Free Appendix - District Court of Delaware - Delaware

Case 1:04-cv-01565-SLR

Document 126-9

Filed 04/17/2007

Page 1 of 35

Adams
out

Direct

this

contract
it

Would that

be

fair to through

say

that

it

was

your

understanding for

Mr Crowley

hi

counsel

was

looking

lo

more
Well
that

knew were

it

It

wasnt
lot

only

niy

understanding
they that not

knei going hijh

they
it

akinq
And he

for

more
He

but knew could

werent
there come

get

from

me
and

lie

knew that to

it
if

was to

water
was 10 11 12 13 14 15

mark

knew

they
out to

terms

prepared

reluctantly think job your

go do

Denver
job

myself
as

dont
nowhere near has

could like
he

as

good

Mr Crowley

has

done
Coram been
as

What

role with

the of

opposed

to

4r

Crowleys
What has

role since my role

March

2002

been

Yes
Like tO-day every changes supervise the to

16 17 10 19 20

operation
but made contract
in

didnt
ceratin

tell hii that

On

da

basis
rn.aior

w1t

do

reviewed any any
of

decision
he wanted

every
to

for over executive
to

$50000
branch
purchase caused hours

that

make

the

financial software come out

arrangements which and was
an

that

Coraru

wanted big
for

do

21 22 23 24 25

especially the
our

contract
several

me

to

interview getting on top like of

people

to make

sure we

were kept

moneys

worth him very
frequently the claim and

it

callod

called

people

Mr 1arabita

supervised

_____

A1231

Case 1:04-cv-01565-SLR

Document 126-9

Filed 04/17/2007

Page 2 of 35

Adams BY IJR

Cross/Godnick

GODNICK

Judge Exhibit

Adams

Id

like

to

refer

you

Equity Committee

MR
BY

GODNICK

put

that

before

our Honor

MR

G0D1slICK

Those and --

are

the

series

of

emails

between

Messrs Schreiher

got

it
you

got And

it
spedfically
email other be

Thank
10

Id
to

like

to

direct

your April 5th

attention
2002 to Do in which the see

Mr
lie

Schreibers

Mr

Cook dated
no other

11

says

among to

things
of

attorney

.1

12
13

know

Trustee

needs

part

those

conversations

you

that

14

do
Now7 Judge

15

Adams
that

as

of April 5th

artt

correct

wasyoi.i

16
17

understanding money under

Mr

Crowley that

believed
had existed

that

Cerberus owed

him

the

contract

betwoei

Cerberus and

18

Mr

Crowley

correct
correct
your

19 20 21
22

Thats
And

it was

view

am

right

that

that

was

matter

between

Cerberus and
was in in

Mr

Crowley

correct

That

my view

yes
you

23
24

And
of

fact
terms of

think how none

testified earlier the
If anything

resolutioi
to

that

much
of

Cerberus agreed
is

25

pay

Mr

Crowley was

your

business

that

right

A1232

Case 1:04-cv-01565-SLR

Document 126-9

Filed 04/17/2007

Page 3 of 35

Saracco your like
riot

Redirect thnkirig why about share not tell doing with something could

13

thirties that if if

and

Eorties

arid

again
you ask

Ind
me

so

thats

you
what

today

could Dan

you

would

happen

change

was

made with
the

Crowley
what would

And you either

havent

told

Irustee

happen

No
Thank

you
REDIRECT EX1MINATION

10

BY

MR

BARKPSY

11

Mr
took

Saracco

when

you

just

answered

that

list with

question me that you

12

it to

mean
the

and tell me
Trustee Dan

if you or no
of

disagree not you

13
14

havent told
company We world

whether was

would the

leave

the

because

Crowley those

longer

with

company
in

15

donthave

kinds good job

conversations
left to

because leave

16
17

people that
atellt when

do to

arent

Im

sorry

asked

leave
about and look at what Dan

So
19

think

Crowleys
there done

do

for

Cormrt

Flealthcare that he

cant
be

even

ittlagine

that

would
the

20
21

reason stellar

wouldnt CEO

hore

because

hes

most

job

of

any

and

Ive
folks

probably

reported

directly

22
23

indirectly to

six or under

seven

So Im
dont
think

oath
talking

and to
If

Im
the

being extremely
judge about myself what and

honest
happens
if

24 25

about

certain person leaves

it

happens

significant

A1233

Case 1:04-cv-01565-SLR

Document 126-9

Filed 04/17/2007

Page 4 of 35

Decision THE may have
an

19 of

COURT
on

Because

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rarnificatioris

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decision

impact

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Thank you very

MR
THE

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sLand

much

ourHonor

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adjourned PTTORNEY
Thank

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you

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10 11 12

Betsy correct transcript
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electronic

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7fl 9J
15 16
17

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18 19 20 21 22 23

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25

A1234

Case 1:04-cv-01565-SLR

Document 126-9

Filed 04/17/2007

Page 5 of 35

In The Matter

Of

In

Re Coram Healthcare

Chapter 11

Jerome Shestack Esquire

November 14 2003

Brusilow

Associates
Street

l926Arch
1st Floor

West 19103-1404

Philadelphia PA

215977-9700

FAX215977-9773

Original

File

SHESI 114
File

iX7

244 Pages

Min-U--Scr4t

ID 2642985737

Word- Index included with this Mm-U-Script

CH-11

TRUSTEE

CrwIeyAdminOO63B2

A1235

Case 1:04-cv-01565-SLR
In

Document 126-9
11

Filed 04/17/2007

Re Coram

Healthcare

Chapter

Page Shestack Esqub Jerome 6 of 35 November 14 2003
Page2

Page
III

IN

THE
FOIl

UNITED THE

STATES

BANKRUPTCY OF DElAWARE

COURT
APPEARANCES
JENNEF1

131

DISTRICT

21
In

BLOCK

re

Chapter

11

COFIAM
61

HEALTHCARE INC

CORP
Case

BY

DAVID

BRADFORD THORNTON
Plaza

ESQUIRE ESQUIRE

and

COIIAM

NO

00-3299

131

JOHN One
IBM

Debtors

191

41

Chicago

IL

60611

Friday
1101

November

14.2003 312-222.9350

Itt
151 1121

[email protected]
--

Pretrial examinalion

of held
in

13
141 tsj

JEROME
ollices
of

SHESTACK

ESQUIRE
1650 Arch

the

Counsel

for

the

Equity

Committee

WOLF BLOCK
PA
19103 date above

Street

Philadelphia

commertclngat
belore

1010

1161

ant
Dinter

on

the

Mickey Reporter and

17
19

Registered
at

Prolesslonal

Commissioner
at

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the

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SCHULTE

ROTH

ZABEL

LIP

Pennsylvania

BY HOWARD
919
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GODNICK

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211

Avenue

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ASSOCIATES VIDEOGRAPHERS
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1926 Arch
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New

York

New

York

10022

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231

PhiladelphIa

PA

19103-1404

215.977.9700
1241

10

lioward.godnlclc@

srz.com

wwwbrusiloW.com Counsellor Cerberus Partners

LP

Iii

SCHNADER BY WILBUR
1600 Market

HARRISON KIPNES
Sireel

SEGAL ESQUIRE

LEWIS

Philadelphia

PA

19103

215-751-2336

IS

[email protected]

Counsellor

the

Trustee

116

WElL

GOTSHAL

MANGES

LIP

BY ALAN MILLER ESQUIRE
10
767
Filth

Avenue

NewYork.NewYorklOl53-0119

19

212.310-8722

[email protected]

