Free Appendix - District Court of Delaware - Delaware

Case 1:04-cv-01565-SLR

Document 126-15
Danitz Scott

Filed 04/17/2007

Page 1 of 11
4/6/2007

But signature on

ultimately

he

has

to

have

his
of

it unless they were using some kind
if he
it

form signature don1t
to be

was out
for

in

California
on
to this

know
his

but

appears
and

example
sent

one

signature

then being

Judge

Adams
Do wasntt these 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Exhibit putting
it it be the

understand

you

correctly
to

that

it out

general

practice
to

for you

send

weekly

reports

Judge

Adams
to the

MR BRESSLER
but he can

Ill object

form

answer
Can you repeat
the

question

please
you for

By Ms Mims
correctly you
to

Do
the

understand general reports

that
out

it

wasnt

practice
to

send

these
--

weekly you

Judge

Adams

When
in

when

say of

send

out Im
the

the

context
of

sending
at

letter Crowleys
out to for

and

could

any number once
it

people
to

Mr

direction
Judge

was

final
Crowley
to

send it

Adams

But

Mr

was

responsible

sending

weekly

update

Judge

Adams

Pause
Handing you what will be marked Danitz

25

Exhibit

No

marked

for

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107

A1411

Case 1:04-cv-01565-SLR

Document 126-15
Danitz Scott

Filed 04/17/2007

Page 2 of 11
416/2007

identification

By Ms Mims
stamped you Chapter
11

This

is

document through

Bates Do

TRUSTEE

003163

3165

recognize
Let

this me

document
at
it

look

quickly

Deponent
Take your

examined

exhibit

time
examined

Deponent
All right 10 11 12 13 14 15 16 17 18 19 attachments Do you

exhibit

Yes
this

recognize

document

Yes
What
is

it
letter had
--

Its
that of
--

cover

letter and
sent

with
to

prepared

Mr

Mumford

Ewing
it

Monroe
is

Bemiss
just sent to

Company summary Judge Adams

identifying description through

really

of

information

Mr Crowley
Whos
He

Mr Mumford
believe director Monroe
at the

20 21
22 23 24 president banking hired Adams
--

was
or

time vice
investment
He

or

with

the

firm of Ewing

Ewing Monroe

Bemiss
hired

was

Bemiss was
--

by Judge
to the

as

investment investment

advis banker

advisers

25

trustee

advisers

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108

A1412

Case 1:04-cv-01565-SLR

Document 126-15
Danitz Scott

Filed 04/17/2007

Page 3 of 11
4/6/2007

directly

identified

in the

data

request

just

dont

recall
When you
sent this

letter
believe

did you that
the

--

with

the

attached

index

did you

documents

listed in the Crowley

index were
to

correspondence

from Daniel

Judge

Arlin

Adams

Yes

MR BRESSLER
can 10 11 12 13 14 15 16 17 18 19
at

Object

to

the

form

but

he

answer

Yes

MS MIMS

Lets break Sure
We

for

lunch

MR BRESSLER
THE

VIDEOGRAPHER

are

off

the

record

1157
recess
was

taken

from

1157

a.m

to

1243

p.m

20 21
22 23 24

25

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110

A1413

Case 1:04-cv-01565-SLR

Document 126-15
Danitz Scott

Filed 04/17/2007

Page 4 of 11
4/6/2007

AFTERNOON THE record
at

SESSION
We are

VIDEOGRAPHER

back

on

the

1243
By Ms Mims
Good Good

afternoon

Mr Danitz

afternoon
we

This morning had

were
that

discussing

that

Coram

debt

Do you

remember

testimony

Yes
Did 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
in the for ways an of

Coram have

to

pay

interest

on that

debt Yes
Was part
of that debt

notes

Yes
Did Coram have
to

pay

interest

on those

notes
They were obligated
to

pay

interest

on

the

notes
What
do

you mean by
--

that
agreements there were called different

Well
interest paying What

the

the

note and

obligation that were interest
the

obligation

different
or

ways
do that

Either

by cash

they could

payment takes

kind

called and

P1K and effectively
instead
of

interest

paying

that

obligation

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111

A1414

Case 1:04-cv-01565-SLR

Document 126-15

Filed 04/17/2007

Page 5 of 11

Danitz, Scott R.

