q.

business, is it

Chapter to

Why that in

prudent

pursue doable?

track A. Q.

your

view

wasn't

Which The

was? without an

standalone

investor. A. pursuing Well, the I think track the and reason the we were to

sales

talking

84 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 for third parties that and the plan was was consistent both with going and people that down

something effective, pursued at

efficient the only day the

frankly, end of

the were

the secured

standalone lenders, Q. today 2006 that that

track

and

they

couldn't in

consummate. your for testimony -in the

You the

indicated cost were

savings back-end

forecast correct? A. Q.

loaded,

isn't

Yes. And in that the the first cost six cuttings months, less or

anticipated early on in

the

forecast,

were

demanding? A. Q. failed to Yes. Isn't meet for it true that plastics

these EBITDA

less

demanding the first few

forecasts months? A. Q.

during

There And I

were

shortfalls. that was a cause

assume

concern. A. know, Yeah, every the step board of was concerned, of course.

the

way,

85 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 everybody wouldn't talking did Q. observation projections possibly more Was that if concern you easy based on the

that in

can't

make how make the

the can the we

the the

months, to in

expect

company

difficult

projections

later

months? A. Q. A. was No. Did anyone just -a feeling. there done What were by it, at to how the go we

That's ask

management what to is was

why

shortfalls, we end were of

being

going the his day

either

catch was

up

or

Trenary

going

through that

normal be

reforecasting but,

process, know, say we

would

reflected, you

you

certainly let's

didn't, in

know,

suddenly

throw I in be

the

towel. incidentally, town did and 10 this, GM's years if there been and their

mean, this a

Detroit, this plans Third for

about

restructuring Q. standalone A. Did

keep

unfolding. pursue a

Avenue

plan? No, Third Avenue looked to either

86 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 one at be an Q. somebody that investor You at or an acquirer that the as you I recall. talked pro to quo

referenced

Chrysler had --

about

quid

Frank A. Q.

Macher

had

arranged?

Yes. You was. He the was either senior the the most senior or didn't identify who that

person A. of

most To I

purchasing of my was

officials

Chrysler.

best his or

recollection Schott like or

think Short

name

like

Bob

Bob

Bob

Shoot,

something

that. Q. Did you make a memo of this

conversation? A. think in it I may board Why when reported actually minutes. didn't the board about I think fire this? fired Mr. it to the been board and I

have

reflected

some Q.

Macher A. shortly Q. A.

they

learned he was

Well,

thereafter. Was that I one think of the reasons? were several

Well,

there

reasons.

87 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 It plus reasons? A. BY Q. attention recall? A. Q. six A. was Not It came I specifically. was sometime after the six MR. Yes. DAMREN: I'm -going to direct your do you question. A. What THE was the question? Was that one of the question, A. THE COURT: Just answer the

please. I'm THE sorry, COURT: sir? Just answer the

COURT:

when

was

he

fired,

out? don't a recall specifically. exit over a

just

negotiated, or two. I'm 69, a

negotiated

month Q.

going

to

refer counsel

you

to as

Exhibit

which

your

referenced a small the

containing volume. letter I from

Cerberus ask

offer. you to

It's go to

would

Cerberus. you indicated in your

Now,

88 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 last they data testimony from It that you was on some recall -page take that the offer up. but how

Cerberus like

ranged two

from

625

looks

it's

675,

then you

there's get A. to I the the

aways,

is

that

the

625? what I said but is I didn't seem to

think

recall be in Q.

exact

numbers

those

ballpark. And you said really were or any that in fact that about or

Cerberus the,

and

Ross you

wouldn't your

care plan

whether for

making of what as an do

EBITDA A.

2006 No, I

that. I said is that

think at it

would point.

look

interesting their own due

They They

would would

diligence. would of the run day

conclude and that

how at

they the end

the the

company, '06

business to them. you two.

plan

wasn't

particularly Q. I

germane would on

ask page

to

look It's

at the

the same

paragraph

letter. A. Q. Right. And it's bolded do due you see that?

diligence/assumptions,

89 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 may '06 the was A. Q. proposal diligence most to Right. Doesn't was but that indicate only to that due their

subject based one,

not on

several company forecast that

assumptions, is of on 179 to track

notably, its

the

achieve for

EBITDA

million you that

2006. was

Doesn't an

indicate factor to

that

important

Cerberus? A. just No. It indicates they to me in that it

something

included purposes.

their

letter Q.

for

negotiation What in the about

two,

the

net from the

investment normal with --

working return and

capital to

normal is was

payments about 30

customers did

suppliers that

million, A. Q.

you

think

important?

No. What about of three, the verification of

achievability for 2006

company's

business

plans A.

through

2008. I to think them. '07 I and '08

Incidentally, been a important away. do

have was Q.

think

throw And

what

you

base

that

on?

90 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 two ago That opinion. A. Cerberus, you at at know, the end I've their not of has actually letters done always deals start with out, and is

much the

different day where to do

than the with

this, company what

present or

little pay. them

they

will

won't I that

sold

company money on

year five basis for

or

hadn't they

made

in the

years a

and

which

bought

of

different of

consolidation

strategy

that

type

manufacturer. So I for think their this they own is enter into these

transactions purposes, beginning Q. Cerberus's pay the and the

business just a way of

that

dance. would like price this think I any a it any it be correct that is to

And goal

purchaser can to any

lowest

acquire company? often times on

these A.

assets, I

company, that's it

very also

desire, they

but see

think

depends

how

particular

acquisition and that

fitting often

into

grander

strategy, or

time

dictates

whether

not

they

91 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 any the you page A. two? Q. just A. Q. I'm turn sorry, to the it's next page page. three. If be any be want or steep discount, or not a very steep discount, to pay a

whether

they're

prepared

premium. Q. counsel's offer you on to that that turn You indicated to an in response the to Cerberus ask

question it to was

you

about I

offer. two, the

would

page and

last two

paragraph

page,

the

first

sentences

which

read: "This indication terminated letter way." is of at not interest any time may for to

withdrawn reason. binding

or This

intended

in Did I'm

any --

completely

lost.

Where

on

Right. Other of that is bolded final and then it's final

beginning on

the

sentence, reads:

paragraph

page,

which of at not

"This withdrawn reason. or This

indication terminated letter is

interest any time

may for to

intended

92 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 due they the in A. Q. letter A. expression indication they had as be binding in Is any that way." correct?

Yes. Did an I of you nonetheless regard this

offer? regarded interest this it as a very and an that for an nice

that, a

that

was in

property

an

interest

evaluating

acquisition. Q. this Did letter to they for give doing of said you due the a time frame I

diligence? page. to four

refer A. weeks. Q.

you

the

top

Yes,

they

three

What

did

you in or

expect due four

to

happen at

if

started end A. of I

engaging three

diligence weeks? that been

the

would

have

expected have

the

diligence by

period

would

extended Q. isn't A.

mutual

agreement. three due think case or four weeks just

Because enough to do I

diligence? it I depends don't on the

Well, In

situation.

this

believe

93 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 Ross know its three or four weeks would have been

adequate. Q. that 180 When the did the -did Cerberus to make

company EBITDA

wasn't when

going it made

million

this

offer? A. Q. heavily forward A. Q. would A. their saw as Q. less? A. Q. also Possibly. Now, made to you a indicated and that I'll in this Wilbur view that I'm not sure. by the time had it was gone

Certainly into it due

diligence have

this that?

would I

learned

assume what on

so. effect in your opinion

And

have I

negotiations? they would upon have what adjusted they

assume value

of

based

performance. And meaning they would offer

proposal that it the

represent exhibit had you

you

follows one from

right ever you

behind reviewed

Cerberus,

this

term

sheet

before

testified?

94 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 than As a the that I that A. review it I'm sure I saw this but this I didn't

specifically no. You Ross

before

testimony, Q. Mr.

indicated was

in

your to

testimony top

prepared that? I

pay

dollar, A.

do

you Well, was of

recall I

think 90

was

told and don't

that I said recall

offer kind

roughly sounds

cents I

right.

ever Q.

said

top

dollar. the circumstances in in July, as that would being the you a

Under found 90

company regard high

itself on

cents

the

dollar

offer? A. I think it depends were. would sheet I have is from 11, a on what his

strategies for Mr. Q. the

and

plans You term

can't to

speak him.

Ross. This

ask

lot

longer

four-page of

letter it's

Cerberus. 12, 13 -it lot could 13 be

matter of to

fact, and

pages fair of do

terms say

conditions. were an

Would awful one

that to be

there

hurdles a deal

cleared Ross? say

before

with I

Mr.

A.

wouldn't

that.

would

95 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 any news the that you with just and say if that there was were have a cake intent gotten to on bake, baking a

both the

parties would it of

cake, Q.

deal Now,

done. it, put it,

is

correct, day, as

isn't you on

at need

the the or

end

the to

OEMs

sign or

off

any isn't

deal that

Ross

Cerberus

anyone,

correct? A. Well, I think it that the was a view of

potential

acquirers from

they OEMs

wanted that

adequate Collins valued Q. &

assurance Aikman

would

continue

to

be

supplier. And isn't out it true that when the

finally

got

that

the

company eight plan, to a --

wasn't and it

meeting now,

the

four

plus be

that

it that in

would the the

dropping just

hundred had and no

million, confidence was I no

OEMs

lost

company for I it

after from

that

there A. calls Q. the

support know. OEMs

them?

don't the of

never

received that. you meet the gave the

from One

indicating that to

the

reasons

failure EBITDA

of for

the

company was

forecast

2006

that

96 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 shut until a Ford we lenders certain A. Q. company A. advocate operation field the with prohibited positions Yes. What from As of so again did it prohibit the the with company the from taking

OEMs?

doing, a

the

lenders? I was an

board

member down the

shutting we could Motor done

Hermosillo playing and for of the to in fact,

level

the

Ford had

Company, that once degree

company had

four

hours,

elicited from

some

cooperation contracts the went

Ford

about which

redoing were and

down

there,

really then

company's radio

disadvantage, again. for more of

they

silent I

lobbied on a

quite

some

time basis and

to

down

extended our

resolved basis to not that do

all

issues, lenders that

on

regular

the and

secured

objected the

strongly company Q. board A. think a in

demanded

it. all other with know members of the

Were

agreement I don't

you? if all were. I

number

were.

97 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 that's page
.

Q. A. Q. position A. taking Q. A. but I hate a

Do Not Do was

you off you on

know the know

if top

the of

majority my head.

was?

what

Macher's

that? was very that. stressed about

Frank move Why? Well, to do

like

for

couple but

of

reasons, we take a

this,

could

five-minute

break? THE COURT: Hang to on. lunch I think that at a

maybe we'll 1:15. second

we're just I

close do

enough

that.

We'll

reconvene Give me

need to

counsel's what is I

time. need. fee and

find This

the Court to

application the bottom approved LoBiondo's to I be need of

before it by

the

11

refers which

Court and

agreement fees and

Cooper are not

expenses for

required

included to see

review

and

approval. the Court

that of me

agreement it. I to If

and

approval down can't for

you

can

track it.

that I but

would find

appreciate it in the

seem

docket,

98 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 everyone's BY Q. asking you MR. working on your hands p.m.) THE on MR. it, THE MR. THE COURT: what I Were asked you for? We're still able to lay that's because here. (Recess (Back on taken the at 12:00 at p.m.) 1:20 because it's the docket is Now so long, out not of

not

there.

we're

record

DeFILIPPO: Your COURT: Honor. All

right. Thank you. And

DeFILIPPO: COURT: let's Mr.

Cooper?

here,

proceed.

DAMREN: Mr. Cooper, when we what broke you the to were at I was

questions was on the you down

about

perceived lenders

prohibition and the

that

put

company and you

basically referring the plant

shut to in a

plants

shutdown

that

occurred was

Mexico.

How

long

that

shutdown? A. Q. Four And hours. it was your desire too, and

99 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 that '05 when did A. recall. Q. or A. Hermosillo think it Not '06? It was after had to the problems at and the I even a year, whether it was that To occur? be honest with you, I can't

plant up

been

corrected full would

was

virtually guess '06. want on?

production, been very Q. same A. Q. A. looking of The had to a at

so

my '05 did

best or you

have

late And

to

shut

down

plant Yes. Any

later

others? I think at management other was because

Well,

shutdowns and sundry plant the

plants

various

operating on the

issues. hand, were to I

Hermosillo a get view

other we

that

only

way

going

Ford's

attention contract to

relative the stop

having

reasonable is

for

Hermosillo producing. Ford

production Q. would A. do

actually did

And if I

what did

you

think

you

that? would have

think

they

100 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 have & have done ultimately, relatively have agreed and short to by ultimately I I mean they in a

order,

think

would

reasonable that

contract would

and put

pricing that

modifications on a much

have

plant

sounder

economic

basis. Q. shutting And down what the from were the from & risks your Aikman's in

plant

perspective, position, A. little

Collins

what

would I

happen? there We I I 24 were a it very critical was

Well, short-term of

think risks. new, when or

were

component Fusion risks, don't risks plant.

their so

think say

platform, for 12 or

short-term so I

18

months, have been to

believe of

there

would

any

particular

importance

that

think

that

the or

long-term not Ford with was

risks would

been any but

whether

future my us

business

Collins they anyways,

Aikman,

recollection any risks the new

weren't so I

giving

business the and

thought

the

given time

upside under the

were

manageable

at

101 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 it? A. issue. Q. indicated didn't No, That I if this was a wasn't a soft trim soft circumstances. Q. learned over? A. recall, mutually anything weren't Q. trim A. Q. To but I be honest at It with it you, as I don't Was that this before or after you coming

Chrysler

business

wasn't

looked

completely have

exclusive. to with do with

just we

didn't were

where

or

the

Chrysler a

business. customer of the

Was

Ford

major

division? Yes. So that's not the focus then, is

plastics but

issue. when you you

understand, you any lose it lost other

the

business, Ford

have to

business, that

business Mexico,

except true

plant

in

isn't Ford

that at a

there the

was trim?

business, A. customer,

business Ford

soft

Yeah, sure. MR.

was

soft

trim

DAMREN:

Your

witness.

102 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 were you the REDIRECT-EXAMINATION BY-MR.DeFILIPPO: Q. were other Mr. asked -in if Cooper, whether on cross-examination constituents of the in Mr. of

the

the the you

constituents case, will, or the

creditors the case, was

creditors that the

were in

aware

Macher 2006

principally do I I you do. think day

charge

of

forecast, A. Q. there the Yes, And

remember

that?

you

said

that

they

every

and

knew

who

was

driving A. Q.

process? my view, you yes. that the the

That's And

that

assumed would was

constituents' constituents process, A. would Q. please. exhibits have do

advisors that

have

told

Macher

driving

the

you

remember I just to

that? that they

Yes, relate

assumed

that

their get

principals. 31 out, of Do you

Would It's that in

you the

Exhibit

first

volume on

have 31, I

numbers

them.

Exhibit A.

sir? do.

Yes,

103 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 what was did Q. to its This is a report on that the Capstone 2006 you to turn

lender I

group would

operating to page on

plan. and

like

four page that

read and

the

second the

bullet Judge that who

point

four

tell

whether

supports

your

assumption informed plan

Capstone's was driving A. I

constituents the 2006 it

were

business

process. with that it

Well, testified

seems They

consistent point out by

to.

prepared

almost

exclusively by Frank Zolfo of

the

new and was

management they less

team

headed

Macher Cooper this

indicate crucial

that to the

Kroll

creation

budget. Q. asked Ross's A. Q. pricing of On about cross-examination 69 and you were Mr.

Exhibit

specifically

company's Right. I just

offer.

want

to

clarify

the on was to

that

offer. that and of

You you I

testified he

cross-examination offering refer 69. to 90 cents

thought like

would his

you

page

three

offer

in

Exhibit

104 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 have of A. guess Q. A. Q. three the of it Is must It's Okay. I'm Mr. asking Ross's you to go If to you page look is a are at this be. in a littler book. in another book? I

offer. corner and

bottom

right-hand number

there

Capstone you

Bates

it's

066685,

there? A. Q. the 685, Does page to yes. that indicate Mr. JP in the was pre-petition middle

there pay

what the

Ross and

offering facility A. layout the JP Q. A. percent of

for

claims? Well, what it he gives would -it gives to a for

propose

pay

Morgan And It in an MR.

pre-petition what was 80 was

facility,

yes.

that

proposal? of on cash and 20

percent based

earnout

EBITDA. you. I Your

DeFILIPPO: for

Thank Mr.

nothing

further

Cooper,

Honor. THE MR. COURT: DAMREN: Anything No, Your further? Honor.

105 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 this A. task it A. was, the screen You see on. This here order is a that I'm putting to the it was on can what THE have my a COURT: seat. Stand I'm might by, please. looking here. to Hold

just be

questions

supplement agreement 2005, that

order

approving on July

your 18th,

and

entered seven your will of

and

paragraph of

the

order to

says the

because the

appointment form a

board,

board of

special are of

oversight to

committee and

members

who

unconnected KZCS or and its

independent they're the of

affiliates, to and deal

and with

authorized

directed

compensation performance as Was To sir. THE To was that of it

and

retention firm, to

adequacy your

your

you, this

colleagues

relates

engagement.

that the

committee of my

formed? recollection

best

COURT: the best

Who of to

was my the

on

it?

recollection audit of Mickey

assigned I

committee Cohen,

believe I

consisted believe

Tony

Hartwick,

initially

106 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 then again be to to the no, special A. but Mike Stepp was on a committee and I but he recall That's if

subsequently he my was

resigned, on the

don't

replaced

committee.

recollection. THE COURT: So there was not a

committee Well, the --

formed? the -the not in that sense, was the I

but

audit

committee including and

handling D.O.J. think to put

special the they on

situations,

and that this

SEC

investigations, it was

thought their

appropriate

plate The

also. order requires

THE formation why I

COURT: of a

special that

oversight done? they were were already with

committee, A. independent part of a

wasn't

think

because they

directors, committee

structure They to

dealing it

sensitive

issues. for

believed also have

was

appropriate function.

them

this

THE

COURT: this for

Wouldn't order this

the

answer yet

have

modified task to be

provide out by

carried

that

committee?

107 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 at review KZCS? A. the Well, I can't but I speak can specifically you Mr. team that Boken were of knowledge carry out A. don't was It believe may that have been appropriate. that at I that the

people the

believed directive

inconsistent sir. THE of the of

with

time,

COURT: the

Do

you

have did by

any to this

what

committee to it

tasks this I

given

paragraph A. their as I

order? wasn't or privy to any of I think

No,

discussions mentioned I know to all the

deliberations. was a regular

there of

report

that

the

board

received of all of the that

relative advisors they

compensation of the

regardless and I

constituency the board but

served, that

know time

that to

reviewed the

from

time,

what

committee

providing

this I'm Was of

specific privy ever to. a of

oversight

deliberated, THE the COURT: adequacy

not

there

performance

committee, every

tell

virtually other

board of

meeting the KZC

and/or

members

108 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 questions A. Toronto, was the A. which A. you A. which was ongoing, of the required Aikman's it was to present the status it of was Collins going, the done to & how

bankruptcy, to get

where there, were on

going

what being and

impediments resolve open

were,

what so

issues, in my

so was

forth. an evaluation

So an

view

there

ongoing

oversight of KZC. By the

and

performance THE By the THE were Yes, THE chair I

COURT: the board

board. subset

and

the

committee. COURT: the sir. COURT: of this it Do you remember who By the board of

chair.

audit was

committee? Mickey he? out of a Cohen.

believe COURT: a

THE He's

Where's works

lawyer, and he

Canada,

is

primarily

professional

director. COURT: If you give have you some an Just

THE I'll to few

certainly address more

opportunity give me a

the

witness. here,

moments

please.

109 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 open is speaking an offer Mr. Mr. hearing of This is the transcript 2005 on of the You the

September motion that to

12,

company's understand

extend of

exclusivity. extending

concept

exclusivity? A. Yes, THE here of sir. COURT: to the and So Court here Mr. and he's Cieri he's is making me he

proof

telling So

what says,

Boken Boken plan

would will

testify. testify in

Okay? that the

business offer given of to

developed which

Mr.

Macher's

proof, me,

he the

had

previously and of its the

provides with be an

company

constituencies value that

understanding by a

could

generated of

standalone This

reorganization

the

company. a be

standalone against (sic). Your minded and a

reorganization other

provides can

baseline prepared

alternatives

Honor, in

the

company -in

remains light

light

that

considering

number

of

different The company

reorganization and its

alternatives. lenders and

secured

creditors

110 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 Cieri time made extended Honor, of the to testify, down. That directors company. evaluating the company and the to board selling committee have explored various of be those restructuring to estate. will slow

alternatives maximize the

and

mechanisms debtors' Mr.

value me

the

Let Your

clear, I'm

Boken I'll

Honor,

sorry,

have

not

committed they their have

Instead all to of

committed

reorganizational to and a maximize this

alternatives the value of the

determine

how

this

enterprise of

includes plan one of or

possibility or

standalone or more sales of of

reorganization more of the --

sale or

one

the

businesses. If the exclusivity period periods time, its sale are Your

during

this

of

the

company of the

will

continue and

evaluation

standalone

alternatives. Was on that offer of of Mr. proof Boken view 11 that at of at Mr.

behalf with

that the that

consistent

your in

own

company's

direction

Chapter

111 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 Boken, the is the let want me to ask time in A. consistent. confusion confusion standalone September Yeah, I I of 2005? it's generally of the the

think

think is, or

that at

part least is

here I

maybe

helped plan.

create

this

phrase

THE you

COURT: my next an to

Before

you

go but

there, I do

question,

give I do

you want

opportunity give all you of

to

address,

because

an this.

opportunity A.

to

address

Okay. THE next COURT: on Where the I'm next going motion occurred after next to on you

hearing

extend January

exclusivity 5th of

again, and you

which this

'06,

was to

testified conclusion

yesterday that This a

came

the would be

standalone again is Mr. of

plan

impossible. and he's of

Cieri proof, me

talking an what

making proof, will So

proffer he's

offer Mr.

and

telling

Boken

testify. says, Your he referring to Mr. to to

he

would

also, the

Honor, are

recommit committed

Court

that

debtors

112 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. helped offer plan kind this of with of an exploring whether all reorganization plan of alternatives, of the businesses. the

the

standalone or a

reorganization He would,

sale

however, he and

testify Mr.

regarding have

difficulties confronted debtors' also forma in in

Macher to

attempting

understand

the and

historical attempting going

financial to project

performance on a pro

basis

forward is

what likely

the to in

debtors' be. that

financial

performance Now, proof an

there's that

nothing a or

suggests investor So from

standalone any I other is

equity

investor. of Mr. of proof Boken the in

again Mr.

ask, on

offer of

Cieri with

behalf your at

consistent of of the

what was

view

future January I think

company

that A.

time

2006? it can is, I but a if

Well, your

that

that's shot

second

question,

take

now

with THE The

clarifying? COURT: Yes, please. I think I've

confusion

that

create. THE COURT: Absolutely. Sure.

113 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 Collins & A. recall In ever almost any, in fact a I don't

being of go

involved a debtor and

with where as a

standalone the company

reorganization didn't of have to

out

condition secure, to insure required to but

emergence new A, or

secure,

not

secure,

secure either, that level move

additional fund the

financing plan, had or

help

its of

ongoing

operations

the

financial

resiliency

necessary

forward. The situation with was the same at

Aikman If a

the &

following Aikman had was my bank any

exception. effectuated view or that

Collins

standalone would

plan, be

it

there

not

available to

bank-like payments that

monies

available in a

finance or to be to

down

required

plan there

insure

upon

emergence

would

sufficient the of, very

financial and I

cushion had that

available belief

company, A, the

because very, of

fact

that

the

company

was

asset or

light, no asset that a

there value in

was to

absolutely be the had

little number lenders

secured; existing to

two, in

if

fact plan

standalone

114 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 modified same a reinstate my no view in whole that to or in part their be debt,

was

there

would their

virtually through was

appetite

extend

exposure

additional my view

financing, as

and

therefore to using we a to

it

that

opposed

the have to

typical have

phrase I

standalone, to as

would

what

referred that the we as top had we

modified bringing pole the and

standalone, money in at

opposed of the

totem

insuring top, bring the was so in

that to

resilience were going

from to

the have to of it

speak,

money of

somewhere the totem to

along pole, have

the yet the

lines insure

bottom

sufficient

enough

financial

resilience. So when I talked plan, it about a was to than the the as the

standalone as

really referred other that

concept

what

people

traditional that was an I

standalone a to strong have

plan view to

fact money in in

had

going

get

shoehorned in the

entirely

different because I

place just

capital believe secure

structure, that the

didn't and

company bank

could

shop

traditional

financing.

115 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 was asking the the order something asked for. too. I tell to THE understand COURT: my I have to ask you that

frustration, I accept

because

explanation, is not all of

which what

and

understand, -It

comes two

through of

this

either just

these

offers

proof.

doesn't. A. you. THE would that excuse Now, to COURT: like I to And see for I accept that or I don't know what to -what to

that

order

agreement before I

asked the

before

lunch

witness. Rose, it you had E-mailed I

Mr.

me, Did

but you

really it

wasn't

think I

was? that was

MR. that

ROSE:

thought the

provided

summary provided to

information, the Court.

hourly

information

THE

COURT: And app,

That's just which to so I'm a

not the

what

I is

for. fee now,

record on

clear, the

putting

screen

refers by

Court

approved the to

agreement debtors

reached the

and

among

KZCS,

and

U.S.

Trustees

pursuant

116 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 was same in docket the William KZC we at are agreement agreement on. MR. Cohen the DeFILIPPO: of Pepper Your Hamilton was him Honor, represented reached and get and him which the fees by of Mr. the and expenses and that Mr. are as be

incurred members included

Cooper board

LoBiondo to

are and

not

required in

for

review

approval

connection

with MR.

their ROSE:

fee I'm

applications. sorry, I

misunderstood. THE COURT: Court just And it's that that

and/or that I

order can't

approving lay my

hands

time

arrangement to reach to to

attempting to be

down

here

able

have the

his Court as well,

explanation but --

available

THE number,

COURT: that I I

If

there's be -it

just

would can can

I've up.

got I

docket need

here, him MR. if

pull just

don't

have

that.

DeFILIPPO: interim fee

That app in

statement its exact

every I

form

would

note.

117 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. have think he's not has been can to trace reach THE it him MR. COURT: back or for Okay. us. So Were maybe you he

able

no? Yeah, since Ms. Your Kardos Honor

DeFILIPPO: him ever

calling

asked

that

question. THE COURT: And reaching him or

reaching

him? DeFILIPPO: trading the voice I'm not sure. but I

MR. they're aware of THE anymore Is Macher's in a and

messages, this. see if

urgency Let of to

of me the say

COURT:

questions it fair

witness. or not that

employment fairly

by

the

debtor change Boken in and

resulted the KZCS

significant of Mr.

duties in A.

obligations work give for you Prior as CEO, I the my

their I'll to

debtor? own view Macher Becker wasn't day, was the

relative coming was the on

that.

to

Frank Chuck I

board,

recall and

interim with I

albeit day to

involved

the got

company was that of

impression to give

Chuck

trying focus

some

modicum

direction

and

118 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 function leave no believe to the operations. Boken the KZC was team completely, in the main in know and was the I've to a I

completely, liquidity mentioned crash they less than an

completely You

absorbed know, I

issue. that

this but

was when to

something the

akin

landing, had than a

company

filed,

available a day's I

them of

substantially liquidity. literally three, Less from

worth it

day.

mean,

was two,

operating of

perspective

four

hours

liquidity. So for the Boken most and important the by to KZC way front-end team of liquidity into that than for -was to

stone

unturned

identifying and turn

opportunities

create in

those and

opportunities in the to all candor

fact

liquidity, initial other

during other

period how were

operations, mine the to

than

operations I think and

liquidity efforts or

secondary

anyone's were

anyone's because

thinking, if you

they

secondary meaningful

even

identified

operations, if you

improvements, ways to

alternatives,

identified

119 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. going on really efforts, hours issue a I day restructure footprint, any of the plants, modify the couldn't do

without

liquidity

you

those So

things. virtually all of 10, the Boken's 12, 14, 16

mean was

literally, devoted Becker I to

liquidity know, a

while

Chuck from

was,

you in

overseeing relatively

what

gather the

tentative When

way

operations. on board there the

Macher

came

wasn't

seismic was

shift,

because

liquidity pressing. Morgan go and

issue I

still know

unbelievably you recall, but

don't DIP

if

the with

lenders $300

actually million

didn't

forward

their

commitment. THE They and with risk it to COURT: were I do recall at of that. was

looking because you

what our

frankly them

openness going that the to back need

they,

know, When

were

not

another made the

150.

they issue

cut and

liquidity liquidity

generate

even

more

pressing. So Boken and Boken's team, other

120 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 doing agree all with a contract we're so than create, of you know, out of bits some and of the

pieces initial

imperfect

information for the DIP,

projections were lack best of a

which you of to

candidly know, a

estimates

given, a lack

information, lack on of that flow, area

organization, focus for

continued and on

months the an You for going

generating essentially

price

increases, activity. mean, part it no

which

was

offline know, a I

there and from

would

be

piece to move was

they X to

would 1.4

say X,

there

really

seismic was

shift.

The organizational brought assumed business his in a

seismic where new

shift

more in and he

Frank and for that

came that

team,

team the and

responsibility plan because

developing was

Frank's

team's

backup. So of had that -at had the Boken front and KZC been I

end,

then a

you,

there

would

have

been

meaningful hadn't

seismic been was

shift, the just

but

since of

that

really it

focus

Boken's here's

activities,

essentially

121 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 a if you the that never or KZC's as the operation THE and it's your So show. that the given mean was it

COURT:

does in

actual as

function the in

case to

broad it

duties the to of

that

assumed which all

services decisions management business? never got as with

agreement, respect and to

were

make the

aspects of the

operation A.

debtors' -it

Yes, as the

it

never

broad ever.

initial

services

agreement,

THE witness? MR. please.

COURT:

Anything

further

for

DeFILIPPO:

Yes,

Your

Honor,

CONTINUED

RE-DIRECT-EXAMINATION

BY-MR.DeFILIPPO: Q. about Mr. the Cooper, the Court by was asking of

establishment

the I

board would

special you --

oversight to turn to

committee. Exhibit

like

4-D,

it's

in

volume A. here. Q.

think

it's

this

big

guy

up

Eight?

122 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 that shows that the have it. BY Q. set Court MR. DeFILIPPO: Would of if by you turn Mr. to page three and a of A. things. Q. 14th, A. It's 2005. Right. THE COURT: Hold on. Okay, I the board minutes from July I think I have a bunch of four

minutes, those the this

Cooper,

tell

minutes board on

contain that

resolution

date committee

establishing the Court A. Q.

special you

oversight about?

was Yes, Does

asking it

did. refresh your fact a

that to

recollection special by the A. completely

as

whether committee

in

oversight board? Yes, it

was

established

does. about Is

just

had

forgotten THE who COURT: was

this. there to anything that

appointed

committee? MR. DeFILIPPO: Not that I'm

123 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 will And to make do get you to? please. THE it COURT: bigger a so Here it is, can and see I it. me on page
.

aware

of,

Your THE

Honor. COURT: that for I would if like you to can for of know

the

answer

to

question, me,

research me and

that

investigate who the

that chair

maybe

let

me

know

that

was. MR. DeFILIPPO: have the I will do to so. restore

Does to

Your

Honor the

ability 5th, I 2006 do.

the

Elmo

January

proffer? It's

THE right here. MR. find a way to THE too. MR. on 25 with Mr. THE 25? MR.

COURT:

Yes,

DeFILIPPO: get to page Yes,

Could
.

Your

Honor

26? I can do that

COURT:

DeFILIPPO: Novikoff's COURT: You

Actually

starts

statement. want me to start

DeFILIPPO:

Yes,

Your

Honor,

everyone number

have

line

you

want

124 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 or we wanted that that page Mr. at to MR. DeFILIPPO: Your was ask at Well, and a I just witness at to ask

orient Novikoff and

Honor making Your line

the

Mr.

statement to I move would

hearing
.

Honor one.

26

starting to

Cooper that

read and

Mr.

Novikoff's whether view

statement it as capital is

time

indicate

consistent expressed, in a

with the

Mr. need

Cooper's for

additional

standalone That's fact there be he is

plan. consistent with my views,

A. in not

notes an

specifically out

whether that

investor

there

should BY Q. MR.

seeking.

DeFILIPPO: Who will put capital into the

company? A. notes deal and the that I that of Yeah, the and I think will a up need above a he

company to be

great

capital see

viable the

competitor, course up to of be

didn't

throughout bank

proceeding source Q. of

the

stepping

capital. just one more thing. I know but

And --

you're

these

books

are

troublesome,

125 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 to to if 17. A. Q. could that turn you A. Q. the A. Q. performed that just They're And if just you're the big. there, services about. if you you wouldn't mind going back to Exhibit

back

to

agreement

were

being

asked

Right. Are section you there? If you go back

2-B.

Right. The Court as asked broad to you as if the KZC ever

services 2-B

mandate and I

section want to

appears you at

give

it,

focus

in the

on

some of the

additional first that

language in

bottom the to do

sentence starts, by

2-B

after only

paragraph

"subject the

appropriate you see that?

governance A. the Q. him A. oversight by

board," is

Yes, board. And the Yes, and MR.

which

why

Boken

reported

were

Boken's

duties

directed

board? typically there was

broad

direction I

given. have nothing

DeFILIPPO:

126 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 not. Q. committee A. protocol. Do ever I I you know if the special application? no. Q. A. No Or resolutions? resolutions, no. No, I'm any ever questions. /// RECROSS-EXAMINATION BY-MR.DAMREN: Q. As a member of any the board, or on do you further, Your MR. Honor. DAMREN: Judge, a couple of

recall

receiving the one I to

reports

writings

from the No, And

special we just

committee

oversight, A. Q.

referenced?

don't. your knowledge board of the are there forth

resolutions on

from the

the

setting

limitations its scope

terms

engagement,

of

it

under

the

services

agreement? A. I'm not aware of any writings,

approved

the

fee

can't know

recall the

the

exact general

company's

127 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 not? A. I have of nothing my prior to do with the director A. A. counsel, copies believe members believe assumed members Q. knowledge A. Q. director? A. Q. A. wouldn't Likewise, And you've completely been not, indirect. of internal the fee with general counsel, and got I board I I

applications the to

dealt with was that

appropriate them. but the

respect the the

That -and

protocol, board the or

relevant

approved You of

fee have that

applications. any direct do you?

don't of

any

though,

No, And

it's what

completely about your

indirect. fees as a

paid. otherwise we

Apparently be here. COURT:

THE

Otherwise we wouldn't Well, to

what? be here. as

Otherwise THE were COURT: not I

your Court

fees

subject assume

approval. paid. or

Then THE

they've they

been paid

COURT:

Were

administration

organization,

128 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 the then other make yes, a I I be have have you from on sir? MR. THE the DeFILIPPO: COURT: witness I'm stand we can No, Your to Honor. excuse you to Your if Honor. I assume I to they have been, would but have I

they

hadn't,

assume me, but

someone in all

said don't

something know. THE MR. THE

candor,

COURT: DAMREN: COURT:

Any No.

other

questions?

Anything

further,

going but get we

ask this

remain issue

standby down. at

until So this

other with

pinned

proceed

another

witness MR. some some

point. Well, into Your Honor,

DeFILIPPO: to I move

things

evidence. need 64 I and -to to

exhibits up and

think in.

that 36,

cleaned

moved

THE list

COURT:

Hold got

on. 36

want 64,

here.

I've

what

else? MR. these side. THE COURT: Is there any DeFILIPPO: have all 69, been 70 and 71. to

provided

129 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 haven't Honor, no those had see if one Honor, if clarify between a them, Your objection those five to the admission into evidence of

documents? MR. ROSE: We have to look at

Honor. THE MR. COURT: DAMREN: I was Sure. Judge, the we just to

point,

thought unless we

understanding filed no and were assumed going to an

counsel to to an it

objection objection that be all

exhibit, being

had

admitted exhibits

non-objected of the MR.

part

hearing. DeFILIPPO: have My that then list, Your so

just

didn't

clarified, I assume

that's

the

agreement,

they're

admitted. MR. of MR. not MR. DAMREN: our -My notes indicate I'm just looking to

DeFILIPPO: been ROSE:

admitted Yes,

yet. they are, Your

objection. THE COURT: been All right. they If they now.

already MR.

admitted,

are

DeFILIPPO:

Thank

you,

Your

130 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 are to and and object Mr. we once would we Honor. We designations from well Capstone as from have from to Mr. some Mr. go deposition and Mr. Chadwick as

Nurge

through, who

Your was who and

Honor, the fee in

Caruso,

examiner's Chicago can and

financial works his a in

advisor Chicago

lives I

think

quote

from I

deposition binder to

designations. hand up, I but

have

know to one

whether call to

they're Your

admitted

like

Honor's from a Mr. question

attention Nurge's Your

particular that

item

transcript had THE

answers

Honor

raised COURT:

earlier. Let's do the

designations

first. DAMREN: the Judge, we're for here going Nurge court

MR. to

designations who call the are as both

Mr. in

Chadwick intend to

witnesses, is of

and

don't these

know

what

basis

admitting

portions MR.

of

deposition. Your Honor, and these they

DeFILIPPO: by a party

admissions

opponent for the

provide

important

evidence

applicant

131 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 Peter of the one at a to use in to its take THE time. case. them We into intend account to as ask part them Your --

Honor

COURT: What

Let's are the

discuss two

witness's

names

again? MR. Chadwick. DeFILIPPO: Mr. Nurge Peter is Nurge and

the

Trustee is the

Post-Consummation and Mr. as

Trust

which with

objector, in his

Chadwick the

works

him of

capacity in them the in his

managing

director the

Capstone both of

administration employees Chapter JP of 11

of

trust,

were

Capstone case as and agent

during worked for

debtors'

representing the DIP

Morgan the

both

lender in in

and its

pre-petition protect its

lenders position

efforts cases. of are the

to

these

As

representatives Trust, they

Post-Confirmation opponent. admissible Your you Honor. -THE MR. Their under I

our

party is is, if

deposition Rule 804 I

testimony think it it

can

identify

quickly

COURT:

That's

not

necessary. you.

