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

Case 1 :04-cv-01551-JJF Document 354-27 Filed O9/28/2007 Page 1 of 1
Exhibit 1 to the Proposed Pretrial Order
STATEMENT OF FACTS THAT ARE ADMITTED
AND REQ QUIRE NO PROOF
V l. Student Finance Corporation, or SFC, is a corporation that was located in New
Castle, Delaware. Student Finance Corporation has been in bankruptcy since June 5, 2002.
While in bankruptcy, the affairs of SFC are being directed by a government appointed trustee,
Charles A. Stanziale, Jr.
2. From the time it was formed in 1992 until its bankruptcy in 2002, SFC was in the
business of making or originating loans to students at vocational schools (principally truck -
driving schools) and purchasing loans made directly by vocational schools to students.
3. From time to time, SFC would bundle the student loans and then sell them to
Trusts. The Trusts would then issue certificates to investors. Payments to the investors on the
certificates were backed by, among other things, the payment stream from the student loans.
These transactions were called "securitizations."
4. As a first step in the securitization process, SFC obtained lines of credit usually
from Wilmington Trust Company or PNC Bank. SFC would use the money in the lines of credit
from Wilmington Trust and PNC to fund the student loans.
5. In the next step in the securitization process, SFC would sell the loans to special
companies called SPVs, or Special Purpose Vehicles, that were created by SFC to hold the loans
until enough loans existed that could be pooled together for a securitization.
6. Once there were enough loans in the SPV, SFC would bundle the loans and then
sell them to another SPV created by SFC where they held were in a Trust. The Trust would sell
certificates to investors that were backed by the pools of loans held in the various trusts. SFC
would receive money from the sale of the loans.