Free Transcript - District Court of Delaware - Delaware

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IN THE UNITED STATES DISTRICT COURT IN AND FOR THE DISTRICT OF DELAWARE - - COLLINS & AIKMAN CORPORATION : and COLLINS & AIKMAN PRODUCTS : CO., as Debtors in Possession, : : Plaintiffs, : : v. :Civ. No. 07-265-SLR/LPS : DAVID A. STOCKMAN, et al., : : Defendants. : - - Wilmington, Delaware Wednesday, May 7, 2008 at 12:00 p.m. STATUS TELECONFERENCE - - BEFORE: HONORABLE LEONARD P. STARK, MAGISTRATE - - -

APPEARANCES:

ROSENTHAL MONHAIT & GODDESS BY: CARMELLA P. KEENER, ESQ. and COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP BY: DAVID A. ROSENFELD, ESQ., (New York City, New York)

Ellie Corbett Hannum, Registered Merit Reporter www.corbettreporting.com

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APPEARANCES: (Continued) THE BAYARD FIRM BY: PETER B. LADIG, ESQ. and WILMER HALE BY: ANDREW B. WEISSMAN, ESQ. BY: LAUREN R. YATES, ESQ. (Washington, D.C.) Counsel for David A. Stockman POTTER ANDERSON & CORROON BY: PETER J. WALSH, JR., ESQ. and SULLIVAN & CROMWELL LLP BY: DAVID E. SWARTS, ESQ. (New York City, New York) Counsel for J. Michael Stepp BLANK ROME LLP BY: JOSEPH O. CLICK, ESQ. Counsel for Bryce M. Koth and Robert A. Krause PROCTOR HEYMAN LLP BY: VERNON R. PROCTOR, ESQ. and ARNOLD & PORTER LLP BY: MONIQUE ANNE GAYLOR, ESQ. (New York City, New York) Counsel for David R. Cosgrove ZUCKERMAN SPAEDER LLP BY: THOMAS G. MACAULEY, ESQ. (Wilmington, Delaware) and BY: CARL S. KRAVITZ, ESQ. BY: LAURA E. NEISH, ESQ. (New York City, New York) Counsel for J. Michael Stepp

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APPEARANCES (Continued): PRICKETT, JONES & ELLIOTT, P.A. BY: J. CLAYTON ATHEY, ESQ. and JENNER & BLOCK LLP BY: STEPHEN L. ASCHER, ESQ. (New York City, New York) Counsel for Charles E. Becker MORRIS, NICHOLS, ARSHT & TUNNEL LLP BY: KENNETH J. NACHBAR, ESQ. and GOODWIN PROCTER LLP BY: LAURIE LEVIN, ESQ. BY: JEFFREY A. SIMES, ESQ. (New York City, New York) Counsel for Elkin B. McCallum YOUNG, CONAWAY, STARGATT & TAYLOR, LLP BY: CHRISTIAN D. WRIGHT, ESQ. BY: ANDREW A. LUNDGREN, ESQ. and MAYER BROWN BY: JOSEPH DE SIMONE, ESQ. (New York City, New York) Counsel for Thomas E. Evans PEPPER HAMILTON LLP BY: ALBERT H. MANWARING, ESQ. and STROBL & SHARP, PC BY: LYNN M. BRIMER, ESQ. (Bloomfield Hills, Michigan) Counsel for Cynthia Hess

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Honor. THE COURT: I want to first start by counsel all there? MS. KEENER: Yes. Good afternoon, Your APPEARANCES (CONTINUED): SKADDEN, ARPS, SLATE, MEAGHER & FLOM, LLP BY: RONALD BROWN, ESQ. (Wilmington, Delaware) and BY: LEA HABER KUCK, ESQ. (New York City, New York) Counsel for Daniel P. Tredwell, W. Gerald McConnell, Samuel Valenti, III, Heartland Industrial entities RICHARDS, LAYTON & FINGER, P.A. BY: ANNE C. FOSTER, ESQ. and CRAVATH, SWAINE & MOORE, LLP BY: THOMAS G. RAFFERTY, ESQ. BY: ANTONY L. RYAN, ESQ. (New York City, New York) Counsel for Pricewaterhouse Coopers LATHAM & WATKINS, LLP BY: CHRISTOPHER HARRIS, ESQ. (New York City, New York) Counsel for KPMG LLP - oOo P R O C E E D I N G S THE COURT: Good afternoon. Are