DeFILIPPO:

Thank

132 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 that hand to up the record sections. THE or MR. our a COURT: maybe Can you you put in we those on let you go Honor, Honor about and had -THE COURT: are Hang you on. Before I overruled deposition as a fee MR. DAMREN: to I just regard this

application

the

Court going I the

where on. think of

there's We've that the

no

adversarial to their

claims fee. in

objected makes us

don't sense

adversaries

Hearsay

Rule. COURT: the Court Objection will is the

THE and

permit

designations. MR. in DeFILIPPO: that Mr. context Cooper Thank I a you, Your Your

would,

asked

question

there,

designating

the

entire

depositions? MR. DeFILIPPO: No, just

have

it

writing? provided to

DeFILIPPO:

Yes, and I'm

adversaries with

prepared

binder

all

the

designated

sections. THE COURT: Let me ask you to

133 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 that there rule is a record's review of permission trimmed do that. here? MR. substantially THE down DeFILIPPO: trimmed COURT: this? Yes, I to Your Honor. down. All right. So Yes, it's Is that different than what I

have

from

MR. THE to MR. MR. clear,

DeFILIPPO: COURT: return Can this

have you

your then?

DeFILIPPO: DAMREN: we're

Thank

you. so that the of the you Rule

Judge, going to

just ask

the

entire

transcript Federal

under Rules

Completeness

106

Evidence. THE COURT: that Well, way. piece I I don't think think if have

works

particular that in a of you more the

that

they to be by

designated understood another ask to me read

think

needs

complete

form

piece to

transcript, but just

you to

can ask to me

look

at

that,

the is

entire how

deposition that rule to

start

finish give

not an

works, make

and

I'll

you

opportunity

those

134 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 handed for him that one? MR. THE DAMREN: COURT: in No. And tabs will the one Court was 19 as works in is a that one. MR. witness DeFILIPPO: who is Your Honor, His with the he binder designations So that's at your convenience. is clear, to and the has are

the now

record been P. 82

handed Nurge and

me

sections numbers one here

designated one through 37. F.

there P.

then a

Chadwick in

through called

There's Caruso.

also

section

MR. THE

DeFILIPPO: COURT: We

Yes,

Your

Honor.

haven't

discussed

unavailable. in accordance

deposition rule and

was

taken

-THE COURT: What's his

unavailability? MR. DeFILIPPO: and He lives and his

Chicago

couldn't

require

attendance. THE COURT: Any objection to

designations and the

through those

Court

accept

135 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 who proceed parties, you one that about of I our rights to turn to want to well. Now, tell MR. tab and 29 in me what specifically sir? To ask you to Your me, did you

about,

DeFILIPPO: in the

Nurge a

section,

Honor, Mr.
.

answer

to at

question eight Mr.

from on

Nurge --

testified 8 on I

page
.

page I've

125

line

page have to

125,

Macher on

been

told,

and was and

witnessed tantrums to

occasion, theatrics he got

prone would his

and quit unless

threaten

things With as

way. Your in Honor, the subject to

that, set

forth

pre-trial we rest. we

order

call THE with I a

rebuttal COURT: proof to have

witnesses, All from a right. the

Before

the

objecting with

want

conversation not not he on

witness lists, Mr.

that's at least

either list

your saw,

the still know?

Macher. is he?

Is

around?

Where MR.

Anybody May I

DeFILIPPO: think, is Your

inquire, Mr. his Cohen, firm

Honor? we

Honor, here,

understand

coming

136 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 Boken about is the p.m.) MR. DeFILIPPO: to Your Honor, Mr. afternoon and then robe, Your of those. MS. KARDOS: Might prefer your Your he's on represents tell us Mr. Macher. We think -Okay. And you say He he can may probably be in this

that. vicinity THE his

general

but

COURT: over?

way

MR. MR. Honor, about tie. THE

DeFILIPPO: NATHAN: he's on I

Mr.

Cohen to

is. him, He

talked way he's

and 10

his and

over.

needed for a

minutes

looking

COURT:

can

give

him

one

Honor. THE COURT: now Let's and take an at 2:30

recess we can

reconvene with the

proceed

objecting

party's

case. (Recess (Back on taken the at 2:15 at p.m.) 2:34

record

prepared

answer of the

your

questions

operations He's much

oversight familiar with

committee.

more

137 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 try, under sure. oath, that than Mr. THE You Cooper COURT: may be is. We can give that a

seated,

you're

still

sir. DIRECT EXAMINATION

CONTINUED

BY-MR.DeFILIPPO: Q. Mr. of Boken, who what's your of the by the

recollection special board A. Mickey Q. Court what in

the

members

oversight July The Cohen

committee were?

formed

2005

oversight Tony you

committee

was

and

Hartwick. describe did to the to

And

can

that its

committee

in

order

discharge A. through they

functions? fee application counsel, fee all period Fox, the and

Every the

general our with

Stacey

were

given of it,

application, the

entirety then they

exhibits,

would and

deliberate then call either me with

amongst Mr. any Cohen or Mr.

themselves Hartwick they items where had, that they

would which were may

questions to

related in have the had

both fee

specifically

application and also

questions,

138 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 fee been date. OPENING opening proceed E-mail Mr. Cohen right, further, questions forward about my views on what for have the going

requirements MR. Your THE sir,

would

be I

KZC. nothing

DeFILIPPO: Honor. COURT: may No step

questions? down. Thank you. Any

All

you

THE THE yet? MS. that

WITNESS: COURT:

Okay.

sign

of

KARDOS: on his

just

received

an

he's

way. right. Let's

THE with

COURT: case,

All

your

sir. Judge, I reserved

MR. and I

DAMREN: do have a

brief

opening.

THE

COURT:

Go

ahead.

STATEMENT

BY-MR.DAMREN: I think are in have our objections narrow the to the have to

application suggested We do of

more of

than

some a

testimony of it all on a

great work, and

deal but

criticism relates things.

Kroll's all comes

and

focuses

few

139 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 eight the plan through if was done this that went less their from than First fee, $300 a let's their million start with the fact

forecast to 100 I

for

EBITDA in

million will to be the

year.

Second,

directing plastics that most out that

the

Court's

attention is the

division, had

which

division was the

always

the

problems, and

which we will

important the has

division, red

point

numerous been

flags

that

existed been the fact into

admitted,

that

have to

shown, that the

that

constantly needed to

pointed a deep

there

be

dive

plastics

division. we'll point of Tim out the fact that it

Third the deep

testimony dive had

Trenary

been done,

done if with a

earlier, had

certainly, earlier,

easily the

it

been

problems that it

plastics broken have been

ultimately division, discovered at a

being and

was

couldn't before

work, at

would two

long

maybe more. the

months

minimum, Tim

maybe

much

Trenary to

after meet did

four

by in

failed two

its this

forecast deep dive

first

months

140 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 has into plastics. he He went his out and interviewed Kroll, folks and had

people, his team

assembled out

team,

not

went hard

and

interviewed that and just

asked never

the been

questions before,

apparently what he

asked was to

discovered wasn't it, it up

plastics job

couldn't, set at before the

the

that

was

couldn't that it

possibly was being been

perform asked done is

levels This

to

perform. before.

work

could The

have

long

fourth its of

item

that before

Kroll this a

produced in of

in

exhibits its fee

Court myriad spent

support

applications time was in a it

documents various this

illustrating things. to do It so

doing by

permitted generic of in

Court

more

fashion

with

block

billing what did a

instead really whole is

specifics, front of of

but

nonetheless is we

the

Court

bunch

work. What is hasn't been brought before

their

work

product. about work did

We've about

asked where what

numerous it can is, you

questions is us,

it,

what show

this what

product, you do, who

141 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 of job whether was to as suggesting basically little and have does this bit did you talk yet But to, what were the results of

that,

and

there's the

nothing

there. is a money

case than

actually just

bigger

about It also

the

this

fee

application. in we other will been

will it

implications discuss, case, and

cases, have

because

resolved to as

in the

what

has

referred

process. On to the the one hand Kroll it is was the

Court the

that job of

assigned of the

supporting but the job

projections of a

forecasts, an be

financial

advisor, is to and

independent a sceptic, to did

financial challenge, not do

advisor to

push, and by

apparently when it

Kroll

that, done the and

apparently Tim Trenary these

that

was

finally exposed suspect very

easily were

fact were

that not

forecasts from

justified

the

onset. So or get has it will the be a good discussion of Kroll's the as

not

attitude to buy

people been

into to,

numbers,

testified

142 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 fact by we'll that's get and while opposed them was to be a professional merited. we did have a conflict, sceptic about

really And some

here of

those

issues

were of the

resolved special conflict

through committee was

the to

appointment review fees, in

the of the

still of the a the

inherent

terms advisor

independence reported reported important to to

financial

who who were

restructuring where

committee, bosses

board

whose

members. And to finally, the issue as of You to the process,

transparency will that as hear the it has an even in

been in

discussed. a few

testimony

moments quite but

transparency been more

was to

not

how

portrayed important

date, of

perhaps is how

aspect

this in has

transparency

should is,

work as

this been

situation. discussed with whole the It clients will bunch

There Mr.

Cooper, You

problem have a to

transparency. of different

can't

parties all

running the

company

asking

questions with

time. My

interferes

operations.

143 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 that we to which many came hours to party's efforts the due as indicate that. people on. But not of the key to factor here is, the to do was each that they were not told to was not talk to to do plant and so

They

were

told

except

when

Kroll

around

supposed others.

duplicate not

We're that we

supposed

diligence financial entitled Looking in

assumed and upon fee we

Kroll were

doing

advisor, to at rely the

certainly

that.

applications can see how

periodically, is spending

you on

Kroll due

issues as

related Mr.

diligence, it's we

and

certainly, to $1.4

Boken in as

testified, time, an the time

close thought

million acting and

they

were

independent evidence as a

financial they of

advisor

time

shows

were Mr. Macher. in what

acting

merely

supporter Judge, Court what we to we a

Finally, regard for told, the

will focus had a

ask on

weren't rely the

and

right to rely

upon. public the

We

did

have the of

right

upon

records,

engagement Boken and

letters,

engagement

Mr.

144 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 a Peter the in close fact process, there's in Kroll set and the what of engagement their of Mr. Macher were, We to what had

forth

obligations

their no as

areas that been

responsibility would have We

were. been no a

idea has

they

narrowed idea

suggested. wasn't

had as

that

Kroll

functioning

full-fledged

financial that be too the

advisor. is part of a

And should an

process

whenever advisor not be to is

independent His

financial should have no a

existence. Other them. of due

work

limited. rely the the on kind

parties There's

right to

need that

duplicate into

diligence of

goes

preparation And of

forecasts. those reasons, we will be Judge, ask at

for this

hearing

that in

the

fee

application Thank as our

denied

significant

parts. We call

you. first witness

Nurge. PETER witness duly NURGE, was thereupon having the called first

herein, to and

and

after to

been the

sworn truth

testify nothing

truth, truth,

whole

but

the

145 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 Bay, was examined DIRECT and testified as follows:

EXAMINATION

BY-MR.DAMREN: Q. A. Q. A. New Q. A. Please Peter Where I live state Nurge. do in you New live? Hampshire, Alton your name.

Hampshire. What's I guess your you current can occupation? it

call

semiretired. Q. work? A. Capstone. the have I do consulting a trustee work via for of and I Are you doing any consulting

I'm

Capstone Trust to

Post-Confirmation one other

Retirement unrelated

project

these

matters. Q. educational history. A. University. accounting accounting at Sure. After one I have that of I the I a BBA went major more from into Case public Can you tell the and Court your

background

employment

public than 13

firms.

spent

146 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 them I and through Manzo when years short joined there, stint a left as a that single in 1990, and guy after I which a

shingle &

firm in

called

Policano

Manzo

specialized work. I the

bankruptcy

financial

advisory

was time

with that firm

Policano Mike in

&

Manzo and

up Bob

Policano 2000, part

sold they

that sold

about

and FTI

that

became

of

Consulting, firm.

another

large

financial

advisory

After two

a of

couple my

of

years

with

partners and give its

started we started

Capstone it I

Advisory them help I get

Group would it and on

when them feet

told to to

three and I

years wanted what I Q.

retire

that's

pretty

much

did. What has been your or experience their

advising

troubled

companies

creditors? A. years of Well, pretty for the last 17 or all 18 sorts but sorts

much work

I've for

performed

advisory for

largely

creditors all

also

companies,

manufacturing,

147 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 call came of industries. you might Some have of the of prominent are cases

that

heard

Adelphia and then you

Communications, the may auto have

Cumberland some are I of

Farms, the ones

sector, heard of

that

Federal with

Mogul JP Morgan a

Corporation, few years

which

did

ago, JL

Intermet French,

Corporation, Meridian,

Breed was a

Automotive, plastics and in a the Q.

which

manufacturer, others,

Cambridge

Automotive, companies

few

including

other

auto Do

sector. you have any professional

designations? A. certified Q. to be I was a CPA. I was a CIRA, a

insolvency Can you

restructuring us how

advisor.

tell

Capstone &

involved

with

the

Collins

Aikman A.

Company? Sure. there JP might Morgan be a got a phone at the

that &

problem was with called in

Collins auto

Aikman, and JP I

because had

it

sector at I

worked she

Ann me her and out

Kurinskas asked should if

Morgan,

would

consider

helping to

there

ultimately

prove

be

an

148 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 one the as issue at Collins very Were than JP I & Aikman. after Things that. entities

unraveled Q. other A. was

quickly you

representing

Morgan? two JP clients Morgan in on the case, of --

had

initially

behalf As also

pre-petition it progressed JP was Ann to

secured to a

lenders. I

the

filing, as DIP

represented although done she her it

Morgan --

lender, was

and all

communication at JP

through reported

Kurinskas two as

Morgan, within to issue

different to

people as

organization it a was a

elements,

whether versus issue. Q.

DIP

credit credit

agreement agreement

pre-petition

Were

the

interests in

of

these

two

constituencies A. Q. overview A. mostly making make In Can of a

different lot you of

some

respects?

respects. give us an

briefly

those? The about that DIP not they lenders losing had were money on

Sure. concerned new to loans

agreed they

to got

and

monitor

and

make

sure

149 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 developed quickly, was, from as money -our had job to their $150 million The in this case repaid. the and the was

pre-petition left see the what

lenders, building would how be to to

already was get to

best

way

it

back with

and

maximize claims. Q. involved

recoveries

respect

those

What to get

did an

you

do

once

you of

got the

understanding

situation? A. the We met with management that the historical to get a as had well been

professional in, got We

advisors take

brought

their to

on

situation. financial hold of,

tried

review

information tried and to get

and our

tried arms

around We

collateral, knew we

cash to

in

particular. what the

wanted

understand potential but we

profitability the from company that.

and

profitability a long way

of

were,

were

Early

on

in

the not

case

which very

relatively, in a matter time we

relatively, days this

of

company the

the

were

hired

150 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 ago, the there DIP case were company was out we of money, to needed put to file a a DIP

bankruptcy, very

needed That

together the it

quickly.

DIP

primed so

pre-petition great

secured to

lenders,

was

of

interest

those the

lenders. first our months of the

Literally spent

getting to

arms

around was

liquidity, really cash

trying on

understand company what to

what on do

going

at

the out

managing with the

and

figuring

company. Q. focus And primarily what upon period of time of was the the

liquidity

company? A. time, 2005 from up and It was an extended to the period filing of in of was May

just

prior

through

the and were

completion I think it

customer November

agreements, 2005 there

extensive

discussions. There were was comments a few moments

irregularities didn't fully

disclosed, $300 was only There

lenders of to their the

fund It

million funded

commitment. of $150

extent

million.

151 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 was those were to extensive negotiations to the with the of OEMs as

contributing and

survival cash.

the

company

providing were

We

intimately because in to

involved

with the I

negotiations collateral

they

impacted And

lenders' think this with a

large note we

respect. that

it's period the

important of the that

during happy was I

case Kroll

were

very

work

performed. painful, of

It

very

difficult we got --

task, never ball phase the

very ran and of

and

think never

out

cash, not

dropped to

the that

we're the

objecting Q. put A. time, but

case. team that

What

was

Capstone

together? Well, there My in it varied a from time of key who was to

were

couple on the

players. the time man was

right the

hand

case

field

pretty

much

all an

the

Peter

Chadwick. with

Peter's Capstone at the on

executive was a

director

now. earlier for a

He

managing in the

director case which

points time.

ran

long

Joe

Vizzini,

Al

Norman

and

there

152 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 the I were at different junior of the times four or five other

people, elements Q. A.

people case. was

all

handling

different

What My

your was to

principal provide

role? industry

role

expertise, quality that the

oversight, help be of

client them

communications, the work be

control, should member Had before? Frank CEO I at

plan and

they senior Q.

doing the

basically

team. with Frank

you

ever

worked

Macher A.

Macher Federal very in

was

for

period was

of

the case see

Mogul,

which so

was Frank How

involved action at

with;

yes, Mogul. with to the

did Q.

Federal

did

Capstone & Aikman

interface with

Kroll

and

Collins and

respect about

securing company? A. early, this,

reviewing

information

Kroll which that we to is

set not

the

ground in

rules a case of

pretty like

unusual to direct

were them, it

all

our the

questions data to and

they with

would us or

organize if they we

share to

needed

talk

somebody,

jointly

made

153 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 work the was people answer they available our from time to the were to time to that the

questions So the

extent sort of of

couldn't. focus,

they

central

clearinghouse sort of thing. of

information, Q. cash doing well

that

During

the

period in you

time

when Kroll

management the job

was

crisis

and

that was

believed given or

was on lower in

quite

done,

any

focus

interviewing level

plant or

level even

managers

employees

mid-management

corporate A. in a

offices? Yes. vacuum from We or would to prefer not to

solely

get

our not

information that it, talk there to I but to

professional accuse did get them

advisors, of

would we

ever

coloring and but

often

information of

other a

people that

outside was

Kroll, We

was

line

drawn. a

wanted

tour

some

plants of

and

get

greater at they bunch the drew of

understanding plant the level and

what for we

was

happening part a

and

the

most

line

said

can't

have around

financial

advisors the

running

interrupting

plants.

We

have

lot

of

154 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 with a then second, tell need you me to can BY Q. that I the work was going Kroll on or there Macher and or I don't know if it

who. they came 2006 in up plan with in

Generally initial of, that -or

until

the

amended yeah, huge

December of 2005

I'm

sorry,

December savings said, these the we cost

reflected it how

cost we

opportunities, have no idea if

wasn't we can let

until

evaluate us visit

savings plants. Q.

you

won't

What THE have

about COURT: to

-Excuse me, one When you I

interrupt

you. or

about know

conversations who

statements, said was it, said. if

specifically and when it

remember, MR. DAMREN: With was

respect put on

to

the to

limitation visit can with

you just had

not

plants you and

that us

you who

were you

discussing,

tell when? A. my

conversations

My team

conversations who were and out

were in

principally field the on

the

day-to-day

basis

were

making

155 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 really we in requests, my team, be Q. A. so Mr. that feedback who came I to me from

Chadwick,

understand

will

testifying Do The you

later. have a time frame? have of visit, and I been

time

frame 2005.

would Kind did

September/October -we

arrangement think soft it trim

ultimately plastic in of late the

was

five

plants

five

plants because but our to at

November, plan was that

early was at cost was a

December upcoming, those

scope

limited the it

plants

reviewing those

solely and to

improvements bit of a

plants so

whirlwind you any

tour

speak, they

fairly are,

structured, do you have

know,

here's

what

questions. until bed in after July things 2006 that

It fell

wasn't of

out

said,

okay, on

clearly at the the

nobody plants, plants

understands we insist

what's now

going to

going Q.

visit

ourselves.

What

about

information, if at all, to when you? was

plant-level that

accounting, made was

information A. There

available information

available

156 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 January hundred again eight more to and of which in -I'll was on an historic sort of basis from The plant only ledgers we was and had in

that

thing.

time

trouble

with

plant-level certain

information of the

connection

with

financial

projections. So initially the topic top of for the 2006 plan, was

call this

down

plan

that in top on

discussion it was a

December plan they

of

2005,

because have it a

down a they

didn't

necessarily fashion us. get I'm that, it

plant-by-plant were willing We

basis

in

that

to

share

with did

ultimately I

in a then plus much

2006,

believe. on

not but

percent we

certain the

when plan about, it

got

critical we'll

four talk

that that to at

I'm

sure

plan, on a on

again

they

declined basis,

give

us

plant-by-plant a plant by

looking would

that

plant some

basis of the

have

very

quickly

disclosed proved to

issues

that

ultimately

occur. Q. Exhibit I'm 3-L going 3-M to and refer I you to ask Ms.

and

would

157 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 book BY Q. forecasts that you any post Chang and to help you find it. I'm sorry, 6-L

6-M. A. Q. A. Yes, Have Yes, I'm you this looking seen is at 6-L. 6 L?

Exhibit the, that I'm

sorry, required was

closing to by

date the the

budget

was that

pursuant prepared Q. A. closing under Q. these --

DIP

agreement

company.

And 6-M date DIP I'll

6-M? was an amendment also we to the post it

budget, credit

required

the

agreement. to some specifics in

return

THE has MR.

COURT:

One

second, me

please, Okay.

fallen DAMREN:

apart

on

here.

Both for of

of

these and two

documents

contain on

2006 the

beyond, budgets,

focusing what to

aspect done work up or

had review

through to that

December any

20th the

discuss the

of

proposed were

projections making? A.

company

and

Kroll

We

were

provided

with

these

two

158 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 with on that budgets 20th that I prior guess to is our the meeting -2005 on was December the date the

you're of

asking the

about. with

We

reviewed with

details other We on did

budgets and

Kroll,

lenders our

senior

management of what terms was of

team. going vehicle

own the

analysis industry We did

within

in

sales

rates.

some

performance historical the here think that was proviso was

analysis results that the

comparing, where we

you

know,

had

them

with

historical suspect, at the

information we didn't level

somewhat

but

necessarily true.

plant

But

we

did

performance tried to to

analysis line

historical up as but as a best basis was was we the a

basis, we

things and use

could

understand the it a was

for a --

evaluating a on lot of

plants,

it

comparing flow cash and side

what what of

going was

from

cash on they the were

saw

happening to what

business

projecting Q. Kroll

from

financial the

point

of

view. had

During and

meetings management

that

you

with

discussing

159 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 Exhibit, that that my these to two exhibits, prior to and I'm now 20th, referring what and two was

times

December of

your

understanding in and the

Kroll's

role of

obligation documents

preparation

these and

management's respect to

role the

obligations these A. two

with

creation

of

documents? With respect is to the 6-L was at the exhibit,

understanding

that sort

Kroll of

intimately ground phases because

involved so to

from, and that in

level, of of

speak,

all

pulling the

together of

information, of personnel the

absence and by

lot

financial turnover company

personnel engendered

operating the trouble

was

experiencing. respect that could and his to my the subsequent is

With 6-M,

for role

understanding that by

Kroll's time

change, team

Macher some

had

put

together

rehabilitation with and the

and to

profit fixing plans they the

improvement company's were now

plans

respect that

problems, baked into 6-L

those

budget, of

which

weren't

in

the

version

the

budget,

160 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 but I also believed involved team that in the Kroll of was vetting of the for its a for with

intimately the

terms

management its and use,

results

budget, success, intended

reasonableness, utility which plan as was or a to

prospects basis help the for

start

restructuring sale. Q. Kroll A. vet

market

company

What what Kroll

was

the

importance was

of

having

management has been many in

proposing? the and is one

through times these is to

restructuring of the

process

preeminent and

firms

kind bring

of that

situations, professional how make things sure

their

job in in

expertise work

terms a

of

knowing to

really

bankruptcy get so to too

management their

doesn't

rose

colored keeps the it

with

glasses, they

speak, how

real,

because is

understand to be used.

information So we

supposed

believed to vet

that the

their projections,

responsibility make sure that

was

they

were

supportable, were for a suitable plan of

reasonable for

projections purposes

that and

marketing

161 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 them, they a guaranty things for reorganization. Now, of can a that's not to in say any that it's

performance and will

respect We're not

and

happen. but we

looking

guaranty, they

had

the

expectation about work them. these on the

that

were

knowledgeable done stood a lot of

projections, projections,

had and

behind

Certainly presented they

when them

they

presented with

jointly the used

management, with these,

supported they

achievability the comment were not

although but the of we

aggressive, integral the to

believed but

that they

they were

process, the

preparers Q. The 22nd

latter

projection. 6-L, you is to, dated if was had a

first and what I

document, won't the ask

September you for can 2006

recall in role

EBITDA that than

number Kroll the

that in

document producing

greater one? A.

next

prefer

to

refresh

my

recollection. Q. Well, I think it's going to be

162 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 that $265 with 2005? A. It decreased to approximately necessary you, Mr. A. Q. revision, go to to back it out. Let me assist

Nurge. Please. It so gets let's I backed go to out 6-M, in the if you

and a

page that

six

think

there's the the

chart were that and

there in

indicates for a 2006

what

changes budget

EBITDA had

between role in had

Kroll the

greater

preparing its own

one

that

management costs was and

suggestions earlier. under A. Q. the

or

what

you for

discussed 2006

What Kroll

the

EBITDA

plan? million. that increase in or decrease of

$302.3 And did

respect

to

the

plan

November

million. Q. Now, post did after you date reviewed budget the November the

revised 22,

closing you

of

2005,

have

concerns

about

projected A. the

EBITDA Yes,

for we

2006? We were concerned with

did.

company

was

overly

optimistic

163 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 respect to what could be achieved the of up given its

management results the and

deficiencies, the that nature had led

historical industry the phases of and

the to

events

bankruptcy bankruptcy Q. management your

filing as Did or

and

the

early

well. you with have Kroll any discussions respect with

with

to

concerns? A. My and I team had discussions on with a daily aware

management basis, that we and

Kroll

literally Kroll plans was were

believe the

well

thought and Did

overly

ambitious Q. meetings? A. meetings, discuss for our it

unachievable. you attend any of those

I but

attended the a

certain

of

the to

principal meeting

meeting we

was

that to

requested with

steering and

committee was

meet on

management 20th of Q. steering

that

held

December

2005. And did you meet with met the with

committee and

before

you

management

Kroll?

164 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 that you more A. Q. A. Rodney Vance, I'm Yes, Who Ann Raeburn, Mark I is did. on the steering a fellow from committee? named Eaton and

Kurinskas, David from

Aloise

Cohen

Deutsche the top

Bank, of

and

missing

somebody fellow. long

off

my

head, Q.

another How

did

you

meet met

with with of

the

steering

committee and

before to

you

management

Kroll

the

best

your

recollection? A. than Q. what had A. wanted plan. they the to It an Did the was probably a little bit

hour. Kroll topic for? We to we had told them their we 2006 and of and was management at the know that

meeting

asked

Sure. talk

them were

about getting

Because had flown

together and a and we

in,

Frank it

Macher became

some

management

team,

full-fledged talked they off about on

steering a a wide

committee range of

topics to

and head

put our

presentation of the

trying plan.

criticisms

165 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 that of of a were Steve to Q. the Why best took At And of don't your we just go through The it

recollection.

meeting A. Q.

place

where? Lipton's Kroll offices. who for

Wachtell who for the

and

management A. there

attended John for

meeting? Leonard LoBiondo that

Boken Kroll.

and

It's at

possible the very had to of

Cooper of

was the

there

beginning I'm From not a

meeting percent was

but

leave, that. I if

hundred it

certain

management Marianne was may

Frank I at

Macher, don't that

believe Tim not,

Wright. there have You put yet been

recall time

Trenary but Q. he

or

there. that

Okay. first and

indicated on a

management management

presentation, put was a on a

Kroll you,

first what was Kroll

presentation A. the wide

for

that? agenda together a plan were

Well, company range

there and of

whole put

had

issues,

including how

reorganization with various what

options

and of

they and

doing

elements going on

cash

liquidity,

was

with

respect

166 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 know to was marketing a big of of the of company ours, for but sale, a good which

concern it was

portion about

Frank

Macher to

speaking profits the up to

the of

opportunities how, at well

improve how not

because

frankly, were to

operations

the

plants so

contemporary Q. concerns? A. Q. that? A. advance, be a

standards the

speak. satisfy your

Did

presentation

No, Did

it you

did let

not. Kroll and management

Sure. because I

had knew

prepared this a was

in going to

contentious point in the

issue, outline

detailed I in used as I a

discussion reference had also to

that and

meeting, with my

which

shared the

steering I

committee through

prior that

meeting,

and

walked at my of

discussion made to

outline the and

orally of

the

meeting,

best

recollection points Q. Exhibit

each

every

one

the

therein. And 6-N, that outline next is one marked in the as book.

the

very

167 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 really you need you Let the me ask you to confirm -that. Is in fact

very A. Q.

next

exhibit

That's Would at

correct. you the walk us through and memo to if what you as

presented to did pay from the

meeting, to the

attention the

just go

actual

meeting do

through A. overview was

points, I we

please started had this

so. an and I and

Sure. of what to as and

with

done as

here

trying

make

productive still we

consensual our points 10 and

possible pointed five

while out

making had five we had

that

visited carpet

plants,

plastics and

and that to

acoustics views Because

plants we

preliminary

that the

wanted plan

share.

final

wasn't for there

going

to

be

issued until to

and

used so

marketing was to as the still fixing wrong final

purposes some some with plan

January, react with that also use

time of the was

respect we saw

the

things and to

plan, going to as

because this as a

leaping years of

off

point

show well

the as

next just

five 2006.

potential

168 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 dynamic the was Q. if you end I take start at I the it at from the that wrong place? with that your place concern you'll

surely A.

wrong

certainly I spoke of

agree the that

statement. business to how a Frank the

automotive this who was news

equation, Macher industry that I

not

and

his

team but

understand it was was

works,

because and

topic

had in I

spoken

with

very

important and but

the knew

Federal Frank

Mogul recall frame the

bankruptcy the issues,

would to

it

also

helped

issues

here. In that how there's the a very heavy operate in of

between

customers the

automotive

sector the

and

performance you know,

companies is you've

within got or

sector,

that

relatively supply and

short-term from three to

contracts seven during

periods,

years, that

basically frame with of you a

somewhere's have to reinvent book

time up

yourself, new

come

new

program, is at

contracts, that to

all you

that to

stuff spend

capital the no

intensive front end

have

get

the

work.

There's

169 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've all demand life be two they get of guaranties going to as to how much volume you're

get

here. the over customers the course price will of the can

Typically price the downs

contract. two to

Those five

downs a

significant, to five

percent and

year, theory

percent on

per

year,

in

are

based

the time

fact as to

that how

you to be

should make

smarter and

over that

things, with the

savings

should

shared

OEMs. There heard and was a a market about that issue in the & the Big Three that

lot

newspapers, who were

that's

historically

Collins

Aikman's through auto heavily or

major

customers, of 2005 the

notwithstanding strong industry were

December volumes, slanted imports, here Big over do in

that

increases

towards

Japanese

producers

Japanese the U.S.,

producers that it

manufacturing meant that the volume to

Three time

OEMs and

were were

basically expected to

losing

continue

so. Q. At that time did you have, you

170 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 of this and your team for have each a concern about that & was

different Aikman? A. talking that was

division

of

Collins

It about,

depends but the

which

aspect to

we

were

with

respect

volumes, the

across because With

board

throughout both

company

volumes respect lion --

impacted to the of the the the

divisions.

profit the profit

improvements, improvements division, where we and had

the were that the with so

share in

were

plastics division hardest

was

also had

-the the

had

negotiations

OEMs. ability being for cost was was for to save all

And money the back

that

was

projected, in some part to

without be paid of

OEMs

asking a

through

savings typical

sharing within but

kind the

formula, we

which felt

industry, was no

pretty that

remote in the

there plan. Q.

provision

And that about OEMs.

by

paid a

back,

could

you

explain Talking to the

just

little cost

bit

better? paid back

having

savings

171 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 you A. order to Sure. achieve has it to Typically the get cost what happens, you -in a

savings to

supplier the way to

permission

change If it

manufacturers a a lower

something. resin, it for needs

wants

use in

cost

instance, permission test that

plastic the OEM sure sort OEMs

part, who it of

from and

might doesn't

have pose

to a

make that the

safety they and for do by

risk, that, the

thing,

and say our that

when sure, price cost

typically reduce of

way, by

you

should

this

part

some

element

savings. Q. taken into And was there in any net of factor the prior

account

either

budgets? A. Q. may Not What have that we could other at see. problems that that with

about

discussed

meeting

management A.

concerning Sure. of We the -at

plastics? were concerned earnings we and and were we the were cash out about at the

quality

baseline the

company. getting also

The

time

financial the

statements flows

seeing

cash

172 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 need this like where each more month than seemed what to be be and about $10 by million the able

would

implied we

financial to get a

statements, good

were

never

explanation so we

where were

that never

$10

million totally was

were

going,

comfortable used to. What was with if to

with add

the of

baseline these

that

being on

all

cost

savings Q. being A. a

the the you

implications baseline? -the

of

concerned Well,

baseline wrong

is

foundation the baseline about to

and is,

if

you're of

about

all

your going to end

assumptions up are Q. to do

where be

you're

going

equally Kroll or

wrong. the company about

What to

did

satisfy

your

concerns

baseline? A. Well, were more but we to a lot it of was a confusing and time. there answers

There were to,

questions than it we

questions thought bake

all have

had

would more

been into the

prudent plan for Q.

some type

reserves

these Did

of

issues. any resistance to

you

discuss

173 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 savings them. made have make a did can the initiatives this from plant level managers at

meeting? A. Q. you Not that go at I recall. What other items you at

Let's discuss to

on. the memo

meeting? just as

And you

refer

your

did

meeting A.

itself. told was even them we felt the cost on the be a well -the soft

We plan the

reduction fact trim good that

aggressive

based in to

historically was viewed that

division, division, and

which so to

speak,

was

managed they

well

represented, get a

that

the

didn't of

historically their of cost

hundred or even but 80 or

percent 90

savings

percent a

their lower pointed ideas.

cost

savings,

rather

much We were

percentage. out We they but that were the cost of

supportive like

Individually lot of

sounded

they you

sense, of

sometimes

when

hundreds sense,

items you

that

individually all up the

when

add

them make of

answer

doesn't And

necessarily this was one

sense those

anymore.

174 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 the as a skill at Aikman one of of the Q. the A. because to the situations. It go would from a of have sub the required par Collins to &

performer in

stars

industry

terms

EBITDA What

performance. other topics were discussed

meeting? We the talked about was the fact that

company

significantly many of the cost

liquidity savings outlay placed the

constrained

and

opportunities for or that, was to that and

required the

some

capital been in

orders

hadn't money were down the

there do

necessarily that we

budget

that,

concerned ability to

would

also

slow

achieve We and of

those

savings. the depth of and that

talked the

about

management and

turnover we saw can

the

managers where 10

limiting one or

factor two or

people

handle

cost

savings 30, 40 or

initiatives, across had felt to the be

trying

to

implement

board balls there

750 that

simultaneously, were to dropped be

there we

and

that

needed

greater

175 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 then our he reserves Q. discuss memo, A. probably Q. spend the any your with respect to those. that are you in did the take?

You've all the

indicated topics that

how

long I 45

did

your say

presentation sure but

can't

for

minutes. not 30 I going to ask to you to in

I'm another

minutes will

just

fill was Kroll

record, reaction

but

ask

you, or

there to

from

management

presentation? A. Frank Macher of complimented industry, but he was the what they they were us said on that

understanding understood that the he They but

the

risks could would

highly

confident

deliver

projections. had to say to

consider that

they with

thought the our I

going

stick We at

current case a

projections. little it was his hand bit

pressed one point with

believe

Leonard on the

LoBiondo table and

Kroll you

slammed know,

said,

these these

projections are much our the

are

reasonable, and

achievable, was pretty

projections end of it.

that

176 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 the $200 to did what seen Q. you you in At give any the time during a the meeting as to you had

number, just plans

number on you

thought the two

based what for we

what

thought

EBITDA A.

should As

have I as

been

2006? $180 to

recall our

offered with

million

thoughts come there a

respect

where Q.

