Free Reply Brief - District Court of Delaware - Delaware

Case 1:04-cv-01565-SLR

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EXHIBIT C-6

Case 1:04-cv-01565-SLR

UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE

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IN RE:

Case No. 00-3299

CORA HEALTHCARE,

824 Market Street

Wilmington, DE 19801

. . . . . . . Debtor,. ...

March 3, 2003
9:30 A.M.

TRANSCRIPT OF TRUSTEE'S MOTION FOR AUTHORIZATION TO REJECT THE EXECUTORY CONTRACT OF DANIEL CROWLEY BEFORE THE HONORABLE MARY F. WALRATH UNITED STATES BANKRUPTCY COURT JUDGE
APPEARANCES:

For the Trustee:

Schnader Harrison Segal & Lewis,
LLP By: BARRY E. BRESSLER, ESQ. WILBUR KI PNES, ESQ. RICHARD BARKASY, ESQ. 1600 Market Street, Suite 3600

Philadelphia, PA 19103
Weir & Partners By: JOHN B. YORK, ESQ.
824 Market Street Mall , Suite 101 P.O. Box 708

Wilmington, DE 19899
Office of the U. S. Trustee

By: RICHARD SCHEPACARTER, ESQ. J. Caleb Boggs Federal Building 844 King Street, Lockbox 35 Wilmington, DE 19801

Audio Qperator:
Jennifer M. Pat

one

Proceedings recorded by electronic sound recording, transcript produced by transcription service.

J&J COURT TRASCRIBERS, INC.

E-mail: jjcourtØoptonline.net
(609) 586-2311
Fax No. (609) 587-3599

268 Evergreen Avenue Hamilton, New Jersey 08619

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2

APPEARANCES:

( continued)
RICHARD H. CROSS, JR., ESQ. 1201 North Orange Street, St. 610 P.O. Box 1380

For Daniel Crowley:

Wilmington, DE 19899
Much Shelis Freed Denenberg Ament & Rubenstein By: SCOTT N. SCHREIBER, ESQ. 200 North LaSalle St., Suite 2100

Chicago, IL 60601
For Unse~ured Creditors:

Richards, Layton & Finger, P.A. By: ETTA WOLFE, ESQ.

One Rodney Square
P.O. Box 551

Wilmington, DE 19899
For Equity Committee:

Saul, Ewing, Remick & Saul, LLP By: MARK MINUTI, ESQ. 222 Delaware Avenue, Suite 1200 Wilmington, DE 19899 Jenner & Block, LLC By: RICHARD F. LEVY, ESQ.
STEVE TOMASHEFSKY, ESQ.

One IBM Plaza
Chicago, IL 60611
For Senior Noteholders:

Weil, Gotshal & Manges, LLP

By: ALAN B.MILLER, ESQ.
767 Fifth Avenue

New York, NY 10153
For Cerberus Partners, LP
Klett Rooney Lieber & Schorling By: ADAM G. LANDIS, ESQ. 1000 West Street, 14th Floor Wilmington, DE 19801

Schulte Roth & Zabel LLP By: HOWARD O. GODNICK, ESQ. MICHAEL L. COOK, ESQ. 919 Third Avenue New York, NY 10022

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~

APPEARANCES: (continued)
For Goldman Sachs:

Connolly Bove Lodge & Hutz, LLP By: GWEN LACY, ESQ. 1220 Market Street Wilmington, DE 19899

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INDEX
WITNESSES FOR THE TRUSTEE
ARLIN M. ADAMS

4

Paqe

Direct Examination by Mr. Bressler Cross Examination by Mr. Levy Cross Examination by Mr. Godnick Redirect Examination by Mr. Bressler
DANIEL CROWLEY

12 24 68 69

Direct Examination by Mr. Kipnes Cross Examination by Mr. Levy Redirect Examination by Mr. Kipnes Recross Examination by Mr. Levy Further Redirect Examination by Mr. Kipnes Further Recross Examination by Mr. Godnick MICHAEL SARACCO

73 85

109 110 113 114

Direct Examination by Mr. Barkasy Cross Examination by Mr. Tomashefs ky Redirect Examination by Mr. Barkasy
DEBORAH MEYER

116 125 133

Direct Examination by Mr. Barkasy Cross Examination by Mr. Tomashefsky Redirect Examination by Mr. Barkasy
VITO PONZIO

136 141 144

Direct Examination by Mr, Barkasy Cross Examination by Mr. Tomashefsky Redirect Examination by Mr. Barkasy
JAY SCOTT VICTOR

146 153 158

Direct Examination by Mr. Kipnes Cross Examination by Mr. Tomashefsky Cross Examination by Mr. Godnick Redirect Examination by Mr. Kipnes
ARGUMNT

159 162 179 181

BY MR. BRESSLER BY MR. LEVY BY MR. SCHREIBER

184 187 191

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INDEX
REBUTTAL ARGUMNT
BY MR. BY MR.

5

BRESSLER
LEVY

194 195

DECISION
BY THE COURT

195

EXHIBITS

T-l

Proposed Termination Agreement and Extension of Employment Agreement

Iden t .
13 32
34

Evid.
72 72 72 72
72

EC-l
EC-2

3/26/02 Letter
Letter to Coram Employees
8K Form filed with SEC
Group Exhibit

EC-3
EC-4

37
44

EC-5

2/18 Letter
Two Emails
4/10/02 Letter

47

72 72 72

EC-6
EC-7
EC~8

49

5/6/02 Draft
Document Dated 11/12/99 Document Dated 5/8/02
Document Dated
3/11/02 Letter

51
58

117
72

EC-9
EC- 10

iis
63

EC-l1
T-2
EC- 12

5/8/02

72

77

115
118

2002 Earnings Summary
4/1/02 Document

EC- 13

103
105 107

118
118

EC-14

8/20/02 Letter
9/20/02 Letter

EC-15
EC- 16
EC- 1 7

lIS
118

2/28/03 Letter
3-Page Document from SSG

113
163

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Adams - Direct

14

1 A Oh, maybe a week or so after I was appointed. The first
2 thing I did after I was appointed was to read carefully the
3 opinions written by Her Honor relating to this matter, and then
4 I called Mr. Crowley and arranged to go to Denver, told him I

5 wanted to meet with him and his entire staff, and he set that

6 meeting up. I forget the date, but it was some time in the
7 latter part of March. And I went out to Denver and talked with
8 Mr. Crowley for, I don't know, two hours, maybe three hours,

9 and then met with the entire staff, first collectively, but
10 then I asked that I be given the opportunity to meet with each
11 of the executive staff individual and on a private basis.

12 Q It is accurate that of the -- approximately the 2,100
13 employees that Coram has, about 100 are in Denver.

14 A
15 Q

About that.
But members of the senior executive were brought in from

16 elsewhere around the country to meet with you?

17 A They were, and t~ere were approximately fifteen. I can't
18 tell Y9u precisely the number.

19 Q when you first met with Mr. Crowley was there any
20 discussion of Her Honor's opinion or of his then current

21 relationship with Cerberus?

22 A There was. Almost the first thing I did with Mr. Crowley
23 was to ask him about the conflicts and that had been referred
24 to in the opinions that I've just averted to, and he assured me

25 that he had no further contractual relationship with Cerberus

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Adams - Direct

15

1 except for the remaining claim under the contract for work that

2 he had done prior to my appointment that had nothing to do with

3 Coram, and I made it clear to him that he could not take any
4 compensation from Cerberus for anything except that claim and 5 that he could not spend any time that he would ordinarily be 6 devoting to Coram in order to deal with any of the remaining
7 Cerberus matters.