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Michael Stepp? MR. WALSH: Walsh of Potter Anderson. Your Honor, this is Pete Also on the line is David of Wilmer Hale. THE COURT: Okay. And for defendant Honor. finding out who I have on the line. for the plaintiff. MS. KEENER: Good afternoon, Your Honor. And let me go first

This is Carmella Keener of Rosenthal Monhait & Goddess. I have to apologize; I have laryngitis. I'm going to

pass it off to my co-counsel to introduce himself. MR. ROSENFELD: Good afternoon, Your

David Rosenfeld from Couglin Stoia, on behalf of

the plaintiffs. THE COURT: it for the plaintiffs? and Ms. Keener; correct? MR. ROSENFELD: THE COURT: First for David Stockman. MR. LADIG: Peter Ladig of The Bayard Correct, Your Honor. Okay. Thank you. Is that

That's just you, Mr. Rosenfeld,

Now for the defendants.

Firm, and I believe that Andy Weissman of Wilmer Hale, is on the line with me. MR. WEISSMAN: As well as Lauren Yates

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defendant? Krause. MR. CLICK: again, Your Honor. THE COURT: Okay. For John Galante? Is there Joe Click of Blank Rome you. For defendant Bryce Koth. MR. CLICK: THE COURT: Joe Click with Blank Rome. Okay. Swarts of Sullivan & Cromwell on behalf of Mr. Stepp. THE COURT: Okay. Good afternoon to

For David Cosgrove, please. MR. PROCTOR: Vernon Proctor from

Proctor Heyman and with me on the phone, Your Honor, is Monique A. Gaylor of Arnold & Porter in New York. THE COURT: Okay. Thank you.

For Paul Barnaba. MR. MACAULEY: Good afternoon, Your

Honor, Thomas Macauley with Carl Kravitz and Laura Neish, both from Zuckerman Spaeder. THE COURT: Thank you. For Robert A.

Did I pronounce that correctly, G-A-L-A-N-T-E? anything on the call for John Galante? Mr. Rosenfeld, is Mr. Galante a

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Honor. THE COURT: Good afternoon. Nichols. Charles Becker? MR. ATHEY: Good afternoon, Your Honor. Also on MS. KEENER: Your Honor, he is a

defendant, but he has not yet appeared through counsel. THE COURT: Okay. All right. For

Clayton Athey with Prickett Jones and Elliott. the line is Steven Ascher of Jenner & Block. THE COURT: Thank you.

For Elkin McCallum? MR. NACHBAR: Kenneth Nachbar of Morris

On the line with me are Laurie Levin and

Jeffrey Simes of Goodwin Procter. THE COURT: Thank you.

For Thomas Evans? MR. WRIGHT: Good afternoon, Your Honor.

Christian Wright from Young, Conaway, and also with me is Andrew Lundgren from Young, Conaway, and also on the phone is Joe DeSimone from Mayer Brown. THE COURT: Okay. Good afternoon, Your

MR. DE SIMONE:

Cynthia Hess? MR. MANWARING: Good afternoon, Your

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some time. Honor. Albert Manwaring from Pepper Hamilton, and on the

line with me I have Lynn Brimer from Strobl & Sharp. THE COURT: Good afternoon to you all.

For defendant Daniel Tredwell? MR. BROWN: Good afternoon, Your Honor.

This is Ron Brown of the Wilmington office of Skadden, Arps. Also on the line with me is Lea Kuck of the New And we also represent Gerald McConnell and

York office.

Samuel Valenti, and Heartland Industrial entities. THE COURT: Thank you. And for Pricewaterhouse Coopers, please. MS. FOSTER: Yes, Your Honor. It's Anne Okay. That saves some me

Foster of Richards, Layton & Finger; on the phone with me I have Tom Rafferty and Antony Ryan from Cravath, Swaine & Moore. THE COURT: Thank you.

And I think, finally, for KPMG? MR. HARRIS: Good afternoon. This is

Chris Harris of Latham & Watkins. THE COURT: Anybody that I missed? Did

I get all the defendants, so far as you can tell, Ms. Keener or Mr. Rosenfeld? MS. KEENER: Your Honor, I wasn't

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call. start there? following, but your roll call matched the one that I did before we dialed into the Court. I think the only

individual defendant we are missing is the one we have already addressed. THE COURT: Okay. And why don't we

Do you have anything about the situation

there; why they haven't appeared yet? MS. KEENER: We do not, Your Honor. We

have not heard from anyone on behalf of that defendant. We have not yet made a determination as to whether we will seek a default judgment. THE COURT: Okay.

