Free Designated Record on Appeal - District Court of Delaware - Delaware

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UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re AMERICAN CLASSIC VOYAGES CO., et al., Case No. 01-10954 (KJC) Debtors. AMERICAN CLASSIC VOYAGES CO., et al., DEBTORS, by and through PAUL GUNTHER, PLAN ADMINISTRATOR, Plaintiffs, Adv. Pro. No. 03-56998 (KJC) - against JP MORGAN CHASE BANK, NATIONAL CITY BANK OF MICHIGAN/ILLINOIS, and HIBERNIA NATIONAL BANK, Defendants. Chapter 11 (Jointly Administered)

PLAINTIFFS' DESIGNATION OF ISSUES AND RECORD ON APPEAL American Classic Voyages Co. ("AMCV"), et al. ("Plaintiffs"), through their undersigned counsel, pursuant to Rule 8006 of the Federal Rules of Bankruptcy Procedure, designate the issues and record on appeal in connection with the Notice of Appeal (Docket No. 181) from the order of Bankruptcy Judge Kevin J. Carey, entered in the above-captioned adversary proceeding on the 27th day of April, 2007 (Docket No. 180), which order: (i) held that the Plaintiffs have not proven that the debtors were insolvent as required by Bankruptcy Code Section 547(b)(3); and (ii) entered judgment in favor of the defendants and against the Plaintiffs.

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I.

STATEMENT OF ISSUES TO BE PRESENTED ON APPEAL 1. Whether the Bankruptcy Court erred when it used an improper

standard to evaluate whether the defendants had rebutted the statutory presumption of insolvency contained at 11 U.S.C. §547(f)? 2. Whether the Bankruptcy Court erred when it found that debtors'

management's unsubstantiated projections, upon which defendants' expert's opinions respecting solvency were based, were sufficient to support defendants' expert's solvency analysis? 3. Whether the Bankruptcy Court erred when it found that the

statutory presumption of insolvency was rebutted by defendants where sufficient nonspeculative evidence was neither adduced through trial testimony nor presented in the exhibits in a manner that met the standard required to rebut the presumption? 4. Whether the Bankruptcy Court erred when it based its decision on

the testimony and report of defendants' expert, Brian Calvert, whose testimony and opinion was wholly impugned at trial? 5. Whether the Bankruptcy Court erred when it made findings of fact

that are erroneous or unsupported in the record? 6. Whether the Bankruptcy Court erred when it based its finding that

Plaintiffs failed to reestablish insolvency on the Court's erroneous observation that plaintiffs' expert, Perry Mandarino, did not conduct a "going concern" analysis of the debtors' financial condition? 7. Whether the Bankruptcy Court erred when it failed to find from the

unrefuted and irrefutable evidence that the fair market price that would have been obtained for the assets of AMCV, even sold as an operating entity, would have been 2

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insufficient to pay AMCV's debt and preferred stock obligations, thus rendering AMCV insolvent on the date of the transfer at issue? II. DESIGNATION OF RECORD ON APPEAL Docket No. 181 180 179 177 Date 05/07/2007 04/27/2007 04/27/2007 10/04/2006 Document Description Notice of Appeal Order Entering Judgment for Defendants on the Issue of Solvency Memorandum Opinion that Plaintiffs Have Not Proven That the Debtors Were Insolvent Plaintiffs' Letter to Judge Carey Regarding Clarification on Experts Listing in Plaintiffs' Response Brief Plaintiffs' Answering Brief to Bank Defendants' Post-Trial Solvency Brief, Proposed Findings of Fact, and Conclusions of Law (with exhibits) Bank Defendants' Response to Plaintiffs' Proposed Findings of Fact, Conclusions of Law, and PostTrial Brief Bank Defendants' Findings of Fact and Conclusions of Law (with attachment) Bank Defendants' Post-Trial Solvency Brief Plaintiffs' Proposed Findings of Fact, Conclusions of Law, and Post-Trial Brief (with attachment) Scheduling Order Regarding Post-Trial Briefing and Trial Exhibits Transcript from Insolvency Trial ­ Day 1, July 20, 2006 Transcript from Insolvency Trial ­ Day 2, July 21, 2006 Transcript from Insolvency Trial ­ Day 3, July 24, 2006 Transcript from Insolvency Trial ­ Day 4, July 25, 2006 Order Setting Matter for Trial and Resolution of Motions in Limine Bank Defendants' Solvency Trial Brief Plaintiffs' Pretrial Brief (with attachments) Joint Pre-Trial Memorandum (with exhibits) Order Scheduling Certain Adversary Proceedings For Trial On The Common Issue of Determining Pre-Petition Insolvency For All Transfers For The Applicable Debtors