20

Counsel

tar

Goldman

Sacha

Credit

Partners

LP. 21 22

Foothill

Capital

Corporation

CH-11
24

TRUSTEE

CrowIeyAdminbO6383

.-

Min-U-Sc.ript

Page

Page

A1236

Case 1:04-cv-01565-SLR
In

Document 126-9

Filed 04/17/2007

Re

Coratn Healthcare

Chapter 11

Jerome 7 of 35 Esquire Page Shestack November 14 2003

Page

39

Page

uI

bankruptcy Not
looking
in

none
those
is

of these

things are

very

few

21

words What
result

was

21

of these

things are

open

and shut.There

pi

for

as

of the conflict not

pj

are pretty think

good

answers to the CPS
in

what was done
si

that

should that

have

been
the

comes

under

will

check

in

done

or

what was done
or

damaged
that

moment
Just looking
81

61

company
resulted

what

acts

were there

for

the

record the witness
that

is

from

the conflict the

at

particular document
into

the

11

then
allegations

followed
in

witness appears

brought
to

the deposition

which

the

Complaint analyzing
to the extent or

91

be

number of typewritten

iioi

each
that

one
they

of

the

allegations

10 ii

pages You are
free

were either conclusory

had

to look

at

them

later

121

factual

basis Did

Well basically the
also

you

consider have
it

what was

not

ia Complaint
141

alleges

that

CPS was sold at been
sold or think
to

41
ISJ

done

that

should

been

done
that Professor

either
at

shouldnt have
value

was sold

considered there

in

the sense

isi

an

improper
pretty

and

there that

were questions raised with and others
that as to

16
171

are

some

good

answers

Fischel

what done

should

have
could

allegation Just for the that are

been
19
201

done
to

wasnt

and

no one

1181

record what
are

is

the

seem

come

up with an answer whether
result to to

19 document
the

you

looking took

at each one
set

Did you consider was
in

company
211

These
bf the forth

my notes

213

positionas of
interest as

of the an
it

counts In that documentI
in

221

conflict

make

independent was
to sell

122

very

brief

form what

the
that

determination zj reasonable

whether judgment

allegation

was some
by

of the questions

business

CPS
Page 40

124

were

raised

the allegations

what
Page

42

the

pharmacy business Well
think
in

ui

evidence

is

shown

dealing

with

that that

the case

of

CPS
tIIiflI p1

allegation.These prepared for did

are cursory

notes

they put out

number of bids

myself
that

they got maybe 42 answers and then

they
151

You
assisting at

for purposes
in

of questions

had Brown
61

looking

into

it.They

narrowed bid the
dollars

yourself

answering

the bids highest

down and
bid

then

they got

the deposition

today
it

ij

from maybe 41

million sold
it

Well
to

did

originally

in

trying having

and

that

was rejected.They
it

at

to

teach

my

expert

opinion and then
to

higher
poj

bid So was

seemed

to

me

that

what
1101

done

that

from time

time
since

would have

make

was-

done

certainly

reasonable
to

corrections secretary

especially

new

exploration
121

with

respect

the

sale

of

Ii
pzj

that

company

and the

realization

of the

What
that

would
as

like

to

do

is

just

mark
so

-_
1141

1131

best price That

they could

get

document

deposition
later as

exhibit

was the assumption

on which

you

141

if

we have

questions
to as

to

what you
testifying

IS
1161

based

your evaluation the

15
161

were referring

you -were
of

That wasnt

assumption of which didnt make an

we

will

have

record

thaL

17

based

my

evaluation

171

Sure Shestack-3
notes
for

evaluation respect

made

had an opinion But one
the

with

118

of

Mr

193

to

the settlement

of the

19
120

Shestack

marked

identification

matters
as

that

was asserted

in

Complaint was the

BY
I-think

MR

BRADFORD
few moments

t2l1

being of

inappropriately looked

hatidled

21
221

you

testified

22
233

sale

CPS
to

at

some
still

of the

ago

that

dont want
in

to

put words

your the

answers
that

it.YOu could

-argue

that

uj

mouth but

essence that you took and then

shouldnt have been

sold

mean

itS

24 proposed

settlement

evaluated

Mm-U-Script

13

Page 39

Page

42

CH-11

TRUSTEE

CrowIeyAdminOO6393

A1237

Case 1:04-cv-01565-SLR
Jerome Shestack Esquire November 14 2003

Document 126-9

Filed 04/17/2007
In

Page 8 of 35
Chapter ii

Re Coram

Healthcare

Page

115 Page 117 claim
21 It

And so was
121

it

your

view

that in

the

gave

the
to

legal

analysis

for

it

fact

that

the

company
for

remained

So

it

seemed

mc

that

whatever damages
time

claim the
it

aj

bankruptcy be
attributable

nearly three
to

years

may not
41

Equity

Committee and
it

had

for

41

anything

done

by
151

asserted

was asked

Mr

Crowley or Mr Feinberg Well dont know
are apparently the

and again

what were the damages
to

and

answer
that

to

basically pointed that.There

the 6.3 million note
it

no

allegations

show
on that
aj ej

and the

sale

of

CPS and thats about
any
effort

any

evidence

one way or another
believe
its fair to

Do you
10
IIIJ

Did you make
for yourself might be

to evaluate
if

attribute

the

what amount of damage
to

any

companys
to

prolonged
that

stay

in
iioj

attributable

the

sale

of

CPS

bankruptcy

the

fact

two plans of
iij

No
what

looked

at

the the

reorganization

were put forth

process the
analysis

that

were not

12 competitive
iaj

bidding

13
141 15J

in

good

faith

by Brown

MR

was achieved had no
as
to

what was done
for
that

ith

GODNICK

the

Objection 14

THE WITNESS mean by not
in

money
evaluation

basis

making

What

do YOU

my own
was
with

IS

what anyone

16
112

good faith

company

BY
The Court made of those good
plans did not standard

MR BRADFORD
finding
that

worth ij value
iiai

nor did that

else

come up
than

seemed
it

differen

what the

18
191
taoI

each

buyer bought

for

qualify

under the
19

And
or

did

you make any determination about whether
or infected that the

faith

for

bankruptcy

plan
121

ii

MR
is

come

to

MILLER
not

any opinion
interest

Objection
is
22J

conflict of

tainted to

aj That 23 24

what the Courts finding
are not the

the decision

whether
that

sell

You
used

will

see those

company

words she
231 24j

assume
Interest

the conflict of
in

was persuasive

anything

that

it

Page
III

116 Page
ij

THE WITNESS
that the
basis

It

seems

to

me

ii

could

affect
that

Now
sale

if

the conflict
it

of the

Courts rejection
based

affected
aj

and

p1 41

of the plan was Crowleys

was sold for

less to

largely

on was

than

it

was worth there didnt seem
of
it All

be

conflict

which
solved

eventually

any

evidence
to

of the evidence

solved supposedly

by the second
to
aj

seemed

be

that

one
what
ej ej 101 iij

proper
that

procedure was

but not
effect

in that that

the

Courts rnind.As
of

used that
to
sell it

think have

the termination

had on value
is

Coram
could

or whether
attributable

may

been before

Crowley got

damages

tliat

be
81

there.The evident
ott

to

any of the principles dealing with that

problems with that company were
the record

saw no
subject

and unchallenged

evidence
