Free Opening Brief in Support - District Court of Delaware - Delaware

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EXHIBIT A

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IN ,TH UNI~EO STATES BANKRVPTCY COURT

FOR THE OISTlUc: OF OELAWAA

In n: )
AS SOC IJ.:r¡ Oti

)

CORA RtO~CES UZORK. INe.,) and CORA !NCEPEN~ PRACTICE) Ca.. No. 99.2889

, INC.. ) (XFW)
Oebl:orii. )
)

s&n~ptcy Courtroom
No. i, Sixi:n tloor

Marine Midland Plaza
52' MarKee StreeC Wilmington, Oeiiw&pQ

Thuriday, olcimbQr 21. 2000

1: 35 p.m.

::!:!OR.: TK HONOllLl M)'i 1', ;¡;uTH.

un1t~ StAte. 8a~ptÇi Judie

., T=inscript o~ Proc.~ding; ..

wn.co;/ '" r'EZEi(
1330 ~~9 Street. WilMington oelaw*ri 19801

1~02) i:~5-0477

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37

point witli another plan or sale or some ocher vanicle

that I thirt thtre ii no ba.i. to concludi will result :n

3 anything other than creditor. getting lis. and the

~ equityholderi itill gltting nothing.

S So, 'four Honor. ie ~n' inue is that
6 somiboy did iomethicg wrong, ind I' m not sugg'~ tins

7 ehat, and I'm cirtainly cot IndorlLng ehAt viiy, but it

8 that" ehe point. there ii r.dr.ii in ehe courts. b~t I
9 don' t think that thi aniwer ii to ~ut thii company Que ot

io bulin....

11 Th&n you.
i:i 11 CO~'I: Wen. I'. in a difficult
ii .itu&tio~. I would like to iid.itep my dueii., bue
" '~~-.. ~.'

i, ebinX! havi to d.t.~in. in' decidinq wbieh.r to con! irm

.15 ehii plan uner iii9(al(3), I muit concludl that it is
l' propo.ed in goo faith An that the plan proponentl naVQ

17 ace-d in goo faieh. I juit do cot want to b. in i
11 position to eonelùdl on thi. record tn.t thit ii so. I

i9 cAnot conclude on chi. record thlt t~&t i. 10.
,0 I think that the contr~etuil rilation.hip

21 bet--n carb.ru. .04 thi CE, Mr. crowl,y, did taint th~
22 prociii, an t think that. if anything, thi ultimate

23 ~&irn.i' of the prcee.i in b.nk~tey i. i par.~t
2' principli co be protected by the B&nk~tcy Court.

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1
2

Maybe we would be at the s~me place today
i~ tnat contractual ri1ationship had not been thire. i!

it had biin di.clo.ed to.all partii.. but I don.t know
4

that And i don' tthirt anybody Iii 11 know that.

5 6 7 8

Wi art at & tirrible placi. Thi EquiCy

committ'.l ivin on Ltl n~ir., which ¡ air.e with the
Creditors' Committt... couniel &nd thiir v&luation expert

and thi cro....x&mination ot tnl Equity Committ.e expire
doe. point out the qulltionabli nature of that valuation.

9

10

I think under any ot the Dumrl thi

11 12
r
(; .'

comy i. inloLviat tody. But I don't think I can
conti~ & plan baied on tnat face beeau.. ¡ tàinX chat
becaus. of the procii. o.1ng tainted by this relationihip

13

1.
i5
16 17 18

which b~&n in Novimber ot i,", ~ pirhapi in ~uqu.t ot
1"', hai 10 tainted the dabtQrl i ri.tructurini ot it.

debt, thi debtor.' Dagotiieioö. teward: £ ~lL~. Rven the

dIQtor.' re.t~cturing of itl operation..
t think on that point t think 1 t ii . thame

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20

t~t Mr. croley &n ~rhap. Cerberui and che dtbl:or
it..lf i. tainted in thii mAer beau.e I think thiri is
evidence that Mr. Crowley did åo a 900 job opirationally
in h*lpin9 the debtor turn around. But t CaA' t conclude

21
:12

¿i
21;

tn.t the di~tor mi9ht not h£v. done ivin o.ttir hid chtre

not be.n thi. r,lac1onlhip. I don't knOW. That" the

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33

1 problem. I den' t know wh~t WQul~ have happened wi~hou~
2 thi. a~tti.i ~ontlic~ of interi,t. t do chink ie' s ~n

3 actUAl conflict of incertit.
, I thinl tliae the action. ot Mr. crowley to
5 hide the rilation.hip, and I think ~hat eC-20 did show in 6 intinc to hid. che relacion.hip and to hid. hi, requesc

for iddi~ion.l compensation in Winterl~ in exchange ~or
8 hii tttortl here ~id at ltllt evidenct chit he, him..l~,

9 o.lilv-d that thi. relation.hip should no~ be di.cloied

10 ~~, thiretori, did, in fict, taint hi. £bili~y to serve

11 II ci ot thi dibtor.

12 Whither it openi up a panora" bo or
13 incourage. othir noteholder. or othir partie. in tuturi
14 banptcies to try the iame thing, I'm not &. concerned

15 ~e eb&t. but t ju.t do noe want my ra eonHrr1ng al' pi~ whire chi. typ' of activity oceurrld tor i y.ar

l7 be~ore t~. pl~ we. prg~o.-d for eonfi~tion, t jult

18 c~oe conclud, tnat it'. propoiid in ioe ~.i en tor

19 ~.. ria.on..

20 I do not have chi £bilicy to .ugq..t ·
21 different pl~. I do not have chi ability to 9ive an

ii cx~tion ~rom Stark II.

23 So I leave ic to che debtor to .~e where it
2l iOl. from h.re tor now. I'll look for a fo~ of order if

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(
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1 som.on. ~.ntl to p.r..

ant me ~ieh one.

2 MR. HlNI: ~e will. Your Hocor, i TH COURT: we'll It&n~ &cjourned.
" HIt. LEV' t'hart yc:ii, 'four Flonor,

5 (The he.rins ~.. thin eoneludad at
, i:iS p.ii.)

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,/'"
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1
2 3

St~t. of Del~~ari

county of New c¿.tle

4
5

ctRTr'IC~TZ
!, K¿~hleen &. wbiei. Rigiltered ~rof..iion~l Riportir and No~&ry Pulic. do hireby cirtify thAt ~ni !orlsoin9 ricord. p~g.i 1 to 91. incluiive, ii £ true and ~ccur~t. cranicript of my Ittnoqraphic not.. takin on Tbursday, Oicembir 21, 2000, in thi &bi-captioced

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mattir bifore the 'ederal Bankruptcy Cour~. and .1.1 this 24th day of c.cimber, 2000, i~ New C.itli couty.

10

IN WI~SS ~,. I have hireunto lit my hand

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IC'lXN K. WlI't i
Not&r. Pulic-Reportir

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EXHIBIT B

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWAR

ARIN M. ADAMS, Chapter 11 Trustee of The Post-Confirmation Bankruptcy Estates of

CORA HEALTHCAR CORPORATION, A Delaware Corporation, and of CORA INC., a Delaware Corporation,
Plaintiffs,
v.

Case No. 04-1565 (SLR)

DANIEL D. CROWLEY, DONALD J.