Item No. 1 2 3 4

5

176

09/29/2006

6

175

09/29/2006

7 8 9 10 11 12 13 14 15 16 17 18 18a

174 173 172 170 165 166 167 168 163 155 154 133 117

09/08/2006 09/08/2006 09/08/2006 08/30/2006 08/08/2006 08/08/2006 08/08/2006 08/08/2006 07/21/2006 07/12/2006 07/12/2006 06/23/2006 01/24/2006

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Item No. See Volume 3 See Volume 4

Docket No. N/A N/A

Date N/A N/A

Document Description Plaintiffs' Trial Exhibits (see Attachment A) Defendants' Trial Exhibits (see Attachment B)

Respectfully submitted, Dated: May 17, 2007 MONZACK AND MONACO P.A. /s/ Francis A. Monaco, Jr. Francis A. Monaco, Jr., Esq. (No. 2078) Joseph J. Bodnar, Esq. (No. 2512) 1202 North Orange Street, Suite 444 Wilmington, DE 19899 Telephone: (302) 656-8162 - and ANDERSON KILL & OLICK, P.C. Mark D. Silverschotz, Esq. Jeffrey E. Glen, Esq. Luma S. Al-Shibib, Esq. 1251 Avenue of the Americas New York, NY 10020 Telephone: (212) 278-1000 Attorneys for American Classic Voyages, Co., et al.

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Attachment A Plaintiffs' Trial Exhibits Designated on Appeal Item No. 19 19a 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 PTE No. 3 6 7 8 9 9-1 9-2 9-3 9-4 9-5 9-6 9-7 9-8 9-9 9-10 9-11 9-12 9-13 9-14 10 10-1 10-2 10-3 10-4 Document Description

Complaint in Adversary Proceeding against JP Morgan Chase, Nation City Bank, and Hibernia National Bank, Adv. Pro. No. 03-56998, filed on October 16, 2003 Second Amended Answer and Affirmative Defenses to Complaint filed by JP Morgan Chase Bank Answer to Complaint filed by National City Answer to Complaint filed by Hibernia National Bank Report on Solvency Analysis dated February 18, 2005 by Traxi LLC Schedules to the February 18, 2005 Report on Solvency Analysis by Traxi LLC Exhibit A to the February 18, 2005 Report on Solvency Analysis by Traxi LLC Exhibit B to the February 18, 2005 Report on Solvency Analysis by Traxi LLC Exhibit C to the February 18, 2005 Report on Solvency Analysis by Traxi LLC Exhibit D to the February 18, 2005 Report on Solvency Analysis by Traxi LLC Exhibit E to the February 18, 2005 Report on Solvency Analysis by Traxi LLC Exhibit F to the February 18, 2005 Report on Solvency Analysis by Traxi LLC Exhibit G to the February 18, 2005 Report on Solvency Analysis by Traxi LLC Exhibit H to the February 18, 2005 Report on Solvency Analysis by Traxi LLC Exhibit I to the February 18, 2005 Report on Solvency Analysis by Traxi LLC Exhibit J to the February 18, 2005 Report on Solvency Analysis by Traxi LLC Exhibit K to the February 18, 2005 Report on Solvency Analysis by Traxi LLC Exhibit L to the February 18, 2005 Report on Solvency Analysis by Traxi LLC Exhibit M to the February 18, 2005 Report on Solvency Analysis by Traxi LLC Rebuttal Report of Perry M. Mandarino dated January 31, 2006 Exhibit A to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit B to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit C to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit C-1 to the January 31, 2006 Rebuttal Report of Perry M. Mandarino