at all

po The bidding
iij

procedure was unchallenged so
to

21 31
t4l ItS

BY
Therefore you gave
value
to

MR BRADFORD
very
little

didnt see any reason was done
as

question

what
of

being

affected

by

conflict

13
I41

interest

such

claim
able
to

What
with

did

lwasnt

you understand

the

problems

evaluate
that

it
iisj

CPS

to

be
Objection Well among was
cash drain

16

And
Committee

to

the extent

the Equity

16 i2
18

MR
other

GODN1CK

did not supply yourself the
in

proof of damages
position unable

THE WITNESS
things
it

181

did

you

find

igj

to evaluate

damages

on your
at
is

own
did

on the

19
j2S

company BY Do you have
amount
of did
that

20
211

Well what you look
various
state

you had
21 22 claim 23

MR BRADFORD
of the

expcrts.The
it

Equity Committee the

221

how

any understanding drain
in

reached the

damages
of
its

Its

cash

23 24

experts

stated

amount
the
basis

somewhere check

my

notes

if

you

damagesJt

stated

for that 24

want

me

to

Page

115

Page 118

32

Min-U-Scrip

CH-11

TRUSTEE

CrowIeyAdmjnOO64l2

A1238

Case 1:04-cv-01565-SLR
In

Document 126-9

Filed 04/17/2007

Page 9 of 35

Re Coram

Lealthcare

Chapter

11

Jerome Shestack Esquire No vember 14 2003
Page 239

Page
CERTtFICATION

241

ji

could
Did evaluating

you
the of

in

the context

of

yardstick

damages
according
in

compare
to

131

hereby and
the

certify that

the

testimony

141

the value valuations

Coram

today

the
1s1

proceedings

in

the

toregoing

matter

that

were done
see
are

2003

by EMB

are

contained

buy
notes

and

accuratety

in the

161

and SSG

which
with

among

your

stenographic

taken and

by

me

and

that

documents
ej

the value

of the

company
took
181

the

copy

is

true

correct

transcript

say

three

years

ago

when Crowley

of the

same

19

over

191

iie

No
Fischel

didn

do that Professor
that

MtCKEYDINTER
Registered Protessionat

1111

didn

do

either
that

Reporter

Do you recognize
131

the values

assigned
financial

to

the

company
are

today

by the
131 The
to foregoing certiftcalion

does

not

ppty

advisors
as

relatively

in

the
141 any
reproduction
ot

the

same
direct

same ballpark
being
171

by any

the valuations

that

were
means
unless

under

the

control

done

by Chanin and Warberg

two

or
anchor supervision of the certifying

three years

ago
1171

shorthand

reporter

18
1191

concentrate valuation valuations Professor others
that

on the
1181

aspect
that Fischel

other than

taking the

201

were given
took

way
or of

1211

valuation
for

1221

were used

purposes of
this

1221

23J

accepting Are

the hypothesis

case
that

23
1241

241

you

familiar

with

the

fict

Page
iii

240
11

Page

there

is

litigation

between Coopers

Comm

and

SIGNATURE

PAGE

PriceWatØrhouse

Im not
131

You
that

have

not seen
in that

the

damage

report

hereby
ti

acknowledge
transcript

that

have

read
is

was done

case

the foregoing true

and

the

same

161

No
Give

and correct
given

transcription of the
to

me

minute
suing
in

answers

by me

the questions
if

toi

Is

Coram
stand

PriceWaterhouse

You
181

propounded
noted

except for the changes
errata

any

ii

have

to

line
ii

10 uu

MR BRADFORD
good
time
as

on the

sheet

This
to

is

as 101 at

any

quit

four II

Deposition
1131

adjourned

SIGNATURE DATE

p.m

1161

17 17
18J

91 20
120

21

CH-11
1231

TRUSTEE

124

23 24

CrowleyAdmIflOOG442
_______

Miu-UScript

63

Page

239

Page

242

A1239

Case 1:04-cv-01565-SLR

Document 126-9

Filed 04/17/2007

Page 10 of 35

In The Matter Of:

In Re; Coram Het~lthcare Chapter I I -

Won. Arlin Adams
January 21,2004

Brusilow G Associates I326 Arch Street 1 s t Floor West Philadelphia, PA 19103-2404 (2.[5)977-9700 FRX..(215)977-9773
Origfnnl FileADAMOIZI.'IX'I; 73 Puges

Min-U-Scn)t@ file 10: 0059 1592.95

Word Index included with this Min-U-Script.

4

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Case 1:04-cv-01565-SLR

Document 126-9

Filed 04/17/2007

Page 11 of 35

In Re: Corant Healthcare - Chapter 31

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.. . .

--Page 1

Hon. Arlin Adanls Ja~~uary ,2004 23

1
111

--A .-

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1'1
121

(3

IN THE UNITEO STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

APPEARANCES:

11 4 ~nro: 1 COlUM HUIL~HCARE CORP. : 9 a m CORAM. INC.

: Chap~er11

1'4 JENNER d BLOCK BY: R C M D LEVY, ESQUIRE

IR
Deblors

: Cnsc NO. W3299

11 3

STEVE TOMASHEFSKY, ESOlJlRE

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.
11 8 q llol Conlhed prelrhl warnhallon 01 1121 tION. ARLlN ADAMS. heW 81Ihe ollkes ol 1131 Sehnader, Harrison. Sogal & Lowh. 32nd 1141 Floor. PhV;ldel)l~ia, PA 19103, commencing 1151 1161 Mickey Dider. Reglslcrcd Prolesabnal 1171 Repofler andCommissioser d Dceds lor Ihe
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Wedncsd3y. .January 2 1 . 2 0 ~ 312.222.9350 1 1 rpevy0Iennsr.com 5 Counsellor lhe Equlv Comrnillco Isl

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SCHULTE. ROTH h ZABEI.. LLP (By lelephone] 1st B Y i + o w n n D GODNICK. EGOUIRE

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BRUSllOW d ASSOCIATES COURT REPORTERS 4 VIDEOGRAPI.IERS 1020 Arch Slrcel Is1 Floor Wesl Phlladephla. PA 19103-1404 215.977.9700 Hmw.blusllaw corn

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SCHNADER. HARRISON. SEGAL 6 LEWIS I31 ay. BARRY BRESSLER. ESQUIRE 1600 Morkel Slrool 141 Phlladepnln. PA 19103 215.751-2336
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161 I7J WEIL. GOTSHAL h MANCiES LLP (By lelephone)

BY: JOHNA. NEUWIRTH. ESOUIRE
101.767 Fillh Avenue NeWYOrk. NewYurk 10153~0119 191 212.310.8727 lolm.neuwl1lh8wen.coln

a Counsel lor Goldmen Sachs. Credll Partners. 1
L.P., Foolbdl Capllal Colporatlon 11 71 In1
1131
1241

Min-U-Script@

CH-I? TRUSTEE/ CrowleyAdmin001616
. ._.--

(3) Page 1 - Inage2

Case 1:04-cv-01565-SLR

Document 126-9

Filed 04/17/2007

Page 12 of 35

Hen. h L l n ~ d m s J a n u a r y 21, 2004
-. .-..-.... -.. .

-. ...

.Pago 11

121

In Re: Coirun H e a l t h c a r e - Chapter 11
-.-.

-- --.----Poge 13

($1 the benefits of thc directors ant1 officers

111 understand thar?

la liability ins~~rdnce,correct? 11 1 A: That's right. 0:110 you have any notion as to the 4 151 valuc of thosc claims t o tllc cquity 161 holdcrs dl21 purport LO bc assignctl undcr VI this plali ~iiodilication? A: 1 really don't havcan idca of thc 101 IYI valuc.'Thc prohlcm in thc claim against tta Dan Crowlcp is, again, damages. 1 think 1111 it wo&d be hard-prcsscd. w c would be 1121 hard-prcssrd if w e were asscnlng tlic
,

claim to csrablish d a h g c s , even though there isa finding by Judge Walrath 1151 agilinst Dan Crowlcy bccausc I think thcrc 1161 will bc solnc difficulty in establishing 1171 that whatever he did was deleterious t o llel rhc financial wcll-being of Coram. 0:You ncvcr rctaincd o r autl~orlzccl 1191 rn thr rcrcntion of a damage c x p c n to 121) arlalyze t l ~ potcntial darrugc claims r 1221 ;~gainst'Dan Crowlcy, did you? A: WKdid not bccausc. there, again, 1731 lzrl it's p_rcmatu~.r.\Y'c didn't want to do that
1131
1141

- -. .

