Free Response in Opposition to Motion - District Court of Arizona - Arizona

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BEUS GILBERT PLLC
ATTORNEYS AT LAW

4800 NORTH SCOTTSDALE ROAD SUITE 6000 SCOTTSDALE, ARIZONA 85251 TELEPHONE (480) 429-3000

Leo R. Beus/002687 ­ [email protected] Scot C. Stirling/005757 ­ [email protected] Steven E. Weinberger/015349 ­ [email protected] Kevin Breger/021004 ­ [email protected] Attorneys for Individual Plaintiffs and Trustee

STEVE BROWN & ASSOCIATES, LLC
1440 EAST MISSOURI, STE. 185 PHOENIX, ARIZONA 85014-2412 TELEPHONE (602) 264-9224

Steven J. Brown/010792 Co-Counsel for Trustee UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA DIANE MANN, as Trustee for the Estate of LeapSource, Inc., CHRISTINE V. KIRK, et al., Plaintiffs, vs. GTCR GOLDER RAUNER, L.L.C.; et al., Defendants.

Case No.: CIV-02-2099-PHX-RCB

PLAINTIFFS' RESPONSE TO KIRKLAND & ELLIS MOTION FOR SUMMARY JUDGMENT RE AIDING AND ABETTING BREACH OF FIDUCIARY DUTIES AND TORTIOUS INTERFERENCE CLAIMS Oral Argument Requested

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1 2 3 4 5 6 7 8 9 10 11 considered together. That is, K&E's improper conduct to interfere with the plaintiffs' 12 13 14 15 16 17 18 19 20 21 K&E to be acting at all times in the interests of GTCR, rather than protecting the 22 interests of the creditors of LeapSource, which Mr. Eaton knew to be insolvent. 23 24 25 It is no surprise that Mr. Eaton, who K&E recommended to GTCR for this role during a time of conflict and turmoil at LeapSource, knowing and intending that Mr. Eaton would not be
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The Plaintiffs submit the following Memorandum in opposition to the Kirkland & Ellis Motion for Summary Judgment re Aiding and Abetting Breach of Fiduciary Duty and Tortious Interference claims (Docket No. 255). The Motion should be denied. MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION Although K&E has attempted to separate them by filing separate motions, the factual and legal issues raised by the K&E Motion for Summary Judgment re Aiding and Abetting Breach of Fiduciary Duties and Tortious Interference Claims are closely related to the issues raised by the K&E Motion for Summary Judgment re Vicarious Liability, and should be

contract rights and expectations, and its substantial assistance to the breaches of fiduciary duties owed to the plaintiffs, include both: (a) its own conduct in recommending and working with one of its "of counsel" attorneys, David Eaton, as a "crisis manager" (he was later made Chief Restructuring Officer) for LeapSource, notwithstanding the conflicts of interest between LeapSource and K&E's long-standing and much more lucrative client, GTCR; and (b) the acts of Mr. Eaton himself, who was "of counsel" to K&E during the entire time that he was working for LeapSource, and who was expected by GTCR and by

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free to take any position adverse to GTCR, performed as expected and acted at all times to protect the interests of GTCR.1 In doing GTCR's bidding, however, Mr. Eaton breached his own duties to LeapSource and assisted others, including Mike Makings and the GTCR principals on the LeapSource board of directors, to breach their duties to LeapSource as well. Because of K&E's part in placing Mr. Eaton in the position to do that harm to LeapSource, when both K&E and Mr. Eaton were conflicted, and because of K&E's continuing relationship with Mr. Eaton and its continuing role in the work he was doing at LeapSource to protect GTCR's interests, K&E itself acted improperly in a way that

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 It is remarkable that K&E has argued in this case that it is not liable for Mr. Eaton's conduct at LeapSource because, according to K&E, he was not acting "in his capacity as a K&E attorney" when he was working for LeapSource, but K&E nevertheless expected Mr. Eaton to be bound by his ethical obligations to K&E and to GTCR when he was at LeapSource. K&E cannot have it both ways. A lawyer is always a lawyer, even when he claims not to be acting as a lawyer to a client in a particular matter. In re Neville, 147, Ariz. 106, 708 P.2d 1297 (1985). Moreover, the evidence shows that Mr. Eaton drew upon the same expertise he developed as a K&E bankruptcy lawyer to advise LeapSource about whether, where, and when to file for relief in bankruptcy, among other matters.
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interfered with the plaintiffs' contract rights and expectations, and provided substantial assistance to those breaches of fiduciary duties. In reviewing the claims that are the subject of this Motion, it is important to bear in mind that K&E nowhere denies or attempts to demonstrate that the breaches of fiduciary duty alleged by the Plaintiffs in the Fourth Amended Complaint did not occur and were not committed by the other Defendants. The K&E Motion and Statement of Facts do not make any showing or argument with respect to those claims, and they are assumed as the basis for this Response, which is concerned only with K&E's responsibility for aiding and abetting