Well, thank you all for being on the I set this as a status conference, for the record,

in our case of Collins & Aikman Corporation vs. David A. Stockman, et al.; our case No. 07-265-SLR/LPS. course, I have a court reporter with me. And so Of

certainly, for her benefit, please identify yourselves before you speak. The first issue with respect to status is just to make sure everybody is aware that the case has been referred to me by Judge Robinson by virtue of her referral order of April 17th of 2008, which -- I'm sorry, I have got the wrong date -- February 11th, 2008, excuse

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me, which refers to me all proceedings, all pretrial proceedings through and including the pretrial conference. it seems. Next, as I look at the docket, it appears that there were originally 13 motions to dismiss directed to the original complaint and then an amended complaint has been filed, and all of those motions are now directed -- there are new motions directed to the amended complaint. So it would seem to me that all 13 of So you will be spending some time with me,

those original motions to dismiss the complaint are moot. Is there any defendant who disagrees with me on that point? (No response.) I'm not hearing any disagreement. will take care of those first 13 motions to dismiss directed to the complaint as moot. Next, as for the new 13 motions to dismiss, my understanding is they were all filed on April 28th, and therefore plaintiffs' responses would be due, I believe, May 15th. Miss Keener or Mr. Rosenfeld, is that consistent with your calculation? MR. ROSENFELD: Your Honor, I believe we So we

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that. had a schedule in place that provided us with 60 days. THE COURT: Okay. I wasn't aware of

So when is it that you are planning to reply to

the 13 motions? MR. ROSENFELD: Well, that's one of the Right now those It was

issues we wanted to discuss today.

motions are due to be responded to on June 27th.

our understanding, initially when we set this schedule, that there would be one consolidated brief that we would be receiving instead of 13 individual briefs or one or three -- in other words, a few briefs instead of the full 13. In light of that, in light of the fact that 13 have

been filed, we would request an additional 30 days, which, I believe, is identical to the same time that the defendants had to filed their motion to dismiss, for a total of 90 days, bringing our due date to July 28th. THE COURT: Okay. And before I open it

up to the defendants, what would your position be if I gave you until July 28th? What's your position as to

when you would want the defendants to respond or get their replies in by? MR. ROSENFELD: discussion on that. position on that. We would be open to

We would certainly take a reasonable Forty-five days?

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objections. THE COURT: All right. Is there any

coordination here among the defendants as to their position on the timing of the briefing or do I need to go through each one of you? If there is any coordination

maybe someone will be able to speak up. (No response.) I am sadly not hearing anything. Does

anybody have any objection to the plaintiffs filing their answers to the 13 motions to dismiss on July 28th? (No response.) Okay. I'm not hearing any objection.

Does any defendant have any objection to me setting your date for replies 45 days after July 28th? (No response.) Okay. Again, not hearing any

So we will get an order out that will set

that briefing schedule for the pending 13 motions to dismiss the complaint. Now, it appears there are also a motion to stay pending arbitration and a motion to change venue. I'm not sure which defendants have filed those. First,

with the motion to stay arbitration, pending arbitration. Who filed that, please? MR. HARRIS: This is Chris Harris of

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Cosgrove. to change venue? Your Honor. THE COURT: Okay. How about the motion Latham. That was filed by KPMG. And the status of that

is we have a stipulation with the plaintiffs that they do not need to respond to that until after the defendants' motions to dismiss have been decided by the court. THE COURT: Okay. And you are content

with that stipulation to continue; correct? MR. HARRIS: THE COURT: On behalf of KPMG, yes. And, Mr. Rosenfeld, is that

accurate and are you content for that stipulation to continue? MR. ROSENFELD: Correct on both counts,

Which defendants is that filed by? MR. CLICK: This is Joe Click for Bryce

Koth and Robert Krause.