8 He gave me that assurance.

9 Q Did he also discuss with you that that he still had some
10 talking relationship with Cerberus?

11 A He did. He said from time to time Cerberus asked him to
12 give his comments or opinions about matters that came to their
13 attention, an I said, "Well, you could do that, but you have to

14 make sure that those matters could have nothing to do with
15 Coram, couldn't be a competi ti ve situation or anything of the

16 sort," and the reason why I gave them -- him that opportunity,

17 although I was mindful of the judge's concerns, was I knew he 18 had a substantial claim against Cerberus, and I didn't want to

19 do anything to prejudice that claim. I didn't think that was
20 fair on my part.

21 And I knew that if I was going to succeed as a Trustee it
22 was important to have a good relationship, not only with Mr. 23 Crowley, but all of his people.
24 use in handling these matters.
And that's the style that I
Some people don't use that

25 style. Mr. Levy, for example, uses a very confrontational

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Adams - Redirect

70

1 THE COURT:
2 BY MR. BRESSLER:

Sustained.

3 Q What were your views as to the inquiry into the continued
4 possible conflict?

5 A I instructed you and your colleagues to be very attentive
6 to that issue. I knew of the judge's position, and I had every

7 intention to adhere very closely to that. And if I couldn't
8 take care of the details, I expected you and your associates to

9 do so. 10 Q Have you seen anything in the documents and unsent drafts
11 that Mr. Levy has shown you that is not consistent with Mr.

12 Crowley's representation to you that he's no longer getting

13 paid by Cerberus?

14 A I have seen nothing. If I did, I would be upset about it
15 and probably take steps. 16 Q What is the current level of authority that any of the
17 officers of Coram have to write checks or spend money without

18 your approval?

19 A I think the level is $50,000. I approve everything above

20 from 50,000 up.
21 Q You don't have to know what services Mr. Crowley may have
22 been claiming monies from Cerberus for to know that he told you

23 they were not for Coram work; is that correct?

24

MR. LEVY:
THE COURT:

Obj ection, leading.

25

Overruled, but it could be clarified.

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Crowley - Cross/Levy

89

1 A

I have talked to Feinberg.

2 Q But you don't know how many times.

3 A A number of occasions.

4 Q And you don't know whether in any of those conversations
5 you talked to him about the money that you claim is due to you

6 from him, right?

7 A I'm certain on some of those occasions I did. I don't 8 recall.
9 Q So, you went to the meeting. You expected a proposal, you
10 expected a number, and there was none, right?

11 A I answered that, yes.
12 Q And you came away from the meeting disappointed?
13 A I wondered why I was asked to come to New York to receive
14 a proposal if the proposal was nothing.

15

Q

Fi ve days after the meeting you

sat

down at your computer

16
17 18

and you typed a document relating to that meeting,
A
Q

correct?

I wrote

a draft.
yes
or no?

Can you answer that

19 A

Yes.

20

Q

And the draft you wrote -- do you have the documents up

21 there, Mr. Crowley?

22 A

Yes, I do.

23 Q Will you look at EC-8, please? The draft you wrote, the
24 first two pages of EC-8, the ones that have Bates numbers CRX-

25 63 and 64, correct?

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Crowley - Cross/Levy

90

1 A Yes.

2 Q And in that draft you wrote -- the very next to the last 3 thing you wrote no, the very last thing you wrote was, "I
4 just wanted you to know how I am feeling on this particular

5 day," correct?

6 A Those are the words.
7 Q And that is how you felton that particular day, correct?

8 A Of course I testified for hours with you in the deposition
9 and told you this was --

10 Q Excuse me. The judge was not at the deposition. Could
11 you just answer my question, please?

12 A No.

13 Q That's not how you felt on that day?

14 A It's out of context.
15 Q How is it out of context, Mr. Crowley? 16 A Mr. Levy, I see how you would like to characterize it, but
17 this was part of my life has been -- I write something down,

18 think about it the next day. In this case I wrote something

19 down, the first two pages. I sent it to my attorney. I re-

20 crafted it the next day. I was ready to send that. I sent
21 that to my attorney. Neither one of these letters went beyond

22 me to my attorney. I haven't seen this thing in darn near a
23 year until my attorney showed it to me again a week ago.

24 Q Well, you talked to your attorney about it -- let's see,
25 this is May 6th. You tell -- you went it to Mr. Schreiber,

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Crowley - Cross/Levy

91

1 looks like from the fax marks on May 6, correct?

2 A I sent to Mr. Schreiber. I admit it.
3 Q And you talked to him about it almost immediately
4 thereafter, didn't you?

5 A I don't know that.
6 Q You deny that, sir?
7 A I don't know if I talked to him immediately thereafter.

8 Q You talked to him shortly thereafter.

9 A I talked to him thereafter.
10 Q About this document.

11 A About this document
12 Q And that was pay before I took your deposition last week.
13 A I talked to him about this document in May 2002, yes.

14 Q Now, in this document, the portion you wrote, on Page 2
15 beginning in the second paragraph, some rather -- some 16 complaints about the job that David Friedman did and after
17 complaining you said, "I didn't have to recite the answers that

18 Friedman gave me to say in court." Did you wrote that?
19 A

Yes, I wrote
Did you mean

that.

20 21
22

Q

it

when you said it?

A
Q

Absolutely not.
You wrote it but

I told

you that.

didn't

mean

it, . absolutely.
drama.
I wrote

23 A

Again,

this was a melodrama, a noontime

24 what I felt was -- that David Friedman could have done a whole

25 lot better job and didn't do as well as he could have. There

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Crowley - Cross/Levy 92
1 was significant evidence he could have presented different
2 ways he could have handled this case to supply Your Honor with 3 the information that you have, 1,635 pages of it that had he

4 done that, we may have had a different decision. And I don't
5 think that he did do that.

6 Q He did hand you a list of questions and answers before you
7 took the stand last December, didn't he?

8 A He gave me a list of questions and probable answers and
9 asked me to read them over and we would discuss it. I 10 testified to the best of my ability the truth. I did not
11 recite -- I couldn't recite or wouldn't recite anything that
12 anybody gave me.

13 I gave my own answers.

14 Q Can you give me any explanation then of why you chose the 15 word" reci te" in here?
16 A Here's a letter that's a year old. I was completely
17 sideways because I'm calling Feinberg saying, "I want to be

18 paid for '99, 2000, 2001. You and I know what the deals are."

1 9 "Send them to Bob Gadigan."

20 i sent him a list. I said, "Where are we?"
21 He said, "Send them to Bob Gadigan."

22 I said, "I did."
23 He said, "Send them again."
24 "I think I'm due a lot of money."

25 "What do you think you're due?

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Crowley - Cross/Levy

93

1 "A lot."
2 "You have to give me the source data."

3 "What do you think I'm due?"

4 "I don't know."
5 "Steve, what -- I think I'm due something. I'd like to be
6 paid."

7 He pushed me off in '98, in 2000 and 2001. The contract

8 was dead. I'm not taking anything from him, I'm simply asking
9 for what 1'm due.

10 I asked for proposals, I didn't get it, he drags me to New
11 York for a proposal that he gives me is -- there is none.

12 This letter is, you know, not in my many letters that I've
13 written, when I sit them on the side of my desk it's Draft One

14 of two drafts. You don't show me Draft Two, but there is Draft
15 Two that I was willing to sign my name to that says, "I'm
16 putting whatever it is in here in front of Judge Walrath and

17 he United States Trustee and Judge Adams. I'm happy to do it,
18 and if they say no, then no it is."

19 But you're -- I did not recite anything David Friedman
20 provided to me.

21
22

Q

Is that, sir,
chose

your complete explanation to my question of

why you

the word "recite"?

23 A
24
Q

I chose the word "recite"
Can you answer that
I have no idea.

--

yes

or no?