EBITDA Okay.

could Was

out. ongoing -on? they were at

Kroll review A. the

and of

at the As

the

company

another

budget I

going

mentioned of doing

before, what they

process up

called really down it up, go

bottoms these plant

budget,

and

that

was

taking to the

projections, level that be a and

bringing sure

them that them would

making

made so

sense

at

level

bubbling that use

there to

would the

document to

down

plant

levels of the

for as well

marketing as an

purposes

company,

operating

budget

for

management

performance Q. A. remember

purposes. When That was was that budget published? I don't mid

published date,

in, it

the

precise

but

was

177 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 of in to late Q. that A. EBITDA, that January And budget That $265 coming of 2006. was the EBITDA number

what for

2006? had the same amount the

budget

million, out of

notwithstanding the box through would some extra would

fact

January issues things, million still Q.

they and so of

believed needed

that to

there make added that

be

they

up an it

basically cost out In of and

they so

$5

savings to 265 view

come

million. what was the for 2006

your

importance in EBITDA A. projections point with to

getting forecast the to

the

baseline

correct? of a these discussion

Well, was

purpose as of

serve plan

talk

about to the It as --

reorganization creditor the document

respect

various was part also of

constituencies. to be published to sell

the the

marketing company It and the to go, and or was get

effort to find

to in the

sell the OEMs

investors to

company. to try for

also them

provided to

understand where it

the was

plan

company,

supposed

178 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 willing you or runs so it why they Q. right shouldn't And with the the move their business of away.

significance first

getting

projections

forecast? A. to Some of them were obvious, You only it had

credibility chances but if to

issues. prove that

many

you're wrong with who

credible, respect believed who were new were in to

you're

grossly

your

projections, in the

creditors

they out the of

were of

money,

creditors they whole

the

money it

believed creates for a

money

and

level

complications can lose all

negotiations. and not

OEMs to to

confidence of their

retain give And

business to

with the

follow-on with

programs to

company.

then -runs

respect are a

marketing, issues.

there's it

there to

couple

of of

One,

the

credibility doesn't enough to

management, understand project buy very this it

that their

if

management well

business one

adequately, at

wouldn't other when

want than

to a

company

anything and two, of

steep

discount, $265

you're that

projecting

million

EBITDA,

179 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 implies $1.3 an overall $1.2 are off value in the and range I of

billion, there put

billion, some by a

would might in

imagine have that

buyers

that

been

purchase

price

range. Q. A. Q. Why It's Were is a that? lot of money. parties to a

your a

clients DIP loan

credit A. Q.

agreement, Yes, Then but

agreement?

they I'll me

were. refer you to two that a DIP

exhibits, there was,

let

represent two, was

first there

were and

there it

agreement A. it

was

amended? was date the of DIP agreement May

Yes, existed 2005. in the

there on the

filing, then

17th,

That July I

agreement believe of to

was

amended account with

take

into parties the DIP. in

negotiation to issues there

various to

respect Q.

relative

Were of those any By

any

approval for the

rights lenders

either to

documents budgets?

approve A.

lenders secured

you're lenders?

meaning

the

pre-petition

180 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 May of Q. A. the Any Any lenders. lenders, okay. that be Both the versions

document that

required

various by

budgets the DIP

were

prepared their

approved

lenders us.

and With

advisors, to in the the May for

Capstone,

respect lenders, a

pre-petition 17th draft to

secured was the --

there have post days that It

proviso

calling right

Capstone the was

approval post the

over that

initial due 60 but

filing date

budget of the in the the

after

filing,

didn't was

survive out

negotiation. July

dropped

amendment. Q. Okay. And just a to be clear, it was the a

document

wasn't

just

draft,

signed A. Q.

agreement? That's Okay. correct. And it was subsequently

amended? A. Q. budgets approve closing That's Now, that and correct. referenced had a certain to post

you

Capstone then you Of

right

referenced the

the

budget.

documents

that

181 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 so the no. Q. other And what were the budgets had some for we've one of A. documents. Q. right of And -after 2005 of was there or any discussed those 6-L so far, is either 6-L or 6M

documents? and 6-M were post closing

ability that it for for

Capstone

requirement operating A.

approve the the

budgets,

plans Not

company? pre-petition lenders,

lenders rights To

that

they

approval A.

over? my did answer, have the the right were to

clarify lenders the time

pre-petition disapprove prepared those of

cash to

budgets time and

that we

from

reviewed

quite

closely

and

were

generally budgets and didn't have

satisfied have the the

with

those. of

Those tenure that had. they

duration

didn't overall

inherent

problems

the

financial Q. the

projections What were

limited

to?

Just

Judge

can

better

understand

how

different

they

are.

182 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 please. A. Honor, I after KZC was the originally first retained, was Your just please. advised basis review A. to of I to Mr. see Mr. cash was next from. Q. pricing A. about No projections and of cost cutting, like? A. flow going 90 It's basically of 90-day the cash roll in

forecasts to be and

where its

company over in the

spending where it

days

was

coming

increases No,

that

kind

of

there's

nothing

specific

that. THE COURT: is One moment, so I please, like him.

Cohen the

here, we

would for

deal

with

issue

raised by can right step

Nurge,

you Mr.

can

stand you

there. forward, Were the I you

Cohen, you for the

Thank

coming issue inquiry

over. that or

regarding the

was

Court's

should

it? Yes, speak THE I to was advised. You want me

that? If you would,

COURT:

order and

entered were some

retaining

Services

there

183 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 Hal for the affidavit described board place. Before Novikoff, the bank who that was hearing one of I the spoke to of them and after Mr. issues that that were left open as a result the issues of

order,

primarily issues

dealing and a

with

indemnification that were

some later my

other

scheduled In the

for

hearing. representing Steve as of involved the Cooper

course

of

that

first were

hearing, presented of the and and I

LoBiondo for of

candidates directors in that

members

board got

the

debtor, as well that

process hearing Court. There that their

attended was

second to the

when

issue

presented

was

supplemental by as Mr. Boken of that the

was

filed

services if in

members that

directors

fact

took

attorneys with him

group, of

and

discussed LoBiondo notes dated,

concept

Cooper I have

and my not

being that I and I can

board

members.

from but

conversation. have the my notes

They're from

that the

conversation, following, and

notes

indicate

184 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 from a Issues to of special with and no then read from them. Like corporate of governance, create

committee KZC the

disinterested comp, et Hal, Hal,

board cetera, no no should I

performance, sentence JP

stops. and

problem, problems. be KZC

i.e., A

Morgan

restructuring compensation that's

committee issue we

people, KZC

non-KZC, were can see

wrote

people,

what so

talking what

about.

Stipulation

judge

doing. Form KZC independent as board subcommittee. will any defer

members for

disinterested

directors

issues

involving relating

potential to

conflicting,

issues

compensation issues, to re and

adequacy, then I wrote at the

performance bottom, of U.S.

letter Trustee I

judge, board. that that

resolved

concerns

believe

these took

notes

were

conversation the I first

place I

sometime did not in

between attend, the case

hearing, I it

which was was

don't at that that

believe time, you

involved after

the them,

first

order

entered

retaining

185 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 concerns me, enclosed approving Services, and 15th I wrote which a letter to the Court on July

says: Dear Judge Rhodes, please order with KZC This to 7th, Randel, United find

copy the

of

supplement

to

services and has

agreement John been at R.

L.L.C., order

Boken.

supplemental address 2005

revised the July Paul of the the

concerns on

raised this the

hearing

matter. Office

Representative States post all with The Trustee,

of

the

debtors, and

debtors' have

petition indicated the terms

lenders, their of

KZC of

Services and

support

agreement to order.

this

supplement of

official has

committee not

unsecured with this order before

creditors and we

agreed

hope

to

discuss If

it

with are to

them

Monday's changes we will

hearing. which submit are a

there

suggested the along parties, with a

acceptable revised

order at

black on

line

showing July If

changes

the

hearing

Monday

18th. have not any questions to to or

you do

please

hesitate copies

contact Paul

respectfully

yours,

186 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 on that the A. statement as I KZC 15th Randel, Richard Joseph Harold Cieri, Fischer The Services of July. THE COURT: And I've that seen -that. Novikoff, Elizabeth and Michael Kardos, Stamer, Ron Rose,

Phillip of on

Dublin. John I Boken and

statement filed

was

believe

the

Okay.

that retention July 18th

describes At

the the

proposed hearing on

directors. addressed page the the

Court I

at

page

four, as on was in a

pardon result

me, of of to Mr.

five

and

indicated took place that

hearing the

that

the

7th

July, the

information and other

reported interest,

Court

parties had as

Cooper

and of

Mr.

LoBiondo and

become a result how the the

directors there were

the

company

questions them be as

raised

about of

election company

of

directors with. the have

should I page

dealt

indicated the

for

rest

of

that

parties have

agreed to is a

to,

what

parties of a

agreed

the special

formation oversight

special

committee, will

committee

which

consist

187 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 there. draft Mr. Mr. of had bank among entirely directors of members are of the board to of an of of

who --

unconnected a word this

independent KZCS its, That in or

there's with

missing, case of or

connection any of the

any

affiliates Your to

KZCS. will the of, be

special

committee, directed the of

Honor, with

authorized

and

deal

compensation and the

of,

continued the

retention of

adequacy

performance

KZCS. As the a result of that, discussions the the --

various

constituencies, committee, and any the

group, and

the any

creditors of the --

debtor and have the

other

United to

States the

Trustee, of an of

parties that special

agreed

form

order that

incorporates committee.

the

description

Then

asked had and

if

Mr.

Randel

were

Randel order his you. a

signed I can

the

latest it to

the

submit and

Spence it

for to

signature You at said it, as

then I would

present like The to

yes,

have

look as

absolutely. we get a

Court,

okay,

soon

188 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 fees parties' A. are exactly order? A. order. THE say COURT: Mr. are it? does not, Was Your that Honor. the The Cooper not order and doesn't Mr. to Court This is the -yes, that is the version enter then that's signed off, the Court will and

this. the

Thank

you,

Your

Honor,

other The THE

parties

continued. to is order this -the

supplement COURT: So

that fees does it

LoBiondo's approval A. or

subject

No, THE

COURT:

intent? It not They of was. subject were As to directors, court as the directors'

approval directors company of of

either. the Mr. board

serving of the

directors as

with the Ms.

Cooper and that

serving I had that

chairman that

board, Kardos that

discussed was not the have

with

parties' to file

agreement fee

they

would

applications. THE COURT: Discussed that with

189 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 don't to not directors to serve A. the that to to whom? A. KZCS. THE hearing the COURT: it Did was you tell me in Ms. Kardos who is general counsel

that as

the

parties' not be

intent

fees

directors

subject

Court A.

approval? I didn't Your see that so only to you I in the believe the is

transcript, I did. I

Honor, the

don't part this on of

believe that I

transcript the part

pertained read -to

issue

that But

those

two

pages.

from

THE

COURT: their

Were

the

other hourly board? rates

getting as I

regular the no

directors honestly COURT: what that I the given

upon have I

idea. to is say, now, as of and but CRO, their I

THE know say sure

have

impact KZC's

have I'm

role

would

have

approved as

employment, without

or

appointment approval of

directors fees as

Court

their

directors. A. I believe, and I'm basing this

190 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 in close court thank you be excused A. further? A. No. THE May THE MR. at THE for MR. the and COURT: I be Thank you. Your Honor? on my notes, as well as as a my own of corporate you're with

recollection, governance, saying, the of

that I

matter

and

appreciate were CRO, my

what

because

they as

affiliated but as

entity the

serving it be

directors that

company not THE

was a

understanding of

that

would

requirement All

them.

COURT:

right.

Anything

excused, Yes.

COURT:

DeFILIPPO: this point? Yes.

May

Mr.

Cooper

COURT: coming.

Mr.

Cooper,

DeFILIPPO: loop if on this, to of

Your Ms.

Honor, Kardos

just is

called portion you

testify that fee

would

state

that

the

application into the

that

highlighted as a

was

written of Mr.

fee

application by

result

advice Cohen

she to

received effect

Mr.

Cohen,

from of

the

that

approval

Mr.

191 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 of BY Q. the MR. represent A. right now Mr. was try Cohen, one Cooper and LoBiondo's was not fees as by serving fee as

directors

required

application. THE MR. THE COURT: Thank you, sir. you. thing, I'm Frank and where Mr.

DeFILIPPO: COURT: One

Thank more

more

question

for

you. Mr.

seriously Macher I've he as

considering a witness

calling in this you

proceeding might know

been

advised

that

is? A. I don't, did can but Mr. Hertzberg when Mr. may. Macher and

Hertzberg hired. to find I

the

work Bob

call

Hertzberg

out. COURT: Does your office

THE him? Not

currently, I leave.

but

I'll

call

before THE

COURT:

Okay,

thank

you.

DAMREN: I'm handing of the witness 28th to a the copy DIP and as

amendment copy's the

July

agreement, a copy for

been

given It's

to

counsel marked

Court.

been

192 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 believe would One, gone Exhibit Nurge, 6-S, is and I'm going to to ask you, Mr.

that

amendment

the

prior

agreement? A. It appears every to be, of but I haven't

through Q.

page

it. to budgets, for year as the or

Now, which

with

respect

budget long

contains not these what

forecasts cash did of

range, to the

budgets you a

you

referred would was that be

them,

believe budget that

consequence and an

not was A.

realistic not I

EBITDA

forecast

realistic? believed a couple of things. was to

that

the right

earnings at or

potential the

probably cover debt, out the and

below

amount secured

pre-petition by it and having

lenders' a high

such the

projection

there,

brought then the and a the

unsecured unsecured create a

committee lenders lot of

junior and

into noise have

fray

would

motion lot of

that

ultimately

wouldn't

payback. is, to and I we

The that

second would of

thing go

we

out

market, of

get

letters

indication

interest

193 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 a to to and those would look superb of but they would

never

survive or due

any

kind

critical with of

tire to they

kicking the

diligence at the

respect the day that the

budget,

and

end

wouldn't looked

develop

into like of

firm the

offers

anything

letters,

indicative Q. happen? and A. sometimes was It an

letters And why

interest. it okay for that

wasn't start in

Why

not

the

negotiation

high

end

someplace a fair

between? and & Aikman

It's that

question but

happens,

Collins

extraordinarily basically We had

delicate at the

operation. of the up

survived

will

customers. under the

them

largely

tied

customer move of their

agreement business

that for but

they the

couldn't pendency it took

the get the

bankruptcy, to a

the of

longer the

to

resolution

bankruptcy, new business

more the an

opportunities road would

to be

bid lost. lead miss no

on

down

There's get new

incredibly and a if

long you of

business, you've if you

bidding

cycle, and

got

year to

new

business,

have

replace

194 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 but your business that and on average three been or in every years five out to six could not

years, have,

means

you

you've two 50

bankruptcy years, hole time in you you

and

bidding have 20,

for 40,

three

could

percent by the be the

your got that out you

business there can or

volumes very,

with it

only by from based

place

fill

would

stealing a

business

enticing Q.

business So

competitor. on that had a you pretty

Okay. the to

believed short A. Q. forecast shorten A. cause

company

actually

time

successfully correct. poor

reorganize?

That's And of the a

forecast

or

inaccurate rather than

EBITDA

would

prolong

bankruptcy we

period. that to it an would

Again, serious

believed in

delays

getting

answer. Q. What, and I realize that Mr. you are not was, in it

day-to-day what was the

person

Chadwick

your

principal

involvement and 20, how 2005

reviewing was doing

company's that

status

after

December

meeting?

195 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 for our that -my our A. As a we as come then means of communicating monthly with on

clients,

prepared well up we on as

reports issues of

operations, that would and

any

special the

during would

course prepare

month, special so or we

also

reports

business much

plans in

typically, one phase

were

pretty of the

always

another

gathering results our and

information, of operations trying and to give

monitoring reporting them a

it

to

lenders, basis for

context going My on

understanding

what's

within was

the to ask

business. the drafts and our help

job

review

information, team

questions that to

communicate

clients. Q. maybe Was it's 20th do there, a I assume that the, was as advice the

wrong

assumption, as

December what to you

meeting part

unusual of your

far

as

regular

similar A.

creditors? Having the steering and a committee happened where we

meeting

is

not

unusual, Being to in

that

periodically. really wanted

position the plan

criticize

196 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 his in phone the second, me? A. Hertzberg, client we can of I do. I just spoke to Bob is not a severely, and not but also able of facing to do a marketing in a effort

being fear

that

public

forum

for

polluting to

the raise us

marketing too in a highly bit

effort, the of a

and

not with So

wanting the in OEMs

issues box.

put

that

respect

it

was

unusual. THE Mr. COURT: do Excuse you me, a one report for

Cohen,

have

Your our

Honor.

Mr.

Macher don't

office his

and

we

believe his

release We

phone not

number had

without

permission. him in some

have

contact were or a if

with court we of his but

time. him

If to

there

order could

directing explain that to

appear, the

him

what be

nature

testimony to just

he

would ask

asked

about,

call

and

him his

to

appear,

we're

uncomfortable THE

giving COURT:

phone I

number. don't want

Well, if this he

number,

but of

would

cooperate

resolution be

fee

application, him that.

that

would

appreciated,

tell

197 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 little bit A. objections failure meet of appear know, let me A. to KZC's I don't mind area this. The fees objecting in for its part the party here objects telling of you the to subject It's of my

general simply

inquiry

him.

quite

asserting failure

KZC's Collins 2005 that &

responsibility Aikman six, to meet KZC's

of in is

projections in part

and Mr.

and

defense

Macher not

bears So

the I

responsibility to talk with

for Mr.

that, Macher

KZC.

want

about A.

that. Okay. THE Just to If clarify he's -to me

COURT: I

willing let

voluntarily and if I

assume to

you'll

have

subpoena

him

you'll

know

that.

Yes. THE Just in COURT: to That's all. the

clarify are &

something, upon to be the

part

based

Collins

Aikman

able

to

KZC's

projections? THE of COURT: a Well, there's whose this point I a

dispute are,

about at

projections

they

but

198 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 it the the subpoena You may BY Q. us know forecast, A. just want A. to say the projections.

Okay. THE I'm COURT: not sure. Or maybe the word's

Okay. THE COURT: he's And you to can just let

whether

willing

appear

voluntarily. A. I will, thank Or a you. if he to needs serve a him.

THE we

COURT: get

can

marshal

proceed. MR. DAMREN: What & was the next major to event your up budget your in

Collins

Aikman

bankruptcy 2006 late

recollection was released

after in

the to

bottom

mid

January

to

recollection? A. was Well, released after that was released respect process that I think -in in and

unchanged the

with

to

total

EBITDA, The

marketing

ensued. marketing March, there

Lazard

coordinated ultimately there of

process March five

and

late were

perhaps,

was

indications

interest

199 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 forecast and then opportunity all but two acquiring nonbinding benefit of the company, all of them were the

interests due the

and

were and

without they to be on of

diligence, company

generally in the interest. an think the

established range face of

value

1.2,

$1.3 of the

billion

based

reading

indications were then

The to

parties do due

given and I

diligence of of the due

dropped some have

out

process diligence. that was only

after There

doing might

amount been soft a

third trim

interested they to in had

in

the

division it was in

after down time the

done

their and also

work, by by that the

but

two

parties but

point end of

March,

March

company

was

missing within and

its the

projection, plastics division embarked

particularly pretty on a badly,

the

company

then

new

forecast. It for post was the originally actual going to do a

first but

three then as

months it much months,

nine the

months, time to

decided

to

take as four

get do

information excuse me,

possible months

and of

four

actual

results

200 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 plan that the and of projecting the year out out as the a final eight months to aid

and where

management were, but

process also to

figure the

they

sales Q. sale A.

process. And did those any new projections aid

process Sadly,

in no,

respect? -they a did

they

result

in

receiving from WL

what or

was IAC to

detailed with respect, the

proposal on July

Ross,

6th but

with as

respect events

purchasing the

company,

transpired

projections Q. A. Q. A. point in

failed The Oh

badly. fell further?

projections yes. did I that think

When Well, this it was to --

happen? sort of a seminal I were

whole July we

process 12th the of

occurred, 2006. We

believe

scheduled lenders Ross of and

pre-petition to meet with on a the

secured Wilbur letter prior

were his

scheduled team to

negotiate had

intent

that

they

provided

week. As was I recall, basis the for four that plus eight of

the

letter

201 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 intent June that we had been presented there to our clients of on it

21st, were a

although circulated

were

drafts

earlier that

and was,

certainly but on

had

copy 21

earlier and

June that

the plan

Kroll

management instead now of

presented 265 a hair

which

called it of to

million under what

of

EBITDA million

was

just and

180 had

EBITDA our

explained

happened What from the

clients. that was you

Q. received -that A. difficult expected expected. element there, of but

was

the

explanation and the it Kroll

management for that

to

reasons

change? was more than

Basically to and I get was think the

cost

savings

taking there

longer might

than have been in was a an

material I don't

price

increases that just

remember It's

that the

significant projections could Q. savings A. assumed occur

obstacle. were too

optimistic time back

as

to

what

within it

the

frame. all the cost

So

pushed and were --

measures There take

other

things. would

They

away

business

occur

202 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 It and you was all sooner and and now are Was it was going that to occur all that later that. it

there Q.

analyses it just we your that

show

impression we to

basically these

couldn't in

achieve but

items

hoped later?

2006,

we'll A.

achieve

them was

That

basically was saying, types of

what and

the in large that

company's part I had it

position the

was

very on the Was

issues 20th

pointed up now

out in

December numbers. this a

were

showing Q. had? A.

Okay.

meeting

that

Well, to

the

July

12th

meeting

was

meeting was Ann

negotiate

with Hal

Wilbur

Ross. myself

Kurinskas, members there Just were they

Novikoff, our

several

from to

steering the meeting and Ross the

committee

were

conduct to the by

negotiation. starting advised that month they were the of had just we that

prior

held had that just

over just the

Kroll

told

Wilbur for

months, June badly had

results out

come the

and

that that

missed in

projections four plus

issued

these

eight

203 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 this told projections. Q. aside A. us by When Kroll, I that were you say you were pulled

who? it was John Boken the had to who

believe the

projections, in just far to

that

numbers been it,

coming and the by

worse put month a a

than

budgeted, they missed

context in the

first I

plastics margin, but of May you of 40 for over the and I

division don't the

think the the April

sizeable amount, two I'm months sorry,

recall of

exact first and,

course that

plan, June,

the

first of

two

projected $11

months, million 30 or

know, EBITDA percent the

order missed of

magnitude, that

and

constituted

the

total

projected during

EBITDA that

plastics

division

period. Q. Do you recall with -how long was

conversation A. It 20

Mr.

Boken? long. It until was we

wasn't

terribly or

probably could Q. questions get

minutes feet you

thereabouts us of of

our Do

underneath any any

again. the the other

recall by

being

asked

204 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 participants Boken just in the in meeting other the than Mr.

making you've The

substance

statements A. recall company is

related? other were thing that that I the

only we

that now

informed to at a do a

was

going look get

further causes for

re-projection the shortfalls

and and

the

further became million the of

re-projection six plus six

which

ultimately at $105

forecast

EBITDA Q.

for

August. You this indicated news from all that Mr. after Boken to the get was the

receiving folks their impact A. because that the at

the

meeting them

needed

feet of

under this Well,

again,

what

information? it was pretty are, is it traumatic first to is of all,

the

expectations the plan

nearer the more and

being to be was had

issued,

likely the a

achievable, that been but in there's a the the lot

other lot about of not the

implication talk,

been

of

there

of

talk share were

cost cost

improvements, improvements second

lion budget

until

the

205 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 half up we was of the year the and they of sort the of ratcheted so if

through were

balance that the that you

year,

missing on in

badly, business was a

something that we

else didn't

going

understand, Q. meeting A. Ross. that that but he He

and Did

grave

concern. the

subsequently that the was

have

with We

Mr. did

Ross have the with

scheduled? with Mr. us

meeting by

opened met

meeting the if

telling earlier that

had

company it was

day, he had out than

I'm met that

not

sure the June

day, and

with the

company results he been had

earlier were far

found worse the

planned, that

that had

provided to us

term on

sheet the

provided the

based plus

company

achieving and he by all

four

eight

forecast, so by

rights feel

having

missed bound

badly it

didn't would honor if

terribly

but would

notwithstanding of did $180 that

that

the

spirit

forecast, its

and

that plus

the

company of the

achieve

four

eight go

forecast with

million,

would the the

still offer

ahead was

negotiation basically to

and pay

which

secured

lenders

80

206 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 sort then did any cents in cash note levels which he of their claim upon over with an

earnout higher time,

contingent of EBITDA be

achieving a period but were to of

might said --

incremental, if the

similarly less, be a then

that

results

the

obviously

there

needed

purchase

price to

adjustment. this to meeting had you or

Q. of the view the

Prior

lenders of the

your

knowledge had of been

shared or that

their rather had

offer

that

non-binding by Mr.

letter Ross,

intent anyone side

been

sent him

had

contacted directly? A. all

from

the

lenders'

My of

recollection contacting to I Ross was the

is

that the to

Lazard lenders' the July

the

with prior

side, 12th

reached meeting

out that

aware

of

at

least.

Q. to

What what

were

lenders' you at

reactions the

Mr.

Ross

told

meeting? A. of The -it might be helpful what the we meeting if I

preface to tell

it

by

saying Ross at

intended before we

Mr.

learned

about

the

projections.

207 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 had to wanted have a had that plan At that point in time based that the on the in the eight debt the 90

company's

projections including the had so

were four

marketplace, projections, that cent was was --

plus bank of

senior a

secured value

trading was

range, my

that

the

market, of just where put

that the it into

client's would

expectation from, to

value

start

context. Mr. identified we and had had Ross many in of his the with more due same diligence problems to the

identified built the in

respect than 20

conditions provided had

into

term you

sheet

that of

he

had

that

all,

know, the

many

them

implications all will of

about

company

will

achieve company

its

cost the and

savings, four

the eight be of no that

achieve

plus

financial material nature, to

projections adverse

there and

will

changes that

things was

and

we

knew

that

unlikely

occur. So to we coming Mr. into Ross and the that that meeting he it we

tell

needed needed

higher

number

208 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 firm price to up a the we other talked told us to be a firmer how just offer. much he We was us had to for happen

understand real, if not

offering what would

telling plan

four

plus But that

eight at he The

was

met. he literally to for

the was

meeting not in a

mood

negotiate. the that could call term value he of

market's company

expectations were with or too us, we

this

high, we

wouldn't the and

negotiate term we sheet

accept it off,

could the

couldn't

accept

sheet. We had a of side our bar. We called committee,

members about we we

steering and

the

results we

this sign up of to and a

situation, deal give fees that him and

felt didn't

couldn't the all

know and that

value the we the

exclusivity things what him like the

breakup really deal was,

when of

didn't and we

know told

value

that. him and that if he could the

We the

told deal

perhaps he never

increase even

little said

bit, he

responded And

that,

wouldn't

respond.

209 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 that of we then the next that day he & he issued done a press release things

stating with

was

discussing

Collins Q.

Aikman. Did you have any other & Aikman

Okay. or

discussions potential after A. never away. game walk July

meetings for

with

any

purchaser 12th? I guess

Collins

the

first that

point was

is

we

really This and away on

expected was many all

Ross of a

totally

part

negotiation threatened to

occasions table

he

from in

the

and

until So that be the

we

got

realistic was not

prior

discussions. new. We knew also

this the

something and Lazard to

company out and

would

reaching deal. in

trying So

resuscitate in a bad

we

were

situation the to value

really deal,

didn't not you

know like

what

the

it's

trying he

negotiate cents, find a we

between, wanted

know,

offered to

80

90

cents we a

and

trying

place

where put

could

meet. on

We his offer, was

really nor did

couldn't we

quantam suddenly the

understand on with

what

really

going

company.

210 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 least Q. negotiating for Mr. Lazard Ross? A. situation left who Well, at is So after we were in We a pretty one bad buyer for What were going other to be your just waiting out to

tactics, or the

than to

company

reach

that not we

point.

had

known

for

overpaying that the

assets. course

determined

best

consulting be to we the to be felt

with

the a

steering standalone horse continue

committee plan for with

would

propose the

essentially discussions Ross down Ross certain to

stalking would

sure

road. wanted assets, business the and that assets, they he at

really the I&C were

of

were was

integral building, to the

the

there

synergies he had

with

respect so we

Lear

business believe

acquired, was

didn't away

really

that

he

going

forever. Q. Did idea of or you a discuss the stalking anyone at

horse the

standalone Kroll? We --

with

company A.

Sure.

it's until

sort

of this

interesting.

Probably

around

211 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 meeting the we I July at meeting, in was the company's with point of view

least

dealing we were the

the

pre-petition all at of this

lenders

giving way we to

you

information, plan, full, here. you and It

but

look be

the in

guys

are

going the

repaid

you're belongs

not

fulcrum else.

security

someplace right were

Basically think and you want

after some

the

July where said

there its as to

evals

company now do at view you

advisors the do, and

basically

fulcrum and as the

security, company, as Kirkland

what Kroll and

that said us to

time we try

well they a was

Ellis

really, and felt had what don't in a

basically deal the and was, any with least we but we

implored Ross risk,

reach that

because

they we

although

problem deal

couldn't

quantify and to I

the

determined, to the --

recall

objection Ray that that make how

that

dealing and the

with

Schrock, moving we had

John

Boken, the stop we

company plan so

towards a and deal back that

standalone in any

event talk

would about

sense do we

needed these

to

with

all

capital

issues,

212 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 something open you to and arms, have think to were all into of the fact that its to from the company needed capital book to new

restock

accounts get the

receivable Lear and as take that part

to

business, business thing as

away sort of a of

Chrysler to --

opposed plan. And

standalone

basically around

the

discussions converting debt type bank

centered of the

basically senior

existing of the

secured some

equity

plan

or

equity

security,

you

know, be

getting based

whatever on the some

financing assets all of of

could the

gotten and

company

allowing asset sale

or

the

miscellaneous the to

proceeds, coming larder

including Europe, could

proceeds help a

that the

were cash

from so

stock

you

have

feasible

standalone

plan. The that but go standalone we you plan and do We was ran never to with and

embraced have to

something didn't

someplace. shutting it. the

want

about

company not

down our

liquidating screen.

That

was

on

radar

213 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 out out, was if Q. it in You still fact you you A. having would went terms a -refer to it you as a back stop,

something

were

considering failed again, or or

negotiations or didn't on both that

with

Ross

were were

turn

around

going We

tracks? as we got closer Ross fact the a we to

felt

viable

standalone an

plan and

that in in --

resurrect through of the

interest, lengths to

some

bake the to we

standalone if a we

plan

provision convert sale so as it

that into

wanted and of

could have that

sale, plan be

still

part it

of

the

reorganization, and

that

wouldn't over

stopping

starting Q. what

all

again. six it plus have six on plan these with came

When

the

impact

did

negotiating Ross or A. and it

strategies else? the

and

negotiations

anyone Well,

six

plus there

six were

plan

came

showed

that

fundamental savings showed cash to

problems in

beyond the

just

the and be

cost it enough

inherent that there

company, going the to

wasn't

execute

reasonably

standalone

214 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 date time for time they we would to look but at you plan OEMs. We had a situation, it sounds a sometimes like soft a you without further assistance from the

numbers have making one

and

lot,

business, and that one was

trim the

that's

money

business, losing was

plastics that the we the OEMs were to

division, plastics and to at a

money,

division

benefitting that we if

decision to

was

taken it for

continue least ask

operate OEMs

would

need

the

additional

support. We do were it, sort but of if skeptical they didn't those on record the that do it

had

essentially At them least an

liquidate we had

operations. of offering

been to

opportunity

save

businesses. Q. A. OEMs but And did is you the contact one the OEMs?

Kroll and it I was the

that the

contacted precise September overtures point an in

don't

recall in

probably firm

early the

frame

rejected and we at

additional we

support that

that to

realized

had

have

215 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 to A. September might in have orderly wind down of the plastics we could soft division's and trim

operations, closing division the and

selling rest,

what

selling -And

the

basically COURT: is may

THE This 2006,

this

was

when? early -was

probably have

September, a little it

been but six I

been

October the and

think six

September, out and up BY Q. A. said to MR. in

after

plus

plan the

came math add

August we a

we

started all

doing

said do

can't

make

the

numbers

standalone

plan.

DAMREN: And ultimately we we did it liquidate? customers continue need have being to

Well, that the us if

approached are going plants

the to you

operate

plastics any

reimburse while done There that the -I we for

for

losses

that

we it's

liquidate your

them

because and

convenience long,

expedience. negotiations well,

were

very

difficult in

think

they

ended

November, until

customer December

agreement 2006. was a

wasn't

October

There

preliminary

216 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 time Honor. agreement. issues, lot of but We in hadn't resolved of 2006 in all and that thinking with the most, a

November

negotiations time frame.

happened So I

November back the

guess in

decision later that MR. Your

was

taken not

October

probably to move

October,

later

September

way. DAMREN: witness. One moment, Your

CROSS-EXAMINATION BY-MR.DeFILIPPO: Q. you Mr. Nurge, as a a when was the last to a

served

financial creditor? the

advisor

debtor A.

rather It

than was I

probably

Zainy

Brainy but

bankruptcy. it was six

don't five

recall

the

year,

or

years

ago,

something

like

that. Q. And career to a I how many times do as you a think

your

you've

served

financial

advisor A.

debtor? spent two Gulf at years Oil. Camelot been working I spent Music some on a for small a year the

Cumberland and a half

Farms,

working There may

debtors.

have

217 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 in engagements Brainy Q. was in the So and around, part and of then the Zainy

better

year.

that's

three

debtor

engagements. A. life. Q. the A. Q. when? A. It was probably '95, '96 kind of And 1980's It And Cumberland or was '90's? in the early '90's. place Farms took place And more than four years of my

Camelot

Music

took

frame. Q. You hear spoke say about what projections experience but I

didn't in

you

you

had

actually those any

preparing three

projections. cases, a did set

Other you of ever

than have

debtor

experience for Well, it's a

preparing

projections A.

distressed

company? debtor and our kind

including our

the

projections, of of practice,

practice, we never

because was to the to

did

CRO

type

consulting, team vet

work

with

the the than

management process and

usher

them

through

projections,

rather

218 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 got you to to prepare helped we Q. the projections; so while we

have and

companies view

prepare as

projections, role. as a chief

didn't

that

our

You've

never

served

restructuring A. Q.

officer

yourself?

That's In the in

correct. process & when you first I think had in

involved indicated be done

Collins you

Aikman, on a

that get to

worked for

what

to loan

ready be

debtor the

possession A. Q. negotiation the the DIP

made

to

company?

That's And in

correct. that JP JP process Morgan Morgan as to was as as there a

between and

agent agent the the

for for

lender

pre-petition would the Yes, And on I say

lender be for

what by

conditions lender A. Q. negotiation A. would not so of

priming

DIP

pre-petition there did you was.

lender?

participate side? aware

in

that

either

was

certainly It was,

and it

I was one

yes. a

you

know, we

much on

negotiation side of the

that table

had

party

this

and

another

219 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 was that of the well to party was on the other side a of term the table. for to It DIP the to

putting

together was

sheet

financing lenders object. Q. object? A. so

that that

then had

circulated an

they

opportunity

Which

lenders

had

an

opportunity

The to of And the

pre-petition understand the you new

lenders terms and

had and the

an

opportunity conditions Q. as A. Q.

the

financing their

--

were

advisor

as

DIP

lender's

advisor,

right?

Yes. So whose over side did you the take in

discussion were Let

whether

priming

conditions A.

fair? me clarify. lenders DIP was I represented after order the had the a the so DIP

pre-petition done. the The DIP

until done in

lenders

could

get we

benefit joint

our

monitoring at that there

reports, point be a and

retention that

with fight the

stipulation the

should

between DIP

pre-petition down the

lenders the

lenders lenders

road,

pre-petition

220 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 at on. Q. Exhibit before A. Q. section Do 6-S? you got Yes, I you have was it, do you have to you the 44? DIP the get? A. choosing. Q. So your principal duties ran to Another party of their own would Q. get us. And who would the DIP lenders

pre-petition A. Q. credit Yes. Now,

lenders?

you

were do

asked you

about

the that

agreement,

remember

testimony? A. Q. things It's Yes. And you in I need to Do one in clarify you of some of

said.

have

Exhibit --

volume It's

the

number of

strike

that. book. I

volume

two

the

numbered A.

think

found

the

binder.