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those breaches of fiduciary duty, and its liability for the claims of tortious interference, which arise from the same conduct. II. K&E AIDED AND ABETTED BREACHES OF FIDUCIARY DUTUES BY THE GTCR DEFENDANTS, BY MIKE MAKINGS, AND BY DAVID EATON. The Restatement (Second) Torts § 876 provides that:

5 6 7 8 9 10 11 12 13 14 15 16 17 18 K&E to act as crisis manager and who was made Chief Restructuring Officer of LeapSource 19 20 21 22 23 24 25 ­ with the knowledge and assistance of K&E. The requirement of "substantial assistance" to the breaches of fiduciary duty may be satisfied by the evidence of K&E's conduct in recommending David Eaton for his role at LeapSource, in circumstances in which both he and K&E had a conflict of interest, and by the evidence of K&E's knowledge of Mr. Eaton's conduct at LeapSource, which included negotiating and recommending the sale of the ICG Assets to Mike Makings, attempts to
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For harm resulting to a third person from the tortious conduct of another, one is subject to liability if he (a) does a tortious act in concert with the other or pursuant to a common design with him, or (b) knows that the other's conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other so to conduct himself, or (c) gives substantial assistance to the other in accomplishing a tortious result and his own conduct, separately considered, constitutes a breach of duty to the third person. Under any of those three tests, a reasonable jury could find that K&E is liable for the breaches of fiduciary duties committed by the GTCR VI entities as majority shareholders of LeapSource, by the GTCR principals who were members of the LeapSource board of directors, by Mike Makings as CEO and a director of LeapSource for his self-dealing in company assets, and by David Eaton ­ K&E's own "of counsel" attorney recommended by

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discredit Chris Kirk and to force the release of claims against GTCR, and plans for the liquidation of LeapSource assets and then to put the company into bankruptcy. Those circumstances are described in the Plaintiff's Statement of Additional Facts and some of the facts supporting both the Plaintiffs' claims for aiding and abetting breaches of fiduciary duties and tortious interference are also referred to in the following section of this Memorandum. Whether a defendant has provided "substantial assistance" to the breach of another's fiduciary duties is a question of fact, and it is important to remember the admonition from

9 10 11 12 13 14 15 16 17 18 this case, breach of fiduciary duty]. ... The test is whether the assistance makes it `easier' 19 20 21 22 23 24 25 for the violation to occur, not whether the assistance was necessary." Id. at ¶ 54. Here, the circumstances surrounding K&E's recommendation that one of its own attorneys be retained to act as "crisis manager" for a company that it knew to be involved in a conflict with another K&E client that paid the firm millions of dollars in fees every year are so egregious that a jury could reasonably conclude that Mr. Eaton was recommended precisely because his relationship with K&E would prevent him from taking any position on
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Wells Fargo Bank v. Arizona Laborers, Teamsters and Cement Masons, 201 Ariz. 474, 38 P.3d 12 ¶ 47 (2002) that, "[a]lthough the facts ... are unremarkable taken in isolation, ... taken together, they present what should have been a jury issue on the question of aidingand-abetting liability" (quoting Metge v. Baehler, 762 F.2d 621, 630 (8th Cir. 1985)). "Moreover, `if [a] ... method or transaction is atypical or lacks business justification, it may be possible to infer the knowledge necessary for aiding and abetting liability." Id. at ¶ 51, quoting Woodward v. Metro Bank of Dallas, 522 F.2d 84, 97 (5th Cir. 1975). Finally, "substantial assistance does not mean assistance that is necessary to commit the fraud [or, in

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behalf of LeapSource that would be adverse to the interests of GTCR, which wanted out of its investment in LeapSource in a way that (1) limited its own downside, (2) avoided embarrassment (such as would result from a public airing of the complaints described in the February 24 2001 "Gilman Memorandum," Statement of Additional Facts Exhibit 6), and (3) protected its investment in Comsys, a substantial client of LeapSource. Cunningham Notes, SOAF Exhibit 12. Those were not LeapSource priorities, but GTCR priorities; K&E had no business recommending Mr. Eaton, and Mr. Eaton had no business taking on the representation of See Sean