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Item No. 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69

PTE No. 10-5 10-6 10-7 10-8 10-9 10-10 10-11 10-12 10-13 10-14 10-15 10-16 10-17 10-18 10-19 10-20 10-21 10-22 10-23 10-24 10-25 10-26 10-27 10-28 10-29 10-30 15 16

Document Description

Exhibit C-2 to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit D to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit E to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit F to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit G to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit H to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit H-1(A) to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit H-1(B) to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit H-2(A) to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit H-2(B) to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit H-3(A) to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit H-3(B) to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit H-4(A) to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit H-4(B) to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit H-5(A) to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit H-5(B) to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit H-6(A) to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit H-6(B) to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit J to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit J-1 to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit K to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit K-1(A) to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit K-1(B) to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit K-2(A) to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit K-2(B) to the January 31, 2006 Rebuttal Report of Perry M. Mandarino Exhibit K-3(A) to the January 31, 2006 Rebuttal Report of Perry M. Mandarino AMCV's Form 10-K for the Year Ended December 31, 2000 AMCV's Form 10-Q for the Quarterly Period Ended March 31, 2001

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Item No. 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88

PTE No. 17 20 21 24 25 26 27 28 29 30 31 32 33 34 36 37 38 39 40

Document Description

AMCV's Form 10-Q for the Quarterly Period Ended June 30, 2001 Minutes of the Meeting of the Board of Directors of American Classic Voyages Co. on May 9, 2001 E-mail from Jeff Klein to Bill Pate and Don Liebentritt dated May 7, 2001 attaching updated summaries prepared for a board meeting Email dated July 18, 2001 from Jeff Klein to Jordan Allen, Philip Calian, Randall Talcott, Don Liebentritt, Kathleen Eibl, Perzek and David Heller regarding state of bank discussions Email dated August 20, 2001 from Philip Calian to Don Liebentritt, Jeff Klein, Stacey Brown, Kim Kumiega, Jordan Allen, Randall Talcott, Fran Sevcik and Rod McLeod regarding AMCV research note Memo dated May 11, 2001 from Jordan Allen to Don Liebentritt, Jeff Klein and Bill Pate regarding Meeting with Latham & Watkins on May 14, 2001 Memo dated May 22, 2001 from Jordan Allen to Philip Calian, Randall Talcott, David Heller, Jeff Klein and Don Liebentritt regarding summary of May 21, 2001 and action items Email dated May 25, 2001 from Jordan Allen to David Heller, Don Liebentritt and Jeff Klein attaching a memo titled, "Game Plan" Email dated July 9, 2001 from Jeff Klein to Don Liebentritt, Bill Pate and Kathleen Eibl forwarding an article about AMCV in Chicago's Crain Communications, Inc. Email dated July 13, 2001 from Philip Calian to Jordan Allen, Don Liebentritt, Jeff Klein, Kim Kumiega and Stacey Brown forwarding an article about AMCV in Travel Management Daily Memo dated September 10, 2001 from Philip Calian to the board of directors enclosing the quarterly board book for the quarterly board of directors meeting scheduled for September 12, 2001 Memo dated June 21, 2001 from Timothy Barnes (of Latham & Watkins) to Jordan Allen and David Heller regarding bankruptcy treatment of secured creditor obligations Email dated July 27, 2001 from Jordan Allen to David Heller, Philip Calian, Randall Talcott, Jeff Klein and Don Liebentritt attaching a list of key dates Email dated July 25, 2001 from Jordan Allen to Don Liebentritt and Philip Calian regarding Ingalls and discussion with David Heller regarding setting up a bankruptcy remote entity Email dated August 8, 2001 from Jim Sanford and Don Liebentritt regarding status of negotiations between AMCV and Ingalls Email dated August 12, 2001 from Jim Sanford to Don Liebentritt regarding status of negotiations between AMCV and Ingalls and attaching exhibits to settlement agreement Email dated August 15, 2001 from Philip Calian to Jordan Allen and Don Liebentritt regarding discussion points for discussion to support MARAD Email dated August 31, 2001 from Jorge Romero (of Preston Gates) to Don Liebentritt regarding MARAD and attaching draft amendment to the AMCV/Ingalls settlement agreement Agenda for the June 27, 2001 meeting of the board of directors