Hold

That

just

handed

back. I do. you to look in Exhibit on page

.

want

44 55,

501

and

specifically

221 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 section A. Q. A. Q. requires the 001 M.

Yes. Are I Do the you there?

am. you post to agree that this provision for

closing be -to

date

budget

borrowers through two

encompass date, at it the says

the was

period about

the

maturity Look date,

which

years of

out?

definition 17th, A. about date post that the is 2007.

maturity

May

Actually, the

what

I'm of

concerned closing was that the

definition My date be

post

budgets. closing were final Q. to

recollection budget was

the 60

budgets days of

filed

within

agreement. For the the they two-month, maturity were --were to be two-year

period A. Q. A.

through Oh, You The

date.

talked

about

projections as I

two-year Q. spoke

projections And was

recall. that you 6-L, a

the

exhibit about,

with

Mr.

Damren

Exhibit

222 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 were right that was no. Q. But under this agreement as it post closing A. Q. rendered? A. Q. reasonably substance advisor A. to Yes. Okay. And was in that form and budget and to you as to be date it that budget? was. the first one that was

Yes, Was

satisfactory to the DIP

agent

the Not

pre-petition by the time

lenders? it was issued,

originally A. As

written it was no

was? on in July 28th,

amended longer say

provision Q. some of

was

there. there the the

Well, cash

you

did

that you

budgets over

that on

had of

approval

behalf you?

pre-petition A. Q. A. Q. each

lenders, my

didn't

That's Where's On So week page this in on

recollection, provision of 6-S, a of 1st

yes. contained? E.

that
.

58

paragraph cash 13 and budget

requires a period

continuous ending

weeks

starting

October

223 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 when to A. presumably DIP loan. Q. two-year A. Q. and A. provision. the Throughout period Yes. And anyone The that had to be approved by the entire of term, '07? the be I approved haven't by you? it carefully, of but the

read the

throughout

existence

through

May

else? DIP agent not and a who had this for

This

was

provision

pre-petition Q. Okay. over the

creditors. So you had approval cash flow

rights that

13-week had to

rolling provide?

the A. Q.

debtor Yes. And cash out

in

order

to

create the

13-week have that

rolling to

flow, what

doesn't its

debtor during

figure

EBITDA

period A. there flow The were

will

be? a be classic a situation, between yes, the cash

In should

marriage the

projections cash flow

and

EBITDA

projections. here the

projections, more

however, than

always

far

accurate

224 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 that from EBITDA only was projections, out DIP for and 13 because weeks, who they were it

going for the

and had a

because

lenders know, the

different money we

tolerance out for

for,

you

being

first

150 an

million,

projections, the cash

never

had

objection I can

to

flow

projections Q. 13-week A. Kroll Q. rights in

that Who

recall. the cash flow, the

prepared cash of

rolling A

flow

projections? principally

team

people,

Zolfo Did

Cooper. have 5.010 additional of the approval DIP

you

section

amended

agreement? A. Q. actually financial initial A. Q. Capstone, A. way, Q. Yes. And the are you the -was as your firm

firm

identified with

the cap F and

advisor A?

initial

cap

Yes. So financial advisor defined as

right? I don't it know was look that it was defined way.

but

functionally at the

that

Let's

definition.

225 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 them and you it It's on A. advisor Q. advisor right? A. Q. Capstone 5.01 of A. respect Q. strategic I. A. would It's hidden the in the crease. plan Yes, to No. So have the We what under approval section DIP rights O of did section to as page
.

16,

isn't

it? or such other

It's they There the

Capstone may was agent

retain. no other financial Capstone,

besides

July had

'05

agreement? rights date with budgets. the little

approval

the

post

closing else? to

Anything plan

What on

about one

referred

O,

include

strategic

as

well. Q. the by A. Q. and A. And the post plan closing were date budgets to

strategic the

delivered

company? Yes. And you had a chance to review

diligence Yes.

them?

226 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 have any yes. Q. to Does it say in here of that you in I Q. couldn't Have tell about you seen the you strategic were asked by plan? any Mr.

whether the

questions Damren, A. Q. document Damren, one of I

strategic

plan

were I

you? don't was believe the I was. 2005 by was firm Mr. that had

Now, you

November

were

questioned Exhibit which

about 6-M, your

think

it's

the

things

over

approval A.

rights? With respect to the DIP lenders,

exercise that's of

your

rights to

approval

manner

limited the only we DIP rely

your

representation A. counsel see here the of if I from we

lenders? on to the advice to of

can when an

wanted

pursue to

had

objection in

right

use with

because budget.

we I

were was

disagreement by Hal

advised ran

Novikoff the DIP

Wachtell and to

that then the

this my

solely

to

lenders respect senior

conversation lenders JP was

with the agent,

DIP

that the

management

at

Morgan,

227 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 was we felt because to their of they $150 this in were comfortable loan, with respect is no the

million

which had

topic

agreement, an you

they

interest Q.

pursuing are

objection. saying that you and

Well,

strongly 6-M to

enough

about

Exhibit them

6-L

Exhibit DIP

disapprove

under

the

credit A. more looked we

agreement? It wasn't the at the time time least more of 6-L. It as

around out

December or at

frame

and going

saw to

believed confusion

that and

were

create We

delays we

with had I'm

that. some

considered -hear that

whether Q. word. A.

ability I

sorry,

didn't

We

considered, agent,

we

being and I if that

the considered we wanted

pre-petition whether to use we it,

counsel a

would and to

have

right, make

we

didn't the we

determination they it, DIP didn't but that

tell it,

company would cut no off

that

if to

change was

object by

quickly who had

the in

lender that.

agent

interest

doing

228 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 what make have Q. When you you as to to say you didn't a make a

determination, determination A. the Q. documents, know would A. Q. the As

didn't what?

make

whether we

even would

if

we

did it. two to

right So 6-L

that

exercise these

you and

didn't 6-M, were them

examine carefully

enough you

whether

they

so if

bad you

that could? no. you

disapprove I I

didn't thought

say you

that, said

didn't were

determination to disapproval. What I meant that

whether

they

subject A. I

to the

say, DIP

if

that's I'm

said, the and

was

agent,

sorry, counsel that we

pre-petition I never

agent, the the

pre-petition determination post closing

made to

should

object

budgets. Q. Is that in that because the was a you knew of to that doing be a

company

was

process going set

five-year sometime

plan in

issued up

2006

with

of

bottoms

projections? A. That was part of it. We

229 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 was the the believed the that the appropriate of for course given was

sensitive on and was

nature to ask

everything a meeting our

that with

going Kroll ask

management, they take the in

make

points

and

that

them

into

consideration that were

before

they

did

projections January. to make about

ultimately Q. understand September budget. projected A.

issued Now, your 22nd, I

want

sure the

testimony 2005 post I

closing thought million?

date had a

That

you

said

EBITDA Based

of on

$302 the I

roll

forward that to

from be

subsequent

one

believe

correct. Q. looking itself? A. time I for for think me to we chose not to spend it added at So you couldn't tell that from

the

September

22nd

document

search that

through to be

looking

numbers

had

together. Q. your And view I the thought you said also that

September by

22nd KZC,

document is that

prepared

principally

230 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 of you had the right? A. a much My understanding role was that they into I

greater

than

they

did

actual

preparation they in had

versus the of

vetting.

believe and

that

same

obligation Of

activities once I

terms

vetting. it a --

course Q. A. Q.

you've didn't

prepared ask you

question.

Okay. I'm just trying the to understand 22nd who

thought

prepared

September

document. A. people Q. accountable the I believe on you that Kroll had a lot

working Who for do

that. think was set ultimately forth in

the

results document? the

September A. We would

22nd knew be

September in

22nd

document short led team

replaced

relatively by a management

order

with

projections it

team, and

but the

ultimately CRO who are and

was

management for

responsible the plan

delivering

operations

for

reorganization. Q. Did you just say it's the CRO's

231 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 ultimately plants ahead. A. words but Is I was a fair to arguing responsibility operations? A. I may have said I'm that but to -object for delivering results of

MR.

DAMREN: the

going

with MR.

witness. I thought that

DeFILIPPO:

question. THE COURT: what I I you thought said? used meant. have. that Kroll the were the not was those I so, go

that

think

actually what I

that's them. We I

not

combined

shouldn't believed for

never

responsible We

turning they

around. the or

knew or kind

that

operating

plants that

providing of

engineering necessary there. to

expertise changes were

make

the

operating that they

We

did

assume was make

reviewing the that

what to

being sure people

done, that were

monitoring it was being, an

results the

operating job.

doing

effective BY Q. MR.

DeFILIPPO: In terms of engineering and

232 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 one operational anybody in skills, your is that something to this that

firm

brought

engagement? A. Q. operational the No, Who and that was not our job either. an for

examined

things

from

engineering or the was not DIP to to

perspective lenders? how

pre-petition A. Our were have that in feel were

job

monitor fix

things would felt

going, been

them. So if have but but

That we had

duplicative. to of to on and we

we

needed kind need

might

brought didn't fact its we

that the

talent, do the that,

we in between

relying team the

company

management Q. did? A. Q. Is

Kroll. to my question no

answer

That's Okay. Zolfo

-So

that's you

correct. expecting

weren't the

Kroll

Cooper or

to

provide

operational sure that

engineering was an

expertise built

to into

make the

whatever plan from

being

business

engineering was your right, side

and and who you could

operational didn't have

perspective anybody on

233 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 not in at tell you that had either, were right? So the only

person in

you

the

operating

experts

management, A. Not from a

correct? totally correct. It's

correct

technical

operating

standpoint. Q. A. something's financial did have Q. time which That's But -what but I you was talking if the we about.

know you

working

when

monitor

results the My

and

that's on.

something

expertise question the

related plan no

to

the

point

when time to

business were were

was

created,

there

financial

results A. in Q. looking, A. Q. make

monitor, There

there? results but yes.

were to

financial the

comparison The are

projections, were all

projections not?

forward

they

Yes. And they rely on one's about ability the future,

informed

judgments

correct? A. Q. Yes. And do you agree that one's

234 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 was taken at that to in stop. Judge expertise the future in is a particular an of a important the area of predicting in the

factor

reasonableness A. factor. Q. factor? A. Q. evaluating Yes. Who the I It's

projections? It's not the

factor.

said

is

it

an

important

had

the

most or

expertise the that

in

execution of the cost

executability built A. implement Q. A. into

savings

were

the The them. Frank Yes. THE

2006

projections? team had to

management

Macher's

management

team?

COURT:

This

is

good

time

We'll

reconvene

at

10:00

tomorrow

Shefferly's MR. to the if

courtroom Mr.

upstairs. father He's the from that him

DAMREN: the

Nurge's

hospital but he I

last

night. ask call ill

stable Court his he

moment in fact his to

would a

gets

mother has

that

father's go.

very

permission

We'll

bring

235 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
.

back and

at

later ill. MR.

date.

He's

80

years

old

quite

DeFILIPPO: Honor. COURT:

can't

object

to

that,

Your THE

We'll

work

it at

out. 4:54

(Proceedings p.m.)

adjourned

236 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
. .

CERTIFICATE

OF

REPORTER

I,

Kathy for

Adkins, the

Certified of

Shorthand do

Reporter hereby

State the

Michigan,

certify by

that

foregoing and held

was

reported means, and at

stenographic matter and was

mechanical on the date, the

which the page

time

place that

set the

out

on

title

hereof a true

and and

foregoing transcript

constitutes of same. I to any

accurate

further of the or

certify

that not to the

am I of

not an the

related

parties, related

am any

employee attorneys have of no

of

representing

parties, in the

and

financial matter.

interest

outcome

this I

have

hereunder of

subscribed

my

hand

on

the

____

day

_____________,

_______.

__________________________ Kathy Adkins, CSR

Hearing 237 A ability 8:6,15 9:7,12 22:18 27:10 40:1 123:8 170:14 174:16 181:6 227:14 233:21 able 8:12 15:4 20:11 29:15 40:8 41:4 98:7 116:16 117:2 172:3 196:2 197:21 about 5:21 6:2,8,18 7:8,12,18 8:5 8:15,23 9:6,7 9:11 11:16,17 11:18,24 15:5 18:25 19:3,7 20:4,6 21:12 21:24 28:23 29:8,11 32:20 33:5 35:25 36:4 42:16 43:3,13 47:7 47:15 48:16 50:8,9 60:4 61:24 64:17 64:19 66:16 71:9 72:22 74:18 77:10 77:12,22 81:7 83:12 85:21 86:3,20 88:10 89:13,16,19 91:5 96:12 97:5 98:17 103:17 114:16 121:19 122:14 122:21 125:6 127:11 132:13 135:3,19 136:9,24 138:1 140:23 140:23 141:4 142:1 146:8 148:23 152:18 154:11,14 155:22 156:18 158:3 161:7 162:22 164:18 164:23 166:4 169:13 170:1 170:5,24 171:18,21 172:1,12,14 172:17 174:8 174:17 177:17 182:9 184:10 186:18 196:19 197:11,24 204:23 206:25 207:16 208:15 211:24 212:23 217:14 220:9 221:9,13,21 221:25 225:13 226:3,7 227:6 229:9 233:7 233:22 above 124:18 absence 159:13 absolutely 23:3 112:25 113:22 187:24 absorbed 118:4 accelerated 19:11 accept 115:3,9 134:25 208:10,11 acceptable 30:4 185:19 acceptance 33:16 access 48:8 52:8 accommodation 81:8 accommodations 27:11 28:1 38:15 accomplish 29:15 accordance 81:25 134:13 according 23:14 account 131:2 171:15 179:19 accountability 68:8 accountable 68:6,12,15,19 69:2,5,10,18 230:16 accountants 22:15 accounting 145:24,25 155:23 accounts 76:21,22 212:2 accurate 80:10 223:25 236:10 accurately 37:10 accuse 153:16 accused 41:13 achievability 89:20 161:12 achievable

July 29, 2008

11:15 175:23 204:21 achieve 39:16 89:6 171:2 174:16 202:4,6 205:22 207:17 207:18 achieved 39:18 163:1 achieving 205:16 206:2 acoustics 167:15 acquire 90:19 acquired 29:24 30:15,18 210:18 acquirer 36:23 86:1 acquirers 27:22 95:10 acquiring 28:24 199:1 acquisition 31:4 33:18 90:23 92:10 across 170:6 174:23 act 52:16 acting 143:17,19 action 42:12 152:15 actively 48:4 activities 120:25 230:6 activity 120:9 actual 121:3 167:7

Hearing 238 199:21,25 230:4 actually 5:20 9:18 11:16 16:25 19:4 25:15 32:12 36:2 39:20 40:19 60:2 61:25 62:10 70:24 79:1,6,15 80:10 86:17 90:2 99:22 119:14 123:16 141:3 194:11 217:16 221:12 224:17 231:10 adamant 8:11 11:14 19:3 add 172:7 173:23 215:12 added 177:9 229:21 addition 16:15 additional 16:5 45:24 113:6 114:4 124:9 125:15 214:12,24 224:12 address 5:7 76:18 108:24 111:9 111:11 185:8 addressed 186:11 Adelphia 147:2 adequacy 105:15 107:20 184:16 187:9 adequate 14:11 45:8 93:2 95:11 adequately 178:22 adhere 33:6 adjourned 235:6 adjusted 76:20 93:14 adjustment 206:7 Adkins 1:12 236:3,22 Administered 1:6 administration 127:25 131:11 administrative 19:24 admissible 131:21 admission 129:1 admissions 130:24 admitted 129:10,16,20 129:24 130:10 139:10 admitting 130:21 advance 166:14 adversarial 132:3 adversaries 132:5,22 adverse 207:20 advice 36:11 190:24 195:20 226:17 advised 182:16,19 191:10 202:21 226:21 advising 146:20 advisor 21:9 52:14 69:1 130:6 141:14,15 142:8 143:9 143:17 144:7 144:10 147:15 216:13,21 219:11,12 222:9 224:18 224:21 225:3 225:5 advisors 22:15 35:1,5 48:3,6 49:3 62:20 64:20 64:21 69:23 75:16,24 102:16 107:14 149:12 153:15 153:24 180:5 211:10 advisory 28:13 146:4,10 146:14,24 advocate 96:7 affidavit 183:14 affiliated 55:17 56:10 190:4 affiliates 105:13 187:5 after 11:23 14:23 25:8 27:24 29:5 30:9

July 29, 2008

36:7 42:20 57:8 78:15 87:15 95:19 99:6 101:2 111:16 125:16 139:23 144:23 145:23 146:1 146:12 148:2 155:17 162:20 180:11 181:5 182:24 183:6 184:24 194:24 198:16,19 199:10,12 204:12 209:7 210:9 211:8 215:9 219:18 afternoon 136:16 again 30:20 38:4 45:6 51:20 66:22 72:22 77:13 96:4,15 106:24 111:15 111:19 112:14 131:5 156:16 156:18 194:17 203:23 204:15 213:4,15 against 15:8,12 40:16 109:19 agenda 165:20 agent 31:14 34:22 35:2,19 131:14 218:14 218:15 222:8 223:10 225:5 226:25 227:18 227:24 228:15 228:16 aggressive

Hearing 239 14:15 40:16 40:22 72:14 161:14 173:9 aggressively 13:21 agitated 9:9 ago 90:9 147:7 150:22 216:17 agree 46:10 120:22 168:4 221:5 233:25 agreed 53:14 100:3 148:24 185:16 186:22,23 187:16 agreement 53:1,4 56:23 57:11,22,25 58:23 60:4,13 60:14,21,21 60:23,24 61:8 62:1,5 77:11 92:21 96:23 97:19,22 105:7 115:11 115:24 116:9 116:10 121:6 121:10 125:5 126:16 129:15 148:14,15 157:7,12 179:9,9,14,15 179:17 180:17 185:5,13 188:22 191:24 192:3 193:16 215:23 216:1 220:10 221:17 222:12 224:14 225:10 227:3 227:8 agreements 61:2 150:18 ahead 138:16 205:23 231:9 aid 200:3,5 Aikman 1:3 5:5 7:8 18:23 19:25 40:6 43:25 48:15 52:14 64:22 72:24 80:8 81:8,11 95:12 100:22 113:12,13 147:18,21 148:1 152:17 170:3 174:3 193:12 197:7 197:21 198:15 209:3,6 218:8 Aikman's 25:19 30:15 31:5 100:9 108:2 169:15 aim 47:3 akin 118:6 al 1:3 151:25 albeit 8:21 28:15 35:12 45:9,20 48:10 81:6 117:22 alert 73:17 all 12:6 13:5 27:5 27:9,12 35:4 37:21 39:2,15 40:24 41:5 42:13,17 47:25 50:9 54:9,11 55:2 57:4 59:7 61:2 68:21 77:2 79:10,16 79:19 81:23 83:16 96:18 96:22,24 98:11 107:12 107:13 110:10 111:11 112:1 115:4 118:18 119:4 120:21 121:7 128:3 128:23 129:11 129:23 132:23 133:5 135:16 137:19 138:5 138:12,23,24 142:24 146:23 146:25 148:10 151:19 152:2 152:22 155:23 159:11 168:23 169:13 170:14 172:7,13,21 173:23 175:3 178:15 185:13 190:8 197:18 199:1,9 201:22 202:2 202:5 204:14 204:18 205:17 206:16 207:15 207:17 208:18 209:10 211:3 211:25 212:9 212:14 213:15 215:11 216:1 233:18 allegations 41:18,19 alligators 49:6

July 29, 2008

allowed 52:1 allowing 212:13 almost 17:10 22:12,20 103:11 113:1 Aloise 164:4 along 17:11 114:12 185:20 alpha 46:24 already 5:20 33:14 63:21 69:11 81:4 106:17 129:24 149:3 also 6:1 13:9 14:13 14:22 23:21 31:23,25 42:20,25 43:18,23 45:13 48:1 56:14 72:21 76:12 80:22 90:22 93:21 106:12,20 111:24 112:8 134:6 137:25 141:5 146:25 148:8 157:11 160:1 166:18 167:22 168:12 170:11 171:25 174:15 177:19 177:23 195:5 196:1 199:15 200:3 209:15 229:23 alternative 5:12

Hearing 240 alternatives 79:20 80:25 109:19,24 110:2,11,21 112:1 118:25 although 148:10 161:13 201:2 211:17 Alton 145:7 always 19:7 22:13 33:2 80:13 90:3 139:7 195:7 223:25 ambitious 9:3 163:14 amended 154:4 179:14 179:18 180:20 222:14 224:13 amendment 157:10 180:14 191:23 192:2 American 30:16,17 among 76:21 115:24 187:12 amongst 14:3 137:20 amount 39:7 41:5,23 46:11 177:4 192:15 199:10 203:10 amounts 22:9 40:10 analyses 42:3,12 47:17 48:10 202:2 analysis 39:12 158:6,9 158:15 analyzing 80:25 and/or 17:19 20:25 47:19 55:21 107:25 116:9 Ann 37:1,16 147:22 148:11 164:3 202:16 announced 30:24 31:2 announcement 33:5 announcing 32:10 annual 18:24 another 6:23 11:12 104:1 119:21 128:14 133:21 146:10 164:7 175:8 176:10 195:8 218:25 220:4 answer 77:13 87:1,4 106:22 123:3 135:6 136:23 153:2 173:24 181:14 194:19 232:16 answers 130:13 172:21 answer's 51:19 anticipated 84:13 anybody 135:22 232:2 232:25 anymore 117:13 173:25 anyone's 118:21,22 anyways 100:23 apart 157:16 app 115:22 116:24 apparently 78:7 127:15 140:4 141:16 141:17 appear 196:17,20 197:14 198:7 APPEARANCES 2:1 3:1 4:1 appeared 72:13 APPEARING 2:3,11 3:11 4:3 appears 125:13 192:4 appetite 114:3 applicant 2:3,11 130:25 application 52:24 97:16 126:23 132:2 137:16,18,24 138:20 141:5 144:18 190:22 190:23 191:3 196:24 applications 116:5 127:2,7 140:13 143:11 188:24 appointed 122:23 appointment 105:10 142:5

July 29, 2008

189:22 appreciate 6:12 97:24 190:3 appreciated 196:25 approach 14:24 34:1 approached 215:15 appropriate 40:15 59:16 67:23 106:11 106:20 107:1 125:17 127:3 229:1 approval 97:21,23 116:4 127:20 179:21 180:9 181:13 188:12,17 189:7,23 190:25 222:18 223:13 224:12 225:8,11 226:10,14 approve 179:23 180:24 181:7 approved 58:3 97:18 115:23 126:23 127:7 180:4 189:21 223:1 223:8 approving 105:7 116:9 185:5 approximately 67:3 162:18 April 6:5 203:12 architect 7:18,23 60:4

Hearing 241 61:20 64:15 67:16 architects 62:2 architecture 62:22 area 54:25 120:7 197:2 234:1 areas 16:17 144:3 argue 38:10 arguing 231:5 arms 149:16 150:7 212:21 around 7:15 29:6 41:23 48:21 135:22 143:3 149:16 150:7 153:24 210:25 212:8 213:4 217:1 227:10 231:15 arranged 19:19 86:4 arrangement 116:14 155:7 arrangements 51:8 articulated 15:17 articulating 17:1 articulation 14:25 15:2 artificial 37:22 aside 203:3 asked 47:1 69:20 70:5 98:8 102:4 103:17 115:11,15 117:6 125:6 125:11 132:12 140:4,5,9,23 147:24 164:16 187:19 196:19 203:25 220:9 226:2 asking 98:17 104:5 115:21 121:18 122:14 142:24 158:3 170:16 asleep 44:7 aspect 28:1 142:18 157:20 170:4 aspects 57:4 121:7 assembled 22:13 140:2 asserting 61:14 197:5 asset 113:22,23 212:14 assets 23:2,13,22 24:6,12 29:24 30:16 81:24 90:20 210:8 210:14,15 212:13 assigned 105:23 141:12 assist 162:1 assistance 74:9 214:1 associated 9:4 47:5 59:14 Associates 23:21 assume 24:10 45:11 56:9 57:14 62:16,25 84:22 93:11 93:14 127:21 128:1,2 129:15 195:17 197:14 231:19 assumed 32:13 62:18 71:4 102:15 102:19 120:17 121:5 127:6 129:10 143:8 201:25 assumption 62:19 76:16,19 103:6 195:18 assumptions 42:3 75:23,25 89:4 172:14 assurance 95:11 assured 45:6 attempting 72:9 112:6,8 116:15 attend 163:15 184:23 attendance 65:1 134:19 attendant 30:1 attended 56:3 163:17 165:6 183:10 attention 17:25 56:22 58:18 74:6,15

July 29, 2008

78:2,4 87:12 99:20 130:12 139:5 167:6 attitude 141:23 attorneys 183:19 236:15 audit 105:23 106:8 108:16 August 78:11 80:7,15 82:15 204:11 215:10 authority 20:9 authorize 12:8 68:24 authorized 57:3 105:14 187:7 auto 11:19 30:19 31:3 147:4,11 147:22 169:17 automotive 11:10,18 45:22 45:22 147:8,9 168:5,16 available 13:3 32:8 47:18 48:25 50:14 53:25 54:6,9,11,16 57:11,14 113:15,16,19 116:17 118:8 153:1 155:24 155:25 Avenue 2:7 27:17 85:23,25 average 194:1

Hearing 242 aware 13:23 18:5 23:15,23 28:6 41:12 49:13 57:15 61:18 63:10 65:15 65:18 73:10 73:15 82:18 83:3 102:7 117:11 123:1 126:17 163:12 206:18 218:22 aways 88:4 awful 94:22 a.m 1:9 34:10,12 B B 51:16 52:25 56:22 back 5:13 9:16 11:25 13:22 34:11 52:25 98:5 117:2 119:22 125:1 125:5,8 136:20 149:5 162:1 170:17 170:22,24 201:22 211:23 213:1 216:5 220:22 235:1 backed 162:4 background 145:20 backup 120:19 back-end 13:14 84:9 bad 209:17 210:5 228:8 badly 199:18 200:12 202:24 205:3 205:18 bailiwick 59:24 bake 95:1 172:23 213:9 baked 159:24 baking 95:2 balance 205:2 ball 32:9 36:19 151:12 ballpark 88:8 balls 174:24 bank 113:15 114:25 124:22 164:5 183:20 187:13 207:4 212:11 banker 31:14 bankers 22:15 bankruptcy 1:10 45:2,5 81:17 83:8,15 108:2 146:4 150:2 160:16 163:5,6 168:11 193:18 193:20 194:3 194:16 198:15 216:16 banks 29:20 31:12 38:20,23 42:22 bank's 32:20 bank-like 113:16 bar 208:13 base 89:25 based 40:7 68:21 76:16,20 83:7 85:1 89:4 93:15 104:20 169:8 173:9 176:3 194:10 197:20 199:5 205:16 207:1 212:12 229:13 baseline 17:1 41:3 78:19 109:19 171:22 172:6 172:10,11,13 172:18 177:13 basically 98:20 141:12 152:8 168:20 169:22 177:9 182:1 193:14 201:13 202:4 202:7 205:25 211:8,10,14 212:7,8 215:4 basing 189:25 basis 15:15 16:15,18 18:25 47:18 62:24 63:4,8 74:3 79:2,4

July 29, 2008

90:10 96:17 96:19 100:6 112:9 130:21 154:25 156:1 156:11,19,21 158:16,18 160:5 163:12 182:17 195:11 200:25 basket 83:16 Bates 104:8 Bay 145:8 BBA 145:22 bears 197:9 became 45:14 146:9 164:21 204:9 because 6:8 13:16,24 20:6 32:13 33:17 37:21 37:23 42:17 48:8 51:23 56:10 59:20 63:13 68:10 71:17 77:22 92:22 98:1,2 99:16 105:9 106:16 111:10 113:20 114:23 115:2 118:23 119:11,19 120:18 141:6 147:21 151:5 155:10 156:9 159:13 160:19 164:19 166:5 166:14 167:17 167:22 168:8

Hearing 243 170:7 174:9 190:4 204:18 211:16 215:19 217:22 224:1 224:2 226:20 227:1 228:20 Becker 117:21 119:7 become 186:16 bed 155:18 before 5:7 28:8 29:12 32:2 37:16 45:2,5 58:25 64:1 67:9 78:23 93:25 94:2,23 97:17 101:2 111:7 115:11,12 132:14 135:16 139:21 140:5 140:7,10,12 140:21 152:11 163:24 164:9 176:12 183:18 185:17 191:19 206:25 220:22 229:6 beginning 90:16 91:21 165:10 begun 12:3 30:17,22 behalf 2:3,11 3:11 4:3 110:23 112:16 148:6 222:18 behavior 66:18 behind 40:12 42:3 93:23 161:8 being 7:18 12:15 16:22 25:6 26:5,21 36:1 45:11 47:1 54:8 59:11 60:4 61:16,17 62:3 67:15 78:17 79:13 79:25 80:4,12 80:17 85:11 94:13 108:4 113:2 125:6 129:10 139:19 140:9 170:15 172:7,10 183:21 195:24 196:2 203:25 204:19 215:19 224:4 227:17 231:20,21 232:22 belief 113:20 believe 18:23 19:23 27:4 45:2 52:21 55:16 75:9 81:19 92:25 100:16 105:24,25 107:2 108:17 114:24 118:3 127:3,5 156:14 163:12 165:13 175:20 179:18 184:20 184:23 186:5 189:9,10,25 192:9,24 196:13 200:18 203:4 210:19 226:5 229:14 230:5,13 believed 10:22 20:24 26:9 38:21,24 64:6 72:5 106:19 107:2 153:8 160:1 160:21 161:14 177:7 178:10 178:11 192:13 194:11,17 227:11 229:1 231:13 belongs 211:7 below 34:18 192:15 benefit 199:3 219:20 benefits 12:22 13:14 benefitting 214:8 besides 56:5 225:5 best 12:5 20:15 29:17 40:20 63:17 64:6 86:10 99:9 105:19,22 120:4 149:5 158:17 164:10 165:2 166:21 210:8 better 19:16 38:7 46:20 72:1,19 80:9 170:23 181:24 217:2 between 10:4 28:16,16 60:24 61:3 129:8 162:8 168:15 184:22

July 29, 2008

193:10 209:20 218:14 219:23 223:22 232:14 beyond 7:19 157:19 213:22 bid 22:24 27:19 193:20 bidding 193:24 194:4 Bienenstock 35:11 big 33:15 121:23 125:3 166:2 169:14,22 bigger 123:23 141:4 billing 140:17 billion 179:2,2 199:5 billions 31:2 binder 130:9 132:23 134:3 220:18 binding 91:13 92:1 bit 9:16 22:2 24:16 64:5 141:4 155:14 164:12 170:23 175:19 196:5 197:24 208:24 bits 120:1 black 185:21 block 140:17 board

Hearing 244 7:8,16 8:5,10 8:21 9:10,19 10:3,7,25 11:21 12:5,20 13:10,11,22 14:3,5,8 15:11 16:3,16 16:19 18:14 18:19 19:6,14 20:24 42:19 43:24 44:3,7 44:16,23 45:11,14,20 46:3,14,16,23 53:18,24 54:5 54:15,16,20 54:21 55:6,24 55:25 56:1,6 57:16,17 64:4 64:18,19 65:12,15,24 66:1,18,19,20 67:19,20,22 67:25 68:20 68:20 69:25 70:25 71:12 71:18 73:23 74:7 78:7,12 80:20,24 81:14,21 84:24 86:16 86:18,19 96:6 96:23 105:10 105:10 107:12 107:15,24 108:9,10,12 110:7 116:3 117:21 119:10 121:19 122:3 122:12,19 125:18,20,22 126:7,13 127:3,6 137:10 142:10 170:6 174:23 183:8,16,22 184:3,13,19 187:1 188:19 188:21 189:16 board's 9:2,25 17:25 69:16 Bob 86:11,12,12 146:7 191:14 196:11 Boken 2:4,12 7:25 8:19 14:6 36:2 41:13,25 50:8,23 52:10 55:21 57:3 69:5,10,17 75:13,19 76:15 107:24 109:10,11 110:4,23 111:22,24 112:16 117:17 118:2,14 119:25 120:20 125:19 136:23 137:7 143:15 143:25 165:7 183:14 185:6 186:4 203:4 203:20 204:2 204:13 211:21 Boken's 119:4,25 120:24 125:21 bolded 88:24 91:20 bond 45:4 bonus 10:23 book 104:1,3 157:16 166:25 168:22 212:2 220:17 books 124:25 borrowers 221:7 bosses 142:10 both 17:24 24:13 26:1,25 29:14 43:2 73:16 77:12 84:2 95:2 130:19 131:12,15 137:23 157:18 170:7 180:2 213:5 bottom 74:25 97:17 104:7 114:13 125:15 184:18 198:16 bottoms 176:14 228:23 bought 37:24 90:10 bound 205:19 box 177:6 196:6 Brainy 216:15 217:2 break 34:9 66:3 97:10 breakfast 37:1,12 breakup 208:18 Breed 147:7 bridge 6:4 25:13,15

July 29, 2008

26:20 brief 138:15 briefly 148:20 bright 11:4,13 bring 59:19 114:12 160:14 234:25 bringing 114:8 176:15 broad 121:4,10 125:12,24 broke 98:16 broken 139:19 brought 11:3,4,6,13 17:25 120:16 140:21 149:13 192:18 232:2 232:12 bubbling 176:17 budget 10:2 63:22 64:1 103:15 157:6,11 159:24,25 160:4 162:8 162:21 174:14 176:11,14,21 176:23 177:3 177:4 180:10 180:25 192:7 192:10 193:4 198:16 204:25 221:6,15 222:1,6,23 226:21 229:11 budgeted

Hearing 245 203:7 budgets 157:20 158:1,4 171:16 179:23 180:4,23 181:7,11,16 181:19 192:6 192:8 221:14 221:15 222:17 225:12,19 228:19 build 30:17 building 149:3 210:17 built 13:20,24 16:6 207:13 232:22 234:12 bullet 103:4 bunch 122:1 140:20 142:22 153:23 business 7:10,25 10:19 13:16 15:17 16:7 18:6,8 18:11,14,19 18:20,22 19:1 19:7,10,17,22 20:2,21,22 21:19,21,25 22:4,7,17,23 24:14 25:22 26:6,14 30:20 30:23 33:16 39:14 55:8 57:6 62:2,14 62:17,23 67:24 68:1,17 74:22 78:19 78:25 80:7,16 80:18 81:24 83:18 88:18 89:20 90:14 100:21,23 101:3,9,18,19 101:20,22,22 103:8 109:12 120:18 121:8 158:22 168:6 178:1,15,21 193:17,21,23 193:25 194:1 194:6,8,9 195:6,12 201:25 205:4 210:16,18 212:3,4 214:5 214:6 232:23 233:13 businesses 24:12 56:11 110:16 112:3 214:18 buy 28:21 141:24 178:23 buyer 21:20,22 22:6 22:20 26:23 210:6 buyers 22:3,25 24:21 25:11 27:9 73:14 179:3 buyer's 26:16 buying 25:13,13 26:20 BY-MR.DAMREN 43:10 126:6 138:18 145:3 BY-MR.DeFIL... 7:3 102:2 121:17 137:6 216:11 B.A 1:12 C C 3:13 51:17 cake 95:1,3 call 19:16 35:18 48:14 49:23 56:4 69:22 70:6 130:11 130:20 135:15 137:22 144:20 145:10 147:20 156:7 191:14 191:18 196:20 208:11 234:23 called 17:8 18:7,21 19:18 134:7 144:22 146:3 147:23 176:13 190:20 201:6 208:13 calling 49:10 117:5 180:8 191:8 calls 49:1,4,23 50:2 95:22 Cambridge 147:9 came 6:10 17:16 24:3 37:14 64:2 80:8 87:16 111:17 119:10 120:15 143:12 147:17 154:3 155:1 213:16,20 215:10

July 29, 2008

Camelot 216:24 217:10 camping 47:23 Canada 108:20 candidates 183:8 candidly 120:4 candor 118:18 128:3 cap 224:18,19 capabilities 21:24 capable 9:14 24:10 capacity 131:10 capital 76:17,18 89:14 114:23 124:9 124:16,20,23 168:23 174:11 211:25 212:1 Capstone 35:10 48:6 49:9 50:24 51:12,16 52:1 52:5,7 69:24 103:1 104:8 130:4 131:11 131:12 145:15 145:15 146:14 147:16 151:14 151:21 152:16 180:6,9,23 181:6 224:22 225:2,5,9 Capstone's 103:7 card 26:14