A: Settlement of thc PriccWatcrhousc? Q: Or Crowley o r anything assigned pl undcr the plan modif~cation. A: That is correct. l think w e havc 151 Sl to. 0: If the equity holders arc t o rq 1st receive the bcnelit of ally of'tl~is 101 litigation o r scttlcment, why is it 114 imponant that you, rather than the Equity 1111 Commincc, retain this control? 1114 A: 1think wc havc to do it. 9: What is the basls? 113 A: The claim is ours.We can enlist (141 1151 your hclp in asserting t h c claim. It 1161 would have to bc done by the Trustcc. ltq That's my understanding. .Ills1 Q: Is that thc only reason, it's your ~tsj beliif that as 3 matter of law you could not givc control of that to, sly, a pl) litigation trust? 11211 MR. BRESSLER: Objection to l thc forni of thc q ~ ~ c s d o n . q THE WITNESS: 'That was my

p)

I

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111

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Page 12

Page

14

this early stage ~rntil knew whcrc w e we were goillg.we had t o do it in.the (11 Price\Vatcrhouse because w e couldn't talk ,141 to the other side witho~rt doing it. 151 Q: \Vhy do you believe it's p r e m t u r e , 161 judge? . A: Wr don't know who is going to llavc 171 this claim. Q9: You didn't seek tllc consent of the i q llnl Equity Conunittee to thc terms of thc plan 1111 n~odificationtliat you have in front of
11) :It
,
'

.

t~ndcrstnnding. Q: chat
IIIC ollly

1 81 PI

BY MR. LEW: rcason?

you, did you?. A: I can'r tell you whcthcr Barry 1141 spokc to yo11 o r your colleagucs. l (Ion'! ltsl know. I (lid not. :o llsl 0 S far as you know, thcre was no ~rr, communication with the Equity Committee lisl before, this? A: To my knowlcdgc, you arc corrcct. 1191 0: Undcr the provisions of this plan 1201 1211 modZcation, you retained, you and you 1221 alonc decide whether to commence, ~ J prosccutc, compromjse and seek Bankruptcy J 1741 Colin approval of any scttlcpcnt. do you
1171 1131

-

---

A: I ~ c m c n i b cdiscussing this wit11 r co~lnscl I m s told at that tinic rhat and 161 w e would bc obligated, when w e say "wc." pl thcTrustee would bc obligarcd to ~ s s c n pl the clairn.ThcTrustec could agree to PI give the procccds of the claim t o another ~ t u )party and enlist the hclp of rhc other ( I I I ~party in prosecutir~g the claim, but it 1121 would Ilnvr: to bc done under the aegis of 1121 thc'l'rustce. 0:That is not quite the qucstion 1 (141 Itlsl wkcd.Apan from who asserts rhr claim, ) 1 1 6 ~thc question Ins to do with thc provision 111q that says that you jnd you alone havc the 1101 right to commence, prosecute and ~ I D )compromjsc the claims. DO you belicve ~zqthat right, the right to commence, t?t1 ~ ~ O S C C I I C C and con~promise could have been ]Inl givcn to the +quity Cornmirtee.or a 1131 p ~ ~ t . c ~ n f i r n ~litigatior~ ~ t i o n trllst? (20 MR. BRESSLER: Objection to

I

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Case 1:04-cv-01565-SLR

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Page 13 of 35

Elon. ~ r Adams h Jam~ary 2004 21,

Page 67 11)

In Re: C o r m Healthcare - Chapter 11
Pago 69

111 11 2

A: 1 will not object. . MR. GODNICK: Excuse me.

Mr. Levy, you made requests to the judge to extend this beyond an hour, 151 an hour and 15 minutcs,an 161 hour-and-a-halfand you wcrc.basically m on your knees ant1 she made it very lo) clcar to you and to t h e court on t h e 14 record that this was 10 be 60 minutes 114and no longer. THE WITNESS: Idon't m n t 1111 113 to contradict the judge, no. I want 1131 to cooperate, but I don't want to 1141 contradict tllc Coun. 1151 MR. BRESSLER: Your last 116) qucsiion, please. 11q MR. LEVY: Ihave n series l l e l of q~lcstions that I guarantee will 1101 take five minutes. lzq MR. GODNICK: Iobject. MR. L E W Mr. Rressler 1211 1~ MR. BRESSLER: Ask your l r ~ ncxr question. l p 1 . MR. LEVY: Can 1 have fivc .
PI
11 4

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. .

Page 68 It1 11 2

. . really continue wirh that kind m THE WITNESS: Ask mc PI another two or three questions. PI MR. L E W : Iknow you w ~ n t 151 to coopcrate.Your counscl and Mr. 1 1 Godnick s c a n to think five nlinutcs is 6 m just too important. 101 MR. GODNICK:~ u d ~ c \ v a l n t h el s c e m to think that anything in cxccss r ~ o of 60 mjnutcs was vcrbotcn.You asked l 1111 her seven ways to sundown.You can 1121 take issue with rhc judge. II~I MR. LE,W: I take issue. 1111 I'm not going to argue about it. , 11s; Thank you, judge. (16) MR. BRESSLER: Your last I I topic was going to be about the ~ ltal Novt-mbcr 25th meeting with the 1101 notcholdcrs.Thrcc othcr people havc . 11 tcstilied about that. If it was somc x1 P I ] crucial topic that n o one else might I 1 have ~cstiIicd I may havc let him n to, ml testify. p4l (Deposition conclutled.) .
,
'

-

- .

want to 3sk one 11 qucstion and bc cut off. 2 p~ MR. BRESSLER: You arc now 1 over your 1irnit.We'arc going to give . 1s) you one more ql~estion anyway. I) G THE WITNESS: I think we p l arc using up too much time.
lei
1~11

111 ~ninutcs? don't I

Pugo 70 CERTIFICATION
Ihereby cendy lhal Ihe leslimony

P I

(41 and l proceedings In Ihe loregolng h 1 1 mollor,wo conlained lully and accuraloly 5
IGJ

In Ihe slenographk roles laken by me, nnd

BY MR. LEVY:

vl lhal Ihe copy Is a \rue and correcl
(01\renscrIoI OI lhe same. I91 1101MICKEY OlMER Heglslrred Prolcssloml Aeporler
1111

0:DL) you recall a mecling 011 lto] Novcnlbcr 25th ;~ttcndcd rcprcscntativcs by 1111 of thc notcholders. you, your collns~l? A: 1think 1 do, yes. 1!z1 1131 0:Prior to that meeting, you llnd (14) staned a process with your investnlcnt 11s) bankers? 1161 MR. BRESSLER: .l'hesc have 11qbeen asked and answered of other (lei people. 1191 TIiE WITNESS: I did consult 1201 with invcstmenr c o ~ ~ n s c l oprior to rs 121) that nlccting. MR. BRESSLER: You arc over lzzl I 1 your time. n 1~11 MR. LEW: Okay. 1 can't --.-- . . -. '

114 (131 The loregolr~y cellukdllon J w s no1 epptq 1\41 lo any rsproducllonpl the seme by any

. . .

11s) means unlass under !he dlrocl con1101

pal snr!Jor supervhlon of he cenhlng 11qshorthand reporter.
1181 1191 1201 Pll 1121

[nl

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Page 67 - Page 70 ( 2 0 )

'

Min-U-Scripm

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Case 1:04-cv-01565-SLR

Document 126-9

Filed 04/17/2007

Page 14 of 35

UNITED

STATES DISTRICT

BANKRUPTCY OF DELAWARE

COURT

IN

RE

Case

Nos 003299MFW
0033
00

and

MFW

CORAM

HEALTHCARE

CORP

and

coNyt

INC.