9 10 11 12 13 14 15 16 17 18 ("knowledge of the breach can be inferred from surrounding circumstances raising a 19 20 21 22 23 24 25 reasonable inference of knowledge. ... The facts here bear out that Platel knew or clearly should have known Hendershott had a duty not to profit personally ..."), which is particularly relevant to the analysis of the sale of the ICG Assets to Mike Makings. Although in certain circumstances "doing nothing would be of great assistance to the principal actors in the tortious conduct," York v. Intrust Bank, N.A., 265 Kan. 271, 962 P.2d 405, 425 (1998), in this case David Eaton actively and directly participated in the sale of the
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LeapSource and later becoming an officer of the company, in circumstances where his duty of loyalty to LeapSource was so obviously compromised from the start. K&E's and Eaton's knowledge of impropriety does not require that they (or either one of them) have specific knowledge of particular acts of wrongdoing. Instead, that "may be demonstrated by proof that the aider-abettor `had general awareness that his role was part of an overall activity that is improper,'" and "such knowledge could come through circumstantial evidence." FDIC v. First Interstate Bank of Des Moines, 885, F.2d 423, 431 (8th Cir. 1989). See also Brock v. Hendershott, 840 F.2d 339, 342 (6th Cir. 1988)

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ICG Assets to Mike Makings, in the liquidation of LeapSource assets leading to the petition for relief in bankruptcy, and in the efforts to block Tom Gilman's access to LeapSource corporate records and to coerce releases from Mr. Gilman and from Ms. Kirk for the benefit of GTCR in the course of shutting down LeapSource and putting it into bankruptcy. Mr. Eaton was directly and actively involved in every one of the breaches of fiduciary duty complained of after he was retained as "crisis manager" for LeapSource, and he was able to do what he did because K&E recommended him for a position in which he was impossibly conflicted and compromised by his relationship and agreements with K&E, and

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Ms. Kirk did not say that the tortious interference claims "arise solely from K&E service as 25
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because K&E consulted and worked with him to represent GTCR's ­ not LeapSource's ­ interests, such as by denying access to LeapSource books and records to Tom Gilman. The liquidation and bankruptcy of LeapSource were accomplished with David Eaton's participation and assistance at every step of the process, and the liquidation and bankruptcy of the company at the behest of GTCR and against the interests of LeapSource creditors is the central fact in the breach of fiduciary claims against the GTCR Defendants, Mike Makings, and David Eaton. III. K&E TORTIOUSLY INTERFERED WITH LEAPSOURCE INDIVIDUAL PLAINTIFFS' CONTRACTS AND EXPECTATIONS AND

K&E's entire Motion is based upon a false premise, which is stated in paragraph 10 of the K&E SOF ­ that "Kirk's deposition testimony made clear that the claims against K&E for tortiously interfering with contracts or prospective economic advantage arise solely from K&E service as GTCR's legal counsel." In fact, that is not what the quoted testimony said. The question asked about legal advice, and she answered the question that was asked of her.

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GTCR's legal counsel," and that is not the question she was asked. More than two years ago, in their Response to the K&E Motion to Dismiss the First Amended Complaint, the Plaintiffs explained that the claims against K&E were based on more than K&E's "legal advice" to GTCR: [T]he Plaintiffs have alleged that K&E purported to represent both GTCR and LeapSource, with knowledge of a fundamental conflict of interest between them; that K&E continued to represent both GTCR and LeapSource even after GTCR began its campaign to destroy LeapSource, and with knowledge of the existence of the Agreements that K&E had prepared and that are now the subjects of the interference claims; that K&E and Eaton were aware of GTCR's purpose in retaining Eaton to assist GTCR with the destruction of LeapSource (and thus with the interference with contract relations described in the FAC); and that Eaton, while employed by K&E and "of counsel" to the firm that represented both GTCR and LeapSource, actively and knowingly participated in the destruction of LeapSource as described in the FAC. Response to Defendant Kirkland & Ellis Motion to Dismiss First Amended Complaint, January 2003 at page 3 (emphasis added). That same conduct was alleged with respect to the