Hearing 246 care 88:10 career 21:6 56:15 216:20 carefully 223:2 228:7 carpet 167:15 carping 43:3 carried 106:25 carry 32:14 107:7 Caruso 130:5 134:7 carve 9:16 case 1:5 5:4 23:4 24:20 92:25 102:6,7 121:3 131:1,13 136:18 138:13 141:3,8 145:22 148:5 149:1,22 150:7 151:8 151:13,18,23 152:3,14,21 175:19 184:24 187:4 cases 131:17 141:6 147:1 217:17 cash 29:22 39:6 44:21 79:4 104:19 149:17 150:10 151:3 151:11 153:7 158:20,22 165:24 171:25 171:25 181:16 182:2,3 192:8 206:1 212:16 213:25 222:17 222:23 223:14 223:18,22,24 224:6,8,9 catch 85:12 categorize 45:10 category 8:18 cause 84:22 194:18 causes 204:7 cent 207:6 Center 2:15 3:16 centered 7:14 212:8 central 153:4 cents 29:22 39:7 94:8,13 103:23 206:1 209:21,21 CEO 7:17 10:9,21 11:9 44:12 45:7 56:14 64:14 67:15 72:13,20 117:22 152:13 Cerberus 23:6,6 26:25 27:15 87:22 87:24 88:2,10 89:9 90:3 91:5 93:3,23 94:19 95:7 Cerberus's 90:18 certain 16:6 17:4 40:18 66:20 96:2 156:4,15 163:17 165:11 180:22 210:15 certainly 21:2 25:7 27:13 73:22 85:16 93:8 108:23 139:17 143:10,14 161:10 168:4 201:3 218:22 CERTIFICATE 236:1 certified 147:15 236:3 certify 236:5,12 cetera 184:4 Chadwick 130:3,19 131:7 131:9 134:5 151:20 155:2 194:21 chair 108:13,16 123:5 chairman 44:11 45:7 188:20 challenge 80:18 141:16 challenged 42:15 chance 35:14 225:23 chances 178:7 Chang

July 29, 2008

3:14 58:12 74:12 157:1 change 117:16 159:19 171:3 201:12 227:22 changes 162:7 185:19 185:21 207:20 231:18 chaos 48:23 Chapter 1:4 26:4 47:25 54:18 55:9 80:16,19 83:18 110:25 131:13 charge 59:6 60:5,5 61:20 67:16 67:21 102:8 chart 162:6 check 66:4 Chicago 4:9 130:7,7 134:18 chief 11:11 55:13 59:11 218:4 choice 46:25 choosing 220:5 chose 67:19 229:19 Chrysler 18:7,11,18 19:9,15,19,24 20:21 25:25 48:5 86:3,10 101:3,9 212:4

Hearing 247 Chuck 117:21,24 119:7 Cieri 6:18 109:7 110:23 111:19 112:15 186:2 CIRA 147:14 circulated 201:3 219:3 circumstances 94:11 101:1 claim 19:24 206:1 claims 104:14 132:3 149:7 clarified 129:14 clarify 70:2 103:20 129:7 181:14 197:12,19 219:17 220:13 clarifying 112:21 classic 223:21 cleaned 128:18 cleanup 19:23 clear 9:13,14,15 13:1,9,11 15:3 20:7,10 70:2 73:22,23 74:1 110:4 115:22 133:12 134:2 180:15 cleared 49:16,17 50:4 94:23 clearinghouse 153:4 clearly 13:7 42:2,4,6 155:19 CLERK 5:3 client 152:6 196:13 clients 142:25 148:5 179:8 195:2 195:16 201:1 201:9 client's 207:7 close 43:14,20 44:4 46:11 97:12 143:15 144:17 190:19 closed 25:5 closely 181:18 closer 213:6 closing 63:22 64:1 157:6,11 162:21 180:25 181:3 215:3 221:6,13,15 222:1 225:12 225:19 228:18 229:10 code 49:12 50:10 Cohen 105:25 108:17 116:13 135:24 136:6 137:12 137:21 138:9 164:5 182:11 182:14 190:24 190:25 191:7 196:9 collateral 149:17 151:6 colleagues 105:17 Collins 1:3 5:4 7:8 18:23 19:25 25:19 30:15 31:5 40:5 43:24 48:15 52:14 64:22 72:23 80:8 81:8,10 95:12 100:9,21 108:1 113:12 113:13 147:17 147:21 148:1 152:17 169:15 170:2 174:2 193:12 197:6 197:21 198:15 209:3,6 218:8 colored 160:18 coloring 153:16 combined 231:12 combining 81:10 come 15:4 42:16 168:22 176:8 177:11 195:4 202:23 comes 115:4 138:24 comfortable 172:6 227:1 comforted 42:21

July 29, 2008

coming 7:16 44:24 80:14 101:3 117:21 135:25 177:6 182:4 182:15 190:17 203:6 207:23 212:16 comment 161:13 comments 11:16 78:6 150:21 commitment 20:7,10 119:16 150:24 committed 110:8,9 111:25 committee 12:16 34:25 35:5 53:24 55:4,11,18,19 55:25 56:1,6 73:24 105:11 105:18,24 106:1,3,6,8 106:15,18,25 107:6,17,23 108:11,16 110:1 121:20 122:13,18,24 126:9,23 136:25 137:9 137:11,14 142:6,9 163:20,24 164:2,9,22 166:18 184:3 184:7 185:15 186:24,25 187:6,13,18 192:19 195:22 202:18 208:14 210:10

Hearing 248 common 31:8 communicate 6:11 195:15 communicating 195:1 communication 148:10 communications 147:3 152:6 comp 10:24 184:4 companies 26:4 146:20,25 147:10 168:17 218:2 company 15:6,10,18 17:5,19 18:10 18:21 20:11 21:8,9,10 22:23 23:13 23:20 24:9,15 26:2,13 27:2 27:7 28:4,21 28:24 29:13 39:15 40:1,8 40:15,21 41:4 41:15 43:13 43:19 44:4,8 44:19 45:7 46:19 47:24 48:4,17 49:4 49:6 51:5 57:20 68:12 70:10,24 72:1 72:6,17 73:11 74:2 75:16,23 76:23 78:10 78:20 79:6 80:24 81:5 82:6,6 85:4 88:17 89:5 90:5,8,20,20 93:4 94:12 95:15,19,24 96:1,5,9,10 96:21 98:19 109:14,17,21 109:24 110:7 110:9,19 112:17 113:3 113:20,21 114:24 117:23 118:7 124:17 124:19 142:23 147:18 149:20 149:24 150:1 150:9,11,14 151:3 152:19 157:8,23 159:16 160:7 162:25 165:21 166:1 170:7 171:23 172:16 174:9 176:10 176:20 177:21 177:22,25 178:17,23 181:8 182:2 186:17,20 188:19 190:6 194:11 199:1 199:4,16,18 200:11 204:6 205:10,12,16 205:21 207:16 207:18 208:8 209:15,25 210:3,23 211:10,12,21 212:1,13,23 213:23 217:19 218:11 225:21 227:21 228:21 232:14 company's 15:12 21:19,21 22:7,17 27:4 33:5 39:21,23 40:25 64:19 64:21,23 71:4 74:22,23 75:5 75:20 76:18 81:15 89:20 96:14 103:18 109:3 110:25 126:25 159:23 194:23 202:8 207:2 211:1 comparing 158:9,20 comparison 79:19 233:17 compensation 10:18 105:15 107:13 184:8 184:16 187:8 competitor 124:20 194:9 complete 74:16 133:20 completely 9:17 41:20 66:21,21 91:15 101:6 118:2,4,4 122:21 127:10 127:13 Completeness 133:14 completes 32:3,4 completion 150:17 complications 178:13 complimented 175:12 component 100:13 computer 50:15,18,22

July 29, 2008

conceivably 77:11 concept 109:4 114:18 183:21 concern 5:9 8:17,20,20 9:7,11 33:4 74:18 84:23 85:1 166:2 168:1 170:1 205:5 concerned 5:8 6:7 10:4 31:17,19,23 37:17 84:24 148:23 162:24 171:21 172:10 174:15 221:12 concerning 171:20 concerns 32:20 33:15 162:22 163:9 166:9 172:17 184:18 185:8 185:24 conclude 43:2 88:16 concluded 19:6 64:4 conclusion 6:10 111:18 conclusions 42:16 concoction 10:1 condition 27:10,13,14,15 27:21 43:13 113:4 conditionals 39:20,21,22 conditions

Hearing 249 26:24 30:1 94:21 207:14 218:17 219:10 219:16 conduct 202:18 conducting 22:5 confidence 12:2 95:19 178:14 confident 175:15 confirm 167:1 confirmation 14:20 conflict 142:3,7 conflicting 184:15 confronted 112:6 confusing 70:1 172:19 confusion 111:4,5 112:23 227:12 connection 5:11 28:20 39:13 41:14 116:5 156:4 187:4 cons 12:21 consensual 167:12 consequence 192:10 conservative 14:17 64:5,9 64:11,11 consider 12:21 22:1 147:24 175:16 consideration 47:3 229:5 considered 46:3 227:13,17 227:18 considering 109:23 191:8 213:2 consist 186:25 consisted 105:24 consistent 84:1 103:9 110:24 111:3 112:16 124:8 124:11 consolidation 90:11 constantly 139:11 constituencies 13:12 14:21 48:3 49:3 82:7 109:15 148:18 177:19 187:12 constituency 107:14 constituent 47:20,23 constituents 28:15 47:15 48:14 50:25 54:6 57:12 61:22 62:9,10 62:11,13,15 62:20,21 69:23 102:4,5 102:16,17 103:7 constituted 55:17 203:15 constitutes 60:17,23 236:10 constrained 174:10 constructing 22:21 consulting 145:12,14 146:10 210:9 217:23 consuming 83:9,13 consummate 84:6 contact 185:24 196:15 214:19 contacted 206:13 214:20 contacting 206:16 contain 122:11 157:18 contained 68:16 69:2,6 82:12 222:21 containing 87:22 contains 192:7 contemplated 41:5 contemporary 166:7 contention 48:18 contentious 166:15 context 51:24 53:13 132:11 195:11 203:7 207:9 contingent

July 29, 2008

206:2 continue 15:23 36:21 37:23 95:12 110:19 169:23 210:12 214:10 215:16 continued 3:1 4:1 7:2 40:11 48:7 120:6 121:16 137:5 187:8 188:3 continuous 222:24 contract 57:23 58:4,20 58:25 59:4 60:9 61:6 99:21 100:3 120:11 169:5 contractions 17:16 contractor 53:10,12 61:10 69:1 contracts 16:10,10,11 26:3,7,12 40:18 96:13 168:19,23 contributing 151:2 control 17:5,21,22 39:22,23,24 40:25 152:7 Controls 11:10 convenience 134:1 215:20 conversation 19:21 86:15 135:18 183:23

Hearing 250 183:24 184:21 203:20 226:23 conversations 28:19,23 66:16 154:14,21,23 convert 213:12 converting 212:8 conveyed 65:4,6 81:20 Cooper 3:3,6 5:17 6:8 6:16 7:5 8:1 12:20 21:6 34:14 39:5 43:7,12 78:8 80:3 97:19 98:13,16 102:3 103:13 104:22 116:2 121:18 122:10 124:6 132:12 137:1 142:21 165:9 183:6 183:21 186:16 188:10,20 190:14,16 191:1 224:11 232:20 cooperate 196:23 cooperation 96:12 Cooper's 124:8 coordinated 198:22 copies 127:2 185:25 copy 58:4,7 185:4 191:22,25 201:4 copy's 191:24 core 16:6 corner 104:7 corporate 153:12 184:2 190:2 Corporation 1:3 5:5 18:21 147:6,7 correct 16:23 29:16,18 44:21 45:15 70:22 81:20 82:11 84:10 90:17 92:2 95:4,8 167:3 177:14 180:18 180:21 194:13 218:6,12 229:15 232:18 233:3,4,5,23 corrected 99:7 correcting 18:4 correction 67:12 correctly 57:7,9 cost 7:20 13:13 14:1 16:12 22:19 40:5 41:9 70:12 71:3 84:8,12 154:6,8 155:12 170:17 170:24 171:2 171:5,12 172:7 173:8 173:15,16,18 174:10,21 177:10 182:6 201:14,22 204:23,24 207:17 213:22 234:11 costs 71:10 72:3 162:11 couldn't 19:8 56:1 84:6 119:2 134:18 139:20 140:6 140:8 153:3 193:17 202:4 208:11,16 209:23 211:18 226:2 229:16 counsel 3:3,5 31:14 34:21 45:20 58:6 87:21 127:1,1 129:8 137:17 189:2 191:24 226:18 227:18 228:17 counsel's 91:5 97:14 couple 46:21 55:20 97:8 126:2 146:12 151:17 178:18 192:13 course 54:17 84:25 124:21 169:4 183:5 195:4 203:11 210:9 229:1 230:7 court 1:1,10 5:3,3 5:18,20,24 6:7,15,18,23 7:1 12:9,12

July 29, 2008

20:13,17 34:3 34:8 39:2 53:21 57:14 58:2,3,8,13 61:23 63:3 64:23 65:23 66:3 73:10 75:10 76:13 87:1,4,7 97:11,17,18 97:22 98:7,11 98:13 104:24 105:1,21 106:5,13,22 107:5,19 108:9,12,15 108:18,22 109:7,8 111:7 111:13,25 112:22,25 115:1,9,19,20 115:23 116:8 116:9,17,19 117:1,7,12 119:17 121:2 121:12,18 122:6,11,14 122:22 123:2 123:10,14,18 123:22 125:11 127:17,19,20 127:22 128:5 128:7,10,19 128:25 129:5 129:23 130:15 130:19 131:3 131:24 132:2 132:7,8,14,19 132:25 133:5 133:8,16 134:9,15,20 134:23,23,25 135:16 136:4 136:11,15 137:2,14

Hearing 251 138:5,8,12,16 140:13,16,19 140:22 141:11 143:21 145:19 154:12 157:15 182:10,21 183:12 185:1 186:7,11,15 187:25 188:1 188:5,9,11,14 188:17,25 189:4,7,14,18 189:23 190:8 190:11,13,16 190:20 191:4 191:6,16,20 191:25 196:8 196:16,22 197:13,18,23 198:3,6,10 215:5 231:8 234:17,23 235:5 courtroom 234:19 Court's 58:5 74:15 139:5 182:17 cover 6:19 192:16 co-proponent 79:14 CPA 147:14 crash 118:7 crease 225:16 create 10:21 31:19 33:12 59:23 111:5 112:24 118:16 120:1 184:2 192:20 223:17 227:12 created 233:13 creates 178:12 creation 68:1 103:14 159:6 creations 60:6 credibility 80:18 178:6,19 credible 79:25 80:4,12 82:14 178:8 credit 76:24 77:10 148:14,15 157:12 179:9 220:10 227:8 creditor 177:18 216:14 creditors 12:16 14:16 42:24 53:23 73:24 102:6,6 109:25 146:21 146:24 178:9 178:10 185:16 187:13 195:21 223:12 crisis 153:7 crisp 15:3 critical 100:12 156:16 193:2 criticism 138:23 criticisms 164:25 criticize 195:25 CRO 41:25 52:17 69:5 189:20 190:5 217:22 230:22 cross-exami... 43:9 102:3 103:16,22 216:10 CRO's 230:25 crucial 103:14 crunch 26:10 CSR 236:22 CSR-4697 1:12 Cumberland 147:3 216:23 217:7 current 26:7 145:9 175:18 currently 37:18 191:18 cushion 113:19 customarily 59:14 customer 17:16 27:25 101:10,24 150:18 193:16 215:23 customers 16:9 17:9,11 17:19 27:4,11 27:18 31:8 74:24 76:25 89:16 168:15 169:3,16 193:15 215:15

July 29, 2008

cut 119:21 227:23 cutting 11:24 182:6 cuttings 84:12 cycle 193:24 C&A/KCZ 35:20 D daily 62:24 63:4,8 163:11 Damren 3:13 6:25 38:22 58:1,17 65:2 66:7 74:13 87:10 98:15 101:25 104:25 126:2 128:6 129:6 129:17 130:17 132:1 133:11 134:22 138:14 154:17 157:17 191:21 198:13 215:13 216:8 221:25 226:4 226:8 231:4 234:20 dance 26:14 90:16 data 22:2 24:16 47:16 48:9 52:8 88:15 152:24 date 122:12 138:22 142:17 157:6 157:11 158:2 162:21 176:25

Hearing 252 179:16 180:11 214:22 221:6 221:8,10,14 221:15,19 222:1 225:12 225:19 229:10 235:1 236:7 dated 29:3 58:23 161:17 183:23 dates 28:22 David 164:4 day 5:9 11:20 14:9 19:7 32:14 38:14 43:4 62:12,12,24 62:24 68:18 68:21 84:4 85:13 88:18 90:5 95:5 102:12 117:23 117:23 118:10 119:6 193:4 205:11,11 209:1 236:19 days 149:24 180:11 182:4 221:16 day's 118:9 day-to-day 154:25 194:21 deal 22:8 30:15 94:24 95:3,6 105:14 124:20 138:22 182:12 187:7 208:17 208:20,23 209:16,19 211:15,18,25 dealing 18:3 81:5 106:18 183:2 211:2,20 deals 90:2 dealt 22:21 127:3 186:20 Dear 185:3 debt 31:18 37:18 45:5 114:1 192:17 207:4 212:9 debtor 79:13 113:3 117:15,18 183:9 187:14 216:14,21 217:3,17,20 218:10 223:15 223:18 debtors 1:4 52:24 53:9 57:5 110:3 111:25 112:7 112:9 115:25 121:8 131:13 185:11,11 216:25 December 6:13 64:8 154:5,5 155:10 156:9 157:21 158:1 159:2 163:21 169:17 194:24 195:19 202:10 215:24 227:10 decide 37:22 49:20 51:21 decided 199:23 decision 46:25 214:9 216:5 decisions 57:3 61:11 62:8 67:21 121:6 declined 156:18 decrease 70:11 162:15 decreased 162:18 deep 26:21 139:12 139:16,25 defense 44:17 197:8 defer 184:13 deficiencies 163:2 DeFILIPPO 2:5 5:6,23 6:1 6:12,20 12:19 20:19 34:1,4 34:13 38:25 39:4 43:6 98:9,12 104:21 116:12 116:23 117:4 117:9 121:14 122:8,25 123:7,12,16 123:20 124:1 124:15 125:25 128:9,15,22 129:13,19,25 130:23 131:6 131:25 132:10 132:17,21 133:3,7,10

July 29, 2008

134:8,11,17 135:4,23 136:6,22 138:3 190:14 190:18 191:5 231:6,24 235:3 defined 224:21,23 definition 77:24 221:10 221:13 224:25 degree 21:23 96:11 delays 194:18 227:13 deliberate 137:20 deliberated 107:18 deliberations 107:10 delicate 193:13 delineated 13:8 42:2 deliver 8:6,12,25 9:7 9:12 175:15 delivered 225:20 delivering 9:15 230:23 231:1 delivery 10:19 demand 169:4 demanded 96:20 demanding 84:15,18 denied 144:18

Hearing 253 depends 90:22 92:24 94:15 170:4 deposition 130:2,8,22 131:20 132:9 133:23 134:13 depositions 132:16 depth 16:17 174:17 describe 40:21 47:9 50:5 82:22 137:13 described 5:18 39:11 70:25 78:9 183:15 describes 79:12 186:9 description 13:2 14:25 18:1 78:18 79:5 187:17 descriptive 42:11 design 31:7 designated 132:23 133:19 134:4 designating 132:15 designation 61:19 67:16 designations 130:3,8,16,18 132:9 134:1 134:24 147:13 desire 9:16 90:22 98:25 destination 25:16,18 detail 39:11 detailed 166:15 200:8 details 158:4 determination 227:21 228:2,3 228:12,17 determine 25:12 82:2 110:11 determined 210:8 211:19 determining 12:23 68:23 Detroit 1:11 3:17 25:25 85:20 DEUTSCH 2:6 Deutsche 164:5 develop 193:5 developed 75:16 109:12 149:23 developer 7:24 developing 120:17 development 7:9 62:22 68:7 68:9,13 75:14 78:15 devoted 119:6 Dewey 35:12 dictates 90:25 didn't 9:23 18:12 31:21 37:14 37:20 38:1 44:7,23 65:14 65:17,20 66:9 66:11,14 70:18 71:8 72:10,12 73:17 82:24 83:1 85:16 86:6,19 88:6 94:1 101:7,19 113:4 114:23 119:14 124:21 129:14 150:23 156:10 158:12 173:14 180:12 181:19,20 189:8 205:4 205:18 208:17 208:20 209:18 210:19 212:22 213:4 214:14 217:15 218:3 222:19 227:15 227:20,22 228:1,2,6,10 228:11 230:8 232:13,25 difference 25:14 49:19 different 14:19 23:1 24:5,8,11 28:15 46:22 47:4 90:4,11 109:23 114:22 133:1 142:23 148:12,18 152:1,2 170:2 181:25 224:3 differently 22:22 difficult 59:21 75:22

July 29, 2008

76:10 85:5 151:10 201:14 215:21 difficulties 77:2 112:5 diligence 10:6 14:11 22:5,10,12 24:18 27:3 32:3 33:11 88:16 89:4 92:12,17,20 92:23 93:9 143:8,14 144:14 193:3 199:3,8,10 207:10 225:24 diligence/a... 88:25 diligencing 14:7 diminish 10:22 DIP 51:5 119:14 120:3 131:15 148:9,14,22 150:2,3,23 157:7,12 179:9,13,15 179:20 180:5 191:23 218:15 218:17 219:2 219:12,18,19 219:20,24 220:2,10 222:8 223:4 223:10 224:3 224:13 225:10 226:11,16,22 226:24 227:8 227:24 228:15 232:7 direct

Hearing 254 7:2 43:11 52:22 53:8 56:21 58:18 74:5 78:1,3 87:11 127:8 137:5 145:2 152:22 directed 13:11 66:20 74:14 76:12 105:14 125:21 187:7 directing 139:5 196:17 direction 110:25 117:25 125:24 directions 57:17 directive 49:14 107:3 directly 32:20 49:11 206:14 director 46:7 108:21 127:12,20 131:10 151:21 151:22 directors 43:24 53:18 106:17 110:8 183:9,16 184:14 186:10 186:17,19 187:2 188:16 188:16,18,19 189:6,15,16 189:22,24 190:5 191:2 disadvantage 96:14 disagree 41:19 48:11 disagreement 226:20 disapproval 228:13 disapprove 181:16 227:7 228:9 disaster 43:21 44:5 discharge 137:15 disclosed 53:21,22,23 150:22 156:21 disclosures 5:11 discount 91:1,1 178:24 discounted 79:3 discovered 139:21 140:6 discuss 29:7 77:1 131:3 141:7 157:22 163:19 172:25 173:5 175:3 185:17 210:21 discussed 75:22 134:9 142:14,20 162:11 171:19 174:6 181:1 183:20 188:21 188:25 discussing 154:20 158:25 209:2 discussion 21:5 48:16 141:22 156:8 166:16,20 177:16 219:15 discussions 7:7,13,14 30:7 32:1,25 37:11 81:7 107:10 150:20 163:7 163:10 187:11 209:5,13 210:12 212:7 disinterest 53:20 disinterested 184:3,14 displeased 19:9 dispute 197:24 distinction 68:6 distress 21:10 distressed 217:19 distributable 79:10 distributed 79:10 DISTRICT 1:1,1 dive 139:12,16,25 division 1:2 101:11 139:6,6,8,13 139:20 170:2 170:11,11 173:11,12 199:12,17 203:9,17 214:7,8 215:4 divisions 170:8 division's 215:1 doable

July 29, 2008

83:2,20 docket 5:14,16 26:5 97:25 98:1 116:20,21 document 83:4 161:17,20 176:18 177:19 180:3,16 226:7 229:17 229:24 230:12 230:17,19 documents 23:5 29:1 50:14 61:16 129:2 140:14 157:18 159:5 159:7 179:22 180:25 181:2 181:4 228:7 doesn't 62:5 67:17 76:8 77:13,17 89:2,7 115:6 160:17 171:8 173:24 178:20 188:9 223:18 dog 72:10 doing 15:23 18:2 30:14 32:6 92:12 96:5 120:21 140:15 143:9 145:12 152:8 153:8 165:24 176:13 184:11 194:24 199:10 215:10 227:25 228:21 231:22 dollar 32:16 39:8 94:6,10,13

Hearing 255 dollars 31:2 41:7 domestics 25:24,25 33:17 33:21 don't 8:16 19:12 24:24 26:10 27:12 28:22 35:4 36:3 38:2 45:1 46:5,12 49:2 51:2,5,15 53:19,25 54:10 56:19 59:2 61:25 63:5,24,25 65:13,22,25 69:21 71:23 74:10 77:5,6 82:25 83:12 83:14,17 87:17 92:25 94:9 95:21 96:24 100:16 101:5 106:2 107:2 113:1 115:7 116:22 119:13 126:11 127:8 128:4 130:21 132:4 133:16 154:1 165:1,13 176:24 184:23 189:9,19 191:12 196:13 196:22 197:1 201:18 203:10 211:19 214:21 216:16 224:23 226:5 door 47:22 doubt 9:11 down 27:25 31:13 34:18 55:15 64:8 66:8,11 73:16,18 83:11,14 84:1 96:7,13,17 97:24 98:20 99:11 100:8 110:6 113:17 116:16 128:13 133:4,6 138:6 156:7,9 174:15 176:15 176:19 193:21 199:13 210:13 212:23 215:1 219:25 downs 169:4,5 downside 13:6 downsides 15:2 42:5 Dozens 21:14 draft 75:24 180:8,16 187:21 drafts 59:2 195:13 201:2 drawn 153:19 drew 153:22 drive 36:22 driving 62:14,21 102:13,17 103:8 drop 20:21 dropped 151:12 174:24 180:13 199:9 dropping 95:17 dual 73:12 83:10 Dublin 186:3 due 10:6 22:10,12 24:18 27:2 32:3 33:11 88:15,24 89:3 92:12,17,20 92:23 93:9 143:8,14 144:14 180:11 193:3 199:3,8 199:10 207:10 duly 144:24 duplicate 143:6 144:13 duplicative 232:10 duration 181:20 during 10:12 18:13 54:17 81:16 84:19 110:18 118:18 131:13 151:7 153:6 158:24 168:21 176:1 195:4 203:17 223:19 duties 59:10,13 117:17 121:4 125:21 220:6 duty 35:21 DYKEMA

July 29, 2008

3:15 4:6 dynamic 168:15 D.O.J 106:10 E E 222:22 each 143:5 166:22 170:2 172:1 222:24 earlier 62:4 80:6 130:14 139:16 139:18 151:22 162:12 201:3 201:4 205:10 205:12 early 6:9 12:17 19:13 20:14 63:18,20 64:7 71:14 72:22 84:14 149:22 152:21 155:9 163:5 214:22 215:6 217:9 earnings 171:22 192:14 earnout 29:23 104:20 206:2 ears 49:6 easily 42:23 139:17 141:18 East 4:7 EASTERN 1:1 easy

Hearing 256 85:3 Eaton 164:4 EBITDA 8:7,12 9:8 63:14 65:21 66:25 67:19 70:13 71:5,21 72:5 84:19 88:12 89:6 93:5 95:25 104:20 139:2 161:19 162:8 162:12,23 174:5 176:5,8 177:2,5,14 178:25 192:11 194:15 198:21 201:7,8 203:15,16 204:11 206:3 223:19,23 224:1 229:12 economic 22:19 71:1,8 72:7,15 79:5 100:5 economy 16:14 educational 145:20 effect 70:11,15 93:12 190:25 effective 84:3 231:23 effectively 42:15 effectuated 113:14 efficient 84:2 effort 52:18 177:21 196:1,4 efforts 61:11 118:22 119:5 131:16 143:7 eggs 83:16 eight 29:16 33:6 95:16 121:25 135:7 139:24 156:17 200:1 200:24 202:25 205:17,22 207:3,18 208:4 Eisenhower 3:7 either 15:20,23 17:7 21:7 25:22 27:20 33:13 40:6 50:2 64:25 69:24 70:7 85:12,25 86:8 113:7 115:5 135:19 137:21 171:15 179:22 181:1 188:18 218:21 232:4 233:1 election 186:19 element 171:12 201:17 elements 18:6 148:13 152:3 165:24 elicited 67:12 96:11 eliminated 21:3 Elizabeth 3:4 186:2 Ellis 29:6 211:14 Elmo 123:9 embarked 199:18 embrace 22:7 embraced 212:20 emerge 74:2 emerged 26:13 emergence 113:5,18 employee 48:15 236:14 employees 49:10 131:12 153:11 employment 58:23 117:15 145:20 189:22 enclosed 185:4 encompass 221:7 encouraged 31:15 end 5:9 11:20 13:21,22 14:9 32:14 38:14 43:3 68:18,21 72:16 84:4 85:13 88:17 90:5 92:18 95:5 120:21 168:3,25 172:14 175:25 193:4,10 199:15 ended

July 29, 2008

25:6 41:11 215:22 ending 222:25 ends 22:21 80:17 engage 53:9 59:21 engaged 21:13 28:5 52:13 engagement 52:19 105:17 126:14 143:24 143:25 144:1 232:3 engagements 217:1,4 engaging 92:17 engendered 159:15 engineering 231:17,25 232:6,21,23 enhanced 71:2 72:3 enormous 41:23 enough 15:3 92:23 97:12 114:14 178:21 213:24 227:6 228:7 ensued 198:22 enter 90:13 188:2 entered 61:7 105:8 182:24 184:25 enterprise 59:23 110:12 entertaining

Hearing 257 22:24 enticing 194:9 entire 11:10,22 47:25 60:20,21,24 132:16 133:13 133:23 223:5 entirely 68:3 114:22 187:1 entirety 137:19 entities 148:3 entitled 58:22 143:10 entity 190:5 envisioned 47:9,12 equally 172:15 equation 168:6 equity 23:10 75:19 77:8 112:13 212:10,10 escalating 40:4 ESQUIRE 2:5,13 3:4,5 3:13,14 4:5 essentially 23:22 120:9,25 210:11 214:15 establish 29:2 established 41:10 122:18 199:4 establishing 122:13 establishment 121:19 estate 110:3 estimate 76:20 estimates 120:4 et 1:3 184:4 Europe 212:16 European 30:16,17,21 31:5 evals 211:9 evaluate 154:8 evaluated 42:15 evaluating 92:9 110:10 158:18 234:10 evaluation 108:7 110:20 event 198:14 211:23 events 163:4 200:11 everybody 48:8,11 85:19 everyone 123:23 everyone's 98:14 everything 33:2 229:2 evidence 23:5 29:1 128:16 129:1 130:25 133:15 143:18 ex 55:20,22 exact 28:22 88:7 116:24 126:24 203:10 exactly 188:10 EXAMINATION 7:2 137:5 145:2 examine 228:6 examined 145:1 232:5 examiner's 130:6 examining 14:6 example 16:7 17:2,3,6 except 46:3 57:1 101:20 143:3 exception 113:13 exchange 20:1 exclusive 101:7 exclusively 103:11 exclusivity 6:5,6 109:3,5 110:17 111:15 208:18 excuse 115:12 128:10 154:12 196:8 199:25 excused 190:12,15 executability 234:11 execute

July 29, 2008

75:22 76:10 213:25 execution 234:10 executive 55:13,15 59:11 151:21 exercise 226:14 228:5 exercised 67:22 exhibit 23:14 29:2 33:25 34:5,15 52:23,25 58:2 58:9,10,19 61:9 74:6 87:21 93:23 102:21,24 103:17,24 121:21 125:1 129:9 156:25 157:4 159:8 159:18 166:25 167:2 192:1 220:14,21,24 221:24,25 226:8 227:6,7 exhibits 66:5 102:23 128:17 129:11 137:19 140:12 159:1 179:12 EXHIBIT-6-R 58:15 exist 53:17 existed 139:9 179:16 existence 144:11 223:3 existing 26:11 113:24 212:9

Hearing 258 exit 87:18 expect 30:3 85:4 92:16 expectation 161:6 207:7 expectations 204:18 208:7 expected 92:19 169:23 201:15,16 209:9 expecting 232:19 expedience 215:20 expense 83:13 expenses 97:20 116:1 expensive 83:9 experience 45:25 56:7,20 83:7 146:19 217:15,18 experiencing 159:16 expertise 56:7 152:6 160:15 231:17 232:21 233:11 234:1,9 experts 233:2 explain 41:21 66:9 170:23 196:18 explained 75:15,20 76:15 76:19 78:17 79:17 81:15 82:5 201:8 explanation 115:3 116:17 172:4 201:10 explored 110:1 exploring 112:1 exposed 141:19 exposure 114:3 express 8:3,14 9:11 expressed 8:10,19,20 124:9 expression 92:7 expressions 9:6 extend 109:3 111:15 114:3 extended 92:21 96:17 110:18 150:15 extending 16:9 26:3 109:4 extensive 13:6 22:9,11 150:19 151:1 extent 8:1 57:21 150:25 153:2 extra 177:9 extraordina... 193:13 extremely 9:9 E-mail 34:16,24 35:15 35:18 36:25 38:5 138:11 E-mailed 115:13 F F 134:7 224:18 face 199:6 faced 43:20 facility 104:14,17 facing 27:8 196:1 fact 9:20 11:8 12:3 20:9 25:9,20 26:23 27:16 36:4 42:21,21 49:5,7,14 52:13 59:17 67:18 70:3 72:2,6,22 73:18 79:24 81:19 88:9 94:20 96:9 113:1,21,24 114:20 118:17 122:17 124:12 139:1,11,14 141:19 142:21 144:18 167:1 169:8 173:10 174:8 177:6 183:16 212:1 213:3,8 232:14 234:23 factor 89:8 143:5 171:14 174:20 234:2,4,5,7 failed 39:15 44:17

July 29, 2008

84:18 139:24 200:12 213:3 failure 95:24 197:6,21 fair 50:12 67:7 94:22 117:14 193:11 219:16 231:7 fairly 16:17 40:9 117:16 155:14 fall 6:9 10:12 71:14 fallen 157:16 falling 40:2 41:11 false 44:14 familiar 56:18 61:5 136:25 far 24:22 25:10 26:22 181:1 195:19 203:6 205:13 223:25 Farms 147:3 216:23 217:7 fashion 140:17 156:11 father 234:20 father's 234:24 favor 38:11 fear 196:3 feasible 82:14 212:17

Hearing 259 Federal 133:14 147:5 152:13,15 168:10 fee 2:3,11 97:16 115:22 116:5 116:24 126:23 127:2,7 130:5 132:2,4 137:16,18,24 138:20 139:2 140:13 141:5 143:11 144:18 188:23 190:21 190:23 191:2 196:24 feedback 14:14 155:1 feel 205:18 232:13 feeling 85:9 fees 97:20 116:1 127:11,19 142:6 188:11 188:17 189:6 189:23 191:1 197:5 208:19 feet 146:16 203:23 204:15 fell 59:25 155:18 200:13 fellow 164:3,7 felt 7:17 170:19 173:8 174:25 208:16 210:12 211:16 213:6 227:6 232:11 few 5:15 41:7 52:25 58:22 84:19 108:25 138:24 142:15 147:7,10 150:21 fiduciary 35:20 field 40:18 96:9 151:19 154:24 fielded 52:17 Fifth 2:7 fight 219:23 figure 200:3 223:19 figuring 150:10 file 58:3 150:1 188:23 filed 45:4 57:13 118:7 129:8 183:14 186:5 221:16 filing 48:2 148:8 150:16 163:5 179:16 180:10 180:12 fill 175:8 194:8 final 81:13 82:4 91:21,21 167:17,23 200:1 221:17 finalizes 32:3,4 finally 19:6,14 95:15 141:18 142:12 143:20 finance 113:16 financial 11:6,11 15:15 21:8 22:14 44:14 50:13 52:8,14 59:22 69:1 75:20 112:7,10 113:9,19 114:14 130:6 141:14,15 142:8 143:9 143:17 144:7 144:10 146:4 146:10 149:15 153:24 156:4 158:23 159:14 171:24 172:3 181:22 207:19 216:13,20 224:18,21 225:4 233:10 233:14,16 236:16 financing 113:6 114:4,25 212:12 219:3 219:10 find 53:1 58:20 81:22 97:15 97:25 123:13 157:1 177:22 185:3 191:15 209:22 finding 74:9 findings 20:23

July 29, 2008

finds 44:4 fine 6:25 68:5 finish 133:24 fire 86:19 fired 45:3 86:21 87:12 firm 31:24 32:2 54:4 105:16 135:25 146:3 146:8,11 193:5 208:23 214:23 224:16 224:17 226:9 232:2 firmer 208:1 firms 145:25 160:13 firm's 54:2 first 18:24 20:3,5 35:18 43:12 49:16 54:6 55:2 56:22,24 67:4,5 70:14 74:16,16,20 78:5,14 80:7 84:13,19 91:8 102:22 125:16 130:16 139:1 139:25 144:20 144:23 150:6 161:17 165:17 165:18 178:3 179:12 182:24 183:6 184:22 184:25 199:21