AMAR, WILLIAM J. CASEY, L. PETER
SMITH, and SANDRA L. SMOLEY,

Defendants.

EXPERT REPORT OF JOSEPH A. DWORETZKY

i. INTRODUCTION
1, I am a lawyer practicing law as a shareholder in the firm of Segal & Pudlin in Philadelphia, Pennsylvania. I have been a member of Hang

ley Aronchick

the Pennsylvana bar

since 1978. Except for the period from 1993 to 1996 when I served as the City Solicitor for the
City of

Philadelphia, my practice has been largely devoted to banptcy, creditors' rights and

related litigation matters. I have taught banptcy courses at Rutgers School of Law - Camden and at Temple University's James E. Beasley School of Law and frequently spoken on
banptcy matters in professional education seminars. I am a member of the American College
of Bankptcy and serve as a member ofthe Board of

Regents ofthat organization. A copy of

my currculum vitae is attached as Exhibit 1.
2, I have been requested by the lawfirm Keker & Van Nest LLP to express my

opinion concerning various issues in connection with the reorganization proceedings of Coram Healthcare Corporation ("Coram") that were conducted in the United States Banptcy Court for the Distrct of Delaware during the period from August 8, 2000 through October 5, 2004. In connection with that assignent I have reviewed the documents listed on Exhibit 2 attached hereto and I reserve the right to amend or supplement my report if furter information is provided. I have reached the opinions I express in this report with a reasonable degree of

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professional certainty. I understand that my report is to be considered in connection with a lawsuit filed under the caption Arlin M. Adams, et al. v. Daniel D. Crowley, No. 05-1565 pending in the United States District Court for the District of Delaware (the "Lawsuit"). The Keker firm represents defendant Daniel D. Crowley in the Lawsuit. My services have been provided at my regular biling rate of $575 per hour. My compensation is not contingent upon the outcome ofthe matter. A list of the matters in which I have served as an expert in the last four years is attached as Exhibit 3.

II. OVERVIEW OF THE CORAM BANKRUPTCY
1. The Coram banptcy case lasted almost four years and I wil not attempt to describe here all the steps in the process. By way of overvew, prior to its bankptcy filing in August of 2000, Coram was a public company providing home infusion therapy and related services to individuals referred by their physicians. Coram was heavily leveraged. It owed approximately $250 milion to three noteholders (the "Noteholders") and $8 milion to trade creditors. A balloon payment was due to the Noteholders on May 1, 2001. Coram also faced a signficant regulatory problem. Under the federal regulations commonly referred to as Stark II, Coram was required to have a net worth of approximately $75 millon at the close of calendar 2000, In 1999 the company complied only by averaging several prior years' net worth, a strategy that would not work thereafter, and it faced the likelihood of being out of compliance
with Stark II at the end of2000 unless it could generate a substantial amount of durng the year or restrctue its balance sheet. The effect of

net income

being out of compliance with Stark II was potentially serious: physicians would not be able to refer patients to Coram without certain checks and investigations that Coram would not be able to perform on a practical basis and which would discourage physician referrals.
2. After exploring other ways to meet Stark II, Coram concluded that it could only

feasibly restructure its balance sheet in proceedings under Chapter 11 of the United States Bankmptey Code (the "Code"). COrâ.ïl fied bankmptcy pmceedings in the United States Banptcy Court for the District of Delaware on August 8, 2000. Coram had obtained a valuation prior to the bankptcy fiing that concluded that Coram's enterprise value was $207 milion. Given that the enterprise value did not exceed its debts, in banptcy Coram hoped to eliminate the existing shareholders and convert a substantial portion of the debt to its Noteholders to equity. The effect of such a conversion would be to create sufficient balance sheet net worth to satisfy Stark II and, hopefully, position the company for future successful operation.
3. Coram filed a plan of

reorganization (the "First Plan") and a related disclosure

statement at the time of its banptcy petition. After the First Plan was fied, several stockholders asked the Banptcy Court to appoint an offcial commttee of equity holders to
represent the interests of stockholders in the banptcy case. While Coram opposed such an

appointment, an equity committee (the "Equity Committee") was ultimately appointed. The Equity Committee engaged counsel and a financial advisor. The Equity Committee challenged the First Plan and, after a lengthy confirmation hearng in December of 2000, the Banptcy Cour denied confirmation of the First Plan on the basis that the debtor, as the plan proponent, had not met its burden of proving that the plan had been proposed in good faith. Important to the Banptcy Court's conclusion was its determination that Crowley, the Chairman of the Board

2

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Coram, had an employment contract with Cerberus Parers, L.P. ("Cerberus"), the largest ofthe thee Noteholders that were to be restructured under the First Plan, which had not
and CEO of

been adequately disclosed in the Disclosure Statement.
4. As a result of Board of

the Bankptcy Court's refusal to confirm the First Plan, Coram's

Directors formed a Special Committee that did not include Mr. Crowley. In Februar

of2001, the Special Committee retained an independent restrctung advisor, Goldin Associates

L.L.c. ("Goldin") to evaluate the relationship identified by the Banptcy Cour and determine whether it had an impact on the restructuring process. Goldin undertook an investigation of the relationship between Crowley and Coram and Cerberus and made a number of findings and determinations concerning what had happened. In addition, it made a series of recommendations

to Coram as to the steps that Coram should take to address the concerns raised by the Banptcy Court and to resolve the banptcy proceedings. Coram adopted the Goldin suggestions and, on
July 31,2001, proposed another plan of

reorganzation (the "Second Plan") incorporating those

the Second Plan. The Second Plan proposed a payment of $ 1 0 milion to the holders of the old equity contingent on their
suggestions. Crowley took no par in the creation or proposal of

support for the Plan. The Equity Committee opposed the Second Plan. The Banptcy Court considered the Second Plan and, after an extended confirmation hearng, determined that the Second Plan would not be continned.
5. On March 7, 2002, after the Bankruptcy Court's decision on the Second Plan, the
United States Trustee appointed Arlin Adams to serve as a Chapter 11 trstee for Coram (the

"Trustee"). The Trustee has continued to serve as trustee since that time.
6, For over a year after the Trustee's appointment, at the request of

the Trustee,

Crowley continued to serve the company as its CEO. The Trustee requested the Banptcy Court to approve an agreement that the Trustee negotiated with Crowley that would have paid Crowley approximately $3.4 milion, reduced his perfonnance related bonus and released him
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resigned on March 31, 2003.

reorganization (the "Third Plan"). Like the the Noteholders' debt to equity. The Third Plan, however, provided for a distrbution to old equity of approximately $40 milion and also assigned the class the net proceeds of certain litigation claims, including the claims against Crowley that are asserted in the Lawsuit. The Third Plan, like the First and Second Plans, was vigorously opposed by the Equity Committee. Indeed, the Equity Committee proposed its own plan of reorganization (the "EC Plan"). After 12 days of
7. The Trustee proposed its own plan of First Plan and Second Plan, the Third Plan eliminated old equity and converted some of

hearngs, the Bankptcy Court rejected the EC Plan and, instead, confirmed the Third Plan. The

Trustee's plan was confinned on October 5, 2004, approximately a year and a half after the
Trustee was appointed.
8. Following confirmation of the Third Plan, the Trustee commenced the Lawsuit asserting claims against Crowley for breach of fiduciary duty to Coram. I understand the Trustee has asserted claims against Mr. Crowley in excess of$100 million. The Trustee's theory is that Crowley was responsible for the failure of the First Plan and accordingly he should be held

personally liable for professional costs incured during the banptcy as well as the alleged

3

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difference in value between Coram at the time the Third Plan was confirmed and the value Coram would have had at that time had its First Plan been confrmed in December of200L.

