Free MEMORANDUM in Support - District Court of Delaware - Delaware

_ I . Case 1 :04-cv-01339-SLR Document 41 -4 Filed 06/O3/2005 Page 1 of 2
K. i . EXHIBIT C
I LAW OFFICES
NEUBERGER, Quinn, GIELEN, Ruiam 8: GIBBER, RA.
BALTIMORE, MARYLAND 21202—3282
WWW.DqQ|’Q.COIT`I
(WRITER’S DIRECT DIAL NO.) (DIRECT FAX NO.)
(410) 332-8510 (410) 332-8511
July 29, 2004
VIA E-MAIL
Pamela Jarvis, Esquire
Gregory P. Joseph Law Offices
805 Third Avenue
New York, New York 10022
Re: ALH Holdings LLC ("ALH")
Dear Ms. Jarvis:
For our purposes, I am representing all of the Class B Investors.
Notwithstanding your protestations to the contrary, your letter reflects a much keener and
deeper understanding of the defense of this matter, than you are willing to admit.
The facts are simple. Shamrock assumed operating control of ALH. For a while
Shamrock appeared to be aligned with the Class Bs. Then, Shamrock armounced that ALH was
requiring too much Shamrock time and Shamrock sought to "sell" the Company. Their first
effort was to sell it as a "going concern" but that effort was, in my view, mishandled, as
Shamrock insisted on trying to sell ALH's balance sheet (which contained an enormous level of
goodwill) rather than to try and sell the business as a multiple of cash flow and land option
inventory, which is a valuable commodity. When the sale of the enterprise, as a whole, "failed",
Shamrock persisted in "ridding itself" of the tar baby that it had undertaken and then proposed to
sell off ALH, in a piecemeal fashion. Avie Arenson and I met with Shamrock in Charlotte,
wamed them off this proposed disastrous course and even discussed with them the possible
purchase by the B's of Shamrock's position. Our efforts were ignored and rejected.
The same pattern was shown in the sale of Jacksonville and Memphis. Shamrock had,
for all practical purposes, written off ALH and schemed to recover the loans that Shamrock had
made and tread water until the preference period had expired. None of this is in hindsight, as you
have suggested. The Bs expressed their concerns then and Shamrock dismissed them. The sad
ending is that we find ourselves where we are now. It would serve no purpose to debate whether

g . Case 1 :04-cv-01339-SLR Document 41-4 Filed 06/O3/2005 Page 2 of 2
NEUBERGER, QUINN, GIELEN, Ruam 8: GIBBER, P.A. I
Pamela Jarvis, Esq.
July 29, 2004
Page 2
Shamrock's conduct was just a bad business judgment or constituted bad faith or gross
negligence.
That said, time is of the essence and vacations notwithstanding, if Shamrock is unable or
unwilling to meet before September l4, that too is an answer, of sorts. To suggest a meeting in 7
weeks, but to demand an answer on MHI immediately is either another very arrogant position
being reflected or just plain stupid. Shamrock has made the bed that we now find ourselves in.
They may have, quite possibly, in their efforts to rid themselves of ALH compromised ALH's
position with Ohio Savings, Swiss Re, and Wachovia. Further by pursuing MHI with LaGuardia,
who used his position with ALH to his advantage in Memphis (and to the disadvantage of ALH),
they might have allowed ALH's interest to be further weakened by dealing with him again.
I would suggest that we meet this coming week. I have spoken to Avie Arenson and
Michael Jesselson and they are available to meet in London.
Very truly yours,
\$-»--`_/
Isaac M. Neuberger
IMN/at
207144
1060.3