25 A

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Crowley - Cross/Levy

94

1 Q Okay, thank you.
2 Let's go now to the next paragraph which says -- you wrote
3 on your computer, "I suppose if I had been more trusting,

4 maybe, paren, maybe I would not have written the memo about
5 trying to get upside on your position if I did a great job at
6 Coram."

7 See that, sir?
8 A Yes.

9 Q Now, would you look at EC-9.
10 A Yes.

11 Q And I'm sure you'll recall that that document that was
12 marked in evidence at the hearing, that document which is dated 13 November 12th, 1999 was marked in evidence at the hearing heard

14 in this courtroom in December of 2000. Remember that?

15 A Yes, I do.
16 Q And do you remember that you denied at that time that EC17 9, then EC-20 indicated an intention -- indicated an intention
18 to get upside on the position if I did a great job at Coram?

19 A You know, my testimony's in the court as to this pre20 employment letter to which we did not agree. I don't know what
21 else to say.

22 Q Well, why did you tell Mr. Friedman, that you -- quote -23 I'm sorry, you didn't tell that to Mr. Friedman.

24 Why did you write in this letter, quote, "I would not have
25 written the memo about trying to get upside on your position."

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Crowley - Cross/Levy ~5
1 A Well, this is not a letter. This is draft one of two
2 drafts of material I sent simply to my lawyer that never went
3 to anybody.

4 Q I'll correct the -- I'll correct that -5 A I thought -6 Q What -- I'm not sure I see the importance, but why did you
7 write in this draft, "I would not have written the memo about 8 trying to get upside on your position if I did a great job at

9 Coram"?

10 A I think what I'm saying you know, I don't know. I just
11 didn't trust the man, I guess.

12 Q You do agree, by the way, don't you, that the reference
13 here in this document that we're looking at, EC-8, is a

14 reference to EC-9, the older document? No question in your
15 mind about that; is there?

16 A No.
17 Q Now, let's look at the next page, CRX-65. And we have -18 we agree, don't we, that this was written by Mr. Scott

19 Schreiber?
20 A
This was written by

Scott Schreiber.
handwriting where

21

Q

And that
I believe

that's his

it says "insert"?

22 A 23
Q

it is.
was your lawyer?

And Mr.

Schreiber

24 A

He is my lawyer.

25

Q

Was

and is

your lawyer.

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Crowley - Cross/Levy

96

1 A Yes.
2 Q Was on May 6th, 2002.

3 A Yes.

4 Q And there's no doubt in your -- now, Mr. Schreiber writes
5 in CRX-65, "Hence, I expect that you'll honor the commitment

6 that you made to me over dinner." You see that?

7 A Yes.

8 Q Do you have any idea where Mr. Schreiber could have gotten
9 information suggesting that Feinberg made a commitment to you

10 over dinner other than from you?

11 A I never saw this document, Mr. Levy.

12 Q Can you answer that? My question is, do you have any
13 idea?

14 A No.

15 Q Do you have any idea where Mr. Schreiber could have gotten
16 the idea that the commitment specifically was that Coram's plan

17 is confirmed -- if Coram's plan is confirmed or its assets
18 sold, you'd be reinstated with Cerebus and receive $5 million?

19 A 1-20 Q Yes or no, do you have any idea?
21 A No.
22 Q Good.
23
24
MR. KIPNES:

Move to strike, Your Honor.

MR. LEVY: I
THE COURT:

25

Sustained.

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Crowley - Cross/Levy

97

1 MR. LEVY:
2 BY MR. LEVY:

Okay. I withdraw it.

3 Q And I assume you had no idea of any source of information
4 that Mr. Schreiber might have had that you had received a
5 commitment from Mr. Feinberg that Cerebus would indemnify you

6 for legal fees, correct?

7 A No, because they haven't. 8 Q And finally, perhaps most importantly, do you have an idea
9 where Mr. Schreiber could have gotten information that would
10 lead him to write that you had a commitment from Mr. Feinberg
11 to pay you the difference between what you ul timately received
12 from Coram by way of bonuses and $11,200, OOO?

13 A None at all.
14 Q And do you recognize $11,200,000 as a number that you once
15 perhaps told Judge Adams was the amount you thought was due

16 from Cerebus?

17 A
18 Q

It is not.

Judge Adams was wrong?

19 A

It's not a number that I provided. The numbers are

20 public, they're available in every form of SEC document.

21 They've been testified in court, you've subpoenaed them, I've
22 provided them to the office of the Trustee, the current number

23 is almost 17-million-9. Back then it was 15-million-7. This
24 number represents nothing I would know.

25

MR. KIPNES: Your Honor, for the purpose of the

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Crowley - Cross/Levy 98
1 record, Mr. Levy said owed by Cerberus.

2 THE COURT: All right, just to clarify, it's owed by
3 Coram is what you're question --

4 MR. LEVY: It is, and I thank you.

5 THE COURT: All right.
6 BY MR. LEVY:

7 Q Now, the next letter, the next communication, the next
8 draft if you like, is EC-I0, a May 8th, 2002 document with

9 number 71 CRX-71, 2 and 3 on it; is that correct?
10
A
Q

Yes.

11 12 13
14

Something you wrote.
Yes.
And this one you

A
Q

signed.
and you wrote

A
Q

Yes.
And you

15

wrote, " Dear Steve,"

Steve in,

16 correct?
17 A
18 Q
That's my handwriting.

Right, and just exactly the same way, if you look back at

19 EC-9, the 1999 document, same way you wrote, "Dear Steve/'

20 right?

21 A The first two pages of. the prior equity committee are a
22 draft that I wrote, first two pages, the memo that's dated May
23 8th that's EC- 10 I wrote and I signed, both of them were

24 drafts, neither of them were sent. They both went to my
25 attorney and nowhere else.

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Crowley - Cross/Levy 99
1 Q And with respect to EC- 10, the May 8th letter, you did
2 discuss that letter with Mr. Schreiber some time in May,

3 correct?

4 A I must have. I don't recall it.
5 Q And do you look specifically now at EC-I0, and
6 specifically on the last page in the third paragraph from the

7 bottom, about the middle, you say, "Steve, I am also anxious

8 that unforeseen events sometimes overtake good intentions. You 9 could get hit by a bus and be gone. Cerebus would get bought

10 out or whatever. The point is that then I would be left with
11 nothing. Now, that's not right or fair, is it?"
12
You

see that?

13 A
14
Q

Yes.
And you

wrote that.

15 A

Yes, I wrote

that.
Mr. Feinberg wouldn't
would

16
17 18

Q

Now, why would it be unfair to you?
why

like it, but
bus
and was

it

be unfair to

you if he was hit by a

gone?

19 A
20

Well, in December of 2001 I received my last payment from

this

guy.

I've

asked him to pay me

for '99, 2000, 2001.
in

I

21 have
22

tried

more ways than I know how to
in the public,

terminate this contract
front of Your Honor

and be

paid up front,

or

23
24

anyone what I'm doing for what?

Nothing for

Coram.

Never

asked.

Don' t ~xpect.

Not going to accept.

Nothing

relates to

25 Coram.

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Crowley - Cross/Levy 100
1 I'm saying to this man, "You know that, and I know that,
2 how about let's just get this over and be done with it and put

3 it on public? I'm okay with that."

4 There isn't any conspiracy. Let's get it over with. He's
5 saying, "Good, let's do that. Let's put it in front of
6 everybody."

7 And I'm saying, "Fine. What's the number?"
8 We're going back and forth, and I believe that the man
9 he's a terrific businessman. He's playing hide the ball. I
10 don't know why or what's going on here, but I would just like
11 it over.

12 Lord knows, you've accused me of everything under the sun,
13 Mr. Levy, and it's not true.
So, I'm left to this guy saying,

14 I'll pay you." What? When?

For what? I'd like to be done

15 with it.
16 Here's what for, here's how much, here's the
17 documentation, do it. That's all I'm saying. That's what this

18 lette~ says. I didn't send it, though. Cooled down and threw
19 it in the circular file, the trash.