III. THE BANKRUPTCY SYSTEM AND PROCESS
1. The Trustee's claim that Crowley was responsible for the failure of Second Plans and the nearly four year stay in banptcy before the confirmation of Plan, should be considered in the context of

the First and

the Thid

the banptcy system and process.

Bankruptcy is An Expensive and Uncertain Process
2. As a general matter, business banptcies under Chapter 11 do not come with

any guarantee of success. Many Chapter 11 proceedings never produce a confirmed plan of reorganization. Estimates ofthe failure rate in Chapter 11 cases run from 50 to 75 percent. The
course of a Chapter 11 case is highly uncertain; bankptcy is a form oflitigation and it cares

with it all the uncertainty that is attendant to matters litigated in the court system. Banptcy is a high risk strategy which is generally undertaken only when there are no feasible alternatives.
3. Chapter 11 is also expensive. The Chapter 11 process relies on extensive

involvement of lawyers, accountants and financial advisors ("professionals") to serve the varous constituencies. Because there are a number of different constituencies in the banptcy process, when each is aned with its own professionals, fees tend to mount quickly. These professional
fees - at least many of paricularly

them - are borne by the debtor. The burden ofthis extraordinary expense,

on a business that is in banptcy court because of its financial problems, is sometimes too great for the business to absorb. Many banptcy cases flounder because the

cost ofthe banptcy process exceeds the capacity of

the debtor.

4. In broad terms, there are two forms of banptcy - liquidation and reorganization. In a liquidation proceeding, the assets ofthe bankpt are assembled, sold and the proceeds are distrbuted among the creditors in accordance with a statutory scheme of priorities. Typically in a liquidation proceeding, the debtor's business is not sold on a "going concern" basis and the debtors' assets typically only realize "liquidation value".

5. Reorganization is based on the idea that a company that is operating as a going

concern wil have a greater worth than the liquidation value of its assets. The difference between the liquidation and going concern values is often referred to as the "reorganization premium." In a company where the reorganization premium is significant, it is generally in the best interests of the creditors and equity holders, as a group, for the company to continue in operation so that the going concern value can be preserved and the paries able to share the reorganzation premium. However, when a company becomes insolvent and/or suffers a cash flow crisis, the nonbanptcy legal system does not encourage creditors to act collectively to preserve the going concern. In fact, the law invites a "race to judgment" and rewards the most aggressive creditors by letting them execute against a debtor's assets and obtain full payment even if doing so wil destroy the debtor's ability to operate as a going concern and leave other creditors unable to
collect anything on their legitimate claims,
6. This is where the banptcy laws step in. The provisions of Chapter 11 impose a

stay against all creditor action against the debtor or its assets (the so-called banptcy "estate")
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and permit the debtor to operate free of

non-banptcy creditor litigation. Under the protection

of the banptcy court, the debtor has an opportnity to address its operations, maxinuze its cash flow and propose a plan to distrbute to its creditors an amount greater than the liquidation
value of its assets.

The Plan of Reorganization
7. Chapter i i adopts a class-based bargaining approach. Under a Chapter i i Plan,

the creditors are divided into "classes" determned by the nature and character of their claims or equity interests.. The classes that hold claims or equity interests that are "impaired" (that is,
modified) by the plan are given an opportunity to vote in favor or against the plan. The plan

must provide each creditor at least as much as it would receive in a liquidation, however, the
reorganization premium may be shared among classes by agreement. .

8. The banptcy process is designed to encourage the reaching of a "consensus."
In bankptcy terminology, a consensual plan is a plan that is accepted by all of

the classes

which are impaired under the plan. Withn each class, acceptance need not be unanous. The Code provides specific voting majorities. Thus, a consensual plan in bankptcy does not mean

that one hundred percent of creditors agree, but rather that all classes that have been impaired under the plan have voted to accept by the requisite voting majorities. Individual dissenting creditors in an accepting class are bound by the classes' acceptance.

9. Whle Chapter i i encourages and rewards consensual plans, it also contemplates
that there wil be situations in which a class does not consent to the treatment proposed by a plan. Because a holdout class should not frstrate the goal of preserving the going concern premium for all creditors and interest holders, the bankptcy cour may, under certain circumstances,
approve the plan despite the rejection of

the plan by a dissenting class. This process is

commonly referred to as "cram down" ofthe dissenting class.

i O. The cram down process is intrcate and a sumary wil not capture all the nuance,
plan - may be confirmed ifit passes a checklist of

but in simple terms, a plan that has been accepted by all impaired classes - that is, a consensual thirteen items set out in Section 1129(a) ofthe Code which generally insure that the plan is in accordance with law and was proposed and voted
on through proper process. However, a plan that is presented for confirmation despite the

rejection of one or more impaired classes - that is, a non-consensual or "cram down" plan - can only be confirmed if the banptcy court makes an additional determination that the plan is "fair and equitable" to the class that has rejected the plan. In order to make the fair and equitable
determination and "cram down" the dissenting class, the banptcy court must value the

debtor's enterprise and determine that the value is distrbuted under the plan in accordance with the Code. Put a Section 1129(b) of different way, in order for a plan to be approved over a challenge by a dissenting class, the proponents wil need to show that not only is the plan "procedurally fair", but also that the plan is "substantively fair" based on the value ofthe debtor' business.
the "absolute priority rule" which is expressed in the detail of

11. Valuation of a business enterprise, particularly one in banptcy, is not cut and
dried. Valuation requires the bankptcy court to consider the testimony of

valuation experts

presented by the paries. Because the value of an operating business is generally based on

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predictions of

the financial performance of

the business in the future, there are often shar

disputes among the paries concerning the assumptions to be used in the valuation. hi a litigated valuation dispute, it is not uncommon for modest differences in assumptions (for example,
whether to use a 3% growth rate rather than a 4% growth rate) to translate into tens of

milions of

dollars in the valuation conclusion. The valuation of a business is not an exact science and the final value determined by a court may be different from the value proposed by any ofthe experts.
12. It is widely accepted by banptcy practitioners and

judges, that cram down

plans are more difficult to confirm than consensual plans because section 1129(b) and the related rules and case law give creditors or interest holders who are subject to cram down a variety of rights and procedural protections that permt them the opportunity to make confiation more diffcult and more expensive for the debtor and the other parties. While it requires expertise often expensive expertise - to utilze those rights and procedural protections effectively, when that expertise is present the rights translate into bargaining leverage in the negotiation of a plan. Put a different way, a class that holds a position that may not have objective value according to the applicable rules of priority may nevertheless be able to use its ability to litigate the cram down to obtain a share of the reorganization premium. For this reason, it is not unusual in banptcy for creditors or interest holders to receive more than they would be entitled to receive by virte ofthe absolute priority rule, in order to obtain their consent to a plan. This fact is widely known to bankptcy practitioners and often forms a par of the strategy adopted by

creditors and interest holders in a banptcy proceeding. hideed, as noted above, the Bankptcy Code expects and encourages classes to seek to maximize their leverage and bargain
for a piece of

the pie.