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claim for aiding and abetting breaches of fiduciary duty, and also constitutes tortious interference with contracts, including LeapSource's contractual obligations to pay severance to Individual Plaintiffs. The Plaintiffs have no quarrel with K&E's observation that: Arizona courts analyze seven factors to determine whether there is improper interference. Wagenseller v. Scottsdale Mem'l Hosp., 147 Ariz. 370, 386, 710 P.2d 1025, 1042 (1985) (citing Restatement (Second) of Torts § 767). These are: (1) the nature of the actor's conduct, (2) the actor's motive, (3) the interests of the other with which the actor's conduct interferes, (4) the interests sought to be advanced by the actor, (5) the social interest in protecting the freedom of action of the actor and the contractual interests of the other, (6) the proximity or remoteness 8 Filed 11/14/2005

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of the actor's conduct to the interference, and (7) the relations between the parties. Id. In Arizona, whether an agent may be held liable for interfering with the contracts of his principals or client depends upon whether the agent's interference was "improper" in light of all of the factors listed in Restatement § 767. The answer to that question requires a

5 6 7 8 9 10 11 12 13 14 note that LeapSource could not pay and that had no prospect of being paid ahead of the 15 16 17 18 19 20 21 22 23 24 desire to interfere, liability attaches to interferences that are `incidental to the actor's 25
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factual determination that cannot be made in the context of this motion for summary judgment, but there is more than enough evidence to support a jury verdict that, for example, the sale of the ICG assets was harmful to the interests of the creditors of LeapSource, and prevented LeapSource from performing its contract obligations to creditors, including to Individual Plaintiffs who were owed substantial severance payments by LeapSource. Moreover, the evidence is overwhelming that such interference with the performance of contract obligations was certain to be the result of conveying those assets ­ purchased for $10 million just one year earlier ­ in exchange for forgiveness of a $2.5 million promissory

claims of other creditors if LeapSource were put into bankruptcy for liquidation. A claim of tortious interference does not require proof that the defendant actually desired to interfere with the plaintiff's contract. "The tort is intentional in the sense that [the Defendants] must have intended to interfere with the [Plaintiff's] contract or have known that this result was substantially certain to be produced by its conduct." Snow v. Western Savings & Loan Assn., 152 Ariz. 27, 33, 730 P.2d 204, 211 (1986) (citing Restatement of Torts § 8(A) and § 766 comment j) (emphasis added). Thus, it is not necessary that the defendant actually desire to cause a breach of a contract; "even if [the Defendant] did not

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independent purpose and desire but known to him to be a necessary consequence of his action.'" Id. at 212. In any event, summary judgment is inappropriate when the interfering actor's intent is an issue. Snow v. Western Savings & Loan Assn., 152 Ariz. 27, 33-34, 730 P.2d 204, 211-212 (1986) ("the question of intent ordinarily is for the finder of fact"), citing Antwerp Diamond Exchange v. Better Business Bureau, 130 Ariz. 523, 530, 637 P.2d 733, 740 (1981). Here, the improper conduct that was alleged as tortious interference with contract has now been substantiated by evidence supporting the claim described in the language quoted

9 10 11 12 13 14 15 16 17 18 providing legal advice to his or her own client have no application to a situation in which the 19 20 21 22 23 24 25 lawyer has a conflict of interest. In this case, K&E was conflicted and responded to the conflict by recommending that one of its own lawyers be placed inside LeapSource where he would be in a position to help GTCR ­ so that he was also conflicted. Mr. Yih ­ one of the GTCR principals described in the Gilman Memorandum ­ testified that he immediately forwarded a copy of the Gilman Memorandum to K&E, and that the issues raised in the Gilman Memorandum were discussed with K&E. GTCR has
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above from the Plaintiffs' Response to the K&E Motion to Dismiss the First Amended Complaint. K&E provided legal services to both GTCR and to LeapSource, and was aware of the conflicting interests of GTCR and of LeapSource in early 2001. Those conflicting interests were brought home to K&E by the "Gilman Memorandum" dated February 24, in which Tom Gilman (a member of the LeapSource board and CFO of the company) accused GTCR and principals of GTCR who were also members of the LeapSource board of acting against the interests of LeapSource, and causing damage to the corporation. K&E's authorities regarding the non-liability of a lawyer for doing no more than

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asserted the attorney-client privilege to prevent testimony about the specific substance of those conversations from principals of GTCR and from K&E attorneys. However, copies of the Gilman Memorandum were produced by K&E, showing that the document was received by email promptly after it was received by Mr. Yih, and Mr. Yih has admitted discussing the issues in the memorandum with K&E. This case does not turn upon or require any

speculation about what Mr. Yih or other principals of GTCR said to K&E. The fact that K&E was aware of the conflicts of interest that made its conduct improper is clear from Mr. Yih's testimony, and from the fact that the Gilman Memorandum describing the