20 Q Mr. Crowley, your claim is not for all his money you're
21
22

23
24

talking about was not against Feinberg personally; it was against Cerberus, wasn't it? A In many ways Steve's the principal there. You have -- still have -- or there is a written contract Q
between you and Cerberus, correct?

25

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Crowley - Cross/Levy

101

1 A Sure, and it's
2 Q And it's that contract that defines the rights you think
3 you have for certain upsides; isn't that right?

4 A That's right.
5 Q Well, then why -- and presumably Cerberus has records of
6 what those upsides were, though you've never seen them, right?

7 A I'd like to.
8 Q Okay, then why is Mr. Feinberg's being gone going to
9 affect your right -- will leave you with nothing?

10 A

I must have come to the same conclusion as you, 'cause I

11 threw the letter away and never sent it to him. I thought this
12 was attorney-client privilege, 'cause it went from me to my

13 lawyer to the trash. But here I guess I'm testifying. 14 Q Equity Committee Exhibit -15 THE COURT: Thirteen.
16 MR. LEVY: Thirteen, thank you, Your Honor.
1 7 BY MR. LEVY:
18 Q -- is a document bearing numbers CRX-48 6 and 487 dated
19 April 1st, 2002. I think you've testified you prepared this

20 document?

21 A
22 Q

I did testify that.

And it reflected your intentions as to what you would like

23 to see in the termination agreement on or about the date you

24 wrote it?
25 A
Again, I --

Case 1:04-cv-01565-SLR

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Crowley - Recross/Levy 110
1 A I was really angry. I -- this is bullshi t. I'm sorry. I
2 apologize to the Court.

3 Q Did you have any conversation at that time with Mr.
4 Schreiber about the accuracy of what appears on that page?

5 A I did.
6 Q And what did you say?

7 A This is absolutely wrong. It's not in context with that
8 meeting. None of this happened. Where in the hell did you get
9 this? And why am I looking at it a year later, an insert that

10 I've never seen before? What is this about?

11
12

Q

Does Cerberus owe you any

money in your view for

any work

you have done at any time from the date of your birth to now

13
14

that has anything to
A

do with Coram?

Not a penny.
MR.

15

KI PNES :

No further questions.

16
17
BY MR.

RECROSS EXAMINATION
LEVY:

18 Q Perhaps I misunderstood you, Mr. Crowley. I thought you
19 had testified that after you wrote the May 6 letter and
20 discussed it and the third page, Page 65, with Mr. Schreiber;

21 is that not your testimony?

22 A Mr. Levy, I told you I hadn't seen this thing in over a
23 year, that the only time I've seen it since I thought it was

24 thrown away, I sent it to my lawyer. I did Draft Two, was
25 ready to send it. I cooled down the next day, in the trash it

Case 1:04-cv-01565-SLR

Document 141-3

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Page 24 of 47

Decision
1 and has kept out of whatever monetary claim Mr. Crowley may
2 have against Cerberus.

195

3 MR. LEVY: Mr. Schreiber said we ought to stick with
4 him. Merely resonance of what the director's witness, Mr.
5 Emeral said, "Well, he's doing a good job, let's stick with
6 him. "

7 And the cases that Mr. Bressler talks about do talk
8 about people who in the past have a conflict. I certainly
9 think his past conflict twice colors what happened here today,

10 but it is the ongoing relationship that troubles us so.

11 Thanks.
12 THE COURT: Well, I'm going to deal with the
13 Trustee's motion for approval of the extension. And in doing
14 so, I agree that it is the business judgment rule that I just

15 consider.
16
17
18

To express my feelings I'm going to paraphrase
someone I think epitomizes the business judgment rule, and that

is Warren Buffet. And he has said that the ideal employee is

19

someone who's smart, hard-working and honest. But if the
employee isn't honest, you darn well better hope he's stupid

20 21
22

and lazy, because otherwise you're in trouble.
There is no question in this case that Mr. Crowley is
smart, hard-working, a brilliant businessman.
But I do not

23
24

believe he is honest. And his testimony today has not
convinced me that he has changed since the last time he

25

Case 1:04-cv-01565-SLR

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Page 25 of 47

Decision

196

1 testified.
2 Judge Adams has an impeccable reputation for
3 integrity. Quite frankly, I don't want his reputation or mine
4 sullied by approving continuing employment of an employee that

5 I do not believe to be an honest person. I think being asked
6 today to trust that Mr. Crowley is complying with the Trustee's

7 request simply because there is no proof that he has not
8 complied with the requirements imposed upon him by the Trustee

9 goes too far , given the fact that he has previously failed to

10 disclose relevant information. And quite frankly, the draft
11 documents that were produced continue to show at least in May 12 of 2002, after the appointment of the Trustee, continue to show

13 what I believe is a continuation of Mr. Crowley's continued 14 efforts to continue to get reimbursement from Cerberus for
15 efforts undertaken in this case.

16 It's a belief I have. There is no evidence that an
17 agreement was .reached with Cerberus or that Cerberus

18 participated in it, but I think that the drafts show that Mr. 19 Crowley sought to have that continuation, sought to be paid,

20 albeit after confirmation, that is after he was no longer
21 subject to the jurisdiction of this court, sought to get

22 remuneration for efforts taken in this case, which quite
23 frankly is not permissible.

24 And given that belief, I will not approve any
25 extension of employment. I've said before that fortunately or

Case 1:04-cv-01565-SLR

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Adams - Cross/Levy 25
1 Q Judge Adams, would it be fair to say that during this
2 engagement your principal focus has been to find a consensual

3 resolution of the disputes between the parties and get the

4 company out of bankruptcy?

5 A I think that would be fair.
6 Q And it's also correct, isn't it, that if it was determined
7 that Mr. Crowley did have a continuing conflict of interest it

8 would not have been your judgment to keep him on?

9 A That is correct.
10 Q No matter how good a job he was doing?

11 A That is correct.
12 Q And, sir, you also recognize that the ultimate legal
13 issues in this case are to be determined by the Court?

14 A Yes, that's true.
15 Q And notwithstanding what I truly believe your
16 extraordinary legal abilities, you've not tried to adjudicate
17 the legal ability -- the legal issue, rather, of whether Mr.
18 Crowley has a continuing conflict.

19 A Not the sense of a judge deciding something, but on the
20 factual basis I did attempt to ascertain that, yes.

21 Q Well, would it be fair to s?y, sir, that you've not made
22 ita principal focus of your efforts as Trustee to investigate
23 the conflict issues that have been raised?

24 A Well, I don't think it's the principal focus. I thought I
25 did that right at the beginning, and it was continuing. I

Case 1:04-cv-01565-SLR

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Crowley - Direct

74

1 monthly report.
2 Q And have you done that?

3 A Yes, I prepared the weekly report in accordance with his
4 instructions.
5 Q At your initial meeting with Judge Adams, what
6 conversations, if any, did you have regarding Cerberus?

7 A Judge Adams discussed Judge Walrath's opinion with me. He
8 asked me directly about my relationship with Cerberus. He
9 asked me if I was receiving any compensation from Cerberus in

10 2002. He asked me what work I was doing for Cerberus. We
11 discussed the current activities that I had with Cerberus, and 12 he instructed me as to what circumstances and conditions in
13 which he would grant permission for me to do those projects for
14 Cerberus.

15 Q What instructions were those? 16 A Judge Adams was very specific in that he said I'm not to
17 be paid anything by Cerberus for work done in 2002. I agreed to

18 that. Judge Adams was very specific in saying that any work
19 that I did for Cerberus in 2002 could not be involved in any

20 way with the business or relationships of Coram. I said
21 absolutely, I had no problem with that.