4/6/2007

with cash, it just increases the amount of the obligation that the company has to pay to the lenders.
Q

Does it increase the principal? Not the original principal, but it's an
\,

A

additional amount of debt that they have to pay.
Q

So when a payment in kind or a ,PIK is

made, it increases the liabilities of the company? A
Q

Yes. When you joined Coram in January of 1998,

do you know how Coram was'paying its interest? A
Q

Not at that time, I don't recall.
Do you'know why a company would choose

to - - or why Coram would choose to pay in cash or pay in kind? MR. BRESSLER: but he may answer.
A
Q

I'll object to the form,

Can you repeat the question? (By Ms. Mims) It was a bad question

I'll try to make it clearer. Are there.certain circumstances that would lead a company to pay its interest obligations in cash versus a payment in

1

kind?
A

1

Absolutely there would be, and it's going

to be different for any company that has that option

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800.548.3668 Ext. 1 Page 112

Case 1:04-cv-01565-SLR

Document 126-15
Danitz Scott

Filed 04/17/2007

Page 6 of 11
4/6/2007

Whatisit
This was
was the the

companys
meeting and

presentation Cerberus Capital

that

being

made at Goldman

with

Partners

Sachs

Foothill

on

February 15th Did preparation
of was

you

were

you

involved

in

the

this presentation involved not
the of

with

parts

of

the

presentation
10 11 12 13 14 15 16 17 18 parts
--

but

entire presentation
the

Which involved

parts

presentation

were

you

in
Without going through every
--

just

dont

recall
Were you involved
in the

financial

Yes
--

of

--

Again
first
it for for the

it would

have

been and

similar then

to

19 20 21 22
23

financial

information and

reviewing

any editorial comments and consideration
to

recommendations

changes

Lets go
Healthcare

COR-EQTY create

0002749
target

Did

Coram

Healthcare

budget

in

24 25

2000 Yes

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115

A1415

Case 1:04-cv-01565-SLR

Document 126-15
Danitz Scott

Filed 04/17/2007

Page 7 of 11
41612007

What
It

was

the

target

budget
of to

was

one

measurement being used

operating measure eventually incentive
be

profitability performance used
to of

that
the

was

company

and
for of

then any
the

measure
for

performance executives target

compensation Was

company
to the

the

budget

presented

board
recall 10 11 12 13 14 15 16 17 18 19
debt in that out it being

presented

to

the

board

yes
direct Bates labeled your attention
to the

document
few

COR-EQTY

0002752

so

its

pages

back
The paragraph numbered could you read

loud Yes
2000 are
--

All interest paid
in

payments and
in
60

due

on

Bank

cash

parentheses
million from the
sale

no

PIKs

P-I-K
in

capital
debt

P-I--K-s

reduction
of 44 CPS

series Credit half

principal

20 21
22 23 24

Senior

Facility line percent
--

remains at point percent

million with
in July

half

increase

2000
first

Does refresh budgeted your
to

the

sentence
as to

that

you

read Coram

recollection pay
its

the

way

that

25

interest

obligations

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Ext Page 116

A1416

Case 1:04-cv-01565-SLR

Document 126-15
Danitz Scott

Filed 04/17/2007

Page 8 of 11
416/2007

Yes
Was
the

it that

does
part

It of

was the

to

be paid

in

cash
with

budget

shared

board
Without going have back
to to see the that

original

presentation
just

--

Id

presentation

dont

recall
your attention looking
to at be to
it

Directing right side read 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 prepared preparation report
was put the of the