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Item No. 89 90 91 92 93 94 95 96 97 98 99 100 101

PTE No. 52 56 57 58 59 60 61 63 66 67 81 82 83

Document Description

102 103 104 105 106 107 108 109 110

98 103 105 106 107 108A 109 109A 113

Chart of AMCV and Subsidiaries Debt and Other Significant Liabilities and attached schedules Chart comparing FY 2000 vs. FY 2001 Projected Chart titled GC Forecast / Comparison to Actual Results Chart of trading price / volume of AMCV stock for the period January 2, 1998 to June 29, 2001 ACV Historical Stock Prices for the period April 24, 2000 to April 21, 2005 Chart titled American Classic Voyages GC vs. 07/01 Projections Cost of Capital, 2001 Yearbook, by Ibbotson Associates Memo dated August 9, 2001 regarding Chase's discussion with Sam Zell and signed by CC Wardell Chase loan approval memo (page 3) dated August 15, 2001 Chase loan approval memo (pages 1 and 2) dated August 15, 2001 Agreement dated June 28, 2002 between Northrop Grumman Ship Systems, Inc. and the Maritime Administration, United States Department of Transportation September 10, 2001 memorandum from Randall Talcott to Board of Director re: Cash Projections Business Valuation Review: The Long Term Relationships between Capital Expenditures and Depreciation Across Industries: Important Data for Capitalized Income Based Valuations by Daniel L. McConaughy (March 2004) February 27, 2001 Projections Excerpts from Valuing a Business: The Analysis and Appraisal of Closely Held Companies (Second Edition) by Shannon P. Pratt Excerpts from Investment Valuation: Tools and Techniques for Determining the Value of Any Asset (Second Edition) by Aswath Damodaran Excerpts from Valuing a Business: The Analysis and Appraisal of Closely Held Companies by Shannon P. Pratt, Robert F. Reilly and Robert P. Schweihs

Excerpts from Stocks, Bonds, Bills and Inflation, Valuation Edition 2001 Yearbook, by Ibbotson Associates, Inc. 2001. Excerpts from Stocks, Bonds, Bills and Inflation, Valuation Edition 2001 Yearbook, by Ibbotson Associates, Inc. 2006 (p.198). Reilly Report, dated April 29, 2005 Seven Scenarios Adjusting Calvert's DCF Analysis Excerpt from Stocks, Bonds, Bills and Inflation, Valuation Edition 2001 Yearbook, by Ibbotson Associates, Inc. 2005. (from Calvert's work papers)

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Attachment B Defendants' Trial Exhibits Designated on Appeal Item No. 111 112 113 DTE No. 21 22 24 Document Description

114 115 116 117 118 119

47 48 50 56 57 58

120 121 122 123

59 60 61 64

124 125 126 127 128

65 74 75 76 77

Minutes of the Meeting of the Board of Directors of American Classic Voyages Co. , March 16, 2001 May 8, 2001 American Classic Voyages Co. Press Release and related materials September 12, 2001 American Classic Voyages Co. Board of Directors Meeting Board Package (including minutes of June 27, 2001 meeting of Board of Directors of American Classic Voyages, Co.) Page Bates Stamped AMCV 51713 - American Classic Voyages financial projections excerpt, dated July 31, 2001 Delta Queen Steamboat Co. Delta Queen Coastal Voyages Confidential Information Memorandum, dated as of December 2001 American Classic Voyages Co. Board of Directors Meeting book, March 16, 2001 Group of financial documents TRAX 1571-1701 Delta Queen Steamboat Company Due Diligence Report The Contribution of the North American Cruise Industry to the U.S. Economy in 2001, International Council of Cruise Lines, dated August 2002 August 28, 2001 letter from Alan J. Rude to Sam Zell, with attached offer to purchase Delta Queen Steamboat Company for $190 million October 3, 2001 letter from Robert Yamin to Jordan Allen re: Unsolicited Offer October 12, 2001 letter from Ethan J. Cheramie to Randall Talcott re: Offer to acquire Delta Queen Steamboat Co. Addendum Report of Robert F. Reilly (Willamette Management Associates) on behalf of American Airlines, Inc. and Equity Group Investments, L.L.C., dated December 12, 2005 Handwritten notes of Robert F. Reilly Handwritten notes of Kathleen Eibl Memorandum from Kathleen Eibl (EGI) to File regarding AMCV August Review Memorandum from Kathleen Eibl (EGI) to File regarding AMCV September Review In re American Classic Voyages, Co., Transcript of proceedings before the United States Bankruptcy Court for the District of Delaware, December 13, 2001