22 Judge Adams was very specific that the work, if any, that
23 I would do for Cerberus could not detract from the activities
24 and focus that I had to provide to Coram, and I agreed to that.

25 MR. KIPNES: Your Honor, may I hand the witness

Case 1:04-cv-01565-SLR

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Adams - Direct

19

1 all during that period.

2 And I think that's been true all during the period Mr.
3 Crowley has been there, but that has not been my concern. My
4 concern was primarily while I was in charge.

5 Q Have you formed a view as to what the consequences of Mr.
6 Crowley no longer being with the -- Coram might be?

7 A I have.
8 Q And what is that view?
9 A I think it would de-stabilize the business, it would cause
10 the executives to begin worrying about their situation and

11 maybe depart for other more secure situations. It would cause
12 the suppliers to begin worrying about having their bills paid,

13 it would cause some of the important customers to feel a good
14 deal of uncertainty.

15 When you make a change at the very top of the corporation,
16 it has a tendency to de-stabilize unless there is a very, very
17 good reason, such as heart attack or another job or promotion.

18 But if you suddenly remove the CEO it causes a lot of

19 consternation.
20 Q Have you consulted with processionals in developing that
21 opinion?

22 A I have.
23 Q And who have you talked to or consulted with?
24 A Well, I talked to the to gentlemen whose names you have
25 just mentioned on a number of occasions.

Case 1:04-cv-01565-SLR

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Saracco - Redirect 135
1 trust and faith. So, the folks who sent you those patients
2 stop referring, and your staff gets concerned, and there's a
3 vBry high demand for nurses and pharmacists in hospitals and in

4 this kind of business. They have no problem making a move very
5 quickly onto a new entity or new organization that's not going
6 through a bunch of strife or new changes or problems.

7 So, personally, without asking them, I don't need to
8 ask them. I've watched our turnover rate escalate and decline
9 based upon the longevity and the leadership and direction of
10 the CEO or leader of a company.

11

People have had a lot of change. I f you do it again,

12 or if it occurs again, you will lose people. Can I tell you

13 who and how many? No, I don't need to. I can tell you about
14 turnover rates and what happens when management changes. 15 BY MR. BARKASY:

16 Q Mr. Saracco, do you have any understanding as to whether
17 the Chapter 11 Trustee reviews the terms and conditions of your 18 employment, such as your compensation?

19 A I understand that since we have had a Trustee come in,
20 that it is his responsibility for the changes or payments that

21 are -- that are made to us. I also understand that if any
22 changes in employment were to be made he would have to approve

23 that.
24 Q
25

Thank you, Mr. Saracco.
THE COURT: All right, thank you. Thank you, you may

Case 1:04-cv-01565-SLR

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Meyer - Direct

136

1 step down.

2 THE WITNESS: Thank you, Your Honor.
3 MR. BARKASY: Your Honor, for his next witness, the
4 Trustee will call Deborah Meyer.
5

THE COURT: Just for planning purposes, how many

6 other witnesses does the Trustee have?
7
8

MR. BARKASY: We have three witnesses, Ms. Meyer, Mr.

Ponzio,

who
who

9

Victor,

will be about ten minutes on direct, each, will not be much longer than that.
And
No

and Mr.

10
11 12 13

THE COURT:
MR.

the

Equity Committee?

LEVY:

one.
You may

THE COURT:

All right, thank you.

step

forward and please rema i n standing so you

can be

sworn in.

14 COURT CLERK: Place your hand on the Bible. Please
15 state your full name and spell your last.

16 THE WITNESS: Deborah Marie Meyer, M-e-y-e-r.

17 DEBORAH MEYER, TRUSTEE'S WITNESS, SWORN

18 COURT CLERK: Please be seated.

19 DIRECT EXAMINATION
20 BY MR. BARKASY:

21

Q

Good

afternoon,

Ms. Meyer.

You work

for

Coram,

correct?

22 A

Yes.
What do you do for Coram?
1'm

23
24

Q

A
Q

the senior

vice president

of

field sales.

25

And what

are your. duties as

senior vice president

of

field

Case 1:04-cv-01565-SLR

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Meyer - Direct

137

1 sales?

2 A To provide strategic leadership to the sales force and to
3 have strategic planning to grow top line.

4 Q Where's your office?
5 A Denver, Colorado.

6 Q Even though your office is in Denver, do you travel at all
7 as part of your job?

8 A At least fifty percent of the time I travel.
9 Q And what is it you do when you travel?
10 A Several things. I see customers, I will meet with
11 individual branches and do sales office meetings. i will do
12 strategic planning with individual regions.

13 Q To whom do you report on a day-to-day basis?
14 A Dan Crowley.
15 Q How long have you been with Coram?

16 A Well, actually in 1988 I started with a company called
17 Caravan Medical Systems and started as a infusion nurse. I
18 went out in the field seeing patients, and then five years

19 later Caravan Medical Systems was part of the consolidation
20 that was created in the forming of Coram Healthcare.

21

Q

When did you become

senior

vice president of field

sales?

22 A

August 1st, 2000.
What position did you have before

23

Q

that?
you?

24 A

Area

vice president of sales.

25

Q

Was it Mr. Crowley that promoted

Case 1:04-cv-01565-SLR

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Meyer - Direct

138

1 A Yes.
2 Q And is that the position that you had when Mr. Crowley
3 became CEO in November of 1999?

4 A Area vice president?
5 Q Yes.
6 A Yes.
7 Q How did the company change after Mr. Crowley became CEO? 8 A Well, when Mr. Crowley became CEO there was a fairly quick
9 change, I would say, in vision or clear vision for the company.

10 Pretty immediately we had a meeting, and it was very clear
11 at that point that Dan felt that there was a clear, concise way
12 to be able to create a healthier Coram, and it still stands

13 today. It's grow the top line, cut costs, wear it out, do
14 without and collect the cash. And that's really the focus that
15 we have from a financial standpoint for the company at the
16 beginning, and that still holds true for today as well.

17 Q How have sales been under Mr. Crowley's tenure as CEO?

18 A Well, preliminary for February we've just completed the
19 eighteenth month of top-line growth, month over month. So, we

20
21 22

have had solid growth for the
Q

last

eighteen months.

Ms. Meyer, what

is

it like

to work with

Dan Crowley on a

day-to-day basis?
Intense.
He's
-- he

23 A
24

expect s a

lot from you. Working with
but
in working

him and for him, he expects a

lot

of himself,

25

for

Dan Crowley you

have to

be very committed.

You have to

Case 1:04-cv-01565-SLR

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Meyer - Direct 139
1 understand what you do, and you have to do it well.

2 Q How closely does Mr. Crowley work with you to track sales?
3 A I talk to him pretty much on a daily basis. The routine
4 is I call him in the morning once I get the sales, and we 5 basically -- we talk about the daily sales, but we basically
6 start with the northeast and work our way over to California.

7 so, we go region by region as far as how they're doing, where

8 they are to budget, any opportunities, anything that'll get in
9 the way of making their budget for the month.

10 Q And you do that evèry day?

11 A I would say mostly every day. Four out of five days at
12 the last.
13 Q Have you given any thought to what might happen if Dan
14 Crowley's employment was terminated?

15 A I have, because I think off and on throughout the
16 reorganization there's been rumors that have come and gone, so

17 I have given it thought. And I would be concerned, just
18 because I've been here for so long, and I think the stability
19 and the trust that people have -- when I say the people, I mean

20 the employees of Coram. The trust that they have and the
21 confidence they have in Dan's leadership and the confidence
22 they have in Coram today is the strongest that I have seen it,

23 and I would be worried that that would change.