13. While the paries are incented to bargain vigorously durg the banptcy process, as time progresses and as the business improves or deteriorates, the rights and leverage
the paries may change signficantly. The ongoing attempts to gain and utilize leverage in the bargaining process is much of the art of the banptcy practice for the lawyers and other
of

bai.lki-ptcy prufessionals. Bankruptcy is a keenly strategic process and it is often diffcuit to predict how the parties wil come to a final agreement about the reorganzation and what that agreement wil provide.

The Debtor in Possession
14. There are a number of important players in the bankptcy process. The most

important is the debtor-in-possession or the "DIP". The debtor-in-possession is a term that refers
to the management that ran the debtor immediately prior to the banptcy, but reflects the fact

that the old management is now vested with new duties and responsibilities. The Code presumes that the pre-bankruptcy management wil operate the debtor durng the bankptcy. However, the debtor-in-possession is given new responsibilities and powers that management did not have

prior to banptcy. The debtor-in-possession is entrsted with responsibility to preserve the
bankptcy estate - all the debtor's assets - for the benefit of the creditors and equity interest

holders.
15. Chapter 11 makes the policy decision to entrstthe banptcy estate to the same

people who were the debtor's pre-petition management. The decision is an important one and the reasons for it are not immediately intuitive. After all, the prior management is the group of

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people who were arguably responsible for the company being in banptcy. It would be

reasonable to assume that these are the last people the law would make responsible for the estate.
16. The policy decision to leave prior management in possession results from

experience under Chapters X and XI ofthe prior Banptcy Act. Under old Chapter X, when a public company filed a banptcy proceeding, an independent trstee was immediately appointed to take control of the company and was given responsibility to propose a plan to reorganize it during the course of the banptcy proceeding. A separate chapter, Chapter XI, applied to non-public companies and, in Chapter XI, the norm was different. In Chapter XI, existing management was permitted to operate the company during the reorganization and to
propose a plan to restructure the company's debts. Companes displayed far greater reluctance to

fie under Chapter X than XI. In consequence, many businesses that could only fie under Chapter X failed before filing and many others filed under Chapter X only after their business had deteriorated too far to be reorganzed successfully. Comparing the experience under Chapter X with Chapter XI, the drafters of the Code concluded that the automatic appointment of a trustee at the beginning of the case was a signficant disincentive to the fiing of Chapter X petitions. Because the drafters believed that it was important for businesses to access the reorganization powers of the Code before they reached the point where they could no longer be successfully reorganzed, it was appropriate to build into the Chapter 11 process certai inducements to encourage businesses to initiate a reorganization proceeding before it was too late. Accordingly, in Chapter 11 the presumption is that the prior management continues to operate the debtor's business during the Chapter 11 proceeding. In addition, the Code provides that there wil be an exclusive period in which onlv the debtor may propose a plan of
reorganization. These two provisions, paricularly combined with the provision that permits a
debtor to operate its business in the ordinary course without the approval of

the banptcy cour,

were intended to create an environment in which the pre-petition management would have a meaningful opportunity to operate in Chapter 11 and propose its own plan of reorganization.
17. There were recognized trade-offs in the policy decision. On one hand, there are
several clear advantages to the prior management operating a business during Chapter 11.

Independent trustees are often excellent at liquidating a business and capturing and distrbuting to creditors the liquidation value of the assets. However, running a business is a much more complicated matter than liquidating it, and independent trustees mayor may not have the kind of skils and experience that would allow them to be successful in actually operating the business. The contacts and knowledge base of the former managers are often essential to successfully reorganizing a business and, in those situations, keeping existing management in place during a Chapter 11 proceeding may be the only way to achieve the reorganzation premium. On the downside, however, prior management brings to the bankptcy the whole history of their
dealings and relationships with the Debtor and with the creditors and equity interest holders. The

relationships may be complicated and conflcting. Whether the "baggage" brought by prior management outweighs the benefits of their knowledge, history and continuity is a question - or perhaps better said, a tension - that is present in virtally every Chapter 11 proceeding.
18. This tension, built into the strcture ofthe Code, makes for a complicated system

of governance. The Code gives the debtor-in-possession fiduciary responsibilties to preserve and maximize the banptcy estate, but the pre-petition managers wil often have interests that are adverse to one or more classes of creditors or equity interest holders. Put another way, the

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fiduciar responsibilties ofthe debtor-in-possession are presumptively exercised by individuals
who, as a result of

their pre-banptcy history, may have adverse or conflcting interests.

19. The rules for management are different than the rules relating to the professionals

who represent and advise the debtor concernng the banptcy estate. It is not unlawful in
the individuals who serve as management, to hold conflcting or adverse interests to one or more classes of creditors or equity holders (however, they are expected to act without regard to their conflicting interests). The
bankptcy for the debtor-in-possession, or any of

professionals, however, must be "disinterested" and hold no interest "adverse" to the estate. The
requirement of

being disinterested and without adverse interest is explicit in the Code, and it

applies to the lawyers and accountants who are involved during the bankptcy case for the debtor.
20. As noted above, there is no requirement that the management of

the debtor-in-

possession be disinterested or free of interests adverse to the estate. Management frequently includes the same people that own the debtor's stock; that have made loans to the debtor; or that have guaranteed bank loans to the debtor. These historical relationships do not go away when a banptcy is filed and they may exert strong influences on management.

21. The fact that a debtor-in-possession has an adverse interest to a creditor or
stockholder does not mean that a plan of approved. There are many examples of

reorganzation canot be successfully proposed and

banptcy plans that are approved by the banptcy

courts despite the fact that the debtor's management hold interests adverse to one or more classes of creditors or interest holders under the plan. For example, plans are frequently confirmed where the principal of the debtor has provided personal guarantees to creditors ofthe debtor; where principals of the debtor hold secured or unsecured claims against the debtor; or where principals of the debtor lease or license to the debtor assets that are used in the debtor's operation. In all these situations and many others, plans may be confirmed by the debtor despite
+1-.0 Hl,"L Ll1aL+l..o ..~i.+_..'.. ..........,.--....+~.. __+ "..~..~_4-,._,...+...." ..1..i...""..i. ..t..._...:..l~ uu a~~Ula.i,"v+i...+ W1," çn~+ +kn+ U1," U,"ULV1 ~ 1uaua5v1UvlH l~ uvL Ul~UHvlv~LvU, a1U1vu5U Ulvlv _,. .........._.._,... i.laL

in any given case a plan wil be reached and approved by the Court.
22. The Code is not oblivious to the potential problems caused by the decision to
entrst the estate to people who are not disinterested or who hold adverse interests. The potential
problems created by this structure are dealt with by a number of

protections and safeguards built into the Code that are intended to insure that parties who serve as the debtor-in-possession fulfill their responsibilities notwithstanding the fact that they may not be disinterested.
23. The safeguards include, among other things, the appointment of committees of

creditors and, in some cases, equity security holders, to serve as watchdogs over the debtor, the
requirement that the Court approve transactions outside of business and the power of the ordinar course of

the debtors'

the Court to replace the debtor in possession with an independent

trustee for "cause".