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Item No. 129

DTE No. 78

Document Description

130

92

131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165

105 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 151 162 163 164 165 166 167 169 170 171 176 177 178

In re American Classic Voyages, Co., Transcript of proceedings before the United States Bankruptcy Court for the District of Delaware, December 18, 2001 Presentation to the Creditors of American Classic Voyages Co., by Chanin Capital Partners and American Marine Advisors, dated March 5, 2002 May 25, 2001 memo from Phil Calian to AMCV Board, with attachments Expert Report of Brian Calvert, September 13, 2005 Calvert Ex. 1 - Professional Qualifications of R. Brian Calvert Calvert Ex. 2 - Presentations Made by R. Brian Calvert Calvert Ex. 3 - Depositions Given by R. Brian Calvert Calvert Ex. 4 - Summary of Documents Reviewed Calvert Ex. 5 - Company Structure Organization Chart Calvert Ex. 6 - Financial Statement Highlights of Peer Companies Calvert Ex. 7 - Weighted Average Cost of Capital Calculation Calvert Ex. 7B - Weighted Average Cost of Debt Calculation Calvert Ex. 8 - AMCV Balance Sheet Calvert Ex. 9 - AMCV Income Statement Calvert Ex. 10 - AMCV Statement of Cash Flow Calvert Ex. 11 - AMCV Discounted Cash Flow Calculation Calvert Ex. 12 - AMCV Shareholder Value Calculation Calvert Ex. 13 - DQSC Balance Sheet Calvert Ex. 14 - DQSC Income Sheet Calvert Ex. 15 - DQSC Statement of Cash Flow Calvert Ex. 16 - DQSC Discounted Cash Flow Calculation Calvert Ex. 17 - DQSC Shareholder Value Calculation Calvert Ex. 18 - Comparable Companies Calvert Ex. 19 - Comparable Company BEV/EBITDA Ratio AMCV 2 nd Quarter 10Q Demonstrative Exhibit No. 1 Demonstrative Exhibit No. 2 Demonstrative Exhibit No. 3 Demonstrative Exhibit No. 4 Demonstrative Exhibit No. 5 Demonstrative Exhibit No. 6 Demonstrative Exhibit No. 8 Demonstrative Exhibit No. 9 Demonstrative Exhibit No. 10 Transcript of November 27, 2001 Deposition of Jordan B. Allen Transcript of December 13, 2001 Testimony of Jordan B. Allen Transcript of December 13, 2001 Testimony of Paul M. Leand, Jr.

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Item No. 166 167 168 169 170 171 172 173 174 175

DTE No. 180 183 184 185 186 189 196 241 242 262

Document Description

Transcript of January 27, 2005 Deposition of Jordan B. Allen Transcript of April 6, 2005 Deposition of Randall Talcott Transcript of April 7, 2005 Deposition of Philip Calian Transcript of April 8, 2005 Deposition of Jordan B. Allen Transcript of April 19, 2005 Deposition of Dennis J. Szefel Transcript of May 19, 2005 Deposition of Randall Talcott Handwritten notes dated October 14, 2003 (TRAX 4689-4690) Credit Facility for The Delta Queen Steamboat Co., dated February 25, 1999 Amended and Restated Credit Agreement, dated September 14, 2000 Merrill Lynch Affidavit (Brent Beverley)

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