24 Q Would Mr. Crowley's departure have any impact on your
25 thoughts about your own career plans?

Case 1:04-cv-01565-SLR

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Meyer - Direct 140
1 A I guess I would go back to your last question. I would be
2 concerned of what Coram would look like. And I would be
3 concerned about the

opportunity that would give our competitors

4 on the field. 5 Q You are aware that a Chapter 11 Trustee's been appointed
6
7
8

in
A
Q

this bankruptcy

case?

Yes.
And you know that

trustee is

Judge Adams?

9

A
Q

Yes.
Have you met Judge Adams?

10

11 A
12
Q

Yes, I have.

And in what context?
Three different

13 A

occasions.

He has been in Denver at

14 senior management meetings, and I've had the opportunity to do
15 a presentation in reference to field sales to Judge Adams.

16 Q What happens at those management meetings, other than your

17 presentation? 18 A Judge Adams has given a book which encompasses the whole
19 presentation. Dan Crowley starts off the presentation with an

20 overview of the company. I think on the initial meeting he did
21 a history of the company, and then talked about the financial

22 situation we were in with each of the meetings. Then each of
23 us with our individual departments, individual

24 responsibilities, would go over the initiatives. A little bit
25 different at every meeting, but we would go over the

Case 1:04-cv-01565-SLR

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Page 35 of 47

EXHIBIT C-7

Case 1:04-cv-01565-SLR

Document 141-3

Filed 05/10/2007

Page 36 of 47

:~:~..
,

1

2

IN THE UNITED STATES BANKRUPTCY COURT

3 FOR THE DISTRICT OF DELAWARE
4 -------------------------x Chapter 11

5 In re: Case Nos. 00-3299 (MFW)
6 CORAM HEALTHCARE CORP. through 00-3300 (MFW)

7 and CORAM, INC., (Jointly Administered 8 Debtors. Under Case No.
9 -------------------------x 00-3299 (MFW))
10 11
12
~~~.~

February 27, 2003
9:38 a.m.

13

Depos i tion of DANIEL D. CROWLEY, held at

14 the law offices of Weil, Gotshal & Manges LLP, 767

15 Fifth Avenue, New York, New York, pursuant to
16 notice and agreement, before Donald R. DePew, an

17 RPR, CRR and Notary Public within and for the

18 State of New York.
19

20
21 22

23

., -~ 25
,

24

Spherion Deposition Services
(212) 490-3430

\..

Case 1:04-cv-01565-SLR

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Page 37 of 47

Case 1 :04-cv-01565-SLR Document 121-2
6
I
1

Filed 04/13/2007 Page 18 of 73
8

2
3

follows:

2
3

Crowley MR LEVY: Yes, objection by one is an
objection but for aU.

EXAATION BY
MR. LEVY:
Q.

4
5

4
5

6
7 8

Mr. CrowleyMR. MILER: Richad, point of order, pleae.
MR. LEVY: Yes, sir. MR MILLER: You said you didn't know
if

6

7
8

The materials that had been provided by me to respond to the subpoena by yourelf. Q. About how many docinents were those?
A.
Q. A.
SeveraL.

Q. A.

What docinents did you look at?

9 10
11

9
10

Don Liebentrtt wa the chainn. I

12
13

recal you telling the Court he was the the commttee; has there been a chairman of change?
I'd just like to know who the client
is.

II
12
13 14 15 16

Q. ninbered pages with the Bates symbol CRX on it,

Hundred? I don't recall. Sir, we've got, I believe, 1300

14 15
. 16

meaing it had been produced by you, is that the approximate ninber you looked at yesterday?
A. No. Q. About what par ofthat 1300 did you look at? A. 25, 50, something in that neighborhood.
Q. This was yesterday, right, yes? A. Yes. Q. Can you describe to me any ofthe documents you looked at? Name one. A. Correspondence between myself and my

MR. LEVY: I don't know that he is the
chai and your statement doesn't refresh
my recollection. I' be happy to straighten

17 18 19

20
21

22
23

out with you whether he is the chairm or not, Alan. I'm not tring to keep it from you. I just don't know at this point. MR. MILLER: I know you wouldn't tr to
hide anytg, so than you.

17 18 19

20
21

22
23

24
25
. ,

MR. LEVY: You're welcome. BY MR. LEVY:

24
25

attorney as to a draft letter that was par of

7

, 1

9

1

2
3

4
S

Crowley Q. Mr. Crowley, did you spend some time prepar for this deposition? A. Yes.
Q.
Was any of that time spent with any
person present, other th your attorney,

2
3

4
5

Crowley your brief to the cour. Q. The letter dated May 6th about? A. About that date. It was two versions of the letter that

6 7
8

9 10
11

Mr. Ward, or your atorney, Mr. Schreiber? A. Yes. Q. Who? A. Counel for the tree.
Q. 'Who? A. Pnncipaly,
Mr. Kipnes.

6 . was one letter, yes. 7 Q. Durg your meeting in prepartion in 8 which Mr. Kipnes was present at who sad lets 9 discuss ths docruent? Whose idea was it? 10 A. My coiil. 11
12 13

12
13

MR WAR: Objecon.
The attrneys have ajoint intere in

Q. . How much ti did you spend with

14 15 16 17 18
19

Mr. Kipnespreparg for ths deposition?
A. A couple of . Q. . When? A. Yesteay. Q. Yesteday?
hour.

14
15 16 17 18 19

ths and I thnk that is covere by

prvilege.
Q. A.
I'm sorr.

I don't undersd the procedure when

someone objects, am I jus -

A. . Yes.
of that prepartion Q. Dug the course did you look at any documents? A. Yes. Q. Wht dOCents did you look at?

MR WAR: I thnk who said what to
whom in ths meetig would be privileged.
Mr. Crowley is an employee of

20
21

20
21

22
23

22
23

Mr. Kipnes repreents the tree. the trtee.

And I th in ths pacular proceding

24 25

MR GODNICK: Objection.

MR MILLER: The sae stpulation?

24 25

there is a joint interest
MR LEVY: Ar you going to inct

3 (Pages 6 to 9)

SPHERION DEPOSITION SERVICES (212) 490-3430

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Case 1 :04-cv-01565-SLR Document 121-2
94
1

Filed 04/13/2007 Page 19 of 73
96
I

2
3

A. Q. all? A.
Q.

Crowley I don't know. I might have. Do you hiive any recollection of it at
I just said I don't know.

Crowley
Q. A. Q. A.

2
3

Why?

I thnk I've already testified to ths.
What disappointed you? I believe I've already testified to

4
5

4
5

6 7
8

9

Did you tell Feinberg at this meeting - perhaps this wil refresh your recollection - that David Friedman, who, of course, was the debtors' attorney, did a poor job?
A.
I don't recalL.
I do th he didn't do as good a job

6
7
8

ths.
Q.
I don't believe you've anwered that

io
11

question. You've told me what happened. I wat that or anytng else you ca 9 to know what par of io think of that disappointed you.
II 12
13
A. Mr. Levy, I believe I'm due a

12 13

as he could have.
Q. Do you thin he did a poor job? A. He did a lousy job. Q. Did he ask you to recite some things on the witness stad? A. Mr. Levy, you're mischarcterizing a Q.

substatial money sum from Cerberu for work I did, unrlated to Cora in which value was
created -

14 15 16 17

14 15 16 17

Would you like me to stop while you're

taking? MR BEATIE: I thnk we've heard ths
six, seven times already. A. -- I expected a proposal and a number, there wa none. I was disappointed, I don't know

is draft of my 19

IS
19

I'm not mischarcterizing anyting.
I'm askig did he, David Friedman, ask

20
21

20
21

you to recite anyting on the witness stand? A. No. He handed me a sheet with 22 23 questions and with what he thought were my 24 probable answers. And I gave my anwers in court