24. Because Chapter 11 involves a highly strategic bargaining process that occurs within a litigation environment, the parties and their professionals often consider how to use the lack of disinterestedness ofthe debtor's management to gain bargaining leverage. Conversely, a

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debtor seeking to reorganize may find that management's pre-petition relationships are obstacles to reorganization that need to be addressed in connection with the case.

iv. CONFIRMATION OF A PLAN OF REORGANIZATION FOR CORA
The Cerberus Relationship
1. Par ofthe overall landscape facing Coram at the time of

the banptcy was the

relationship between the company and Cerberus. By virtue of a 1998 agreement between the debtor and the Noteholders, the Noteholders had a contractual right to designate a representative to serve as one of the five members of Coram's board. The Noteholders had exercised that right and appointed Stephen Feinberg to Coram's board in 1998. Feinberg was a principal of Cerberus. As noted above, Cerberus held the largest claim of the three Noteholders. Feinberg served on Coram's board (and as a member of the Board's compensation committee) until a few
weeks before the banptcy fiing.

2. Whle Feinberg was on the board, he introduced Crowley to the company.
Crowley was an accomplished healthcare manager and had previously run an organzation
considerably larger than Coram. After a period of consulting to Coram, in late 1999 Crowley

became the CEO and Chair of the Coram Board under the terms of an employment contract that paid him roughly $650,000 per year and assured him certain performance related bonus compensation if the company achieved certain benchmarks.
3. Crowley's employment contract provided that he was entitled to "have other business interests and may serve as an offcer or consultant to other business."
4. Crowley had an employment contract with Cerberus under which he was to be

paid approximately $1 milion per year for work on non-Coram business. The contract made it
grounds for dismissal if Crowley failed to follow "the reasonable instrctions" of Cerberus.

Obstacles to Confirmation
5. Coram faced a number of obstacles to confirming a plan of reorganization along the lines it contemplated when it filed banptcy.

. First, Coram's banptcy was fied in August of 2000, leaving less than 5
months to reach confirmation before the Stark II problem landed. Whle it is possible, as a matter of statutory timing, to confirm a plan in 5 months, average periods from fiing to confirmation are significantly greater. On a
national basis, the average number of days to confirm a Chapter 1 1 plan

during the period from 1990 to 1999 was 528 days, roughly 18 months. The average in the Delaware Bankptcy Court was 414 days, or about 14 months.
. Second, the debtor contemplated a cram down of old equity, a fact that

required that the Court apply the absolute priority rule in Section 1 129(b) of the Code and provide the equity class all of the procedural rights and
protections of Section 1 1 29(b) of

the Code.

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. Third, while there had been negotiations with the Noteholders concernng the
First Plan prior to banptcy, the debtor did not negotiate with equity so that

the dealings with equity's representatives would occur within the litigation atmosphere of Chapter i i.
all of

. Fourth, the transaction contemplated did not involve a sale to a third pary or

the debtor and the existing Noteholders, the largest of

any market testing of the values, rather the essential transaction was between whom, Cerberus, had a director on the board and a business relationship with the CEO while the

transaction was being strctured. The relationship between the Debtor and

the First Plan and Cerberus made it likely that equity would be distrstful of the bankptcy court would give it paricularly careful scrutiny.
. Fifth, a large par of

Coram's equity was owned or acquired by financially sophisticated distress investors, I understand that a number of sophisticated that equity in the period before the investors bought as much as 25% of banptcy proceeding was filed i. The investors formed an informal group to
maximize the value ofthe equity. The group made a 13-D filing with the

Securities Exchange Conuission on July i ih and July 27th, 2000, indicating an intention to act together with respect to their investment in Coram. The investors engaged an experienced bankptcy litigator named Richard Levy of Altheimer & Grey who had both the experience and expertise to be able to utilze the protections and procedural rights granted to a class proposed to be cranued down under a banptcy plan. As early as June of 2000, Levy was in touch with the Coram's professionals demanding an opportnity to
paricipate in Coram's restrcturing and complaining about Coram's conduct.
. Sixth, after the case was fied, Levy was successful in persuading the U.S. Trustee to form an offcial conuittee of equity securty holders (the "Equity
Committee") and appoint several members of The appointment of

the 13-D group as members. the Equity Conuittee was significant for a number of

reasons, among them the fact that as an "offcial" committee, the Equity Committee was entitled to engage counsel- they promptly retained Levy and his firm - and other bankptcy professionals. Moreover, the cost of the Equity Conuittee's professionals was paid by Coram not by the individual equity owners.
. Finally, the Noteholders, on one hand, and the investors who had retained

Levy, on the other, were knowledgeable and financially sophisticated players.

Given that banptcy is a zero sum game, in order to increase distrbution to the equity class, the debtor would have to reduce the distrbution to the

1 The purchases continued after the bankrptcy was fied. Some of the shares were purchased for
as little as $.06 per share.

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Noteholders. Thus, in some respects, the plan process became a fight between the Equity Committee and the Noteholders.

The First Plan
6. Represented by professionals with significant expertise whose fees were funded

by the debtor, the Equity Committee proved to be a formidable opponent.
7. The Equity Committee raised several challenges to the First Plan. Whle there

were a number of challenges, they can be sumarzed as contentions that the First Plan (i) was not substantively fair, that is the old equity interests were not worthless and their true value was not recognized under the Plan; and (ii) was not procedurally fair because the Debtor and Crowley had a relationship with Cerberus that undermined the bona fides of the plan.
8. With respect to the valuation issue, the Trustee concedes that Coram's value, both
at the time ofthe banptcy and in December of2000, was less than the amount of debt. Thus, the First Plan's proposal to eliminate equity did not in fact deprive equity of which it was entitled and was therefore substantively fair to the holders of

Coram's
value to
the old equity.

9. With respect to the procedural fairness challenge, the Equity Commttee proved to

be successful in raising enough concern about the Cerberus relationship to defeat the First Plan. the debtor's disclosure concernng Crowley's An important issue was the adequacy of relationship.
10. Crowley's relationship with Cerberus was discussed in the Disclosure Statement

filed at the commencement ofthe banptcy case. A section stated:
Mr. Crowley also serves as a consultant to Cerberus Parers LP,

"Cerberus" which is a member ofthe Noteholder Group, with
respect to its investments in varous health care companes other

than the Debtors. Mr. Crowley generally receives a fee from Cerberus for such services, but receives no fee from Cerberus for any services he provides respecting the Debtors.

11. Although the language disclosed that Crow ley worked for Cerberus for a fee, the Disclosure Statement did not state there was a written contract between Cerberus and Crowley which generally provided that Crowley was to be paid approximately $1 milion per year for non-Coram work and which required Crowley to follow the "reasonable instrctions" of
Cerberus.