9 10 11 12 13 14 15 16 17 18 that K&E be used to provide certain services to LeapSource when the company was first 19 20 21 22 23 24 25
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deteriorating relations between GTCR and LeapSource was provided to K&E. The copy of the draft "for cause" letter found on Mr. Clyne's computer also show that K&E was aware of the fact that its "of counsel" attorney Mr. Eaton was taking the side of GTCR in the conflicts described in the Gilman Memorandum. K&E has denied the existence of an attorney-client relationship with LeapSource, and so has denied the existence of a conflict of interest affecting K&E's representation of GTCR and of the GTCR principals who were members of the LeapSource board in early 2001 (Messrs. Rauner, Nolan, and Yih). However, Ms. Kirk has testified that Mr. Nolan required

formed, and that such services were in fact provided by K&E as required by GTCR. K&E invoices to LeapSource were paid by LeapSource between September 1999 and January 2001. Mr. Nolan has testified that he has no memory of such a conversation with Ms. Kirk, but admitted that GTCR frequently used K&E to provide such services to "portfolio companies" in which GTCR made equity investments ­ companies like LeapSource, saying:

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A. We use K & E a lot. They're familiar with our documents, and a lot of times it's -- they do work for our companies. That makes it easier to get the equity documents done. MR. STIRLING: Q. When you say "they do work for our companies," do you mean the companies in which GTCR equity funds make investments? A. Yes.

Nolan Deposition, 153:17-154:23. Mr. Yih, who was formerly an associate with K&E and is now a principal of GTCR, testified that when he became involved in LeapSource matters in early 2001 (actually beginning at the end of December 2000), he was also under the impression that K&E was counsel for LeapSource. Q. Were you aware that Kirkland & Ellis had provided professional services to LeapSource? MS. REFO: Objection to the form. A. I believed, yes, at the time, that it was also company's counsel. BY MR. STIRLING: Q. A. Kirkland & Ellis was? Yes.

Yih Deposition 334:20 - 335:3. The law is clear in Arizona that "[t]he existence of an attorney-client relationship depends largely on the client's `belief that it exists.'" In re Pappas, 159 Ariz. 516, 768 P.2d 1161, 1167 (Ariz. 1988) (emphasis added). In this case, Ms. Kirk has testified to the existence of an attorney client relationship between K&E and LeapSource, and the basis for

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her belief that such a relationship existed. That belief was not only reasonable, but was apparently shared ­ at least at the time ­ by Dan Yih of GTCR. Notwithstanding the conflict of interest ­ or perhaps because of it ­ K&E recommended to GTCR that it retain David Eaton, an attorney who was then "of counsel" to the law firm, to act as a "crisis manager" for LeapSource. Mr. Evanich of K&E testified that he made the recommendation to GTCR, knowing that Mr. Eaton would not be free to take any position adverse to the interests of GTCR while he was purportedly going to be representing the interests of LeapSource. In fact, Mr. Eaton spent the "great majority" of his

9 10 11 12 13 14 15 16 17 18 principals' first references to Mr. Eaton (before he was identified by name) make it clear that 19 20 21 22 23 24 25 GTCR expected Mr. Eaton to assist GTCR in deciding what GTCR should do to protect GTCR's interests. Mr. Eaton's relationship with K&E was not disclosed to the non-GTCR members of the LeapSource board. Thereafter, Mr. Eaton began to work with new time working for K&E clients as an "of counsel" attorney to the firm, and a jury could reasonably conclude that Mr. Eaton was not about to do anything to jeopardize his relationship with K&E or with a K&E client like GTCR who paid millions of dollars in fees to K&E each year. Thus, Mr. Eaton was placed at LeapSource in circumstances that coopted his loyalty to LeapSource and to the interests of LeapSource creditors from the start. Mr. Eaton was perceived by GTCR as a "K&E kind of advisor" and was consulted by principals of GTCR who then proposed to the LeapSource board that Mr. Eaton be retained (through his firm AEG Partners) to act as a crisis manager for LeapSource. The GTCR

LeapSource management and with the GTCR members of the LeapSource board (but not with Ms. Kirk or Mr. Gilman, who were still members of the LeapSource board until later in March 2001), and was made "Chief Restructuring Officer" of LeapSource in March 2001.
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In his capacity as Chief Restructuring Officer, Mr. Eaton negotiated the sale of the ICG Assets, purchased for $10 million in January 2000 (only one year earlier) to Mike Makings, who was the CEO and a member of the LeapSource board when the transaction was proposed, in exchange for the forgiveness of a $2.5 million note from LeapSource. At the time, Mr. Eaton has admitted knowing that LeapSource was insolvent, and in the circumstances in which the transaction was consummated, it was clear that LeapSource was about to go into bankruptcy for liquidation, after Mr. Eaton finished disposing of its other assets. The transaction was approved by the GTCR principals on the LeapSource board.