25

why I wa asked to come to New York to hea
nothing.
Q. Do you recall him saying to you that "you kissed the wrong woman"? A. Generally.

22 23 24
25

to the best of my ability, the trth and nothing

95
1

97
i

Crowley
but the trth.

2
3

2
3

Q.

Did the anwers that you gave in cour

-4
5

var from the probable answers on the sheet that David Friedman gave you?

4
5

Q. A. Q.

Crowley Did he say that at the May meeting?
I don't recall when it was sad. What did you understad that to mea?

MR WAR: Objection, foundation.

6

Jv KINES: Object to the question.
MR. WAR: Objection to the substance
of the form.

7
8

6 7
8

9
10
11

MR KINES: Also nught be privileged.
. Go ahea.

9 10
11

How does he know? Gò ahea. A. I don't know anymore. I just don't know. It's a long time ago. Q. Ten month ago, yes?
You don't remember?

A.

Sur they were my anwers.

12
13

I'm my own person. I speak what I

12

th is right.
Q. Did you come away from that meeting in May disapointed?

14
15

16 17 18
19

Jv GODNICK: You're referrng to the dinner?
MR LEVY: The dier.

A. I thnk you're going to depose him 13 Ask hi I don't remember. 14 15 Q. Do you know what EC 20 is, doe. that. 16 ring a bell at all? A. Not a clue. 17 18 Q. That's the personal- memorandwn of

20
21

MR GODNICK: Than you. Jv LEVY: Let's clea that up.
Q. You didn't have any meeting in May with Feinberg other than that dinner, did you? . A. I don't recl it Q. Did you come away disappointed?
A.
I cae away disappointed, yes.

22 23 24
25

19 personal and confdential that you sent to 20 Mr. Feinberg. You signed it, he never signed it. 21 It was mentioned in the judge's opinion. It 22 related to your getting an upside on Cerberu's 23 position if you did well at Cora generaly. Do you recal that? 24 MR GODNICK: I'm going to object to 25

25 (Pages 94 to 97)
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100

1 Crowley
2 the charcterization of the document.

1 Crowley
2 A. WelI, you have to put it in context. 3 Th is the first dra of tw dra, which
4 you've mischaracterized and basically did not tell
5 the trth to -- in your brief, two draf of a

3 MR KINE: I assume by definition
4 we're talkig about a documt that's before

5 Decmber 14thof2001, wmch is what 16 MR.MILLER: 2000, early.

7 MR KlNE: -- wmch is what I thought
8 l,ve were here about.

6 single letter, unent. The thrd attchment wa 7 not wrtten by me. I did not see it. And had no
8 awareness of it until this proceding and counsel

9 MR. LEVY: I'm simply ting to

9 showed it to me. And it wa wrtten by Scott
io Schreiber, not me.

10 identifY it, beuse I don't have it here.

11 Q. Do you rel it at all?
12 A. I'm sorr, I don't know EC 20 from

i i Q. Do you know whose handwrting appe

12 for the word "Insert" on CRX 65?

13 lunar planeta orbit -- I don't reall what
14 you're taki about.

13 A. It's Mr. Sclieibets handwriting.
14 Q. Did you discuss tms document in your

15 Q. Do you reall that evening in May with
16 Mr. Feinberg, tellng him you didn't have to write
17 a document in which you asked for an upside on
18 Cerberu's position if

15 preparation for your deposition yesterday?

16 A. Yes.
17 Q. And Mr. Kipnes was present at that
18 discussion?

you did well with Cora?

19 A. No, I don't remember that.

19 A. Yes.
20 Q. What did Mr. Kipnes say about that?

20 Q. Trutee's Exlbit 19.

21 MR K.: 19?
22 MR. LEVY: 19.
25 for a moment.

21 MR WAR: Same objection as
22 previously. 23 MR. KINE: Objection to the fonn of

23 Q. There's Bates numbers CRX 63, 4, and 5.

24 And I won't charcterize it otherwse

24 the question. 25 Assumes facts not in evidence.
101

99

2 MR GODNICK: I ca't hea you.
3 MR. LEVY: I said I won't charterize
4 it othrwse for the moment.

1 Crowley

2 MR. GODNICK: I will make the Federal
3 Rule of

i Crowley

Evidence 612 objection.

4 MR. LEVY: Are you going to instruct

5 MR. MILLER: It's a draft letter to...
6 Q. Do you have that in front of

5 him?
6 MR. WAR: As long as it is discussions
7 with counel for the trtee for whom he is 8 an employee, and the counel for the trtee

you?

7 MR WAR: No, not yet.

8 I believe you've got the òrigial.

9 Q. Have you seen ths before today?

9 and counel for him previously have interest,
io it is privileged.
11 MR. LEVY: Wil you

lOA. Yes. Counsel showed it to me in
1 1 preparaton.
12 Q. Did you wrte ths?

join in the

12 instrction?
13 MR KIPNES: I do, subject also to my 14 objection that the question assumed a fact 15 not in evidence. 16 Q. Dung the preparon did Mr. Kipnes
17 say anyting at all about ths document? 18 I'm not asking you what he said. I
19 just wat to know whether he said anytlung at all 20 about it.

13 A. I wrote the first two pages.
14 Q. Did you write the thd page?

15 A. No.
16 Q. Do you know who wrote the thd page?

17 MR GODNICK: I ca't bea you.
18 Q. Do you know who wrote the thd page?

19 MR GODNlCK: I'm sony, Richard, you 20 asked if he wrote the thd pae, he said,

21 no? 22 MR LEVY: Tht's correct. 23 A. I wrote the firs tw pag. It's a
24 dr -

21 MR WAR: I'll let the witnes anwer
22 to the extent, yes or no, was there any
23 discussion with Mr. Kipnes as to the

24 docwnent

25 Q. If you ca confne yourelf, plea.
26 (Pages 98 to 10 1)

25 MR KIPNE: Whoa that's not what the

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104

1 Crowley
2 question wa.
3 MR. LEVY: I adopt the question.

I Crowley
2 context, you do sound bites, and mischaracterize.

3 This is an unsigned draf one of a

4 Withdrw my question and I adopt Mr. Ward's
5 question.

4 couple of - the next letter is the same letter. 5 And you've handed me three pages. The third page
6is -- I did not see it until this proceeing,

6 MR. GODNlCK: I nee to know. 7 MR. KINES: Now we nee Mr. Ward's
8 question.

7 written by not me, but my attorney.

8 'This letter was tyed by me, period.
9 Q. "This letter" now meaning 63 and 64?

9 MR. MILER: Stop it, will you guys? 10 We're watig a lot oftime.
1 I MR. KINES: I wan't fencing.

10 A. CRX 00063 and CRX 00064 was a draft

II tyed by me. I thought it was attorney-client
12 priviIegeybecause I sent it only to my lawyer, 13 Scott Schreiber, and I've never seen it again.

12 The first quesion wa did Mr. Kipnes
13 say anytlung. Then what Mr. Ward said wa

14 there a discussion at whch Mr. Kipnes wa 15 present. Those are two very different 16 questions, wluch question are we asking.

14 Q. Did you write it? 15 Did you tye it on or about May 6th? 16 A. I must have. I don't know.
l7 Q. Your meeting was on May 1st; is that

17 MR LEVY: I thougt I wa clear, we're
18 asking Mr. Ward's question fit.

1 8 correct?

19 MR GODNlCK: Can you state the
20 question, because I believe you're the
ii questioner, Mr. Levy.
22 Q. During your 23 discussion of

19 A. I don't know. On and about there.
20 Q. Between May 1st and May 6th did you

21 make any notes, write anyting--

a preparation was there this document at whch Mr. Kipnes

23 I'm sorr.
24 Q. - concerning the meeting?

22 A. No.

24 wa present? 25 A. Yes.

25 A. No.
103

105

1 Crowley
2 Q. Did Mr. Kipnes say anytlung - and you
3 don't have to tell me

I Crowley