12. While the Disclosure Statement addressed (inadequately) Crowley's relationship to Cerberus, the draft did not state that Feinberg had been a director of Coram until a few weeks

before the banptcy fiing.
Drafting of Disclosure Statement

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13. At the end of the confirmation hearg with respect to the First Plan the

bankptcy court determined that the disclosure was inadequate and, at least in part because of that, concluded that there was a "taint" to the restructung.
14. The Trustee contends that the inadequate disclosure was Crowley's responsibilty,

and therefore he should be held personally liable for Coram's extended stay in banptcy. I
disagree. In a Chapter 11 case, the Disclosure Statement is generally prepared by the debtor's

professionals based on information that they gather from the debtor and from the information
that they lear durng the course of

the banptcy case. This was the case here. The lead

lawyer representing Coram in the banptcy, David Friedman, testified that his firm prepared

the Disclosure Statement. With respect to the section that relates to Mr. Crowley, his firm obtained the language used in the Disclosure Statement from Allen Marabito, who was a lawyer and an officer of Coram. Friedman did not follow up with Crowley about the relationship
described in the Disclosure Statement. Whle the language Mr. Marabito supplied and which

was used in the Disclosure Statement states that Crowley worked for Cerberus on non-Coram matters and was "paid a fee" for such services, Friedman did not ask the amount or the other details of the arrangement.
15. Friedman testified that, in hindsight, that it was a failing not to have asked Crowley for more information concerning Crowley's relationship with Cerberus, in paricular the

. amount he was paid.
16. There were several reasons why Friedman and the lawyers representing the debtor

should have been more focused on the disclosure:

. Beginnng on June 1, 2000 - more than two months prior to the banptcy Levy had advised Friedman that Levy's clients would scrutinize any transaction in which any member of the Coram's board had an interest. Levy
_..__.:C__l1... _...:__.. _ ______ ..1-_.... T'_.:_1-___,~ ______~_1 _/!l"____..,.....'.. ::PClilUliaUY lal::CU a liUUliCl11 aUUUl .ICUIUCL~ :: aPPIUVi:U UL '-lUWICY ::

employment contract with Coram.
. Given the fact that Feinberg, a principal of Cerberus, had served on the

Debtor's board until a few weeks before the banptcy was fied and that the Notes, the debtor's relationship with Cerberus was the largest holder of Cerberus would be an important area for examination in the confirmation process.
. In view of

the challenges presented in confirming a cram down plan in less than five months, the lawyers would not have wanted to give the Equity Committee the opportunity to divert attention away from the underlying substantive fairness of the plan.

. Crowley was not experienced with the banptcy process and could not be

expected to be as focused on the scope of disclosure required in bankptcy as the lawyers. Knowing that Crowley worked for Cerberus and got a fee for his work, the lawyers should have followed up and more fully disclosed the employment contract.

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17. The inadequacy of the disclosure proved to be a flash point in the hearngs on the the First Plan and while it contrbuted to the Cour's decision on the First Plan, I do not think it is reasonable to conclude that the inadequacy of disclosure is what made confirmation so difficult to obtain in ths case. By the time of the Second Plan, there had been complete disclosure with respect to Crowley's relationship to Cerberus, and yet the Second Plan
confirmation of

was rejected as welL.
The Second Plan

18. The Trustee attributes the failure of the Second Plan to Crowley and urges that he
be held personally liable for Coram's continued stay in banptcy. I do not think this view is

reasonable.
19, After the First Plan was rejected, Coram (without Crowley's paricipation)

engaged Goldin as an Independent Restructuring Advisor. Goldin looked into the concerns that had caused the rejection of the First Plan. Goldin and Friedman made recommendations about how to proceed. Coram accepted those recommendations2 and prepared and prosecuted the
Second Plan. By the time ofthe confirmation hearng concerning the Second Plan, there was no

longer any issue concerning disclosure. In rejecting the Second Plan, the Court took the view

that despite the full disclosure and despite the fact that Crowley had not paricipated in the the Second Plan, the contractual relationship between Cerberus and Crowley created such a continuing conflct that the plan could not be confirmed. As a result, hindsight, that Crowley should have resigned or severed the Trustee contends, with the benefit of his relationship with Cerberus after the First Plan was rej ected.
preparation or presentation of

20. As I discussed above, the Code does not create a flat prohibition on a member of a debtor's management from serving as a debtor-in-possession, even ifhe or she is not "disinterested" or holds an adverse interest to the estate. In such circumstances, the manager and
+ho. ,..th+_..',.PlUl.,,.;i:ivu.Q.l~ U.\,""U +_ rlo.+o...~_.o kru'1 kon+ +_ o.r1,...Ot'i"UL\. i"ii.\,ULJ.Vl.1. iu.\. ~'l't."..l"rt""lltø ui\, U\.VLVL i: _.._+t:nn~"_nl" ..o.orl Lv U\'L\"J.IIUU\. u.vvv U\.i:i. Lv aUU.l\Ji,.; +hO n;+nn+;".. ThO. "'p.lLvpi'u."'''''

response is very much determined on a case-by-case basis.
21. Here it is not reasonable to expect that Crowley would know the best way to

address the situation. Neither Friedman nor Goldin advised Crowley that he should resign or sever his relationship to Cerberus. The steps that Friedman and Goldin proposed to address the Judge's concern appear reasonable. Friedman was an experienced banptcy lawyer and he
thought that proceeding as Coram did made sense. Indeed, he testified that he was ''very

surrised" that the Second Plan was rejected after those steps had been followed. I do not see
why Crowley would have disagreed with his lawyers' judgment on this issue of

bankptcy

process,
The Length of

the Bankruptcy

Goldin's recommendations but issued a the Board adopted all of statement to the effect that it disagreed with Goldin's recommendation to reduce Crowley's compensation because, among other things, Crowley's management had saved the company.

2 The Special Committee of

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22. While the Trustee asserts that the problems that led to Coram's nearly four year
stay in banptcy can all be attributed to Crowley, I do not believe that position is reasonable.

23.

In my view, the problems in reorganzing Coram arose from a combination of

factors:
. The high risk and uncertainty attendant to any Chapter 11 filing.

. The paricular diffculty of confirming a cram down plan of

reorganization when the class suffering cram down is well represented and aggressive in using its rights under the Banptcy Code.

. The fact that there were large and sophisticated financial players in the Equity

Committee and the Noteholders and any distribution to the former had to be taken from the later.
. The fact that the debtor's professionals underestimated the diffculties they

would face in confirming a plan. Despite knowing as early as June of2000
that equity was seriously concerned about a possible restructurng of

the debt

and had engaged an experienced professional to protect its interests, the debtor's professionals did not fully explore the relationship between the debtor and Cerberus. This lead to a disclosure statement that was inadequate and diverted the Banptcy Court's attention from the substantive fairness of the First Plan,
. The skil of

the Equity Committee's professionals in utilizing the banptcy

process to maximize the Equity Committee's leverage. Over the course of

several years they required the debtor and the Trustee to propose thee fully
rli:uTolr\'lorl piaui= vi i\.UJ.,5a.HLaLiVu. i.v uiu15 LU\. ,.",,,.0 t" \.vii""iu\)iu.U. U) u""y\.,i.vp",u._l....t' ri....o",.rrn..;l"o+;,... +-" i.""TlI" +¡".o \.a~"" LV..__..11"(';__ D"

challenges to the disclosure, to the conflct in the Cerberus-debtor relationship and ultimately to the valuation of the enterprise, the Equity Committee created enough roadblocks that its position was signficantly improved over what it would have received simply based on the priority of their position.3

3 The way that the Coram Chapter 1 I played out, the Equity Committee maximized its leverage

through an aggressive litigation position and ultimately achieved a better bargain than originally
proposed. The Equity Committee's efforts improved the distribution to the holders of

the old equity from

zero under the First Plan to $ i 0 milion under the Second Plan and to at least $40 milion under the Third Plan. I understand that old shareholders have received at least $.80 per share under the Third Plan. That means that shareholders who purchased Coram's stock at $.06 per share at the time ofbanlaptcy have
received 13 times their investment.