Hearing 260 203:8,11,13 204:18 209:8 218:7 222:3 224:4 Fischer 186:3 fit 31:10 33:12 fitting 90:24 five 90:9 129:2 152:1 155:8,8 167:14,14,24 169:6,7 186:12 194:1 198:25 216:17 five-minute 97:10 five-year 228:22 fix 232:9 fixing 159:22 167:21 flags 139:9 flavor 46:24 flow 79:4 120:6 158:21 182:2 223:14,18,23 223:24 224:6 224:8,9 flown 164:20 flows 171:25 focus 101:13 117:25 120:7,24 125:14 143:21 150:13 153:4 153:9 focused 74:23 focuses 138:24 focusing 157:19 folks 140:3 204:14 followed 18:1 following 25:23 56:24 113:12 183:25 follows 59:12 93:22 145:1 follow-on 178:16 foolishness 50:3 footnote 25:7 footprint 119:2 Ford 25:25 48:5 96:9,12,17 99:23 100:20 101:10,19,22 101:23 Ford's 10:14 99:20 forecast 39:16 42:17 84:9,14 89:6 95:25 102:9 139:2,24 177:14 178:4 192:11 194:14 194:15 198:4 199:19,21 204:10 205:17 205:21,22 forecasting 62:8 forecasts 59:6 60:6 61:12,20 67:17 68:16 69:2,6,10,18 84:19 141:13 141:19 144:15 157:19 182:2 192:7 foregoing 236:5,9 foreseeable 45:8 foreseen 17:17 forever 210:20 forgotten 122:21 form 53:4 67:25 105:11 116:25 133:20 184:12 187:16 222:7 forma 112:9 formation 106:14 186:24 formed 105:18 106:6 137:9 formula 170:18 formulated 27:24 Fort 1:10 forth 17:14 38:4 47:17 108:5 126:13 135:14 144:2 230:16

July 29, 2008

forthcoming 19:10 fortunately 72:11,13 forum 196:3 forward 36:18 73:13,14 93:10 112:9 113:10 119:15 138:2 182:14 229:13 233:18 found 44:20 94:12 205:13 220:18 foundation 172:12 four 29:16 33:6 78:9 92:14,18 92:22 93:1 95:16 96:10 98:24 103:4,5 118:11 122:1 139:23 152:1 156:16 186:11 199:24,25 200:24 202:25 205:16,22 207:3,18 208:4 217:5 fourth 140:11 four-page 94:19 Fox 137:17 fractions 32:17 frame 6:8 81:7 92:11 155:4,5 168:12,21 201:21 214:23

Hearing 261 216:4 217:13 227:10 Frank 7:15,22 8:23 19:2,25 20:8 57:22 62:21 64:12,13 65:13 86:4 97:5 103:12 117:20 120:15 152:10,12,15 164:20 165:12 166:3 168:7 168:11 175:12 191:8 234:15 Franklin 2:15 30:24 frankly 5:8 10:10 33:2 84:3 119:19 166:5 Frank's 64:10 120:18 fray 192:20 French 147:8 frequent 16:2,18 fro 11:24 front 13:21 120:21 140:19 168:25 front-end 118:13 frustration 115:2 FTI 146:9 fulcrum 36:1 211:6,11 full 46:24 47:24 99:8 211:6 fully 13:4 150:23 full-fledged 144:7 164:22 function 21:13 106:21 118:14 121:3 functionally 224:24 functioning 144:6 functions 59:13 137:15 fund 30:25 113:7 150:23 fundamental 213:22 funded 150:25 further 14:20,23 43:7 104:22,24 121:12 126:1 128:7 138:4 190:9 200:13 204:6,8 214:1 236:12 Fusion 100:14 futile 73:20 76:7,9 77:14 82:20 83:1 futility 76:3 77:3 future 25:11,20 26:8 27:6 45:9 100:21 112:17 233:22 234:2 G gain 32:24 game 209:11 gaping 26:15 gatekeepers 55:5 gather 119:8 gathering 195:8 gave 95:23 geared 27:5 gees 11:21 general 3:5 8:18 11:1 40:5,11 126:25 127:1 136:3 137:17 189:2 197:2 generally 22:4 111:2 154:3 181:18 199:3 generate 10:23 41:4 70:13 119:23 generated 109:16 generating 120:8 generic 140:17 germane 24:25 25:7 88:19 getting 16:10,11 150:7 164:19 171:24 177:13 178:2

July 29, 2008

189:15 194:18 212:11 give 19:14 60:11 92:11 97:14 108:23,25 111:9,10 117:19,25 125:13 133:25 136:11 137:2 146:15 148:20 156:19 176:2 178:16 195:10 208:18 given 12:1,6 42:18 43:4 46:18 62:23 71:4 72:4 100:24 107:7 109:14 120:4 121:4 125:24 137:18 153:9 163:1 189:20 191:24 199:7 229:1 gives 21:22 104:15 104:15 giving 36:12 100:23 196:21 211:3 glasses 160:18 GM 25:25 48:5 49:9 GM's 85:20 go 16:17 52:25 83:14 85:13 87:23 104:5 111:7 113:4 119:15 125:8

Hearing 262 130:4 132:15 138:16 162:5 162:6 165:1 167:7 173:4 174:3 176:18 177:25 192:24 205:23 212:22 231:8 234:25 goal 90:18 goes 144:14 going 13:25 15:23 18:20,22 20:11 23:4 26:10 29:15 31:3 33:6,10 33:11,12,24 37:25 44:8,24 52:22 56:21 68:5 73:12,13 73:15,18 74:5 74:19,25 76:10 78:1,3 79:17 83:10 84:1 85:12,13 87:11,20 93:4 99:19 108:2,3 111:13 112:9 114:11,21 119:19,21 120:12 125:1 128:10 129:11 130:17 132:3 133:12 138:1 150:9 154:1 155:20,21 156:24 158:6 158:20 161:25 165:25 166:14 167:18,23 169:2 172:5 172:14,15 175:7,18 176:11 182:3 192:1 195:12 199:20 202:1 204:6 205:4 209:25 210:1 210:19 211:5 213:5,24 215:16 224:2 227:12 228:22 229:3 231:4 232:9 gone 11:11 56:12 93:9 192:5 good 10:8,11 21:15 31:9,22 33:20 37:15,21 38:2 45:25 141:22 166:2 172:4 173:12 234:17 GOSSETT 3:15 4:6 gotten 14:14 95:3 212:12 governance 45:23 125:18 184:2 190:3 grander 90:24 grant 62:19 grave 205:5 great 22:8 44:16 124:19 138:22 150:5 greater 153:20 161:21 162:9 174:25 230:3 grossly 178:8 ground 152:20 159:11 group 47:23 65:7 103:2 146:14 183:20 187:13 groups 14:18 81:10 guaranties 169:1 guaranty 161:3,5 guess 19:19 38:21 40:19 45:9 51:4 99:9 104:2 145:10 158:2 209:8 216:4 guessing 38:23 guideline 42:18 Gulf 216:23 guy 121:23 146:2 guys 211:5 H hadn't 13:3 17:16 90:9 120:24 128:2 174:12 216:1 hair 201:7 Hal 34:17 37:17 183:19 184:5 184:6 202:16 226:21

July 29, 2008

half 13:18 205:1 216:24 Hamilton 116:13 Hampshire 145:7,8 hand 36:9 58:7 83:6 99:18 130:9 132:23 141:10 151:18 175:21 236:18 handed 58:6,19 134:3 134:24 220:21 handing 191:22 handle 174:21 handling 19:3 106:9 152:2 hands 98:8 116:10 Hang 97:11 132:14 happen 44:25 92:16 100:10 161:4 193:9 200:15 208:3 happened 16:1 45:1 67:8 67:9 195:23 201:9 216:3 happening 54:15 153:21 158:21 happens 171:1 193:12 happy 14:18 151:8 hard

Hearing 263 8:23 10:5 32:9 36:19 140:4 hardest 170:12 Harold 186:1 Hartland 55:18 56:10,14 Hartwick 55:14 56:20 105:25 137:12 137:22 hasn't 140:21 hate 97:9 haven't 129:24 134:9 192:4 223:2 head 8:22 19:18 28:12 66:10 97:2 164:7,24 headed 103:12 hear 8:14 14:5 142:14 217:15 227:15 heard 20:4,5 147:2,5 169:13 hearing 1:7 5:1 109:2 111:14 124:4 129:12 144:17 183:4,6,11,18 184:22 185:9 185:18,21 186:10,13 189:5 hearsay 45:10 132:6 heavily 93:9 169:18 heavy 168:14 held 31:20 163:21 202:20 236:7 help 113:7 146:16 152:7 157:1 160:6 195:14 212:16 helped 111:5 112:24 168:12 218:2 helpful 206:22 helping 147:24 her 147:24 148:13 hereby 53:9 236:5 herein 61:1,4 144:23 hereof 236:9 hereto 60:25 61:3 hereunder 236:18 Hermosillo 10:14 12:3 96:7 99:7,18 99:21 Hertzberg 191:12,13,14 196:12 hesitate 185:24 hiccups 17:12 hidden 225:16 high 42:23 94:14 192:17 193:10 208:8 higher 13:19,19 37:19 37:25 206:3 207:25 highlighted 14:3 190:22 highly 10:7 25:4 42:10 175:14 196:4 Highway 2:16 him 19:20 28:11,16 28:20,23 29:3 32:25 33:23 38:23 59:19 60:4 63:25 66:16,17 71:23 94:17 116:15,15,22 117:3,5,7,8 125:22 131:9 134:25 136:7 136:11 182:12 183:20 191:17 196:16,17,18 196:20,25 197:2,15 198:11 206:13 208:18,21,22 234:25 hindsight 72:12 hire 59:16 hired 46:17 149:25 191:14 historic

July 29, 2008

156:1 historical 25:6 112:7 149:14 158:9 158:11,16 163:2 historically 169:15 173:10 173:14 history 145:21 hit 66:10 hold 26:11 105:3 122:6 128:19 149:16 220:18 holders 45:4 holding 56:15 hole 26:15 27:7 194:5 Hon 1:5 honest 35:3 38:18 46:13 56:19 99:2 101:5 honestly 189:17 honor 6:13,21,22 20:15 34:2 38:22 39:1 43:8 49:12 50:10 58:1 66:2 98:10 104:23,25 109:21 110:5 110:19 111:24 116:12 117:5 121:14 123:1

Hearing 264 124:2,4 126:1 128:1,9,15 129:4,14,22 130:1,4,14,23 131:2,22 132:11,12 133:7 134:8 134:11 135:6 135:13,24,24 136:8,14,22 138:4 182:24 187:6 188:2 188:13 189:9 190:12,18 196:12 205:20 216:9 235:4 Honor's 5:9 130:11 hope 72:19 185:17 hoped 202:5 hopefully 18:3 horse 210:11,22 hospital 234:21 hour 164:13 hourly 46:8 115:18 189:15 hours 46:9 96:11 98:24 118:12 119:6 143:13 housekeeping 5:7 however 112:4 223:24 HS 34:16 huge 30:13 154:6 human 59:20 hundred 31:1 95:18 156:15 165:11 173:14 hundreds 173:22 hurdles 13:19 94:23 I IAC 200:9 idea 46:1 47:6 144:4,5 154:8 189:17 210:22 ideas 173:19 identification 8:17 58:10,14 identified 5:18 12:23 21:1 42:5,6 65:8 118:23 118:25 207:11 207:12 224:17 identify 5:15 86:6 131:22 identifying 118:16 ill 234:24 235:2 Illinois 4:9 illustrating 140:14 imagine 179:3 imbedded 34:15 impact 189:19 204:16 213:17 impacted 151:5 170:7 impair 53:20 54:1 impediments 108:4 imperfect 120:2 implement 174:22 234:14 implication 26:5 204:21 implications 141:6 172:9 207:16 implied 172:2 implies 179:1 implored 211:15 importance 21:19 79:24 80:3,11 100:17 160:9 177:13 important 21:16 26:22 80:19 89:8,17 89:23 118:13 130:25 139:8 142:11,18 151:7 168:10 234:2,6 importantly 25:10 imports 169:20 impossibili... 77:2 impossibility

July 29, 2008

76:3 impossible 76:5 77:15,16 82:20 83:1 111:19 impression 117:24 202:3 improve 166:4 improvement 159:22 improvements 118:24 155:13 170:9,10 204:23,24 imprudent 83:14 inaccurate 70:25 194:14 inappropriate 66:22 incentive 10:17,18,24 incidentally 11:2 85:18 89:22 include 23:1 225:17 included 13:4,5 38:3 89:11 97:21 116:4 includes 29:3 110:13 including 22:14 44:11,14 48:5 57:8 59:15 69:23 106:9 147:10 165:22 207:3 212:15 217:20 inconsistent 107:3 incorporates

Hearing 265 187:17 increase 70:10 76:21,22 162:15 208:23 increases 40:11,12 41:3 120:8 169:18 182:7 201:17 increasing 71:9 incredibly 193:22 incremental 206:4 incurred 116:2 indemnifica... 183:3 independence 53:17,20 54:1 54:2 142:8 independent 53:10,12 54:2 61:10 69:1 105:13 106:17 141:14 143:17 144:10 184:12 187:3 indicate 67:20 89:2,7 103:13 104:11 124:7 129:19 143:1 183:25 indicated 9:19 43:11 52:12 59:10 63:11 80:22 81:4 84:7 87:25 91:4 93:20 94:4 101:18 165:16 175:2 185:13 186:12,21 204:12 218:9 indicates 53:9 61:9 69:9 78:8 82:5 89:10 162:7 indicating 74:17 95:22 indication 91:10,23 92:8 192:25 indications 198:25 199:6 indicative 193:7 indicted 44:12 indirect 127:10,13 individual 53:5 individually 173:20,22 industries 30:19 147:1 industry 152:5 158:7 163:3 168:8 169:17 170:19 174:4 175:13 inevitably 17:10 22:20 information 44:15 47:16 48:9 50:13,22 115:18,18 120:2,5 149:15 152:18 153:5,15,17 155:22,24,25 156:3 158:11 159:12 160:20 186:14 195:8 195:14 199:24 204:16 211:4 informed 19:20 62:15 103:7 204:5 233:22 inherent 142:7 181:21 213:23 initial 70:9 118:19 120:3 121:10 154:4 180:10 224:18,19 initially 21:1 55:16 105:25 148:6 156:6 initiatives 173:1 174:22 input 68:22 inquire 135:23 inquiry 182:17 197:2 insight 21:23 insist 155:20 insisted 27:3 59:11 insistence 39:6 insolvency 147:15 instance 171:6 instead 110:9 140:17 201:6 insufficient 59:20 insure 79:25 80:4 113:7,18 114:13

July 29, 2008

insuring 114:10 integral 161:15 210:16 intellectual 31:6 intend 130:20 131:1 intended 91:12,25 160:6 206:24 intensive 168:24 intent 95:2 188:15 189:5 200:22 201:1 206:11 interactions 16:8 interest 30:19 81:5 91:10,23 92:7 92:9 150:5 186:15 192:25 193:7 198:25 199:6 213:8 227:4,24 236:16 interested 27:18 30:14 199:12 interesting 22:1 25:6 26:17 88:14 210:25 interests 148:17 199:2 interface 152:16 interference 9:18 interferes 142:25 interfering

Hearing 266 interfering 64:14 interim 116:24 117:22 Intermet 147:7 internal 127:1 international 33:19 interrupt 154:13 interrupting 153:25 intervention 48:23 interviewed 140:1,3 interviewing 153:10 intimately 151:4 159:10 160:2 into 16:6,17 33:13 61:7 70:11 90:13,24 93:9 118:17 124:16 128:16 129:1 131:2 139:12 140:1 141:24 144:14 145:23 159:24 171:15 172:23 179:18 190:23 192:20 193:5 207:8 207:14,23 212:10 213:12 229:5 230:3 232:22 234:12 invective 66:19 investigate 123:4 investigations 106:10 investment 22:15 89:14 investments 31:3 33:14 investor 72:25 73:5,19 74:4 75:19 76:4 77:4,8 77:18,23,25 78:23 79:7,16 82:13 83:23 86:1 112:13 112:14 124:13 investors 177:22 involved 7:7 19:5 28:14 30:10,12 48:4 51:4 113:2 117:23 147:17 149:9 151:4 152:14 159:10 160:2 183:9 184:23 218:8 involvement 194:22 involving 184:15 IN-HOUSE 3:3 irregularities 150:22 irrelevant 26:18 issuance 12:8 51:13 52:3,9 issue 5:7 12:24 26:19 68:24 101:16,16 118:5 119:7 119:12,22 128:13 142:13 148:1,14,16 166:15 169:12 182:12,16 183:11 184:8 189:11 issued 12:15 14:23 41:15 167:18 202:25 204:20 209:1 222:10 228:22 229:7 issues 17:20,24 18:3 44:13 96:18 99:17 106:19 108:5 142:4 143:13 156:22 165:22 168:12 168:13 172:24 177:8 178:6 178:19 179:20 183:1,3,3 184:13,14,15 184:17 195:3 196:5 202:9 211:25 216:2 item 80:23 130:12 140:11 items 67:17 137:24 173:4,22 202:5 I&C 210:16 i.e 184:6 J January 5:22,25 12:18 63:18,20 64:7 111:16 112:18

July 29, 2008

123:9 156:14 167:19 177:1 177:7 198:17 229:7 Japanese 169:19,20 Jersey 3:8 JL 147:8 job 10:11 16:25 140:7 141:12 141:13,24 149:4 153:8 160:14 195:13 231:23 232:4 232:8 Joe 151:25 John 2:4,12 8:19 36:2 41:25 69:5 165:7 185:6 186:4 203:4 211:21 Johnson 11:9 joined 146:3 joint 219:21 jointly 1:6 152:25 161:11 JONG-JU 3:14 Joseph 186:3 JP 10:17 37:4 104:13,17 131:14 147:6 147:19,23

Hearing 267 148:4,6,9,11 184:6 218:14 218:15 226:25 judge 103:5 126:2 129:6 130:17 133:11 138:14 143:20 144:16 181:24 184:10 184:18 185:3 234:19 judgment 12:5 67:24 judgments 233:22 July 1:8 5:2 23:13 28:4,21 29:3 29:6,9,10 32:16 37:8 58:23 94:12 105:8 122:3 137:10 155:18 179:18 180:14 185:1,8,22 186:6,10,14 191:23 200:10 200:18 202:14 206:17 209:7 211:1,8 222:14 225:10 June 201:2,5 202:23 203:13 205:13 junior 152:2 192:19 just 16:15 26:21 34:6 35:16 37:21 38:1 45:9 48:7,22 50:3 51:21 55:5 58:19 60:16 65:7 71:24 75:4 76:9 77:13 80:20 81:12 83:1,10 85:9 87:1,4,17 89:11 90:15 91:18 92:22 95:1,18 97:13 101:7 102:19 103:20 105:2 108:24 114:23 115:6,21 116:10,19,22 120:25 122:20 124:1,24 125:3,14 126:10 129:6 129:14,17 132:1,17 133:11,22 138:10 140:6 141:4 150:16 154:20 165:1 167:6,25 170:23 173:6 175:8 176:3 180:15,16 181:23 182:20 190:18 196:11 196:20 197:12 197:19 198:1 198:6 201:7 201:19 202:4 202:19,21,23 202:25 203:7 204:2 207:8 208:3 210:2 213:22 220:21 230:10,25 justified 141:20 J.D 17:17 K Kardos 3:4 117:4 136:13 138:10 186:2 188:22 189:2 190:19 Kathy 1:12 236:3,22 keep 15:7,11 51:22 85:22 keeps 160:19 KENNETH 2:13 key 143:5 151:17 kicking 193:3 kind 35:6 94:9 112:14 144:14 155:6 160:13 170:18 182:7 193:2 217:12 217:21 231:17 232:12 Kirkland 29:6 211:13 knew 24:23 42:19 43:5 47:14 62:9,13 64:17 64:19 71:20 102:12 149:18 166:14 168:11 207:21 209:14 228:20 230:18 231:15 know 8:16,19 10:25 11:1,4,15,17 11:18,18,21 11:23 12:1 13:23 14:12

July 29, 2008

14:13,17 17:2 17:6,10,12 19:12 21:22 21:22 23:6,17 23:18 25:16 28:8,11 30:1 30:2 31:11,21 32:9,10 33:15 35:4,7,10 36:17 37:20 38:18 39:15 41:2 42:10 44:8,24 45:1 46:5,12 47:2 47:15 50:9,17 50:21,24 51:2 51:6,11,15,25 52:7 53:19 54:1,5,10 56:19 61:23 63:5 65:6,13 65:22 69:15 69:19 71:25 72:11,18 73:23 74:10 77:5,6,11 83:12 84:25 85:15,16 90:4 93:4 95:21 96:24 97:1,3 107:12,15 115:7 118:5,5 119:7,13,20 120:1,5,10 123:2,5 124:24 126:22 126:25 128:4 130:10,21 135:22 154:1 154:15 155:15 158:9 164:14 166:12 168:17 175:22 189:19 191:10 197:15 197:16 198:7

Hearing 268 203:14 207:15 208:17,20 209:18,20 212:11 218:23 224:4,23 228:8 233:8 knowing 28:16 160:15 knowledge 29:19 46:3 57:10 59:3 63:2,6 65:3 107:6 126:12 127:9 206:9 knowledgeable 161:6 known 28:17 71:12 210:7 Kost 6:3 Kroll 3:3,6 7:25 47:5 49:16 52:13 57:18 61:6 68:25 69:9,9,17 103:13 140:2 140:11 141:10 141:16 143:3 143:8,13 144:1,6 151:9 152:17,20 153:7,18 154:2 157:23 158:4,25 159:9 160:1 160:10,11 161:20 162:9 162:13 163:8 163:11,12,25 164:10,14 165:5,8,18,21 166:11 172:16 175:10,21 176:10 201:5 201:11 202:20 203:3 210:23 211:13 214:20 224:11 229:4 230:13 231:13 232:15,20 Kroll's 61:9,21 62:7 138:23 141:23 159:3,19 Kurinskas 37:2,6,17 147:23 148:11 164:3 202:16 KZC 2:4,12 14:6 19:5 41:12 42:1 52:13 53:4,10 107:25 108:8 116:14 118:3 118:14 120:20 125:11 138:2 182:25 184:4 184:8,9,13 185:5,12 186:5 197:10 229:25 KZCS 57:2,18 105:13 107:21 115:24 117:18 187:4 187:5,10 189:3 KZC's 53:11 121:3 189:20 197:5 197:5,8,22 L L 4:5 157:4 Labeouf 35:13 lack 79:16 120:5,5 120:6 lag 40:11 laid 7:16 42:14 land 25:17 landing 118:7 language 125:15 larder 212:17 large 26:18 82:1 146:10 151:6 202:8 largely 146:24 193:15 largest 40:6,7 74:23 last 5:13 44:16 58:22 74:15 75:3,10 78:4 88:21 91:7 146:22 216:12 234:21 late 10:12 64:8 99:10 155:9 177:1 198:17 198:24 later 24:22 27:15 32:17 43:19 67:20 85:5 99:12 155:3 183:4 202:1,6 216:6,6 235:1 latest 187:20

July 29, 2008

latter 13:18 161:16 lawsuits 45:3 lawyer 108:19 lawyers 22:16 64:24 66:4 lay 98:7 116:10 layout 104:16 Lazard 198:22 206:15 209:15 210:3 Lazard's 6:3 lead 193:22 leads 25:16,17 leaping 167:24 Lear 18:21 19:9,17 19:21 30:23 81:9,9 210:18 212:3 learn 18:13 learned 18:17 43:13 86:20 93:10 101:3 206:25 least 9:2 10:6 13:1 39:7 41:2 48:11 56:18 57:23 111:4 135:20 206:18 210:15 211:2 211:16 214:11 214:16 227:11

Hearing 269 leave 36:21 118:15 165:10 191:19 led 43:1 163:4 230:21 ledger 41:1,2 ledgers 156:1 left 146:1 149:3 183:1 210:7 lender 103:2 131:15 148:9 218:15 218:16,18,18 227:24 lenders 12:15 14:15 27:23 28:5 29:7,13,14 30:5 32:8 35:22,25 36:5 36:8,13 38:15 38:21,24 39:6 40:14,19 42:22 48:6 51:4 53:22 65:4 69:24 71:1 74:1 84:6 96:1,5 96:19 98:19 109:25 113:25 119:14 131:16 148:7,22 149:2 150:4,5 150:23 151:6 158:5 179:22 179:24,25 180:1,2,5,7 181:9,12,15 185:12 192:16 192:20 195:10 200:20 205:25 206:9,13,16 206:19 211:3 219:4,6,8,18 219:20,24,24 219:25 220:2 220:7 222:9 222:19 224:3 226:11,16,23 226:24 232:7 lender's 38:7 219:12 lengths 213:9 Leonard 37:7 55:18 165:7 175:21 less 17:5 24:21 31:18 64:10 84:14,18 93:18 103:14 118:9,9 139:4 206:6 letter 52:19 87:24 88:22 89:12 91:12,25 92:5 92:12 94:19 184:18 185:1 200:21,25 206:11 letters 90:3 143:25 192:25 193:6 193:7 letting 26:3 49:21 let's 7:1 22:8 28:25 85:17 98:14 130:15 131:3 136:15 138:12 139:1 162:5 173:4 224:25 Leuliette 55:12 56:13 level 22:17 37:19,25 40:17 50:21 81:4 96:8 113:9 153:10 153:11,22 158:13 159:11 173:1 176:16 176:17 178:13 levels 140:9 176:19 206:3 life 169:5 217:6 light 109:22,22 113:22 likely 81:17 112:10 204:20 Likewise 127:13 limitation 154:18 limitations 126:14 limited 57:1 59:15 144:12 155:11 181:23 226:15 limiting 174:20 limits 40:9 48:19 line 15:17 17:11 44:17 123:24 124:5 135:8 153:19,23 158:16 185:21 lines

July 29, 2008

114:12 lion 170:9 204:24 Lipton's 165:4 liquidate 214:15 215:14 215:19 liquidating 212:24 liquidity 45:8 118:5,9 118:12,16,18 118:21 119:2 119:6,12,22 119:23 150:8 150:13 165:25 174:10 list 128:20 129:13 135:20 lists 135:20 literally 22:16 118:10 119:5 150:6 163:11 208:5 little 40:1 90:6 100:12 113:23 141:4 164:12 170:23 175:19 197:24 208:24 215:7 225:14 littler 104:3 live 145:6,7 lives 130:6 134:17 LLC 2:4,12 loaded 13:14 84:9

Hearing 270 loan 76:17 179:9 218:11 223:4 227:2 loans 148:24 lobbied 96:16 LoBiondo 35:19 36:12 37:7 46:16 55:19 56:5 116:2 165:7 175:21 183:7 183:21 186:16 LoBiondo's 97:19 188:11 191:1 lock 21:3 long 98:1,22 139:21 140:10 149:20 151:23 164:8 175:4 192:8 193:22 203:19 203:21 215:21 longer 94:18 193:18 201:15 222:15 long-term 100:19 look 33:24 35:14 59:17 60:10 88:14,20 104:6 129:3 133:22 187:24 193:1 204:7 211:4 214:4 220:24 221:9 224:25 looked 5:13 14:22 24:17 85:25 101:6 193:6 227:11 looking 11:1 23:2 24:13 25:11 27:1 73:14 74:7,11 99:16 105:2 119:18 129:17 136:9 143:11 156:20 157:3 161:5 229:17,21 233:19 looks 35:6 88:3 loop 190:19 lose 11:21 101:20 178:14 losing 148:23 169:22 214:7 losses 215:18 lost 91:15 95:18 101:18 193:21 lot 83:8 94:18,22 148:19 153:25 158:19 159:13 161:7 169:13 172:20 173:21 179:7 192:21 192:22 204:22 204:23 214:4 216:3 230:13 loud 60:18 low 42:25 lower 153:10 171:5 173:17 lowest 90:19 lunch 97:12 115:11 L.L.C 185:6 L.L.P 2:6 M M 221:1 Macher 7:15 8:3 17:25 55:21 58:4,21 59:5 61:11,21 62:6,7,16,21 63:12 64:5 65:4,11 67:8 68:6,18 71:15 71:19,20 72:10 74:21 75:4 86:4,20 102:8,17 103:12 112:5 117:20 119:10 135:8,21 136:1 143:19 144:1 152:11 152:12 154:2 159:20 164:20 165:12 166:3 168:7 175:12 191:9,13 196:12 197:9 197:10 Macher's 9:5 57:23 61:19 65:19 68:3 71:25 97:3 109:12 117:15 234:15 mad

July 29, 2008

38:1 66:23,24 magnitude 203:14 MAHER 2:6 main 118:3 major 17:12 27:4 55:8 82:7 101:10 145:24 169:16 198:14 majority 97:1 make 13:11 20:9 30:22 31:3 47:1,18 49:19 57:3 68:5 71:8,11 82:13 85:2,4 86:14 93:4 121:6 123:23 128:20 133:25 148:25 148:25 160:17 160:23 167:11 169:9 171:8 173:23,24 177:8 211:23 215:11 227:20 228:1,2,12 229:4,8 231:18,21 232:21 233:22 makes 75:21 132:5 making 11:18 22:24 27:19 48:25 49:4,23 62:17 68:19 88:11 109:8 111:20 124:3 148:24 154:25 157:24

Hearing 271 167:12 176:16 204:2 214:6 man 151:19 manage 31:1 83:18 manageable 100:25 managed 173:13 management 11:2 13:11,23 15:16,22 18:2 19:5 20:24 21:8 41:10,25 42:19 44:11 44:17 50:1 57:5 59:16 64:20 68:24 85:10 99:15 103:12 121:7 149:11 153:7 158:5,25 160:3,10,17 161:12 162:10 163:2,8,11,21 163:25 164:10 164:14,21 165:6,12,17 165:18 166:11 171:20 174:18 174:18 175:10 176:21 178:20 178:20 200:2 201:5,11 217:24 226:25 229:4 230:20 230:21 232:15 233:3 234:13 234:15 management's 12:7 21:23 159:5 manager 10:8,9 11:6,12 30:25 48:14 68:11 managers 49:11,15 52:1 153:10 173:1 174:19 managing 131:10 150:9 151:22 mandate 7:23 59:4 125:12 manner 226:15 manufacturer 90:12 147:9 manufacturers 171:4 manufacturing 17:3 146:25 169:20 many 21:12 26:24 51:11,15,25 73:10 143:13 160:12 174:10 178:7 207:11 207:15 209:11 216:19 Manzo 146:3,6,8 March 6:4 198:24,24 199:15,15 margin 203:10 Marianne 11:7 165:13 Mark 164:5 marked 58:9,14 166:24 191:25 market 22:18 59:17 76:1 160:7 169:12 192:24 207:6 marketing 11:8 160:25 166:1 167:19 176:20 177:20 178:18 196:1 196:3 198:21 198:23 marketplace 207:3 market's 208:7 marriage 223:22 marshal 198:11 Martin 35:11 material 40:5,10 201:17 207:20 math 215:11 matter 70:3 94:20 149:24 185:9 190:2 236:7 236:17 matters 28:14 61:1,4 145:18 maturity 221:8,10,19 maximize 110:3,11 149:6 maybe 5:6 28:18 64:7 97:12 111:4 117:1 123:5 132:20 139:21

July 29, 2008

139:22 195:18 198:3 mean 22:11 34:18 38:20 44:6 55:22 72:11 73:6 85:18 100:1 118:10 119:5 120:10 121:2 meaning 64:21 93:17 179:24 meaningful 30:18 41:4 49:19 118:24 120:23 means 194:2 195:1 236:7 meant 36:16 47:13 73:4,5 169:21 228:14 231:11 measures 201:23 mechanical 236:6 mechanisms 110:2 meet 84:18 95:24 139:24 163:20 163:23 164:8 197:7,22 200:20 209:22 meeting 27:3 29:5,12 30:9 56:3 64:18 66:18 66:19 78:11 80:21 82:16 95:16 107:24 158:1 163:18

Hearing 272 163:19 164:15 165:3,6,10 166:17,19,21 167:5,7 171:19 173:2 173:5,7 174:7 176:1 194:25 195:19,23 202:12,14,15 202:19 204:1 204:14 205:7 205:8,9 206:8 206:18,21,24 207:23 208:5 211:1,9 229:3 meetings 27:5 49:1,5 53:25 82:19 158:24 163:16 163:18 209:5 melody 48:11 member 45:14 53:18 54:3 69:25 96:6 126:7 152:9 members 8:5,21 9:10 19:5 34:25 35:4 47:20 50:25 54:16 55:20,25 56:2 56:6 64:20 65:12,15 66:20 96:22 105:12 107:25 116:3 127:4,7 137:8 142:11 183:8,15,22 184:13 187:1 202:17 208:14 memo 86:14 167:6 173:6 175:4 memorialize 65:14,17 memorialized 65:10,16 66:1 mentioned 10:20 37:16 69:21 73:21 107:11 118:6 176:12 merely 143:19 Meridian 147:8 merited 142:2 messages 117:10 met 149:11 163:24 164:9 205:10 205:12 208:4 Metaldyne 55:14 56:14,17 Mexican 10:11 Mexico 98:22 101:21 Michael 186:1 Michigan 1:1,11 2:17 3:17 236:4 Mickey 105:24 108:17 137:12 mid 176:25 198:17 middle 104:11 midst 46:19 56:17 midsummer 19:13 20:15 mid-July 29:12 mid-management 153:11 mid-200's 11:25 64:12 migrate 71:7 72:6 Mike 55:17 56:9 106:1 146:7 million 8:6,13 9:8 18:25 19:23 23:15,23 41:7 63:14,23 65:20 70:13 71:21,22 89:7 89:17 93:5 95:18 119:15 139:3,3 143:16 149:1 150:24,25 162:14,19 172:1,5 176:7 177:5,10,11 178:25 201:7 201:8 203:14 204:10 205:23 224:5 227:2 229:12 mind 47:13 125:1 197:1 minded 109:22 mine 118:20 minimum 139:22 minus 28:18 minute 6:24 minutes

July 29, 2008

53:24 54:5,15 65:24 66:1 74:7 78:16 86:18 122:3 122:10,11 136:9 175:6,8 203:22 miscellaneous 212:14 miss 193:23 missed 202:24 203:8 203:15 205:18 missing 164:6 187:3 199:16 205:3 mistake 30:14 misunderstood 116:7 mitigate 15:25 27:6 model 71:2,8 72:8,15 78:19,24 79:1 modicum 117:25 modifications 100:4 modified 57:22 73:8 106:23 114:7 114:17 modify 119:1 Mogul 147:5 152:13 152:15 168:10 molecular 22:16 moment 60:11 182:10 216:8 234:22

Hearing 273 moments 108:25 142:15 150:21 Monday 185:22 Monday's 185:18 money 73:3 90:9 114:9,12,21 141:4 148:23 149:3 150:1 170:15 174:13 178:10,11,12 179:7 214:6,7 224:4 monies 113:16 monitor 148:25 232:8 233:9,15 monitoring 195:9 219:21 231:20 Monroe 4:7 month 87:19 172:1 195:5 202:23 203:8 monthly 15:15 195:2 months 22:11,11,12 73:11 84:13 84:20 85:3,6 100:15 120:7 139:21,25 150:6 199:21 199:22,24,25 200:1 202:22 203:11,13 mood 208:6 Morgan 10:17 37:4 104:17 119:14 131:14 147:6 147:19,23 148:4,6,9,11 184:6 218:14 218:15 226:25 morning 37:8 most 6:7 47:25 81:24 86:8,9 89:5 118:13 139:8 153:22 216:2 234:9 mostly 148:23 mother 234:24 motion 6:4,6 58:5 109:3 111:14 192:21 Motor 96:9 move 20:12 21:4 31:13 97:6 113:10 120:12 124:4 128:16 178:1 193:17 216:7 moved 128:18 moving 211:22 much 29:1 40:15 46:6 53:3 72:1,18 90:4 100:5 136:25 139:22 146:17 146:23 151:19 156:17 169:1 173:17 175:25 195:7 199:23 208:2 218:24 230:3 multiple 79:3 83:15 Music 216:24 217:10 must 71:17 104:2 mutual 30:25,25 92:21 mutually 101:7 myriad 140:14 myself 9:11 69:24 202:16 N name 86:11 145:4 named 164:3 names 131:5 narrow 40:9 138:20 narrowed 144:4 NATHAN 2:13,14 136:7 nature 5:10,16 163:3 196:18 207:21 229:2 nearer 204:19 necessarily 156:10 158:13 173:24 174:13 necessary

July 29, 2008

8:2 59:22 113:9 131:24 162:1 231:18 need 6:23 45:18 46:14,16 49:2 74:9 78:23 82:12 95:6 97:14,15,21 116:22 119:23 124:9,19 128:17 144:13 154:15 167:6 172:17 214:11 215:17 220:13 232:13 needed 8:1 136:9 139:12 150:1 150:2 152:24 174:25 177:8 204:14 206:6 207:24,25 211:24 212:1 232:11 needs 76:18 133:19 171:6 198:10 negative 15:20,25 negotiate 32:21 33:1 36:22 82:7 200:21 202:15 208:7,9 209:20 negotiated 87:18,18 negotiating 19:2 31:22 210:2 213:18 negotiation 89:12 179:19 180:13 193:9