2 Q. SO five days afer the meeting you sat

what he said -- just did

3 down and you tyed -- its called "draf" -- your
4 first dra or a draf of a lettr to Feinberg,

4 Mr. Kipnes say anytng about tils document?

5 A. I don't recal that.
6 Q.. Was ths document -7 You know, we've been taking about it

5 right? 6 MR. GODNICK: Is there a basis for

7 assumg its. on May 1st?
8 I haven't heard testimony as to

8 being wrtten by you, did you dictate it, did you
9 tye it, did you handwrte it and have it

9 May 1st.

10 trcribed?
11 How did it come into being? 12 MR GODNlCK: We're referrng now to
13 the first two pages, correc

10 MR LEVY : Yes, there is. I was trng
1 I to save time. I'll represent to you based on

12 e-mas tht Mike was a par to, in fact.

13 A. Mr. Levy, you said "called "dra,"
14 that's not what ths.is. It is a dra. It is
15 one of two dr. You have both of them. It is

14 MR LEVY: Sure. 15 A. Agai ths is - you've only shown me
16 one documnt. Ths is draf one of

two dr.

16 not caled "dr" it ¡sa dra I tyed it. I
17 didn't have any notes. And I sent it to my

17 MR LEVY: Let me be clea. I'm
18 takig about only pages CRX 63 and 64.

18 attorney.

19 A. I undersd.

20 Q. My queson is physicaly how did it
21 come into being, did you ty it, did you dictate

19 Q. There's what looks like a rubber stap 20 impression on the top that says "Dr" on both
21 pages.

22 it, did you handwrte it and have someone else

22 A. Right.
23 Q. Do you see that?
24 A. That would be the "Draf" stamp.

23 ty it?

24 A. I will anwer that.
25 I also know you tae thngs out of

25 Q. Who put it on?

27 (Pages 102 to 105)

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EXHIBIT C-8

Case 1:04-cv-01565-SLR

Document 141-3
Danitz, Scott R.

Filed 05/10/2007

Page 42 of 47
ft/6/2007

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE
Case No. 04-1565

Certified CopV

VIDEO DEPOSITION OF SCOTT R. DANITZ
April 6 i 2007

ARLIN M. ADAMS i Chapter 11 Trustee of the Post-Confirmation Bankruptcy of Estates of Coram

CARE CORPORATION, and of CORA, INC., a Delaware corporation,
HEALTH

Plaintiffs,

vs.
DANIEL D. CROWLEY, DONALD J. AMRAL i WILLIAM J. CASEY i L. PETER SMITH, and SANDRA L. SMOLEY i

Defendants.

APPEACES:
SCHNADER HARISON SEGAL & LEWIS, LLP By Barry E. Bressler, Esq.
1600 Market Street i Suite 3600 Philadelphia , Pennsylvania 19103 -7286

215-751-2050
bbressler~schnader. com Appearing on behalf of Plaintiffs.

KEKER & VAN NEST, LLP By Laurie Carr Mims, Esq. 710 Sansome Street San Francisco, California 94111-1704

415-391-5400
ìmims~kvn. com

Appearing on behalf of Defendant Daniel D. Crowley.

Also Present:

Carie Finegan, Videographer

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4/6/2007

year 2000.

MR. BRESSLER: I understand.

Q (By Mr. Bressler) If the - -- if the
4

threshold in 2001 was still $14 million, it would

5

have been exceeded in six months, wouldn i t it have?

6

A At that point in time, if that was the
measurement date, yes.

7

8

Q Various people are shown as getting copies
of this report. Let i s go through them. My name is

9

10

first?

11

A Yes.
Q And what did you understand my function to
be?

12

13

14

A You were chief counsel i lead counsel for
Judge Adams.
Q

15

16

In the bankruptcy? In the bankruptcy, yes.
Next name

17

A
Q

18

is

Joseph Devine.

Do you know

19 20

who Mr.
A

Devine is?
Yes, he's a partner colleague in your firm

21

and handled SEC work for Judge Adams in working with

:22

myself and other employees in the company in our SEe

,23
'24
2S

filings. Q Are you also aware that Mr. Devine was
also involved in the KERP program and other business

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EXHIBIT C-9

Case 1:04-cv-01565-SLR

Document 141-3
Marabito, Allen J.

Filed 05/10/2007

Page 45 of 47
4/5/2007

IN THE UNITED STATES DISTRICT COURT. FOR THE DISTRICT OF DELAWARE
Case No. 04-1565

Certified Co

- -- - - - - - - - -- - - - - - - - - - - - -- --- - - - -- - - - - - - - -- - -- - - -VIDEO DEPOSITION OF ALLEN J. MARABITO April 5, 2007

i
l~

r
r

ARLIN M. ADAMS, Chapter 11 Trustee of the Post-Confirmation Bankruptcy of Estates of Coram CARE CORPORATION, and of CORA, INC., a HEALTH Delaware corporation,

t t,
f

Plaintiffs,

r
I,

vs.
DANIEL D. CROWLEY, DONALD J. AMARA, WILLIAM J. CASEY, L. PETER SMITH, and SANDRA L. SMOLEY,

r
t
f

r

Defendants.

t
!
¡

!

F

APPEARACES:
SCHNADER HARRISON SEGAL & LEWIS, LLP By Barry E. Bressler, Esq. 1600 Market Street, Suite 3600 Philadelphia, Pennsylvania 19103-7286

i i.
I.

t: r

t.

215-751-2050
bbressler~schnader. com Appearing on behalf of Plaintiffs.

KEKER & VAN NEST, LLP By Laurie Carr Mims, Esq. 710 Sansome Street San Francisco, California 94111-1704

415-391-5400
lmims~kvn. com

Appearing on behalf of Defendant Daniel D. Crowley.
t

Also Present: Carie Finegan, Videographer

i
¡

I

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Marabito, Allen J.

Filed 05/10/2007

Page 46 of 47
4/5/2007

issues. So Joe Devine was a corporate

attorney.

Q Can you describe the procedure by which
or other incentive compensation plans were
after Mr. Crowley left the company?

A I think when when Judge Adams came in
trustee, one of the initial topics was how do you
the employees as employees, and your office

up with a concept that was then permitted under bankruptcy code, management incentives to stay
11 12
13

and perform, and then we were asked as the

management side, myself and senior HR officer

principally what was the existing compensation
arrangements, what were recommended compensation

14
1S

arrangements, and that information was in turn

16

provided to Joe Devine, your firm and the trustee to

17

crunch.

is
19

Q And there was some back and forth between
you and Mr. Devine and the trustee i I take it?

20

A Yes.
Q Would it be fair to say that the trustee
has a reputation for frugality?

21
22 23

A Yes. Yes, he iS - - he 1 s frugal and he
comes from an era that was by necessity frugal.

24

25

Q And then once a decision was reached or a
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nsensus between the trustee, Mr. Devine, you and
ponzio, right, I. think is the senior HR person?

A Yes.
Q Counsel for the trustee prepared a motion
approve such KERPs that went to the court?
6 7

A Yes.
Q And do you know who prepared and presented
those motions to the court?

8

9

A That would have been Mr. Devine and Judge
Adams.

10 11 12 13 14

Q And do you know who the lawyers were who
drafted the motion and filed it with the court?

A Not all of them, but I know Joe Devine had
signature power on all of the instruments.

15 16

Q And in respect to those KERPs, my funct ion

was to be the court - - the trustee i s bankruptcy
lawyer?
A

17 18

Yeah, I think you were the bankruptcy

19

lawyer.

I - - I wouldn i t look to Joe for bankruptcy

20 21 22

advice.

Q Could you tell us who Will Kipnes is?

A Will Kipnes is an attorney in your firm
that was present at confirmation hearings,

23

24 25

depositions, and has a litigation practice.

Q By the way, now that we've reviewed the

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