24
Debtors

Jointly Administered under 00-3299
Market Street

Wilmington
January

De1awa
2004

iO1

22 941 a.m

TRANSCRIPT OF HEARING BEFORE HONORABLE MARY WALRATH UNITED STATES BANKRUPTCY COURT JUDGE

APPEARANCES
For

Cerberus

Schulte Roth Zabel LLP MICHAEL COOK ESQ HOWARD GODNICK ESQ NIKHIL SINGHVI ESQ SOPHIE KIM ESQ 919 Third Avenue New York NY 10022

By

For

Chapter

11

Trustee

Harrison Segal LLP BARRY E. BRESSLER By ESQ. WILLIAM KIPNES ESQ RICHARD BARKASY ESQ MICHAEL BARBIE ESQ 1600 Market Street Suite 3600

Schnader

Lewis

Philadelphia
Audio

PA

19103

Operator
recorded produced by

Jennifer electronic by

Patone transcript

Proceedings

sound recording transcription service

INC TRANSCRIBER$ Avenue Evergreen Ham.lton New Jersey 08619 E-Mail iicourt@otonhine net 268

I3J COURT

O9

59-2311

Fax

No

609 5873599

Al 240

Case 1:04-cv-01565-SLR

Document 126-9

Filed 04/17/2007

Page 15 of 35

Shestack review was no of the record in fuly it was
--

Cross/Bradford to that think actual

51

indicated of 2000

you

did

it

not

that

there

secret think

Corani might it

file bankruptcy2 for

yes
the

was

headed

insolvency

earlier

than

filing

SQ

Okay
By the

and--

way
as

on

in

terms opined the one

of

the

fairness

of

the they

CPS thought was

deal Brown
it

recall
That have

specifically million

that was

was so the

fair
at

deal
you of

$42

tha

received group

fair
10

least

independent could make

expert the

opining the

as

to

fairness but
it

that
have

You

argument

11

other house

way

you was

did

respectable

investment

banking

12

saying You

fair
would you the

13 14

would time

agree

not
price

that for verge

it

is

not of

an an asset
to

opportune sell
it

to maximize when

sale of

15

at

time

youTre

on

the

filing

16

bankruptcy

17

dont
the you money do or

know

the in

answer cash thought

to

that
you

mean

if

when

you

need

18

youre
the

drain
was

need

it

then
was

Then an the

19

what

Board

necessary
for Feinbetg

This

20

independent proposition
It

Uoard before been

except

perhaps and they

They

had

21
22

them

made an independent
but that

decision
it

may have
to When

an unwise decision pass buys the an business asset take

decision

23

seems

me

would company

judgment an

rule
company Do on

24

from

insolvent legal

25

the

brink

of

bankruptcy

they

certain

risks

JJ

COURT

TRANSCRIBERS

INC

A1241

Case 1:04-cv-01565-SLR

Document 126-9

Filed 04/17/2007

Page 16 of 35

Adams greater obtaining because refer Levy gave very the best
10 11

Direct/Bressler the consideration Now me had the some that we

183

consideration
was they reasonable

thought amount

were

doubt
of what that In they

had

strongly

urged upon
action

value an

to and me

as

aderivaiv
Liebentritt of the amount the

That

ws

action

Mr
fact

Mr

had brought complaint

to my attention and that they were

copy

draft of

seeking would upon sign the

substantial agreement legal that He and

money

So

before to call

plan
was

thought to Terry
as

had

mind that
in

available known

me

and

looked for

around long

with

mind
for was

have the

Shestack have

time
knew of

clerked he

Court
of

you

already

heard
as

12 13

him when
very

President both

the

IBA

Hes
and

known

one
in

the

top

litigators and

nationally and
It

certainly

the

14

Delaware be

Valley
to

called that

hint

asked meant

him

if

he

would
to

15

willing

evaluate

claim

great

deal

16
17

me
He aside every or his

was very
and

busy do

at

the and

time

He

said

he
to he

would give asked had you

put him for long
to for

18

everything conceivable

that
of

told my staff that

19

piece before and

paper or anything
signed these

20
21

staff

and

documents
just you to to want take

discussion give

with

him

said
opinion

Jerry
want for me He write

22

me your against

unvarnished

sides the $56

23
24

me

me

Is

that

reasonable

accept that he to

million payment
it

under

this

context

said

thought that

25

was

and

asked

him if he would

report

JJ

COURT

TEMSCRIBERS

INC

A1242

Case 1:04-cv-01565-SLR

Document 126-9

Filed 04/17/2007

Page 17 of 35

201 Monday

CERTIFIATIQ1
PATRICIA certify official that the

REPKO
is

court correct of

approved

transcriber
from the in the

foregoing sound

transcript the

electronic

recording

proceedings

aboveentitled

matter

___________________________
11

Date

February

2004

PATRICIA JJ COURT

PKO TRANSCRIBE

INC

J17

COURT

TRANSCRIBERS

INC

A1243

Case 1:04-cv-01565-SLR

Document 126-9

Filed 04/17/2007

Page 18 of 35

IN

THE FOR

UNITED
THE

STATES

DISTRICT

COURT

DISTRICT

OF COLORADO

GENESIS

INSURANCE

COMPANY

Plaintiff and Counterclaim Defendant

Case

No

vs
DANIEL

05CV335WDM

-PAC
CROWLEY
Defendant
10

and

Third-Party

Plaintiff ARLIN Chapter Estates
and

11

ADAMS
11

12

of

Trustee of the Bankruptcy Coram Healthcare Corporation

Coram

Inc
Defendant and Counterclaimarit

13

14

15

NATIONAL

UNION

FIRE

INSURANCE

COMPANY

OF

PITTSBURGH
16

PA
Third-Party Defendant

17

18

19

20

21

DEPOSITION
Palo

OF

DONALD

ANARAL
2006

August

30 Alto California

23

Reportedby
24

EMI

RPR
25

ALBRIGHT CSR No

CERTIFIED
13042

Job

No

70613

.2
Esquire Deposition Services

800.770.3363

A1244

Case 1:04-cv-01565-SLR

Document 126-9

Filed 04/17/2007

Page 19 of 35

possibly

coming

into

it

with

an

equity

partner

being

Cerberus
So

Feinberg with

told

you

that
in

he

that

he

and another

Cerberus

had

worked

Crowley

connection

with

situation

Yes
And any other did
he

tell you which

that

Crowley had

was

working

for

companies

in

Cerberus

financial

interest
10 He

made

me aware

of

the

relationship

with

11

Winterland
What
is

12

Winterland company
understand
it

13

T-shirt
Do

14

you

was was

little more rock and

than
in

15

T-shirt San

company

that

Winterland

roll venue

16

Francisco
grew up here until had and know
to

17

what be

Winterland T-shirt that
it

was

18

But

understood You

it

just now
an

company
was of

19

never than

understanding they
in

20

little rock

broader

that

that

sold

all kinds
to

music

21

and

roll type

memorabilia

addition

T-shirts

22

No

sir
you understand with that Cerberus had some

23

But did sort of financial

24

relationship

Winterland

25

Yes

80
Esquire Deposition Services

800.770.3363

A1245

Case 1:04-cv-01565-SLR

Document 126-9
And

Filed 04/17/2007

Page 20 of 35
sir

how

did

you

have

that

understanding

Feinberg Did connection with you

told

me
that Crowley had role in

understand

Winterland

Yes
And
He

what was
so

did

you

understand
to

that

role

to

be

consultant you

the that

CEO
he

And services
10 to

understood

was

providing

Winterland

Yes
And
to

11

you

also

understood

that

he

was