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24. These factors - and those I have identified earlier in this report - lead to a long

term, intense fight between the Noteholders and the Equity Commttee. Whle Coram initially hoped to confrm a plan in five months, I note that the Trustee - highly reputable, conflct-free and independent - did not confirm a plan for more than 18 months after his appointment and the plan he confirmed provided at least $40 milion in value to the Equity Class. Indeed after Crowley left the Company, the Equity Committee repeatedly attacked the Trustee's conduct of the case, leading the Trustee's professionals to complaint to the Assistant United States Trustee (the offcial in the U. S. Justice Deparent overseeing the banptcy) that the Equity Committee "made outrageously high demands", "has shown that it is wiling to take actions that
wil har shareholders so long as they advance some undefined agenda" and "the Equity

Committee has engaged in needless and duplicative discovery that wil end up costing the
shareholders millons." According to the Trustee's calculation, the Equity Committee's

professionals sought to bill more than $10 million to Coram for their work. This lead the Trustee to observe that the "Equity Committee's scorched earh litigation tactics have resulted in an
astonishing amount of administrative clalls."

25, For the reasons I have stated above, I do not thin that the Trustee's claim that

Crowley is responsible for Coram's extended stay' ter 11 is reasonable.

Dated: July 20, 2007

h A. Dworetzky Hangley Aronchick Segal & Pudlin
One Logan Square, 27 Floor

Philadelphia, PA 19103

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EXHIBIT 1

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Curriculum Vitae
Exhibit 1

JOSEPH A. DWORETZKY
Hangley Aronchick Segal & Pudlin One Logan Square - 27th Floor Philadelphia, PA 19103-6933 (215) 496-7014 (Offce) (215) 568-0300 (Offce Fax) JAD~hangley,com

EDUCATION
Law School: Degrees: Class Rank: Average: Honors:

VILLANOVA UNIVERSITY SCHOOL OF LAW
J.D., sunua cum laude in May 1977 . First in class of 182 3.78 Saint Ives Medal (best overall cwnulative average); Pulling Award (best Law Review artcle); Roman Catholic Alum Award (best first year grades: 4,0 gpa); Order of the Coif; Vilanova Law Review (Staff, Volume 21; Associate Editor, Volume 22); Title Insurance Award (best grades).

College: Degree: Concentration: Class Rank: Average: Honors:

PURUE UNIVERSITY B.A with distinction in June 1972 3-year program with double majors in Philosophy and Writig Top 5%
3.6
Phi Beta Kappa; Marchette Award (outstanding student of

philosophy)

EXPERINCE
1997 - Date:
HANGLEY ARONCHICK SEGAL & PUDLIN, Shareholder and Member of Board of

Directors.

Represent business and governental clients in all tyes of conuercial dispute resolution, bankptcy and financial and operational restrctuings.
1993 - 1996:

CITY OF PHILADELPHIA, City Solicitor, 1994 to 1996; Acting City Solicitor, 1994; Chair of
Corporate Group, July - December 1993. As City Solicitor responsible for the overall representation of

legal the City in all civil matters as well as management of 130-lawyer departent

Senior legal advisor to the Mayor and City CounciL. Member of

the Mayor's Cabinet and

numerous boards, conussions and other governental policy makig groups.
1978 - 1993:

DRIKER BIDDLE & REATH, Managing Parter 1992-1993; Parer 1984-1993; Associate 1978-84. Concentration in bankptcy and creditors' rights. Representation of debtors and creditors in all phases of Chapter 11 proceedings and conuercial workouts and restrctungs.
Represented clients in hundreds of Chapter 11 cases involving a wide array of different tyes of

law.
1977 - 1978:

JUGE ELLSWORTH A. VAN GRAFEILAND, United States Cour of Appeals for the Second
Circuit, Law Clerk

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PROFESSIONAL
. Adjunct Professor, RUTGERS UNERSITY SCHOOL OF LAW-CAMDEN (1987-93), Taught

Banptcy in the fall semester from 1987 through 1991 and Advanced Banptcy Practice in the
spring semester from 1988 though 1993. Designed the latter comse to simulate an actual Chapter 11 case in which students represented clients in litigation and negotiation.
. Fellow, American College of Bankptcy Law (1 994-date). Member of the Board of

Regents

(2003-date).
. Chair, Merit Selection Commttee for Bankptcy Judges in Eastern Distrct of Pennsylvania
(2005, 2006).

. Vice Chair, Lawyers Advisory Commttee ofthe Thid Judicial Circuit (2006-date) appointed by Chief Judge Scirica,
· Chair, Eastern District of Pennsylvania Bankptcy Conference (2001): Co-chair of

Education

Commttee (1990-91), Steering Commttee (1992,1999), Vice Chair (2000).
· Board Member and Treasmer of

the Consumer Bankptcy Assistance Project Co-Chair, Long

Range Planng Commttee (1997-98). CBAP provides pro bono representation to low income

Philadelphians who need to me bankptcy to obtain relief from financial bmdens.
· The Best Lawyers in America, Banptcyand Creditor-Debtor Rights Law (2004-05; 05-06; 2007),

· Chambers USA, America's Leading Lawyers for Business (2004-07) selected as "Band 1 ", one of top 1 0 bankptcy attorneys in Pennsylvania,

· Law & Politics and Philadelphia Magazine, peer-selected as one oftop 100 (out of 34,000)
lawyers in Pennsylvania in all disciplines (2004-07),

SIGNIICANT REPRESENTATIONS
· Counsel for Pennylvania Departent ûfEducatiûn in action to have a receiver appointed for Chester-Upland School Distrct on account of financial mismanagement
· Counsel to Libert Mutual Insmance Company in Chapter 11 proceedings of Em on Corporation and related litigation concernng the validity of more than a bilion dollars worth oflong term prepaid natual gas supply contracts discovered to have been part of "roundtrip" or "circular" sales. Trial counsel for Libert in 5-weekjmy trial in the Southern District of

New York.

· Served as advisor to management or debtholders in numerous healthcare industry restrctuings.
Lead counsel for Saint Joseph's Hospital in its Chapter 11 proceedigs, Negotiated the merger of
Amendment suit againt the Commonwealth of

Saint Joseph's and Girard Hospital into Nort Pluladelphia Health System and, by setting a Boren Pennylvania, obtained for the reorganied debtors an annual supplemental payment from DPW on account of the grossly disproportonate share of low income patients at the two hospitals. Served as pricipal counsel to the bondholders in the
Metropolitan Hospital (sale and liquidation of

bankptcy of

thee hospital system in

Philadelphia), Lead counsel in the reorganiations of life care communities in Pine Run Trust (bank creditor) and Lutheran Retirement Home (debtor). Counsel for principal debtholders in the
restrctuings of Clivedon Nursing Home and Tucker House. Represented the owners of a group

of seven affliated nursing homes in their successful Chapter 11 proceedings, Counsel for Germntown Home. a Pennsylvania contiuing care retirement communty, in its successful Chapter 11 reorganization. Principal negotiator and lead counsel in the City of Phiadelphia's privatiation of a troubled 500 bed nursing facility.