Hearing 274 202:19 205:24 209:10 218:14 218:21,24 negotiations 28:5,9 31:16 32:5 37:23 93:13 151:1,5 170:13 178:13 213:3,18 215:21 216:3 neither 69:9 net 89:13 171:14 never 22:6 38:19 70:6 95:21 121:4,9,9 140:5 151:11 151:12 172:3 172:5 193:2 208:24 209:9 212:19 217:22 218:4 224:6 228:17 231:13 new 2:8,8 3:8 10:14 11:1 16:11 26:3,6 26:14 33:16 74:22 100:13 100:23 103:11 113:6 120:16 145:7,8 148:24 168:22 168:23 178:13 193:21,23,25 199:19 200:5 209:14 212:2 219:10 news 95:15 168:6 204:13 newspapers 169:14 nice 16:25 92:6 night 5:13 234:21 nine 60:11,13 199:22 nobody 155:19 noise 192:21 nonbinding 199:2 nonetheless 92:4 140:18 non-binding 206:11 non-KZC 184:8 non-objected 129:11 normal 85:14 89:15,15 normalized 76:24 Norman 151:25 north 8:12 Northwestern 2:16 notably 89:5 notch 43:25 44:3 45:17 note 13:22 29:23 116:25 151:7 206:2 notes 48:12 124:12 124:19 129:19 183:22,24,25 184:20 190:1 nothing 52:4 60:3 79:6 79:15 80:14 104:22 112:11 125:25 127:24 138:3 141:2 144:25 182:8 noticed 16:19 notwithstan... 169:16 177:5 205:20 November 150:19 155:9 162:16,21 215:22 216:2 216:4 226:6 Novikoff 34:16,17 36:25 37:17 124:3 183:19 186:1 202:16 226:21 Novikoff's 35:15 38:5 123:17 124:6 number 5:4 9:16 14:1 31:8 39:25 40:4 44:10,13 44:13 48:2 56:11 58:9,11 63:23 64:9,11 64:12 66:8,11 67:11 96:25 104:8 109:23 113:24 116:20 123:24 161:19 176:2,2 177:2 196:14,21,23 207:25 220:15 numbered 220:17

July 29, 2008

numbers 8:24 23:18 70:17,20 88:7 102:23 134:5 141:25 202:11 203:6 214:4 215:11 229:21 numerous 139:9 140:23 Nurge 35:7 130:3,18 131:6,7 134:4 135:5,7 144:21,22 145:5 162:2 182:13 192:2 216:12 Nurge's 130:13 234:20 nutshell 41:18 O O 225:9,14 oath 7:4 137:4 object 38:23 130:18 219:5,7 227:22 228:18 231:4 235:3 objected 96:19 132:4 objecting 135:17 136:17 151:13 197:4 objection 39:3 129:1,9 129:10,22 132:7 134:20 211:19 224:6 226:19 227:4 objections

Hearing 275 138:19 197:20 objector 131:9 objects 197:4 obligation 159:4 230:5 obligations 117:17 144:2 159:6 observation 85:2 observations 81:13 obstacle 201:19 obtained 18:15 obvious 178:5 obviously 17:4 53:24 206:6 occasion 21:7 135:10 occasions 209:11 occupation 145:9 occur 81:16,17 99:1 156:23 201:21 201:25 202:1 207:22 occurred 15:22 98:21 111:15 200:17 October 215:8,23 216:5 216:6 222:25 OEM 40:2 171:7 OEMs 39:25 40:17 95:6,11,18,22 96:2 151:1 169:11,22 170:13,16,25 171:10 177:23 178:14 196:5 214:2,9,11,19 214:21 offer 23:12,18,22 27:25 28:6,20 29:2,3,7,20 30:2,4,7 31:17,24 37:19 87:22 88:1 91:6,6 92:5 93:6,17 94:8,14 103:18,21,24 104:6 109:9 109:13 110:22 111:21 112:12 112:15 205:24 206:10 208:1 209:23 offered 176:6 209:20 offering 103:23 104:13 208:2 214:17 offers 32:1 115:5 193:5 office 185:10 191:16 196:13 officer 55:13 218:5 offices 153:12 165:4 official 185:15 officials 86:9 officio 55:20,23 offline 120:9 often 22:1 23:1 90:21,25 153:17 Oh 34:18 200:14 221:20 Oil 216:23 okay 5:19 46:14 48:19 49:13 50:5,17 58:13 63:21 70:17 80:11 83:3 104:4 109:10 111:12 117:1 122:6 136:4 138:8 155:19 157:16 165:16 176:9 180:2 180:15,19 186:8 187:25 191:20 193:8 194:10 197:12 198:2,5 202:12 209:4 222:6 223:13 230:9 232:19 old 25:24,24 33:16 33:21 235:1 omega 46:24 once 96:10 130:10 149:8 230:7 ones 8:23 147:4 one's

July 29, 2008

233:21,25 ongoing 33:15 108:7,7 113:8 176:9 only 15:15 20:7,8 24:7 37:13 41:24 42:9 57:21 59:9 84:3 89:3 99:19 125:17 150:24 156:2 178:6 189:10 194:7 199:11 204:4 224:2 226:17 233:1 onset 141:21 open 47:22 108:5 109:22 183:1 212:21 opened 205:9 opening 138:15,15,17 openness 119:20 operate 168:15 214:10 215:17 operating 7:19 10:7,9 11:2,22 12:6 13:23 41:10 41:24 50:1 51:14 52:9 99:17 103:3 118:11 159:14 176:21 181:8 231:16,18,22 233:2,5 operation 10:14 31:5

Hearing 276 33:19 55:15 57:5 96:8 121:1,8 193:13 operational 31:10 59:21,24 232:1,6,21,24 operations 10:12 113:8 118:1,19,20 118:24 119:9 136:24 142:25 166:6 195:3,9 214:16 215:2 230:23 231:2 opinion 83:4 90:1 93:12 opinions 46:21,22 47:4 opponent 130:24 131:20 opportunities 10:23 12:22 74:22 118:16 118:17 154:7 166:4 174:11 193:20 opportunity 20:25 108:24 111:9,11 133:25 199:8 214:17 219:4 219:6,9 opposed 36:19 48:22 82:1 114:5,8 142:1 212:5 optimistic 162:25 201:20 optionality 32:7 options 165:23 orally 166:20 orbit 37:22 order 6:5 40:17 58:5 100:2 105:5,7 105:9 106:13 106:23 107:8 115:10,17 116:9 135:15 137:14 171:2 182:24 183:2 184:25 185:4 185:7,14,16 185:20 187:16 187:21 188:4 188:6,8,9 196:17 203:14 219:19 223:17 230:20 orderly 215:1 orders 174:12 organization 11:12 12:5 21:25 24:9 48:21 49:8 50:6 52:2 120:6 127:25 148:13 organizational 120:15 organize 48:24 152:23 organized 49:18 50:4 51:18,22 organizing 49:25 52:6 orient 124:2 original 41:9 originally 17:17 182:23 199:20 222:13 other 8:4,21 14:20 16:17 17:18 17:21 19:4 29:4 35:1 41:1 45:3 50:25,25 57:12 61:17 65:15 67:17 68:22 69:25 76:21 77:12 79:20 82:18 91:20 96:22 99:16,18 101:19 102:5 107:25 109:19 112:13 114:19 118:19,20 119:25 128:5 128:12,24 141:6 144:12 145:17 147:10 148:4 152:1 153:18 158:5 171:18 173:4 174:6 178:23 181:12 183:3 186:15 187:14 188:3 189:14 201:24 203:25 204:1,4,21 208:14 209:5 210:2 217:16 219:1 225:2,4 others 9:6 14:4 17:6 48:7 49:22,23 81:11 99:14 143:7 147:10 otherwise 60:5 127:15,17

July 29, 2008

127:18 ourselves 155:21 outcome 236:16 outlay 174:12 outline 166:16,20,24 outside 39:21,23 54:16 65:7 153:18 over 8:6 10:1 17:5 23:23 28:6 63:13 66:3 74:25 76:11 78:5 87:18 101:4 136:5,8 169:4,9,23 180:9 181:13 182:3,15 202:20 203:11 206:3 213:15 219:15 222:18 223:14 226:9 overall 179:1 181:21 overly 162:25 163:13 overpaying 210:7 overplay 36:8 overruled 132:8 overseeing 119:8 oversight 67:23 105:11 106:14 107:18 108:7 121:20 122:13,18 125:24 126:10

Hearing 277 136:24 137:9 137:11 152:6 186:25 overtures 214:23 overview 67:23 148:21 167:10 overwhelmed 50:2 Oxford 30:19 P P 134:4,5 page 36:8 60:11,11 60:13 74:16 74:17,25 75:1 75:2,7,9,9 76:12 78:5 88:3,21 91:7 91:8,16,17,18 91:22 92:13 97:18 103:4,5 103:24 104:5 104:12 122:9 123:13,19 124:5 135:7,7 135:8 162:6 186:11,12,22 192:5 220:25 222:22 225:1 236:9 pages 52:25 58:22 94:21 189:13 paid 46:6,8 127:14 127:21,22 170:17,22,24 painful 151:10 paper 31:20 par 174:3 paragraph 35:18 36:24 53:8 56:22 60:12,14,17 60:20 74:15 74:16,20 75:3 75:6,11 76:2 76:11 77:1,19 78:4 79:18 81:14 82:5 88:21 91:7,22 105:8 107:8 125:16 222:22 parallel 78:10 parcel 27:1,2 pardon 186:11 Parkway 3:7 part 12:18 21:8 26:18 27:1,2 40:14 54:3 56:25 57:24 61:8 106:18 111:3 114:1 120:11 129:12 131:2 144:8 146:9 153:22 170:16 171:6 171:12 177:20 189:10,12 195:20 197:5 197:8,20 202:9 209:10 212:5 213:13 217:2 228:25 participants 204:1 participate 21:7 218:20 particular 14:2,21 15:4 33:4 51:13 66:18 67:12 71:5,24 80:21 82:16 90:23 100:17 130:12 133:18 149:17 234:1 particularly 9:10 24:25 31:4 33:22 46:21 88:19 199:17 parties 29:4 60:25 61:3 81:1,1 84:1 95:2 135:18 142:23 144:12 179:8 179:19 185:19 186:15,22,23 187:15 188:3 188:15,22 189:5 199:7 199:14 236:13 236:15 partner 36:12 partners 56:11 146:13 parts 11:19 30:20 31:3 45:22 144:19 party 73:2 130:24 131:19 197:4 218:25 219:1 220:4 party's

July 29, 2008

136:18 143:6 pass 40:9 Paul 2:5 185:9,25 pay 29:23 32:16 90:7,19 91:2 94:5 104:13 104:16 167:6 205:25 payable 76:23 payback 192:22 payment 20:1 payments 89:15 113:17 pendency 193:18 people 11:3,4,14 15:3 19:15 31:20 37:24 42:15 47:23 48:10 48:25 49:21 49:22 62:16 81:24 84:3 107:2 114:18 140:2 141:24 143:3 148:12 152:2,2 153:1 153:18 174:20 184:8,9 224:10 230:14 231:22 Pepper 116:13 perceived 98:18 percent 70:11,12 71:3 71:3,10,10

Hearing 278 72:3,4 104:19 104:20 156:15 165:11 169:6 169:7 173:15 173:16 194:5 203:16 percentage 173:17 perform 57:19,19 140:8 140:9 performance 13:19 33:22 93:16 105:16 107:20 108:8 112:7,10 158:8,15 161:3 168:16 174:5 176:22 184:4,17 187:9 performed 29:24 125:12 146:23 151:9 performer 174:3 performing 41:13 perhaps 66:3 142:17 198:24 208:23 period 92:20 110:18 118:19 137:16 150:12,15 151:8 152:12 153:6 194:16 203:18 206:3 221:8,19 222:24 223:6 223:20 periodically 143:12 195:24 periods 110:17 168:19 permission 27:16 58:6 133:9 171:3,7 196:15 234:25 permit 132:8 permitted 51:1,12,20 140:16 persistence 12:1 person 46:15 86:7 194:21 233:2 personally 19:2,3 30:10 personnel 59:16 159:14 159:14 perspective 9:3 14:22 26:16 38:8 100:9 118:11 232:6,24 perspectives 32:24 pertained 189:11 Peter 35:7 131:6,7 144:21,22 145:5 151:20 Peter's 151:20 petition 51:7 185:12 petroleum 40:7 phase 151:13 195:7 phases 159:12 163:5 Phillip 186:3 phone 70:4 147:19 196:14,21,23 phrase 7:24 57:7 111:5 114:6 physically 65:1 pick 63:8 picked 63:1 70:4 piece 120:11 133:18 133:21 pieces 30:23 120:2 pier 25:13,17 26:21 pinned 128:13 pivot 36:5 place 10:5 14:2 15:7 37:11 71:15 71:19 78:24 114:22 165:3 168:2,3 183:17 184:21 186:13 194:7 209:22 217:7 217:10 236:8 placed 174:13 places 5:16 plan 5:12,17 6:15 7:10,25 9:3 9:13,21 10:18 10:18,19,21 11:15,24 12:8

July 29, 2008

12:14,23 13:1 13:4,5,7,13 13:16,20 14:7 14:10,18,22 15:5,18,19 16:7,20 18:6 20:22 21:2,3 21:19,22 22:4 22:7,23 24:11 25:23 27:24 32:11,15 33:12 39:14 41:6 51:14 52:3,9 62:2 62:17,23 64:4 64:15 68:2,7 68:10,24 69:3 69:6 75:14,17 75:18,21 76:9 77:8,8 78:15 78:17 79:11 79:19,24,25 80:4,5,7,12 80:16,18 81:18,25 82:2 84:5 85:24 88:11,18 95:16 103:3,8 109:12 110:14 111:6,18 112:2,13 113:7,14,17 113:25 114:17 114:19 120:18 124:10 139:24 152:7 154:4 155:10 156:6 156:7,10,17 156:18 160:7 160:25 162:13 162:16 164:19 164:25 165:22 167:17,22,23 170:21 172:24 173:9 177:17

Hearing 279 177:24 195:25 200:25 201:6 203:12 204:19 207:13 208:4 210:11 211:5 211:22 212:6 212:10,18,19 213:7,10,13 213:16,20 214:1 215:9 215:12 225:14 225:17,20 226:1,3 228:22 230:23 232:23 233:13 planned 205:14 planning 62:14 plans 7:19 24:14 52:6 55:8 68:17 85:22 89:21 94:16 159:22,23 163:13 176:4 181:8 195:6 plant 17:22 50:21 51:8,10,25 98:22 99:7,12 99:18 100:5,8 100:18 101:20 143:2 153:10 153:22 156:1 156:20,20 158:13 173:1 176:16,19 plants 51:1,11,15 98:20 99:16 119:1 153:20 153:25 154:10 154:20 155:8 155:9,12,13 155:20,21 158:19 166:6 167:14,15 215:17 231:15 231:16 plant-by-plant 156:11,19 plant-level 52:8 155:23 156:3 plastic 81:9 155:8 171:6 plastics 12:4 45:22 51:12 55:15 84:17 101:16 139:6,13,18 140:1,6 147:9 167:14 170:10 171:20 199:17 203:9,17 214:7,8 215:1 215:17 plate 106:12 platform 30:18,21 100:14 platforms 10:15 play 8:2 32:9 players 151:18 playing 36:19 40:17 96:8 pleading 59:18 please 60:15 87:2 102:22 105:1 108:25 112:22 121:15 123:21 145:4 157:15 162:3 167:8 182:10,15,22 185:3,24 plus 11:25 28:18 29:16,23 33:6 64:10 65:20 87:16 95:16 156:16 200:24 202:25 204:10 205:17,22 207:3,18 208:4 213:16 213:20 215:9 point 9:18 17:10 19:12 25:20 35:21 36:5 63:12 71:5 88:15 103:5 103:10 128:14 129:7 139:8 139:14 158:23 166:16 167:24 175:20 177:17 190:15 197:25 199:14 200:17 207:1 209:8 210:6 211:1 214:24 219:22 233:12 pointed 69:12 139:11 167:13 173:18 202:10 points 151:23 166:23 167:8,13 229:4 pole 114:9,13 Policano 146:3,6,7

July 29, 2008

policy 26:2 47:22 48:7 polluting 196:3 poor 194:14 portion 166:3 190:21 portions 130:22 portrayed 142:17 pose 171:8 position 59:14 72:7 97:4 100:10 131:17 195:24 202:8 positions 59:9 96:2 positive 15:20,24 possession 218:11 possibility 110:13 possible 31:15 81:8 165:8 167:12 199:24 possibly 13:3 85:4 93:19 140:8 post 51:7 63:22 157:6,10 162:21 180:10 180:10,24 181:3 185:12 199:22 221:6 221:13,15 222:1 225:12

Hearing 280 225:19 228:18 229:10 Post-Confir... 131:19 145:16 Post-Consum... 3:12 4:4 131:8 potential 12:22 13:2 15:1,2 25:11 26:23 27:9,21 36:22 73:14 79:20 80:25 95:10 149:19 167:25 184:15 192:14 209:6 Powers 17:17 practice 28:13 217:21 217:22 precise 176:25 214:21 predictable 42:24 predicted 43:1 predicting 234:1 preeminent 160:13 preface 206:23 prefer 81:24 136:13 153:13 161:23 preliminary 167:16 215:25 premium 91:3 preparation 39:14 59:6 144:15 159:4 230:4 prepare 195:5 218:1,2 prepared 6:21 9:19 32:11 33:1 91:2 94:5 103:11 109:20 132:22 136:23 157:8 166:13 180:4 181:17 195:2 224:8 229:25 230:7 230:11 preparers 161:16 preparing 162:9 217:16 217:18 prerogatives 64:14 presence 8:4,4 present 90:6 108:1 187:23 presentation 164:24 165:17 165:19 166:8 175:4,11 presentations 16:3,12,13 presented 161:10,11 167:5 183:7 183:11 201:1 201:5 press 209:1 pressed 8:23 175:19 pressing 119:13,24 presumably 223:3 pretty 11:16 20:10 29:1 43:14 53:3 146:17 146:23 151:19 152:20 170:19 175:24 194:11 195:7 199:18 204:17 210:5 prevent 49:9 previously 109:13 pre-petition 27:23 34:22 35:2,22 51:3 104:13,17 131:16 148:7 148:15 149:2 150:4 179:25 180:7 181:9 181:15 192:16 200:19 211:2 218:16,18 219:8,18,24 219:25 220:7 222:9,19 223:12 227:18 228:16,16 232:7 pre-trial 135:14 price 40:10,12 41:3 90:19 120:8 169:4,5 171:11 179:4 201:17 206:7 208:24 prices 70:10 71:9 pricing 100:4 103:21 182:7 primarily

July 29, 2008

30:21 108:20 150:13 183:2 primed 150:3 priming 218:17 219:15 principal 61:19 152:4 163:18 194:22 220:6 principally 60:5 102:8 154:23 224:10 229:25 principals 102:20 prior 12:14 48:2 51:13 52:2,8 56:7 59:2 61:2 117:20 127:25 150:16 158:1 159:2 166:19 171:15 192:2 200:22 202:19 206:8 206:17 209:13 private 23:9 privately 26:1 privy 107:9,18 pro 19:22 20:4 86:3 112:8 probably 12:17 19:13 28:17 31:1 40:20 136:1 164:12 175:6 192:15 203:22 210:25 214:22 215:6 216:6

Hearing 281 216:15 217:12 problem 25:19 142:21 147:20 184:6 211:17 problems 99:6 139:7,18 159:23 171:18 181:21 184:7 207:11 213:22 procedures 15:7 proceed 7:1 39:9 98:14 128:13 135:17 136:17 138:13 198:12 proceeding 124:22 191:9 proceedings 73:10 83:8 235:6 proceeds 212:15,15 process 21:5,9,16,20 22:3 24:19 25:1 30:10 47:10,25 48:25 62:14 72:23 85:14 102:13,18 103:8 141:9 142:12 144:9 144:9 160:12 161:15 176:13 183:10 198:21 198:23 199:9 200:2,4,6,17 217:25 218:7 218:13 228:21 processes 15:6 78:9 produced 140:12 producers 169:19,20 producing 99:22 161:21 product 140:22,24 production 10:11 99:9,22 productive 167:11 productivity 17:23 professional 108:21 142:1 147:12 149:12 153:15 160:15 professionals 22:14 79:18 proffer 6:3 111:20 123:9 profit 159:21 170:8,9 profitability 149:19,19 profits 166:4 program 168:22 programs 7:21 14:1 16:6 41:9 178:16 progress 15:8,12 progressed 148:8 prohibit 96:4 prohibited 40:20,21 96:1 prohibition 98:18 project 112:8 145:17 178:22 projected 39:24 162:23 170:15 203:13 203:16 229:12 projecting 158:23 178:25 200:1 projection 17:18 42:8,18 161:16 192:17 199:16 projections 15:9,12 17:8 24:20,22,25 33:7 41:15,24 42:2 85:3,5 120:3 141:13 156:5 157:23 160:22,24 161:7,8 175:16,18,23 175:24 176:15 177:16 178:3 178:9 181:22 182:6 197:7 197:22,25 198:1 200:5 200:12,13 201:20 202:24 203:1,5 206:25 207:2 207:4,19 217:14,16,19 217:21,25 218:1,2 221:22,23 223:23,23,24 224:1,5,7,9 228:24 229:6 230:20 233:17 233:18 234:3 234:12 prolong

July 29, 2008

194:15 prominent 147:1 promised 20:1 promote 15:24 prone 135:10 proof 109:9,13 110:22 111:20 111:21 112:12 112:15 115:5 135:17 property 31:7 92:8 proponent 79:13 proposal 89:3 93:21 104:18 200:9 proposals 27:10 propose 104:16 210:10 proposed 157:22 186:9 proposing 160:10 pros 12:21 prospects 160:4 protect 131:17 protocol 126:25 127:5 prove 60:19 147:25 178:7 proved 156:22 proverbial

Hearing 282 10:5 provide 16:4 58:7 76:17 78:18 106:24 130:25 152:5 223:15 232:20 provided 32:12 75:13 115:17,18 128:23 132:21 157:25 177:23 200:22 205:14 205:15 207:15 provides 109:14,18 providing 44:14 107:17 151:3 231:16 provision 61:7 170:20 213:11 221:5 222:15,21 223:11,11 proviso 158:10 180:8 prudent 83:17,19 172:23 public 61:17 143:24 145:23,24 196:2 publicly 26:1 30:22 published 176:23,24 177:20 pull 116:21 pulled 203:2 pulling 159:12 purchase 179:4 206:7 purchased 45:5 purchaser 90:18 209:6 purchasers 24:4 purchasing 16:13 19:15,19 86:9 200:10 purpose 177:15 purposes 89:12 90:15 160:25 167:19 176:20,22 pursuant 57:1 115:25 157:7 pursue 72:24 83:19 85:23 226:18 pursued 84:4 pursuing 73:11 78:10 83:9,25 227:4 push 141:16 pushed 201:22 put 13:17 14:1 46:9 63:23 70:11 78:24 83:16 95:5 98:19 100:4 106:12 124:16 132:19 150:2 151:15 154:19 159:20 164:24 165:17,18,21 179:4 196:5 203:7 207:8 209:23 putting 105:5 115:22 219:2 P&L 59:7 79:1,2 P.C 2:14 P.L.L.C 3:15 4:6 p.m 98:4,6 136:19 136:21 235:7 Q quality 152:7 171:22 quantam 209:23 quantify 211:18 quarterly 17:7,9 question 39:1 77:13 87:2,5,6 91:5 111:8 112:20 117:6 123:3 130:13 132:12 135:6 191:7 193:11 230:8 231:7 232:16 233:12 questioned 226:7 questions 43:7 76:14 98:17 105:3 108:23 117:13 126:3 128:5 136:23 137:22 137:25 138:1 138:5 140:4

July 29, 2008

140:23 142:24 152:23 153:2 155:16 172:20 172:21 185:23 186:18 195:14 203:25 226:3 quick 34:8 quickly 26:13 40:2 131:22 148:2 149:24 150:3 156:21 227:23 quid 19:22 20:4 86:3 quit 9:22 10:1 12:13 63:13 64:1,3,16 65:19 66:9,12 66:14 67:9,10 67:13,18 135:11 quite 96:16 142:16 153:9 181:18 197:2 235:2 quo 19:22 20:4 86:3 quote 36:6 130:8 R R 2:5 185:6 radar 212:25 radically 24:5 radio 96:15 Raeburn

Hearing 283 164:4 raise 196:4 raised 130:14 182:12 185:8 186:18 ran 26:7 151:11,23 212:20 220:6 226:22 Randel 185:9 186:1 187:19,20 random 48:22,23 49:4 49:5 randomly 51:21 range 23:14 164:23 165:22 179:1 179:5 192:8 199:5 207:6 ranged 88:2 rarely 10:20 32:2 ratcheted 205:1 rate 46:8 rates 59:17 158:8 189:15 rather 38:11 42:22 173:17 194:15 206:11 216:14 217:25 rationale 17:1 37:15 38:2 raw 40:10 Ray 211:20 reach 27:11 38:15 116:15 117:3 210:3 211:15 reached 115:24 116:14 206:17 reaching 117:7,8 209:15 react 167:20 reaction 9:5,25 71:22 71:24 175:10 reactions 206:19 read 35:16 56:24 57:7,9 60:16 60:17,20 74:19 91:9 103:4 124:6 133:23 184:1 189:12 223:2 reading 199:6 reads 76:13 91:22 ready 218:10 real 26:19 160:19 208:3 realistic 192:11,12 209:13 realizable 80:1,5 realization 80:15 realize 194:20 realized 214:25 really 7:14 38:19 52:4 67:21 69:19 77:17 88:10 96:13 114:17 115:14 119:11 120:13 120:24 140:18 142:2 150:9 155:18 160:16 167:18 176:14 195:25 208:19 209:9,18,23 209:25 210:14 210:19 211:14 reason 31:22,25 37:21 38:17 39:8 46:18 83:24 91:12,25 reasonable 42:9,10 43:4 99:21 100:3 160:24 175:23 reasonableness 160:4 234:3 reasonably 72:16 213:25 222:7 reasons 14:19 16:21 25:21,23 38:20 59:18 86:23,25 87:8 95:23 97:8 144:16 201:12 rebuttal 135:15 recall 8:21 10:13 13:10 26:24 27:12,13 28:3

July 29, 2008

28:22 29:10 30:6 35:13 36:3 37:14 41:7 43:16,18 43:23 44:12 56:12 59:2 63:24,25 65:25 67:11 69:21 70:14 71:19,23 72:25 73:9,25 80:1 81:12 82:25 86:1 87:13,17 88:1 88:7 94:6,9 99:3 101:6 106:2 113:2 117:21 119:13 119:17 126:8 126:24 161:19 165:13 168:11 173:3 176:6 200:24 203:10 203:19,24 204:5 211:19 214:21 216:16 221:23 224:7 receivable 76:22 212:2 receive 15:15 received 68:22 95:21 107:12 138:10 190:24 201:11 receiving 39:6 69:22 126:8 200:8 204:13 recess 34:10 98:4 136:16,19 recipients 34:24

Hearing 284 recognized 13:15 80:6 recollection 20:16 29:17 63:18 64:7 86:11 100:22 105:19,22 106:4 122:17 137:8 161:24 164:11 165:2 166:22 190:2 198:16,18 206:15 221:14 222:20 recommendation 68:20 70:23 recommendat... 71:9 recommended 45:20 recommit 111:24 reconciles 6:16 reconvene 97:13 136:16 234:18 record 5:13 10:8 34:11 61:17 98:5 115:21 132:20 134:2 136:20 175:9 214:16 records 143:24 record's 133:12 recoveries 149:6 RECROSS-EXA... 126:5 red 139:9 REDIRECT-EX... 102:1 redoing 96:12 reduce 67:19 171:11 reduced 67:1 71:3 72:4 reducing 17:13,13 32:7 71:10 reduction 7:20 13:13 14:1 16:12 41:9 67:4 173:9 reductions 70:12 redundancies 50:3 refer 47:8 76:2 87:20 92:13 103:24 156:24 173:6 179:11 213:1 reference 35:17 59:4 77:17 78:6,16 78:22 82:12 82:16 166:17 referenced 59:7 81:14 86:2 87:21 126:10 180:22 180:24 references 65:19 82:19 referencing 80:23 referred 50:10 59:25 61:1,4 73:12 74:8,8,18 75:10 114:7 114:18 141:8 192:9 225:14 referring 34:14 55:3 62:4 75:8 77:7,24 80:24 98:21 111:23 159:1 refers 77:6 97:18 115:23 reflected 85:15 86:17 154:6 reflection 81:20 reflects 83:4 reforecast 67:5 reforecasting 85:14 reforecasts 29:16 refresh 122:16 161:23 refurbishing 16:10 refused 19:4 regard 8:10 53:16,17 92:4 94:13 132:1 143:21 regarded 92:6 regarding 82:8 112:4 182:16 regardless 107:14 regenerate 12:4

July 29, 2008

regular 16:14 96:19 107:11 189:15 195:20 regularly 28:14 62:15 rehabilitation 159:21 reimburse 215:18 reinforced 14:24 reinstate 114:1 reinvent 168:21 reinvigorate 12:4 reiterated 80:20 rejected 30:6 31:12 214:23 relate 35:24 36:11 102:20 related 137:23 143:14 204:3 233:12 236:12,14 relates 36:25 105:17 138:24 relating 184:16 relations 33:20 76:24 relationship 27:6 33:17 61:24 63:9 relative 47:14 62:17 99:20 107:13 117:20 179:20

Hearing 285 relatively 47:21 53:6 100:2 119:9 149:23,23 168:18 230:19 release 196:14 209:1 released 198:17,19,20 releases 17:9 relevant 33:22 127:6 reluctance 40:13 rely 22:4 143:10,23 143:23 144:13 226:17 233:21 relying 232:14 remain 128:12 remains 109:21 remember 7:12 14:13 102:9,18 108:15 154:16 176:25 201:18 220:10 remote 170:19 Renaissance 3:16 rendered 222:4 reopen 31:16 reorganization 6:19 45:25 46:20 55:7 75:15,18,18 79:11 81:18 82:3 109:17 109:18,24 110:14 112:1 112:3 113:3 161:1 165:23 177:17 213:13 230:24 reorganizat... 110:10 reorganize 194:12 repaid 149:1 211:5 repetitive 50:2 rephrase 38:25 replace 193:25 replaced 106:3 230:19 report 103:1 107:11 196:9 reported 20:23 74:21 75:5 86:16 125:19 142:9 142:10 148:12 186:14 236:6 Reporter 236:1,4 reporting 16:16 195:10 reports 15:16,16 126:8 195:2,6 219:21 represent 58:21 93:22 179:12 191:17 representation 43:4 226:16 representat... 6:17 representative 63:3,7 185:10 representat... 47:19 62:11,13 131:18 represented 18:24 116:13 148:9 173:13 219:17 representing 28:15 131:14 148:3 183:5 236:15 represents 136:1 requested 16:4 51:17 59:19 163:19 requests 16:16 155:1 require 134:18 required 8:1 28:2 97:20 108:1 113:8 113:17 116:3 157:6,11 174:2,11 180:3 191:2 requirement 59:5 181:7 190:7 requirements 7:15 59:8 67:15 138:2 requires 106:13 221:6 222:23 reread 61:13 research 123:4 reserved

July 29, 2008

138:14 reserves 172:23 175:1 resign 9:20 resigned 106:2 resilience 114:10,15 resiliency 113:9 resin 171:5 resins 40:7 resistance 172:25 resolution 57:2 122:12 193:19 196:24 resolutions 57:16 126:13 126:19,20 resolve 108:5 resolved 96:18 141:7 142:5 184:18 216:1 resolving 10:11 resourced 18:22 resources 22:18 59:21 respect 5:10 16:9 18:2 24:17 41:8 45:21 46:25 55:6 57:4 60:25 61:3,12 62:8 121:7 127:4 149:6 151:6 152:17

Hearing 286 154:18 159:6 159:8,17,22 161:3 162:16 163:1,8 165:25 167:20 170:5,8 175:1 176:7 177:18 178:9,17 179:20 180:6 192:6 193:3 196:6 198:20 200:6,9,10 207:12 210:17 225:12 226:11 226:24 227:1 respected 10:7 respectfully 185:25 respects 148:18,19 respond 40:1 208:25 responded 208:24 response 41:17 67:13 76:14 91:4 responsibil... 59:13 67:24 responsibility 55:1 68:4,11 68:14 120:17 144:3 160:22 197:6,9 231:1 responsible 7:9 68:1,9,23 69:17 230:22 231:14 rest 135:15 186:21 215:3 restock 212:2 restore 123:8 restructure 119:1 restructuring 45:24 46:20 55:4 56:17,20 59:22,24 81:15 82:9,14 85:22 110:1 142:9 147:15 160:7,12 184:7 218:5 restructurings 56:8,13,16 result 7:22 20:20,25 32:25 183:1 186:12,17 187:11 190:23 200:8 resulted 117:16 results 10:19 39:16,17 141:1 158:10 160:3 163:3 195:9 199:25 202:22 205:13 206:5 208:15 230:16 231:1 231:21 233:10 233:15,16 resume 6:21 resurrect 213:8 resuscitate 209:16 retain 178:15 225:3 retained 52:16 182:23 retaining 182:25 184:25 retention 105:15 186:9 187:8 219:22 retire 146:17 Retirement 145:16 return 89:15 133:9 157:13 returns 76:23 revenue 26:15 27:7 71:2 revenues 72:2 review 13:6 22:16 94:2 97:21 107:20 116:4 133:13 142:6 149:14 157:21 176:11 182:18 195:13 225:23 reviewed 93:24 107:16 158:3 162:20 181:17 reviewing 152:18 155:12 194:23 231:20 revised 63:22 64:1 162:21 185:7 185:20 revision 162:5 revolving 76:16 77:10 RE-DIRECT-E... 121:16 re-projection

July 29, 2008

204:7,9 Rhodes 1:5 185:3 Richard 186:2 right 7:24 12:6 23:7 23:19 29:8,11 29:25 30:5 34:7 35:8,16 37:9 39:2 42:8 53:2 59:15 70:17 70:20 73:2 75:8,12 78:13 78:21 79:21 80:9 82:10 88:23 89:1 91:19 93:23 94:9 98:11 103:19 122:5 123:11 125:7 125:10 129:23 133:5 135:16 138:6,12 143:22,23 144:12 151:18 178:3 180:9 180:23 181:6 181:15 182:13 190:8 191:19 192:15 211:8 219:12 222:18 224:22 225:6 226:19 227:19 228:5 230:1 232:24 233:1 rightly 32:13 rights 135:14 179:21 181:13 205:17 223:14 224:13 225:8,11 226:10,14

Hearing 287 right-hand 104:7 rigorous 80:17 risk 8:18 13:15 14:2 20:25 119:21 171:9 211:17 risks 9:4 12:21 13:6 42:13 100:7 100:12,15,17 100:19,24 175:14 RMR 1:12 road 193:21 210:13 219:25 robe 136:14 rock 10:5 Rodney 164:4 role 8:2 53:11 61:9 61:21 62:6,7 152:4,5 159:3 159:5,19 161:21 162:9 189:20 218:3 230:3 roll 182:1 229:13 rolling 223:14,18 224:9 Ron 186:2 RONALD 4:5 rose 4:5 115:13,16 116:6 129:3 129:21 160:17 186:2 Roseland 3:8 Ross 23:21 26:25 27:14,25 28:6 28:8,12,17 29:13,14,19 30:8,14 31:9 31:16 32:9,12 32:19 36:20 38:6,11,16 39:9 81:3 88:10 93:21 94:5,17,24 95:7 104:12 200:9,21 202:15,21 205:7,9 206:12,17,20 206:24 207:10 207:24 209:9 210:4,13,14 211:16 213:3 213:7,19 Ross's 23:20 31:24 103:18 104:6 Rothschild 28:13 roughly 94:8 RPR 1:12 rule 131:21 132:6 133:13,17,24 134:14 rules 133:14 152:20 run 26:12 30:23 88:17 running 35:21 142:23 153:24 runs 78:5 178:6,19 S Sadly 200:7 safety 171:9 sale 21:5 24:19 25:4 38:6,11 110:14,20 112:3 160:8 166:1 200:6 212:14 213:12 213:13 sales 25:1 83:25 110:14 158:8 200:4 salesperson 11:8 SAMUEL 3:13 sat 31:13 satisfactory 222:7 satisfied 14:10 72:15 181:19 satisfy 166:8 172:17 save 170:14 214:17 savings 84:8 154:6,9 169:10 170:17 170:24 171:2