getting

paid

12

do

that

work Yes
You

right

13

14

knew was

when

Crowley

was

consulting

he

was

15

doing

it

that

how

he made

living

right

16

Correct
So is it

17

fair statement was also

then

that
at

you
the

knew very

from least

18

the

beginning

that

Crowley other

working

19

for Winterland

this

Cerberus

company

20

Yeah

21

MR KIPNES
BY

Object

to

the

form

22

MR

PETERS
Did you care Was
to

23

how that

much

Crowley was that

getting you

paid

to

24

work

at

Winterland
information

something

thought

was

25

important

obtain

81 Services

Esquire

Deposition

800.770.3363

A1246

Case 1:04-cv-01565-SLR

Document 126-9
No
Did you think
if it

Filed 04/17/2007

Page 21 of 35

was

important

for you was

to

obtain paid

information by Cerberus been

about
to

what

anything

Crowley

getting
he

perform

whatever

consulting

services

may

have

performing

for

them

No
Did you ever ask Feinberg for that

information

No
Feinberg
10

certainly paying

knew

whatever

Cerberus

or

Cerberus

companies

were

Crowley

correct

11

assume
You board member
of

12

would Corain you had

have

assumed have

that

Feinberg
you

also

13

could asked

provided
it

that

14

information

if

him for

15

Yes
correct
But you never

16

did

right

17

No
Now
performing there
for

18

came

time
is

that that

Dan

Crowley

started

19

services

Coram

right

20

Yes
And members
of at

21

various board

points his

in time

Dan

negotiated

with

22

the

Coram

compensation
to

package

correct

23

MR KIPNES
Dont
BY

Object

the

form

24

remember

25

MR

PETERS

82
Esquire Deposition Services

800.770.3363

A1247

Case 1:04-cv-01565-SLR

Document 126-9

Filed 04/17/2007

Page 22 of 35

Crowley

Yes
And Feinberg and then the board approved the agreement that

Crowley

reached

Yes
And performing
at

that

time

you

were

aware

that

Crowley

was

services

for Winterland

correct

Yes
You
10

understood

he

was

getting

paid

to

perform

those

services

correct

11

Yes
And much he was you

12

didnt
paid to

ask

because

you

didnt
services

care

how

13

getting

perform

those

correct

14

Correct
Did perform have an services you by understand Winterland about that or by
he

15

was

getting
or

paid you

to not

16

Cerberus

did

17

understanding

that

because

you

didn1t

care

18

didnt
So

care
he

19

whether being

was by

getting

paid

by

Cerberus make

or

20

whether

he

was to

paid

Winterland

didnt

any

21

difference

you

22

No
And the CEO
of

23

then

for

how

long

did

Dan

Crowley

serve

as

24

Coram
Couple of

25

years

87
Esquire Deposition Services

800.770.3363

A1248

Case 1:04-cv-01565-SLR

Document 126-9

Filed 04/17/2007

Page 23 of 35

He

stepped for us that

into that

the

same menu facing

of

problems company

that when

youve
were

described

were

the

you

the

CEO

is

fair statement

Yes
Did he address

them

Yes
Can cash you tell us how
he

addressed

the

issue

of

flow
Dan
is

an

operating He took

maestro

He

fine

tuned
the

and

10

tweaked

the

system
information

costs

out
cut

He

improved He
cut

11

management increased than

systems and

cost

costs
different

12

revenues
and

increased
he

collections
charismatic R-Net

which

is

13

revenues
How

provided the Aetna

leadership
Did he have

14

about

situation

15

to

address

that
He

16

came

to

resolution

with

that

He

settled

17

that
How
His

18

about

employee

instability
was looking
for

19

leadership

Company

20

leadership
And
as the

21

how

would during

you

rate Dan

Crowleys
period
of

performance time that
he

22

CEO

of

Coram

theentire

23

performed

that

job
to

24

Good You

excellent
that when
the

25

said

company

was

placed

in

88
Esquire Deposition Services

800.770.3363

A1249

Case 1:04-cv-01565-SLR

Document 126-9

Filed 04/17/2007

Page 24 of 35

the

undersigned
of

Certified

Shorthand

Reporter

of

the

State

California do hereby

certify
That the time

foregoing and place foregoing

proceedings herein
set

were

taken that

before me at any iqitnesses
10 11 12 13 14 15 16 17 18 19 20 21 22

the

forth

in the

proceedings

prior to verbatim

testifying were
record of the

placed under
was

oath

that

proceedings
was

made by me

using machine under
an

shorthand

which

thereafter
the

transcribed
is

my

direction

further that thereof
further

foregoing

accurate

transcription

certify that action
of

am nor

neither relative
or

financially interested in the employee
of

any
IN

attorney WITNESS

of

any

the have

parties
this date

WHEREOF

subscribed

my

name

Dated

SEP13ZUOB
_____________________

17
25
EI4I

ALERIGHT

CSR

No

13042

Al 250

Case 1:04-cv-01565-SLR

Document 126-9

Filed 04/17/2007

Page 25 of 35
Page

IN

THE FOR

UNITED
THE

STATES

DISTRICT
OF

COURT

DISTRICT

COLORADO

GENESIS

INSURANCE

COMPANY

Plaintiff and Counterclaim Defendant

Case

No

vs
DANIEL

05CV--335-WDM
-PAC

CROWLEY
Defendant
and

ThirdParty

Plaintiff
ARLIN Chapter
Estates and

ADAMS
11

of

Trustee of the Bankruptcy Coram Healthcare Corporation

Coram

Inc
Defendant
and

Counterclaimant
NATIONAL UNION
FIRE

INSURANCE

COMPANY

OF

PITTSBURGH

PA
ThirdParty Defendant

DEPOSITION
Palo

OF

SANDRA

SNOLEY
2006

August

31

Alto

California

Reported by EMI ALBRIGHT

RPR
Job

CSR

No

13042

No

70614A

A1251

Case 1:04-cv-01565-SLR
IN

Document 126-9
Page2

Filed 04/17/2007
APPEARANCES
For
the

Page 26 of 35
Page4

THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

continued

Deponent

Sandra

Sinoley

GENESIS

INSURANCE
Plaintiff

COMPANY

WILSON

SONSINI NIELSEN
California

GOODRICH

ROSATI

and Defendant case

BY
No
650
Palo

PERI

Counterclaim

Page Mill Road
Alto

94304-1050

vs

05-CV-335-WDM
650.493.9300 650.493.6811

DANIELD.CROWLEY
Defendant 10
Plaintiff

Fax

and

Third-Patty

11

ARLINM.ADAMS
Chapter
II

10
of
the

Trustee

Bankruptcy Corporation

12

Estates

of Corain

Healthcare

11 12 13

and 13

Corain

Inc

Defendaistand 14 Counterclairnarit

14 15

15

NATIONAL PITTSBURGH

UNION

FIRE

INSURANCE

COMPANY OF

16 17

PA
Defendant

16
Third-Party 17 18 19 _____________________________________________________________

19 20

20
21 22 23
Plaintiff

DEPOSITION
and

OF SANDRA
Defendant
at

SMOLEY
at

taken Mill

on

behalf

of

22 23

Counterclaim

650

Page and

Road
at

Palo

Alto

California on August

beginning

1011

24 25

1105

am

am
me

ending

312006

before

EMI

ALB RIGHT

RPR
25

CSRNo

13042

Page
APPEARANCES
For Plaintiff

Page EXAMINATION INDEX

and

Counterclaim

Defendant

Genesis

Insurance

Company

WITNESS
LOSS

SANDRA

SMOLEY

THOMPSON

JUDGE

LLP

I9l9PennsylvaniaAvenue.N.W
Suite

EXAMINATION
Jud

BY

PAGENO

M-200

Washington
202.772.5170

DC
Fax

20006-3458

2027725180
[email protected]