2

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. Successfully argued on behalf of

the Southeastern Peiiylvania Transportation Authority in In re Penn Central Transportation Company, (Toxic Tort Cases) 944 F.2d 164 (3d Cir. 1991) (discharge Remigton Rand in In re Remington Rand Corp., 836 F.2d 825 ofCERCLA claim); on behalf of

Joseph's Hospital v. Departent of

(3d Cir, 1988) (date governent contract claim "arises"); and on behalf of the debtor in Saint Public Welfare, 103 B.R. 643 (Bank. E.D.Pa. 1989) (l1th Amendment waiver),

PRO BONO REPRESENTATIONS
. Represented Philadelphia Theatre Company in reorganiing after it canceled its season in 1988 due to finncial problems, Over a two year period, PTC elimnated most of its debt, renegotiated
its lease and raised enough funds to put on four productions, Today, PTC is one of

the leading

professional theatres in Philadelphia.

. Represented the Peiiylvania Ballet in reorganiing in 1983 after it was forced to tennate its season, Negotiated a consensual workout with 5 bank creditors tht resulted in significant debt
forgiveness and restrctued the remainig debt

COMMUNTY AFFAIS
. Member, Board of Directors of

Pennsylvana Energy Development Authority (2004 to date)

appointed by Governor and c01Uired by State Senate,
. Member, Board of Council is made up of Directors of

Parkway Council Foundation (2005 to di-te). The Parkway the significant cultual intitutions on the Benjamin Frankin Parkway in
Executive Commttee ofa $1J

Philadelphia,
. Trustee, Wiliam Penn Foundation, Board member and member of

bilion charitable foundation concentrating its philanthropy in the Philadelphia region (2001 to

2005),
. Member, Board of

Managers, Moore College of Ar & Design (2003 to 2006). Moore is the

countr's only women's art college. Member of Academic Affairs and College Planng

Commttees.
. Board Member, Vice President and Director of

the Philadelphia Volunteer Lawyers for the Ars

from 1980 though 1985,

. Coleman Award, 1997, for outstanding service to the arts communty in Philadelphia.

3

Case 1:04-cv-01565-SLR

Document 176-2

Filed 08/20/2007

Page 28 of 47

EXHIBIT 2

Case 1:04-cv-01565-SLR

Document 176-2

Filed 08/20/2007

Page 29 of 47

Documents Reviewed
Exhibit 2

Summary Judgment Documents
4/1712007

Motion for Defendant Daniel Crowley in Support of Summar Judgment, or, in the Alternative, Partial Sumar Judgment
Opening Brief of Declaration of Daniel Crowley in Support of

4/17/2007

Motion for Sumary

Judgment, or, in the Alternative, Parial Sumary Judgment

4/17/2007

Appendix of Opening Brief

Documents in Support of in Support of

Defendant Danel D. Crowley's his Motion for Sumar Judgment (par 1,2

and 3)

4/17/2007

Motion for Summary Judgment on Liabilty or, in the Briefin Support of Alternative, For the Cour to Deem Certain Facts Established
Appendix of Documents in Support of

4/17/2007

Motion for Sumar Judgment

or, in the Alternative, for the Court to Deem Certain Facts Established
5/4/2007

Memorandum of Chapter 11 Trustee Arlin M. Adams in Opposition to Motion of Danel D. Crowley for Summary Judgment, or, in the

Alternative Parial Sumary Judgment
5/4/2007
Appendix of Documents in Support of

in Opposition to Motion of

Memorandum of Arlin M. Adams Danel D. Crowley for Summar Judgment, .

or, in the Alternative Parial Summar Judgment

5/4/2007

Declaration of

Danel Crowley in Opposition to Plaintiffs Motion for Summar Judgment
Defendant Daniel Crowley in Opposition to

5/4/2007

Answering Brief of

Plaintiffs Motion for Sumar Judgment on Liability or, in the
Alternative, for the Cour to Deem Certain Facts Established
5/412007

Defendant Danel Crowley in Opposition to Plaintiffs Motion for Sumary Judgment on Liability or, in the Alternative, for the Cour to Deem
Appendix of Documents in Support of Answering Brief of

Certain Facts Established (par 1 and 2)

5/1512007

Reply Brief of

Motion for Summar Judgment, or, in the Alternative, Parial Sumar Judgment
Daniel Crowley in Support of

Case 1:04-cv-01565-SLR

Document 176-2

Filed 08/20/2007

Page 30 of 47

5/15/2007

Appendix of

in Motion for Summary Judgment, or, in the Alternative, Partal Support of Sumar Judgment
Documents in Support of Danel Crowley's Reply Brief in Support of

5/15/2007

Reply Brief

the Trustee's Motion for Sumar Judgment on Liability or, in the Alternative, For the Cour to Deem Certain Facts Established
Appendix of Documents in Support of Reply Brief in Support of

5/15/2007

the

Trustee's Motion for Summar Judgment on Liability or, in the

Alternative, For the Cour to Deem Certain Facts Established

Depositions
3/22/2007 3/16/2007

Richard F. Levy
David M. Friedman
ArlIn Adams

3/27/2007 3/28/2007 4/05/2007

Arlin Adams
Allen J. Marabito
Danel D. Crowley

4/06/07
11/9/06

Michael Temin (Genesis v. Crowley)

Pleadings and Filngs
9/21/2000

Objection ofthe U.S. Trustee to the Disclosure Statement and Plan of Reorganization
Objection of

9/25/2000

Practice Association, Inc. to the Disclosure Statement in Support of Plan of

Coram Resource Network, Inc., and Coram Independent the Debtors and Debtors in Possession Reorganization of

9/26/2000

Unsecured Creditors in the Matter the Offcial Committee of Objection of of Coram Resource Network, Inc. and Coram Independent Practice Association, Inc., to Debtors' Application to Approve Disclosure Reorganization Statement Relating to Chapter 11 Plan of
Debtors' Reply to Objections to Adequacy of

10/6/2000

Debtors' Disclosure

Statement Pursuant to Section 1125 ofthe Banptcy Code
10/1 0/2000

Debtors' First Amended and Restated Joint Plan Pursuant to Chapter 1 1

2

Case 1:04-cv-01565-SLR

Document 176-2

Filed 08/20/2007

Page 31 of 47

of

the u.s. Banptcy Code
the Banptcy Code

10/10/2000 First Amended and Restated Disclosure Statement Pursuant to Section
1125 of

10/1 0/2000 Order (1) Approving the Disclosure Statement, (II) Establishing a Form

Votes on Chapter 11 Plan, (III) Establishing a Voting Deadline and Procedures for Tabulation of V otes on the Chapter 11 Plan, and (IV) Scheduling a Hearng to Consider Confirmation of Chapter 11 Plan
of Ballot and Procedures for the Solicitation of

10/22/2001 Equity Committee Objections to Debtors' Second Joint Plan of Reorganization
10/25/2000 Application ofthe Official Committee of

Equity Securty Holders of Coram Healthcare Corp. for An Order Authorizing the Retention and Employment of Altheimer & Gray as Counsel