July 29, 2008

171:13 172:8 173:15,16,19 174:11,16,21 177:10 201:14 201:23 207:17 213:23 234:11 saw 93:16 94:1 135:21 158:21 167:21 174:19 227:11 saying 36:20 190:4 202:8 206:23 227:5 says 60:20 62:1 69:12,13,25 76:9 80:2,2 105:9 109:11 111:23 185:2 221:10 scale 43:15 82:1 sceptic 141:15 142:1 scheduled 183:4 200:19 200:20 205:7 scheduling 49:5 Schott 86:12 Schrock 211:21 scope 126:15 155:11 scrap 17:23 screen 105:6 115:23 212:25 screwed 43:15

Hearing 288 search 229:20 seat 105:2 seated 137:3 SEC 106:10 second 36:24 74:17 78:5 97:15 103:4 112:20 139:4 154:13 157:15 183:11 192:23 196:9 204:25 secondary 118:21,23 Secondly 16:2 section 125:9,13 134:6 135:5 220:25 221:1 224:13 225:9,9 sections 132:18,24 134:4 sector 147:4,11,22 168:16,17 secure 113:5,5,5,6 114:25 secured 12:15 14:15 32:8 36:5 38:20 40:14 40:19 42:22 48:5 51:4 53:22 69:23 71:1 74:1 84:5 96:19 109:25 113:23 148:7 150:4 179:25 180:7 192:16 200:19 205:25 207:4 212:9 securing 152:18 security 36:1 211:6,11 212:11 see 35:17 36:6 37:20 38:3 44:23 58:24 59:12 60:9 61:25 66:23 88:25 90:23 97:22 105:3 115:10 117:12 123:23 124:21 125:18 129:18 143:12 149:4 152:15 171:17 182:11 184:10 189:8 226:19 seeing 65:25 171:25 seeking 124:14 seen 10:21 22:6 58:24 59:1 157:4 176:4 186:7 226:1 seismic 119:11 120:13 120:14,23 sell 22:18 25:22 81:23 177:21 177:21 selling 21:10 110:8 215:2,3 seminal 200:16 semiretired 145:11 senior 19:15 44:11 55:14 68:11 86:8,9 152:9 158:5 207:4 212:9 226:25 sense 21:15 106:7 132:5 173:21 173:23,24 176:17 211:24 sensitive 106:19 229:2 sent 52:20 206:12 sentence 56:23,25 60:16 79:23 82:4 91:21 125:16 184:5 sentences 91:8 September 5:24 109:2 111:1 161:18 214:22 215:6 215:7,9 216:6 229:10,17,24 230:11,17,18 September/O... 155:6 serious 194:18 seriously 191:8 serve 78:19 177:16 189:16 198:11 served 107:15 216:13

July 29, 2008

216:20 218:4 serves 79:4 service 17:18 services 2:4,12 53:1,4 56:23 57:11 61:6,8 62:1,5 121:5,10 125:5,12 126:15 182:25 183:15 185:5 185:6,12 186:5 serving 188:18,20 190:5 191:1 session 5:4 set 24:14 28:25 33:7 38:4 122:10 135:14 140:7 144:2 152:20 217:18 228:23 230:16 236:8 sets 39:20 setting 126:13 seven 105:9 168:20 several 31:1 86:24 89:4 202:17 severely 196:1 shall 57:3 shape 44:9 67:25 share

Hearing 289 68:10 152:24 156:12 167:16 170:9 204:24 shared 31:6,7,7,7 68:8,13 166:18 169:10 206:9 sharing 170:17 sheet 75:17,24 76:15 77:5,7,21 93:24 94:18 205:15 207:14 208:10,12 219:2 Shefferly's 234:19 shift 119:11 120:13 120:14,23 shifted 64:9 shingle 146:2 shocked 20:6 shoehorned 114:21 Shoot 86:12 shop 23:10 114:24 short 41:7,11 86:12 100:2 146:2 194:12 230:20 shorten 194:16 shortfalls 84:21 85:11 204:8 Shorthand 236:3 shortly 29:5 36:7 45:5 86:22 short-term 100:12,14 168:18 shot 112:21 shouldn't 178:1 231:12 show 23:6 121:1 140:25 167:24 202:2 showed 213:21,24 showing 185:21 202:11 shown 139:11 shows 122:23 143:18 shut 96:17 98:20 99:11 shutdown 98:21,23 shutdowns 99:16 shutting 96:7 100:8 212:23 sic 109:20 side 40:25 41:1 128:24 158:22 206:13,17 208:13 218:21 218:25 219:1 219:14 232:25 sign 22:8 95:6 138:8 208:16 signature 187:22 signed 180:17 187:20 188:1 significance 178:2 significant 24:21 39:8 117:16 144:19 169:6 201:19 significantly 174:9 silent 96:15 similar 195:21 similarly 206:5 simply 22:4 197:3 simultaneously 174:23 single 69:22 146:2 sir 20:13,18 87:3 102:24 105:20 107:4 108:14 109:6 128:8 135:3 137:4 138:6,13 191:4 site 50:15,18,22 sitting 49:4 situation 43:15,19 44:15 44:19 75:21 92:25 113:11 142:19 149:10 149:14 208:16

July 29, 2008

209:17 210:6 214:3 223:21 situations 44:3 106:9 160:14 174:1 six 74:23 84:13 87:15,16 162:6 194:1 197:8 204:10 204:10 213:16 213:16,20,20 215:9,9 216:17 sixed 26:21 sizeable 203:9 skeptical 214:13 skepticism 8:15,17 skill 174:19 skills 232:1 slammed 175:21 slanted 169:19 slow 110:5 174:15 slowly 13:20 small 40:10 87:22 216:25 smart 31:13,25 smarter 169:9 socially 28:17 soft

Hearing 290 101:11,15,22 101:23 155:9 173:10 199:12 214:5 215:3 sold 90:8 146:8,9 sole 79:12 solely 153:14 155:12 226:22 somebody 47:4 86:3 152:25 164:6 someplace 193:10 211:7 212:22 something's 37:21 233:9 somewhat 10:4 17:21 56:18 158:12 somewhere 26:20 114:12 somewhere's 168:20 soon 187:25 sooner 202:1 sophisticated 23:9 24:4 sorry 12:11 74:6 87:3 91:17 110:5 116:6 154:5 157:1,5 203:12 227:15 228:16 sort 153:3,5 156:2 159:10 171:9 200:16 205:1 206:23 210:24 212:4 214:13 sorts 146:23,25 sound 23:18,19 29:8 49:20 sounded 173:20 sounder 100:5 sounds 29:11 94:9 214:4 source 124:23 south 30:16,17 55:16 SOUTHERN 1:2 Southfield 2:17 speak 19:20 26:6 32:19 49:15 52:1 83:17 94:16 107:22 114:11 155:14 159:11 160:18 166:7 173:12 182:20 speaking 47:21 109:8 166:3 special 16:3 105:11 106:6,9,14 121:20 122:13 122:18 126:9 126:22 137:9 142:6 184:3 186:24,24 187:6,17 195:3,6 specialized 146:4 specific 107:17 182:8 specifically 8:22 34:15 60:8 87:14,17 94:2 103:17 107:22 124:12 135:2 137:23 154:15 220:25 specifics 50:8 57:24 140:18 157:13 speculating 24:7 speculation 38:24 Spence 187:22 spend 168:24 175:8 229:19 spending 143:13 182:3 spent 140:15 145:25 150:7 216:22 216:23 spinning 81:9 spirit 57:25 205:20 spoke 168:5 183:18 196:11 217:14 221:25 spoken 168:9 square 44:2,6 stable 234:22 Stacey 137:17

July 29, 2008

stage 28:25 stake 49:21,25 stakeholders 49:10,15 61:23 stalking 210:11,21 Stamer 186:1 stand 105:1 128:11 182:13 standalone 5:12,17 25:23 32:11,15 38:7 38:12,16 72:24 73:8,13 73:19 74:3,19 75:17,21 76:3 76:9 77:3,7 77:23 78:18 78:25 82:8,13 83:22 84:5 85:24 109:17 109:18 110:13 110:20 111:6 111:18 112:2 112:12 113:2 113:14,25 114:6,8,17,19 124:10 210:10 210:22 211:22 212:6,18,19 213:7,10,25 215:12 standard 16:15,16 53:3 53:7 standards 166:7 standby 128:12 standpoint

Hearing 291 233:6 stands 40:16,23 stars 174:4 start 5:8 90:3 123:18 133:23 139:1 160:6 168:2 193:9 207:8 started 92:17 146:13 146:14 167:9 215:10 starting 124:5 202:20 213:15 222:25 starts 123:16 125:17 state 37:10 78:16 145:4 190:21 236:4 stated 75:25 statement 50:12 116:23 123:17 124:3 124:6 138:17 168:5 186:4,9 statements 154:14 171:24 172:3 204:3 States 1:1 40:8 185:11 187:15 stating 209:2 status 16:5,6,8,12,14 19:17 55:6,7 55:8 62:16 108:1 194:23 stealing 194:8 steel 33:19 steep 91:1,1 178:24 steering 34:25 35:5 163:20,24 164:2,9,22 166:18 195:22 202:17 208:14 210:9 stenographic 236:6 step 84:25 138:6 182:14 Stepp 55:17 56:9 106:1 stepping 124:22 steps 16:20,22 42:12 Steve 165:9 183:6 Steven 1:5 stick 175:18 stint 146:2 stipulation 184:10 219:22 stock 212:16 stone 118:15 stood 15:18 161:8 stop 31:22 99:22 211:23 213:1 234:18 stopping 213:14 stops 184:5 straight 36:18 71:25 strain 13:17 strategic 31:9 78:15 79:19,24 80:4 225:14,17,20 226:1,3 strategically 33:13 strategies 7:20 42:11 94:16 213:18 strategy 90:11,24 straw 72:10 Street 1:10 4:7 stress 13:17 38:5 79:23 stressed 35:20 80:3 97:5 strictly 74:2 strike 220:16 strong 114:20 169:17 strongest 31:15 strongly 7:18 38:10 96:20 227:6 structure 22:19 53:7

July 29, 2008

106:18 114:23 structured 155:15 stuff 168:23 style 33:3 sub 174:3 subcommittee 55:1,3 57:18 184:12 subcommittees 54:19,21 subject 14:11 89:3 125:17 127:20 135:13 188:11 188:17 189:6 197:1 228:13 subjected 80:17 submit 185:20 187:21 subpoena 197:15 198:11 subscribed 236:18 subsequent 33:19 57:15 66:15,17 159:17 229:14 subsequently 66:25 106:2 180:19 205:6 subset 108:10 substance 37:11 204:2 222:8 substandard 41:14 substantially 10:22 32:7

Hearing 292 118:8 133:4 success 10:9 41:8 160:5 successfully 71:6 194:12 suddenly 85:16 209:24 sufficient 76:17 113:19 114:14 suggested 19:14 138:21 144:5 185:18 suggesting 141:11 suggestion 70:9 suggestions 162:11 suggests 112:12 suitable 160:24 Suite 4:8 summary 115:17 summer 10:12 71:13 sundry 99:17 superb 193:1 superseded 57:23 supersedes 61:1 supplement 105:6 185:4,14 188:4 supplemental 183:13 185:7 supplementa... 46:15 supplementing 45:23 supplier 95:13 171:3 suppliers 40:12 89:16 supply 168:19 support 9:20 11:22 52:17 61:10 62:6,7 74:4 95:20 140:13 185:13 214:12 214:24 supportable 160:23 supported 161:12 supporter 143:19 supporting 8:2 61:21 141:12 supportive 173:19 supports 103:6 supposed 61:23 74:11 143:6,7 160:20 177:25 sure 64:25 65:5,9 66:6 73:25 93:7 94:1 101:24 112:25 117:9 129:5 137:3 145:22 147:19 148:22 148:25 156:17 160:17,23 164:17 166:13 167:9 171:1,8 171:10,21 175:5 176:16 189:21 198:4 205:11 210:12 210:24 229:8 231:21 232:22 surely 168:3 survival 151:2 survive 180:12 193:2 survived 193:14 suspect 24:8,17 52:23 141:20 158:12 sustained 39:3 sworn 144:24 SWR 1:5 synergies 210:17 T tab 135:5 table 36:23 175:22 209:12 218:25 219:1 tabs 134:24 tactically 33:13 tactics 7:20 42:11 210:2 take 13:25 16:21 18:7,11,18

July 29, 2008

19:7,17,21 20:2,21 34:8 36:20 40:15 53:14 61:15 88:4 97:9 112:20 131:2 136:15 149:13 168:1 175:4 179:18 199:23 201:25 212:3 219:14 229:5 taken 16:23 18:20 34:10 50:15 98:4 134:13 136:19 171:15 214:9 216:5 234:21 taking 40:22 51:23 96:1 97:6 176:15 201:15 talent 45:21 232:12 talented 11:5,7,14 talk 49:22,22 141:1 143:2 152:25 153:18 156:17 164:18 177:17 197:10 204:22 204:23 211:24 talked 27:17 47:7 86:2 114:16 136:7 164:23 174:8,17 208:15 221:21 talking 5:21 6:1 77:10 77:12,22 83:25 85:21 111:19 170:5

Hearing 293 170:24 184:10 233:7 tantrums 135:10 task 105:23 106:24 151:10 tasks 57:19 107:7 team 11:22 22:13 42:1 52:17 64:20 103:12 107:25 118:3 118:14 119:25 120:16,16 140:2,3 151:14 152:9 154:24 155:2 158:5 159:20 160:3 163:10 164:21 168:7 170:1 195:15 200:21 217:24 224:10 230:21 230:22 232:15 234:13,15 team's 120:19 technical 233:5 telephonically 65:1 tell 18:17 23:5 47:11 77:21 103:5 107:23 115:8 122:10 135:3 136:2 145:19 147:16 154:14,21 189:4 196:25 206:24 207:24 226:2 227:21 229:16 233:1 telling 109:9 111:21 197:1 205:9 208:3 ten 43:16 tentative 119:9 tenure 181:20 term 73:7 75:17,24 76:15 77:5,7 77:21 93:24 94:18 205:15 207:14 208:10 208:12 219:2 223:5 terminated 30:7 91:11,24 terminating 32:1 terms 26:24 57:2 94:21 126:14 142:7 158:7 160:2,15 174:4 185:14 213:10 219:9 230:6 231:25 terribly 203:21 205:19 test 171:8 tested 76:1 testified 6:9,16 29:4 35:25 36:3 45:13 67:14 70:16 72:21 93:25 103:10 103:21 111:17 135:7 141:25 143:15 145:1 testify 109:10,11 110:5 111:22 112:4 144:24 190:20 testifying 36:4 43:18,23 70:14 155:3 testimony 6:3 43:12 48:13 63:11 73:1 84:7 88:1 94:3,4 131:20 138:21 139:15 142:15 196:19 220:11 229:9 text 35:15 thank 6:20 43:6 98:12 104:21 129:25 131:25 132:10 133:10 138:7 144:19 182:15 188:2 190:11,17 191:4,5,20 198:9 theatrics 135:11 themselves 137:21 theory 169:7 thereabouts 203:22 thereafter 86:22 therefore 114:4 thereof

July 29, 2008

79:16 thereupon 144:22 thing 37:13 45:12 79:22 124:24 153:5 156:2 171:9 191:6 192:23 204:4 212:5 things 16:1 59:7 71:7 76:21 119:3 122:2 128:16 135:12 138:25 140:15 148:1 155:17 158:17 160:16 161:4 167:21 169:10 177:9 192:13 201:24 207:20 208:19 209:2 220:14 226:9 232:5,9 think 6:13 8:20 9:1 10:20 11:9 12:7 17:8 20:14 21:1,15 21:21,25 24:3 24:24 25:10 26:9,25 27:14 27:16,20 29:1 29:9,11,25 30:20,24 31:1 31:11,21 32:13 36:2,17 36:18 37:13 37:15 39:5,19 41:6,22 42:1 42:4,5,7 44:15 45:19 49:12,18 50:11 51:23 54:8,14 55:3

Hearing 294 56:16 60:1,2 66:10 67:22 69:11,20 71:13 72:11 73:21 75:7 77:9 81:3,6 82:24 83:2,13 83:17,24 86:11,17,21 86:24 88:6,13 89:17,22,23 90:13,21,22 92:24 94:7,15 95:9 96:25 97:11 99:8,15 99:23,25 100:2,11,13 100:19 102:11 106:11,16 107:10 111:2 111:3 112:19 112:23 115:15 117:10 118:21 121:23 122:1 124:18 128:17 130:7 131:21 132:4 133:16 133:17,19 135:24 136:2 138:19 150:18 151:7,11 155:8 158:12 161:25 162:6 198:23 199:8 200:16 201:16 203:9 211:9 212:23 215:8 215:22 216:19 218:8 220:18 226:8 229:19 230:15 231:10 thinking 54:3 118:22 216:4 third 27:17 40:13 73:2 80:23 81:1,1 84:1 85:23,25 139:14 199:11 third-party 73:3,19 77:18 77:23,25 79:7 thought 14:15,16 19:24 30:13 31:24 40:15 42:23 42:25 47:12 48:8 64:13 72:10,16 73:3 100:24 103:22 106:11 115:16 129:7 143:16 163:13 172:22 175:17 176:3 176:4 228:11 229:11,23 230:11 231:6 231:8 thoughts 176:7 threat 10:1 12:10,13 12:13 65:3,10 65:19 67:12 threaten 67:8,10 135:11 threatened 9:22 63:13 64:3,16 67:18 209:11 threatening 63:25 three 26:15 75:1 76:12 89:19 91:17 92:14 92:18,22 93:1 103:24 104:6 118:11 122:9 146:15 168:19 169:14,22 194:2,4 199:21 217:3 217:17 throughout 124:21 170:6 223:3,5 throw 85:17 89:24 tie 136:10 tied 10:16,17,17 193:15 Tim 11:5 16:24 55:12 56:13 139:15,23 141:18 165:14 time 6:8 13:25 18:14 20:3,5 24:1 42:19 43:5,20 46:22 46:23 47:16 47:24 48:15 54:9,11 55:12 63:12,20,21 71:5,16 81:2 81:3,7 83:9 83:13 90:25 91:11,24 92:11 93:8 96:16 97:14 100:25 107:4 107:16,16 110:18,24 111:1 112:18 116:14 124:7 131:4 140:14 142:24 143:16 143:16,18 146:7 149:25

July 29, 2008

150:12,16 151:16,17,20 151:24 152:13 153:1,1,6 155:4,5 156:2 159:20 165:14 167:20 168:21 169:9,23,25 171:23 172:19 176:1 181:17 181:17 184:24 193:23 194:6 194:12 196:16 199:14,23 201:21 206:4 207:1 211:13 214:23,25 216:4,13 217:13 222:10 227:9,10 229:20 233:13 233:14 234:17 236:8 timely 47:18 50:18 times 21:12,14 22:1 46:8 67:11 90:21 152:1 159:2 160:12 216:19 timetable 19:11 41:10 tire 193:2 title 236:9 today 72:22 82:23 84:8 together 150:2 151:15 159:12,21 164:19 165:21

Hearing 295 219:2 229:22 told 29:14 42:20 45:11 62:20 66:17 94:7 102:16 135:9 143:1,2,22 146:15 164:17 173:8 202:21 203:5 206:20 208:6,21,22 tolerance 224:4 tomorrow 234:18 Tony 55:14 56:19 105:25 137:12 top 8:22 32:16 36:7,7 43:25 44:3 45:17 92:13 94:5,10 97:2 114:9,11 156:7,9 164:6 topic 156:8 164:15 168:9 227:3 topics 164:23 174:6 175:3 Toronto 108:20 total 46:11 79:5 198:21 203:16 totally 68:9 172:6 209:9 233:4 totem 114:9,13 tour 153:20 155:14 towards 27:5 169:19 211:22 towel 85:17 town 85:19 trace 117:2 track 10:8 15:8,11 73:12,18 78:14 83:11 83:20,25 84:5 89:5 97:23 tracks 73:16 78:10 83:10,15 213:5 traded 37:25 trading 31:18 37:18 117:10 207:5 traditional 114:19,25 transacting 81:23 transaction 25:8 39:9 81:16 82:1,8 transactions 79:3 90:14 transcript 6:2 109:1 130:13 133:13 133:21 189:9 189:11 236:10 transcripts 5:21 transfer 19:1 transparency 47:8,13 48:20 48:22 49:8 142:13,16,19 142:22 transpired 200:11 traumatic 204:17 tremendous 45:21 Trenary 11:5 16:24 17:24 55:21 85:13 139:15 139:23 141:18 165:14 Trenary's 11:11 tried 149:14,15,16 158:16 trim 101:11,15,22 101:23 155:9 173:11 199:12 214:5 215:3 trimmed 133:4,6 trouble 156:3 159:15 troubled 146:20 troublesome 124:25 true 52:15 54:21 84:17 95:14 101:21 158:14 236:10 trust 3:12 4:4 131:8 131:11,19 145:16 trustee 63:7 70:7 131:7 145:15

July 29, 2008

184:19 185:11 187:15 Trustees 115:25 truth 144:24,25,25 try 16:21 28:25 47:4 137:3 177:23 191:15 211:15 trying 32:9 117:24 150:8 164:24 167:11 174:22 195:10 209:16 209:19,21 230:10 turn 34:6 72:12 91:7,18 103:3 118:17 121:21 122:9 125:5 135:5 213:4 turning 27:25 231:14 turnover 159:15 174:18 turns 44:10 two 14:17 24:4 26:15 39:20 40:4 44:2 46:16 61:16 71:7 74:25 75:2,9 87:19 88:3,21 89:13 90:9 91:7,8 91:16 113:24 115:5 118:11 131:4 139:21 139:25 146:13 148:5,12,17

Hearing 296 157:20,25 159:1,4,7 169:6,7 174:21 176:4 178:24 179:11 179:13 189:12 194:4 199:9 199:14 203:11 203:13 216:22 220:16 221:9 228:6 two-month 221:18 two-year 221:18,23 223:6 type 90:12 172:24 212:10 217:22 types 202:9 typical 114:6 170:18 typically 15:14,17,21,22 16:24 17:15 18:1 22:9 42:10 53:6 55:21 79:4,11 81:22 125:23 169:3 171:1 171:10 195:6 U ultimately 100:1,1 139:19 147:25 155:7 156:13,22 192:21 198:23 204:9 215:14 229:7 230:15 230:21 231:14 unable 38:15 unachievable 163:14 unavailability 134:16 unavailable 134:12 unbelievably 119:12 uncalled 66:21 uncertain 81:6 unchanged 198:20 uncomfortable 196:21 unconnected 105:12 187:2 under 7:4 25:18 60:1 94:11 100:25 126:15 131:21 133:13 137:4 157:12 162:13 193:16 201:8 204:15 222:12 225:9 227:7 underlined 60:22 underlying 42:12 underneath 203:23 understand 16:21 19:8 38:17 101:17 109:4 112:6 115:2,3 135:25 149:18 150:8 155:2 158:17 160:19 168:7 177:24 178:21 181:24 205:5 208:2 209:24 219:9 229:9 230:10 understanding 19:16 36:15 48:1 50:16 51:7 53:11,15 60:24 109:15 129:7 149:9 153:21 159:3 159:9,18 175:13 190:6 195:11 230:2 understandings 61:2 understands 155:19 understood 18:19 38:19 133:20 175:14 undertaken 39:13 undertakings 55:9 undertook 27:22 underway 25:3 undesired 9:17 unequivocal 8:24 unflattering 11:17 unfolding 85:22 unit 11:10 United 1:1 40:8 185:10 187:15 University 145:23 unless 49:16 129:8

July 29, 2008

135:11 unlikely 25:4 207:21 unmitigated 43:21 44:5 unofficial 56:2 unraveled 148:2 unreasonable 42:9 unrelated 145:17 unrequested 9:17 unsecured 12:16 14:16 42:24 53:23 73:24 185:15 192:18,19 untenable 72:7 unturned 118:15 unusual 152:21 195:19 195:23 196:7 unwanted 9:17 upcoming 155:11 update 75:14 updates 16:5 upset 9:10 31:20 64:13 upside 13:2 100:24 upsides 15:1 42:4,13 upstairs 234:19

Hearing 297 urgency 25:21 117:11 use 40:21 76:8 77:14 79:18 131:1 158:18 160:6 167:23 171:5 176:19 226:19 227:20 users 40:7 usher 217:24 utility 160:5 utilize 24:11 utilizes 53:4 U.S 1:10 63:7 70:7 115:25 169:21 184:19 V vacuum 153:14 vague 70:1 value 23:2,14,23 24:5 79:5,9 93:15 109:16 110:3,12 113:23 179:1 199:4 207:5,8 208:8,17,20 209:18 valued 95:13 valuing 78:20 Vance 164:5 variance 17:15 variances 15:21,21,24,25 16:20,22 17:2 17:4,22 18:4 varied 151:16 various 13:12 49:3 68:16 99:17 110:2 140:15 165:24 177:18 179:19 180:3 187:12 vehicle 158:7 vendors 12:16 76:25 verification 89:19 version 20:22 27:24 159:25 188:1 versions 180:2 versus 148:15 230:4 vet 160:10,22 217:25 vetting 14:11,25 51:5 160:2 230:4,6 via 145:15 viable 59:23 71:7 72:7,17 124:20 213:7 vicinity 136:3 view 8:24 9:1 12:7 13:1 14:24 21:18,24 22:22 23:1 24:5 33:21 38:5 39:17 48:23 64:10 69:16 71:11 71:25 72:1,23 74:18 80:13 80:19,20 83:20 93:15 95:9 99:19 102:14 108:6 110:24 112:17 113:15 114:2 114:5,20 117:19 124:8 158:23 177:12 206:10 211:1 211:11 218:3 229:24 viewed 35:20 173:11 views 8:5,9 15:5 22:25 24:8 124:11 138:1 167:16 virtually 44:20 47:22 56:3 80:16 99:8 107:24 114:2 119:4 visit 51:1,8,12,16 51:17 154:9 154:19 155:7 155:21 visited 51:3,9 167:14 visits 51:18 vis-a-vis 15:18

July 29, 2008

Vizzini 151:25 voice 117:10 volume 17:3,15 34:5 52:23 74:12 78:2 87:23 102:22 121:22 169:1,22 220:15,16 volumes 39:24 40:2 169:18 170:5 170:7 194:6 voluntarily 197:14 198:8 vs 1:5 W W 1:5 Wachtell 34:17 165:4 226:22 waiting 210:2 walk 167:4 209:12 walked 166:19 want 60:19 91:1 99:11 103:20 111:9,10 123:18,24 125:14 128:19 135:3,18 178:22 182:19 196:22 197:10 198:1 211:12 212:22 220:24 229:8

Hearing 298 wanted 51:8,16 63:13 69:19 71:21 72:18 95:10 124:2 146:17 149:18 153:19 164:18 167:16 195:25 207:24 209:21 210:14 213:11 226:18 227:19 wanting 196:4 wants 171:5 wasn't 9:20 15:19 19:10 47:5 50:1 63:21 65:23 71:18 72:9 83:20 88:18 93:4 95:16 101:3 101:15 106:15 107:9 115:14 117:22 119:11 140:7 144:6 154:7 155:17 167:17 180:16 193:8 203:21 213:24 215:23 227:9 water 25:18 way 9:23 13:13,16 15:20 16:7 17:2,3,6 31:16 67:25 72:12 79:9 83:17 84:25 90:15 91:13 92:1 99:19 118:15 119:9 123:13 133:17 135:12 136:5 136:8 138:11 149:5,20 171:4,11 211:4 216:7 224:24,24 ways 27:6 118:25 week 200:23 222:24 weeks 92:15,18,22 93:1 222:25 224:2 Weil 35:11 went 5:13 27:17 51:9 66:8,11 79:22 96:15 139:3 140:1,3 145:23 213:9 weren't 24:15 55:25 100:23 101:9 143:22 159:25 232:19 West 1:10 we'll 34:8 97:13,13 139:14 142:13 156:17 202:6 234:18,25 235:5 we're 6:21 17:12 62:1 97:12 98:2,9 120:12 130:17 133:12 143:7 151:12 161:4 196:20 we've 132:4 140:22 169:13 181:1 whatever 7:24 46:9 212:11 232:22 whenever 144:9 whereas 59:10 whether 12:24 25:12 26:8,19 32:21 49:1 68:23 79:2,7,12 88:11 90:25 91:2 99:4 100:20 102:4 103:6 112:2 122:17 124:7 124:12 130:10 141:23 148:14 198:7 219:15 226:2 227:14 227:19 228:4 228:8,12 whirlwind 155:14 whole 55:6 114:1 140:19 142:22 144:25 165:20 178:12 200:17 wide 164:23 165:22 Wilbur 23:20 28:12,17 33:1 36:20 38:6 81:3 93:20 200:20 202:15,21 Wilbur's 33:15 37:19 William 116:13 willing

July 29, 2008

32:16,21 156:12 178:15 197:13 198:7 wind 215:1 windfall 32:12 winter 6:10 withdrawn 91:11,24 within 39:22 40:9 53:13 148:12 158:7 168:17 170:18 195:12 199:17 201:21 221:16 witness 58:7 101:25 108:24 115:12 117:13 121:13 124:2 128:11 128:14 134:12 135:19 138:7 144:20,23 191:9,22 216:9 231:5 witnessed 135:9 witnesses 130:20 135:15 witness's 131:4 WL 23:21 26:25 200:9 WLR 23:21 WLRK.com 34:16 WOLLMUTH 2:6 word

Hearing 299 40:20 49:17 49:18 51:20 51:22 61:15 76:8 77:14 187:3 227:16 words 60:21 82:25 231:11 word's 198:3 work 12:2 14:6 39:12 41:14 41:23 52:6 117:18 138:23 139:20 140:10 140:20,22,24 142:19 144:11 145:13,14 146:5,24 151:9 152:7 153:14 154:1 157:22 160:16 161:8 168:25 191:13 199:13 217:23 235:5 worked 47:10 131:14 147:22 152:10 218:9 working 15:19 47:13 76:18 89:14 98:10 216:22 216:24 230:14 233:9 works 108:19 130:7 131:9 133:17 133:24 134:18 168:8 world 22:22,25 worried 37:24 worse 203:6 205:14 worth 118:9 wouldn't 32:14 54:12 66:23 77:24 85:20 88:10 94:25 106:22 125:1 127:16 127:18 178:22 192:22 193:5 208:9,25 213:14 Wright 11:7 165:13 writing 65:11,14,16,17 65:18 69:8,12 69:13 132:20 writings 61:18 126:9,17 written 57:16 190:22 222:13 wrong 42:8 70:21 75:6 167:22 168:2,3 172:12,15 178:8 195:18 wrote 184:9,17 185:1 X X 70:24 120:12 120:13 Y Y 70:24 yeah 9:24 37:13 50:11 53:13 75:3 84:24 101:23 111:2 117:4 124:18 154:5 year 13:18 18:24 26:10 32:18 70:14 90:8 99:4 139:4 169:6,7 192:7 193:24 200:2 205:1,2 216:16,23 217:2 years 24:22 26:16,22 28:18 85:21 90:10 146:1 146:12,16,23 147:7 167:25 168:20 194:2 194:2,4 216:17,22 217:5 221:9 235:1 Yep 36:10 yesterday 5:10 6:17 10:20 35:25 42:7 59:10,25 69:21 72:21 73:22 74:8,14 75:10 82:22 111:17 York 2:8,8 yourself 168:22 218:5 Z Z 70:24

July 29, 2008

Zainy 216:15 217:1 zero 71:6 72:5 Zolfo 3:3,6 7:25 103:13 224:11 232:20 ZOUSMER 2:14 $ $1.2 179:2 $1.3 179:2 199:5 $1.4 143:15 $10 172:1,4 $105 204:10 $11 203:14 $150 149:1 150:25 227:2 $180 176:6 205:23 $200 176:7 $250 70:13 71:22 $265 162:19 177:5 178:25 $300 8:6,12 9:8 18:25 63:14 71:21 119:15 139:3 150:23 $302 229:12 $302.3

Hearing 300 162:14 $40 19:22 $5 177:9 $675 23:15 $725 23:15 $800,000 46:11 $900 23:23 0 001 221:1 05 10:13 71:14 80:15 99:5,10 225:10 05-55927 1:5 5:4 06 12:18,25 19:13 26:17 33:21 41:6 63:19 88:18 89:24 99:5,10 111:16 066685 104:8 07 89:22 223:6 07068 3:8 08 26:8 89:22 09 26:8,10 1 1st 222:25 1.2 199:5 1.4 120:12 1:15 97:14 1:20 98:5 10 26:9 43:14 85:21 119:5 136:9 167:14 174:21 10:00 234:18 10:21 34:10 10:26 34:11 100 139:3 101 3:7 10110 2:8 106 133:14 11 1:4 26:4 47:25 54:18 55:9 80:16,19 83:18 94:20 97:18 110:25 131:13 11th 5:23 6:2 12 60:12,14,17,20 94:20 100:15 109:2 119:5 12th 5:24 29:6,10 200:18 202:14 206:18 209:7 12:00 98:4 125 135:8,8 13 94:20,20 145:25 222:24 224:2 13th 37:8 13-week 223:14,17 224:9 14 119:5 14th 122:4 15th 185:2 186:6 150 119:21 224:5 16 119:5 225:1 17 52:23 61:9 125:2 146:22 17th 179:17 180:8 221:11 179 89:6 18 78:11 100:15 146:22 18th 105:8 185:22 186:10 180 67:3,20 93:5 201:8 19 134:24 1980's 217:8

July 29, 2008

1990 146:1 2 2 56:22 2-B 125:9,13,16 2:15 136:19 2:30 136:16 2:34 136:20 20 28:18 104:19 194:5,24 203:22 207:13 20th 157:21 158:2 159:2 163:22 195:19 202:10 2000 146:8 2005 5:24 6:11 58:23 78:11 80:7 82:15 105:8 109:2 111:1 122:4 137:10 150:17 150:19 154:6 155:6 156:9 158:2 162:17 162:22 163:22 169:17 179:17 181:5 185:9 194:24 197:7 226:6 229:10 2006 5:25 6:2,5 7:10,19 8:7 8:12 12:14,23 14:10 15:13

Hearing 301 18:6,11 20:17 23:13 24:20 24:24 25:3,5 25:5 28:4,21 29:4 37:8 39:14 41:15 51:14 52:3,9 63:14 65:21 67:1 84:9 88:12 89:7,21 95:25 102:9 103:2,8 112:18 123:9 154:4 155:18 156:6,14 157:19 161:20 162:8,12,23 164:18 167:25 176:5 177:1,3 177:13 198:16 200:18 202:5 215:7,24 216:2 228:23 234:12 2007 221:11 2008 1:8 5:2 89:21 21 201:5 21st 201:2 211 1:10 212 2:9 22 162:22 22nd 6:14 161:18 229:10,17,24 230:11,17,18 24 100:15 248 2:18 25 123:17,19 26 123:13 124:5 26th 6:5 260 2:15 265 63:23 66:8,13 66:14 67:3 177:11 201:6 267 67:19 27 34:5,15 28th 191:23 222:14 29 1:8 5:2 135:5 29th 6:4 29100 2:16 3 3-L 156:25 3-M 156:25 30 49:2 89:16 174:22 175:8 203:15 300 11:25 64:10 65:20 3050 4:8 31 102:21,24 312 4:10 313 3:18 351-0099 2:18 36 128:18,20 365 66:11 37 134:6 382-3300 2:9 4 4-D 121:21 4-H 78:2 4-R 74:6 4:54 235:6 40 49:2 174:22 194:5 203:16 400 3:16 44 220:15,24 45 175:6 48034 2:17 48243-1668 3:17 5 5 70:10,11 71:3 71:3,9,10 72:3,4 5th 5:22,25 111:16

July 29, 2008

123:9 5.01 225:10 5.010 224:13 50 49:2 194:5 500 2:7 501 220:25 55 4:7 220:25 551-4931 4:10 568-6519 3:18 58 222:22 6 6 157:4 6M 181:1 6th 29:3 200:10 6-L 157:1,3 159:8 159:25 161:17 181:1,3 221:25 227:6 227:9 228:7 6-M 157:2,9,10 159:18 162:5 181:3 226:8 227:7 228:7 6-N 166:25 6-R 58:12 6-S 192:1 220:21

Hearing 302 222:22 60 180:11 221:16 60603-5709 4:9 618-5172 3:9 625 88:2,5 64 128:18,20 675 88:3 685 104:10 69 23:14 29:2 87:21 103:17 103:25 128:22 7 7 58:23 7th 185:8 186:13 70 128:22 71 128:22 750 174:23 8 8 74:12 135:8 80 29:22 104:19 173:15 205:25 209:20 235:1 804 131:21 82 134:5 9 9:33 1:9 90 39:7 94:8,13 103:23 173:16 182:4 207:5 209:21 90's 217:8,9 90-day 182:1 95 217:12 96 217:12 973 3:9

July 29, 2008