the

lower you can

page

where date

text

there appears

and

time

stamp Yes 609 p.m
Does Coram
at the

December

22nd

1999

oclock

--

computer

system that

you

used

at

this time date
It

stamp

documents
if the

would
in

only be
the

on there

preparer

that

command And
It

report
it

thats being printed

what can
be

would

indicate

different
or header

mean you can put
of

anything

in

the

footer

report

Okay
But
of

that
this

was
it

the was
--

intent
to on

here
the

is

in that the

put
this this

date

prepared
So

on

particular report
was

page

you believe
of

that
--

in December

December

22nd

99

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117

A1417

Case 1:04-cv-01565-SLR

Document 126-15
Danitz Scott

Filed 04/17/2007

Page 9 of 11
4/6/2007

was paid by

cash

Because going
to

Mr
by

Crowley

indicated we

were

pay And

it

cash
company
have

did the

enough

cash

to

pay

it

by

cash
We

had

funds with

available

to

make

the

interest

payment Did

cash yes
direct you to make
the

Mr

Crowley

payment 10 11 12 13 14 15 16 17 18 19
still

in

cash dont
know
he
if

it was

me

specifically instructed
me to

but make

eventually
the

yes

would

have

payment
After

yes
the

payment

was

made did Coram

have

cash

available
recall time

dont
availability But
to at

how
of

--

the

cash

the

the

interest they

payment

answer because

your question

yes

still had

cash
during

wenever borrowed on any facility
as
it

my tenure
So is

the fair

principal
to its say

financial Coram

officer

20 21
had enough

that

must have
it

cash
to

to

meet

obligations

because

22
23 24 25

didnt have

borrow
Object
to the

MR BRESSLER
they could filed the meet

form

If

their obligations

they
he

wouldnt have
can answer
if

bankruptcy

petition

but

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121

A1418

Case 1:04-cv-01565-SLR

Document 126-15
Danitz Scott

Filed 04/17/2007

Page 10 of 11
4/6/2007

he

knows

Right
terms cash cash
--

The cash

--

the

question
the

isnt right
There used

in

we

had

to

make
the

payment
and
we

was

available
to

to

make

payment

that

make

the

payment
Did Coram
to

By Ms Mims
available operations after
the

have
its

enough

cash

payment

meet

day-to-day

obligations

MR BRESSLER
10 11 12 13 14 15 16 17 18 19 20 cash had
that that

Object

to

the

form

He

can

answer

if

he

can
For the

Yes
time

day-to-day

operations

at

yes

Pause
By Ms Mims
been have made as affected
If that in

interest

payment

payment
the

kind
that

P1K would
was

valuation

prepared

by Chanin Capital have

Partners
no

idea
that

Did paying rather
on

interest
in

obligation have any

in

than

as

payment

kind

21
22 23 24

effect

EBITDA

No
Did shareholder
We

it
it

did

not
any effect
on the

have

value

of

equity werent valuing
shareholder

25

equity

so

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122

A1419

Case 1:04-cv-01565-SLR

Document 126-15

Filed 04/17/2007

Page 11 of 11

21

STATE OF COLORADO

ss
COUNTY OF DENVER Vanessa
that am

REPORTERS

CERTIFICATE

Campbell

do

hereby

certify and
that the

Registered within

Professional Reporter
State of of

Notary

Public
to was

the

Colorado

previous deponent

the

commencement
to

the

examination
the

duly sworn further

testify to
this time

truth

certify that by me at
was the

deposition was and place

10 11 12
13

taken

in

shorthand

herein

set

forth and

thereafter
the

reduced

to

typewritten
true

form and
correct further

that

foregoing

constitutes

and

transcript certify that counsel
for am not

14
15

related
the

to

employed

by

nor of

any

of

16

parties or attorneys herein interested
in In the

nor otherwise\
the

17

result of

within have

action

18

witness
seal

whereof
12th

affixed my

19 20

signature and

this

day of

April

2007 2010

My commission expires

November

_________ RPR
Vanessa
23

1.oTARE4\\
E1JBLC.I

216

16th

Campbell Street Suite
80202

CRR
650

Denver
24

Colorado

25

A1420