Ms
PlaintiftDaniel

Mims

26

For

Defendant

and

Third-Party

Crowley
--

Mr

Senter

33

10

KEKERVANNESTLLP BY LAURIECARRMIMS
710 Sansome San
Francisco Street California

11

94111-1704

10 EXHIBIT
11

12 4153977188 13
1t For

Fax

INDEX PAGE

[email protected]
Defendant and Counterclaiinant Arlin

Adams LEWIS
LLP

15

EXHEBIT 13

SCHNADER HARRISON BY WILBUR KIPNES
1600

SEGAL

NO
exhibits

DESCRIPTION
marked
for identification

NO

16

Market

Street

No
14
19103-7286

Suite3600 17
Philadelphia 215.751.2336 Pennsylvania

15

18

215.751.2205Fax
[email protected]

16

19
For Third-Party Defendant National

Union

Fire

Insurance

18

20 21

Company

of

Pittsburgh

PA
RICE LL.C SENTER

SENTER

GOLDFARB

19 20 21 22 23 24

BY
22
Suite

WILLIAM
1700Colorado

IlooBroadway

23

Denver

80290

303.320.0509

24

303.320O2lOFax
[email protected]

25

Pages

to

A1252

Case 1:04-cv-01565-SLR
Goldin

Document 126-9
Page
14
to

Filed 04/17/2007
interest executive that

Page 27 of 35
Page

16

And we
you
say

affirmatively special

moved

directly

look

into that

it

would
at

preclude

him

from

continuing

as

chief

When

committee from on

was

formed and
special

was

an

officer

Coram

independent

committee
they

Mr
it

Crowley
It

Mr

Fineberg

No Why
Well
did

Yes
of
the

mean
board was
the

werent

was

committee

you

think

that
that

he was
the

person
place feeling

came

in

and

did

multiple
in

jobs

We

Who
Well And Yes
10 11 12 13 14 15 16 17 18 19 20

on

that

committee Don

werent areas
outside

only

he was was

CEO
dont

He was CEO
what
lie is

multiple

chair

was

Amaral

And my
of
his

care

doing

it

vas

you

job with
at

Coram And
ofno
active

And he was doing
so

magnificent job
it

Coram
was

my
to

feeling

is

hes

Was Yes

Mr

Casey

on

the

board

10 11

consultant

elsewhere board

issue

me
over

Was

the

providing

oversight

Mr

Crowley

Mr

Smith

on

that

committee

12 13
else

Oh
So

yes you had
particular best seen that

dont

remember

Mr

Smith being on
that

if

Mr

Crowley
the

was

actually

acting

in

Do you remember

anybody

committee

14 15

some
in

way

against

interests the

of

Coram

perhaps have
taken

No
Was
that

the

interests

of Cerberus

board

would

committee

--

whose
to

idea

was Judge

it

to

form

this

special

16 17 18

steps

to

address

that
that
It

independent The board you
than

committee
--

address

Walraths

decision

Well
All

cant

answer
the

didnt

happen keeping
an

the

independent independent

board

members members
is

right

But

board--

you were

eye

When
other

say

the

board

that

evetybo

y19
20 21

Oh
How

absolutely
did
it

absolutely that the special

Mr Crowley

come about

independent

committee

21
22 23 24 25

Correct Did you do
that pursuant
to

retained

Goldin and
to get

Associates

advice

of counsel

say

from

22 23

We
that

wanted

somebody
for vety

so

we

let

it

out

on
well

the

street

Mr

Friedman
recall

we were

looking do of

independent
see outside

thought

of

dont forward

his

direct-did

we thought
advice

it

up

and
but

we moved

24

person who would
totally

this the

look board

of even

us And 17

And we

get

of counsel

Im

not

quite

25

independent

here

go

do your

work

Page
sure

15
believe
it

Page
was
three

who

it

was
associated before with

names

that

came back
trip

One was

unable

Did any around
to

counsel

Coram

say

to the

board

at

or

to

do

it

because
that

of being

on an extended of being
thats the

And Goldin
and because above

that

time look
the to told that

you

do anything else you have with

was

one

had

reputation said

independent

either

terminate

employment
his

Mr

Crowley
with

or

reproach want

And so we
that

guy
their

we need
thing

we

Mr We

Crowley were

has

terminate that

relationship

Cerberus

somebody
did his

is

going

to

do

And he went

never
believe

off and
necessary
--

thing
that

Did you

was
that

Was
ahead
looking

it

your understanding
that

Goldin and

Associates

--

We
it

never
this

thought
special

of

We

were

moving

mt

withdraw

with

committee
--

Was
with
the special

it

your understanding Associates and
that

when

the

committee of
the

retained

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

When
board

you were

moving

ahead

committee

the

10 11
12

Goldin and
investigation limited in

Goldins was
in

scope any

knew about Mr Crowleys
not

relationship that

with Cerberus
It

evaluation

way

restricted

or

Im
out

100

percent

sure

the

timing of and dont

was where

found
it

terms of what not
--

Goldin could

look

at or

find

when

disclosures to that

were--

know

was

in

13
14

Absolutely
If

relationship

Mi

Goldin had

did the

Mr

Goldin conclude
that

or

make any
had
to

But look which
it

certainly there
is

after the

judges

ruling

and

the

judge

said

15

recommendations terminated with
or

to

committee had
to

Mr

Crowley
his

this

relationship conflict

between
interest

Crowley
the

and Cerberus had
before

16
17 18

Mr

Crowley

terminate

relationship

think information

is

of

board

Cerberus

the

regarding

Mr

Crowleys

relationship

with

No
If

Cerberus

19
unclear as to the

Goldin and you have cant Thats
the
--

Associates

had due

made such

recommendation

Im just
All

timing

20 21

would

given

it

consideration do

right
it

Well

mean how
it

know
so
--

what

would have

knew about
relationship to

at

some point
you of
are

dont

know where

it

was

in

22 23

done
During Goldin board

--

didnt happen of Goldins

what

asking between was

course

investigation

did

anyone
to the

When

you

learned

the

relationship that that

Mr

Crowley of

an

24 25

or

any of

Corams counsel we have

say

or

recommend
our

Cerberus

did

you conclude

conflict

of

directors

to terminate

relationship

Pages

14

to

17

A1253

Case 1:04-cv-01565-SLR

Document 126-9

Filed 04/17/2007

Page 28 of 35

1

Q. ~ n what did they tell you about Coram? d

MS. NIELSEN: Yes. MR. JUDGE: I have no further qucstions. blS. NIELSEN: Thank you. MS. MIMS: We have a few questions, not

2 A. There was going to be a challenge, that it was a company that
4

5
7

prudent to try to salvage the company but we thought that it could be salvaged. Mr. Crowley was working as a CEO for other entities other than Coram?

THE WIlNESS: Thank you.
9

8 really appreciate it. (Discussion off tlie record.) EXAMINATION BY MS. MIMS: Nest, and we met this mo.ming. I told you that I represent pending in Delaware. And l just have a few follow up

10 Q. What d o you know about that? 11 A. I don't. I just knew that he was. Cle had a company called

13 15 17

13

companies that were in trouble.

1 5 A. I guess I always knew after he left Foundation that he went 1 7 Q. S o in the fall.of 1999 and the winter of 2000 when you were 18 considering going on the board o f Coram, you were aware tha 19 Mr. Crowley was working o n other things?

2 4 A. I didn't think it was any o f my business.

1

2

3 5

know, issues t'hat could come before the state legislature, they would want to see the secretary of health and welfare, that kind of thing. you know about his work that you respected?

2 A. Well, not specifically. I mean, what specific entity? I

3

mean, like --

6 A. He was smart, he was a turnaround artist, and h e could fix8 Q. How did you learn that he was a turnaround artist?

9 A. By reputation:

.