It was filed on their behalf, So if

and I don't have the motion in front of me.

co-defendants' counsel who joined that motion could chime in, that would be helpful. MR. PROCTOR: This is Vernon Proctor for

We change joined in that, I believe. THE COURT: Okay. And that has not been

responded to by the plaintiffs; is that correct? MR. ROSENFELD: That's correct, Your

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to confirm. Your Honor. THE COURT: Okay. Your Honor, I am trying Click. Honor. THE COURT: Okay. Is there a

stipulation in place there or does somebody want me to set a briefing schedule on that? MR. ROSENFELD: Your Honor, I have a

recollection of there being a stipulation in place. THE COURT: In the meantime, Mr. Click

or Mr. Proctor, do you know if there is a stipulation in place with respect to briefing on that motion? MR. CLICK: Your Honor, this is Joe

I don't recall that one; that's not to say there

isn't, but I just don't recall. MR. PROCTOR: I am checking as well,

MR. ROSENFELD:

I am just having a little difficulty But, if possible, can we

confirming it at this time. send a letter to Your Honor? THE COURT:

That will be fine.

Let me

ask, Mr. Proctor and Mr. Click, do you have any opposition to staying briefing on your motion to transfer assuming there is no stipulation in place? MR. CLICK: This is Joe Click. I have

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Christian Wright. no objection to the stay. MR. PROCTOR: This is Vernon Proctor,

and I don't have an objection either. THE COURT: Mr. Rosenfeld, why don't you

get to the bottom of whether there already is a stipulation in place, and if there isn't, why don't you submit one that would stay briefing on the motion to change venue. MR. ROSENFELD: MR. WRIGHT: Certainly.

Your Honor, this is

This may help the parties narrow it.

I think there is a November 15, 2007, stipulation regarding the motion to transfer venue. It looks like it

had a date to extend it into early 2008, but I don't think anything happened after that. THE COURT: MR. WRIGHT: Okay. At least, I don't see

anything on my copies of the record. THE COURT: That's very helpful.

But, Mr. Rosenfeld, why don't you take a look at that after the call and, perhaps, it needs to be updated or perhaps not. So either a letter or a

stipulation should take care of that. MR. WRIGHT: Your Honor, this is

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dismiss. THE COURT: So technically the Christian Wright, again; I apologize. It turns out there It says:

is a later stipulation, December 28th, 2007.

"It is further stipulated that the date on or before which plaintiffs or any parties shall respond to certain defendants' motion to transfer venue shall be extended until 45 days after the filing of defendants' answer or motion to dismiss provided that the passage of time based on this and the previous scheduling agreement requested by plaintiffs shall not be argued by plaintiffs as any basis to deny transfer." And that's docket ID No. 88. Thank you for that. But it

THE COURT:

sounds like that's only staying it until a certain time after -- what was that -- an answer? by quickly. MR. WRIGHT: An answer or motion to I'm sorry it went

plaintiffs' motion on that brief are due in 45 days, approximately. And it sounds like there may be an

agreement to stay briefing on that. So if that's the case, again, Mr. Rosenfeld, submit a new joint stipulation, and I will be happy to sign that. MR. ROSENFELD: Thank you, Your Honor.

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again. Okay. THE COURT: All right. Okay. Is there anything further

that we need to discuss at this time related to this case, Mr. Rosenfeld? MR. ROSENFELD: perspective, Your Honor. THE COURT: Okay. And is there any Nothing further from our

defendant that wants to raise any issue? (No response.) No. Happily, I am hearing silence

Well, we will get an order out with the

briefing schedule, and we will look for a stipulation related to that issue. There is nothing further on my end. appreciate your patience. Thank you all very much. ALL COUNSEL: Thank you, Your Honor. I

(The hearing concluded at 11:25 a.m.)

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STATE OF DELAWARE: NEW CASTLE COUNTY: I, Ellen Corbett Hannum, a Notary Public within and for the County and State aforesaid, do hereby certify that the foregoing teleconference was taken before me, pursuant to notice, at the time and place indicated; that the statements of participants were correctly recorded in machine shorthand by me and thereafter transcribed under my supervision with computer-aided transcription; that the transcript is a true record of the statements made by the participants; and that I am neither of counsel nor kin to any party in said action, nor interested in the outcome thereof. WITNESS my hand and official seal this 15th day of May A.D. 2008. _________________________ Ellen Corbett Hannum, RMR, CMRS Notary Public - Reporter Delaware Certified Shorthand Reporter Certification No. 118-RPR, Expires 1/31/11 C E R T I F I C A T E

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