5 incomc othcr than Coram? 6 A. Oh, yes, because he was working for other companid. 7 Q. Do you know of a company called Winterland? 8 A.- Hc told me about that. Is that the T-shirt company? Yeah. 9 Q. Yes, s o it's a T-shirt company. And by he, you mean Dan

1 2 A. Probably in the fall -- I went on the board in February. Probably in the fall before that 13 1 4 Q. And how did you learn that? 1 5 A. I had iun into him from time to time in passing. And he

1 2 Q. What did he tell you about it?

1 3 A. Minimal. That he was working in that company also.
15 A. I don't know.

18 Q. You said this'moming that while you wcrc serving on the

19
21

to go on the board in February.

19
21 22

board of Corarn, you &d the other board members were keepin Crowley's performance. Can you describe what you did to 'monitor his performance at Coram?

you joined the board about Coram? 2 2 A. Yes, Don ~ m k and Bill Casey. l

8 ' ( p a g e s 2 6 to 2 9 )

Case 1:04-cv-01565-SLR
STATE ss
County of Alameda

Document 126-9
Page
38

Filed 04/17/2007

Page 29 of 35

OF CALIFORNIA

the

undersigned of
California

Certified

Shorthand
certify

Reporter
the

of

the

State

do hereby were
taken

That
at

foregoing place

proceedings
set forth to

before

me

the

time and

herein

that

any

witnesses

in the

foregoing

proceedings 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
that

prior

testifying

were

placed

under

oath

verbatim machine

record

of

the

proceedings was
the

was

made by me
transcribed

using

shorthand

which
that

thereafter

under

my

direction

further thereof that

foregoing

is

an

accurate

transcription further certify

am

not

relative party
to this

employee
relative not or

attorney

or counsel

of any

action

or that

employee

of any such
interested

attorney said

or counsel
action

and

am

financially thereof

in the

or the

outcome IN

WITNESS

WHEREOF

have

this

date

subscribed

name Dated__________________________

EMI ALBRIGHT

CSR No

13042

11

Page

38

A1254

Case 1:04-cv-01565-SLR

Document 126-9
Feinberg

Filed 04/17/2007

Page 30 of 35
211412007

Stephen

IN

THE FOR

UNITED THE

STATES

DISTRICT OF DELAWARE

COURT

DISTRICT

Certified

Copy

ARLIN ADAMS Chapter II Trustee of the PostConfirmation Bankruptcy of Estates of CORAM HEALTHCARE CORPORATION and of CORAM Delaware corporation

Case No
04-1565

INC

Plaintiff

vs
DANIEL

CROWLEY
WILLIAM and SMITH

DONALD

AMARAL
PETER

CASEY
SANDRA

SMOLEY Defendants

Wednesday

February

14

2007

1029

a.m

of STEPHEN Deposition FEINBERG the offices of Cerberus 200 Park Capital Management New York New York 10171 Avenue to Notice before Otis Davis pursuant Public of the State of New Notary held
at

L.P

York

LiveNote

WorM

Service

800.548.3668

Ext Pagel

A1255

Case 1:04-cv-01565-SLR

Document 126-9
Feinberg

Filed 04/17/2007

Page 31 of 35
211412007

Stephen

Stephen

Feinberg

MR
questions

KIPNES

Thats.two
break that

Could you

up

please

MR
Yes initially and

PETERS
to

Yes
of

both the

them

Me

then

board yes
recall about about the having

What board 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 discussions probably best one Dan Rick
of

do you

directors change and

discussions his role more

Crowley Smith

from overseeing
of

becoming

hands-on

manager
Rick not the

wasnt
--

cooperating
was probably you

he not

was the

it

situation top guy had

anyway
it so

because

needed the

getting gotten

done dire

because

company

One two
it

Rick

wasnt
better
And The
It

cooperating
if

was

probably

Dan

just ran

the whole

thing

anyway

the board

company saw where

desperately
the

needed was

it

company and

going

was

pretty

obvious

believe Did you

unanimous
have any members about

ever

with

other board

LiveNote

World Service

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Ext Page
124

A1256

Case 1:04-cv-01565-SLR

Document 126-9
Feinberg

Filed 04/17/2007

Page 32 of 35
211412007

Stephen

Stephen how you came to know

Feinberg Dan with Crowley about his

ongoing

relationship

Cerberus

Yes
With whom did you have those

discussions
Don

Amaral for one
else besides Don

Anybody

Amaral
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 recall Amaral board members believe about do talked to other

it yes
you recall
of

What on the

telling

Don

subject with told Dan him you

Cerberuss ongoing

relationship

Crowley
exactly recall on what
it

was

What That

do he

telling
lot of

him
our he

worked paid

companies
has have done

that good

we

him

for and

it
that

that we

job for

us

close

relationship
recall what do you about
--

Do you telling

other board

members

Something Something

similar

similar

Yes

LiveNote

World Service

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Ext Page
125

A1257

Case 1:04-cv-01565-SLR

Document 126-9
Feinberg

Filed 04/17/2007

Page 33 of 35
2114/2007

Stephen

Stephen Did to hide you

Feinberg ever
in or

any

way

attempt board an

from Don the fact

Amaral that

any other Crowley had

members ongoing

Dan with

relationship

Cerberus

No
Was
it

your understanding

--

withdrawn
Did 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 told
as to

you
the

have board

an understanding members knew that

whether

Dan with

Crowley

had

an ongoing

relationship

Cerberus
They did

know
members

All of

the board

knew

thought Did specifically gets paid
to

so
ever much ask Dan you Crowley
at

anybody how with

about work

Cerberus

any were

time anybody
board

from Coram

while you

member
To Amaral
the

best

of

my recollection getting

what

he was

paid

When

do you

recall

telling

Mr

Amaral

that
At some point when Don was

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Ext Page
126

A1258

Case 1:04-cv-01565-SLR

Document 126-9
Feinberg

Filed 04/17/2007

Page 34 of 35
2/14/2007

Stephen

Stephen negotiating with Dan

Feinberg about his Coram

contract
Other with Amaral else ever
do

than you you

the

conversation recall anybody at any much

ever

asking

specifically board member

time while you Crowley was

were

how

getting

paid

No
10 11 12 13 14 15 16 17 18 19 20 assumed Crowley how much needed Dan
to

dont believe
ever
feel

so
you how much

Did you conceal was

that

from the

board by

Crowley

getting

paid

Cerberus

No
Did you concealing Dan ever discuss with
of

Dan Coram by

from the
was

board

Crowley

getting

paid

Cerberus

Io
Dan was

assumed

--

additionally
in

telling Amaral
the

these was

discussions
negotiating

Amaral was the

guy

that

21
22 23 24 25

compensation
you originally proposed board
as

And Crowley who that you
to

the Coram who

consultant

knew

could

assist

Coram

is

right

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Ext Page
127

A1259

Case 1:04-cv-01565-SLR

Document 126-9
Feinberg

Filed 04/17/2007

Page 35 of 35
2/14/2007

Stephen

Stephen done we Consulting have with and What November 1999
of

Feinberg which
is

Agreement

what

should

done

here
He

But

wasnt
care
of the

involved

this

takes

agreements

mistake was was your the

made
in

understanding
the

form of Cerberus

relationship

between

and

Dan

Crowley putting
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
for

aside
he

Coram
consult with
we us

That and work on

would on

companies
to him
us

companies wanted

would would

bring give

if he or

to
For

and

he he

advice

more
yearly did

that

received upside on

compensation
deals that
we

salary
he

and

that

recommended
It says in

paragraph

3.1

under receive

Basic Compensation that he would
salary of

$80000
Was
he

month
that

receiving

salary

work

on Coram with

or for work

on other

projects

Cerberus
on other projects with

For work

Cerberus
How
was

that

number

of

$80000

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157

Al 260