9 10 11 12 13 14 15 16 17 18 cause," unless Ms. Kirk could "deliver" Mr. Gilman's release: 19 20 21 22 23 24 25
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The transaction was a breach of fiduciary duties by all concerned. At the same time, Mr. Gilman made a demand as a LeapSource shareholder to review the books and records of the company, which demand was resisted by Mr. Eaton (who passed on the request to K&E and was advised by K&E that it would be necessary to consult GTCR about Mr. Gilman's request to review LeapSource books and records before responding to Mr. Gilman). Mr. Eaton's response was, among other things, to attempt to coerce a release of GTCR from Mr. Gilman and Ms. Kirk, by threatening to issue a letter claiming that Ms. Kirk's removal as CEO of LeapSource back in February 2001 was "for

So as of right now, the deal is off unless you can deliver Tom Gilman's release, and if we are not able to get that in the next couple of days then we'll issue the for cause letter and just proceed down that path. Deposition Exhibit 143, LS-CK2-2516, Statement of Additional Facts Precluding Summary Judgment ("SOAF") Exhibit 37 (emphasis added)

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In the end, Mr. Eaton served GTCR's interests with respect to LeapSource, which included (a) limiting GTCR's downside, (b) avoiding embarrassment, and (c) protecting its interest in other investments, including COMSYS, another company funded by GTCR and a customer of LeapSource. See Notes of GTCR employee Sean Cunningham at Bates

GTCR012260-012261, Deposition Exhibit 196, SOAF Exhibit 12. At one point, Mr. Rauner suggested a transaction whereby GTCR and Comsys might end up with LeapSource assets, at the same time that the company was headed toward liquidation in bankruptcy with unpaid creditors.

9 10 11 12 13 14 15 16 17 18 Q. 19 A. 20 Rauner Deposition, 194:18-195:10. 21 22 23 24 25 In the end, LeapSource was put into bankruptcy with the ICG assets sold to Mike Makings in exchange for release of a promissory note that LeapSource could not pay, and with no other assets with which to pay its creditors. The liquidation and bankruptcy of LeapSource was accomplished by David Eaton and with the approval of the GTCR members
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Q. If you -- if you could, I'd like you to refer to the lines that -- where you are quoted here as referring to "getting the right to convert some portion or all of our investment in COMSYS into some sort of ownership in the data center." Do you see that part of the message? A. Q. I do, yes, sir. Can you -- do you know what that is referring to?

A. I think what it says is that there might be a scenario where we finance COMSYS to take over and build the data center, which was losing money at the time, I believe, and that, as a result, we and COMSYS would be co-owners in the data center on some basis. I think that's what that's saying. Who is the -- the "we" in that sentence? We, GTCR Fund VI.

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of the LeapSource board, who were serving GTCR's interests rather than preserving assets for the benefit of creditors. The dissipation of the LeapSource assets in order to accomplish GTCR's objectives of shutting down LeapSource without any further demand for funding or compensation from LeapSource, attempting to avoid a public airing of the complaints described in the Gilman Memorandum, and protecting GTCR's investment in Comsys was not in the interests of LeapSource or its creditors. The result of the actions taken by David Eaton to accomplish that result included the sale of the ICG Assets for virtually no consideration at all, which

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made those assets unavailable to satisfy contract claims for severance payments to Individual Plaintiffs and others, or to satisfy the claims of other creditors. For that improper

interference with the contract obligations and expectations of the Plaintiffs, K&E should be held to account. Conclusion. The K&E Motion for Summary Judgment re Aiding and Abetting Breach of Fiduciary Duty and Tortious Interference Claims should be denied, together with the K&E Motion for Summary Judgment re Vicarious Liability.

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Dated this 14th day of November, 2005. BEUS GILBERT PLLC

By

s/ Scot C. Stirling Leo R. Beus Scot C. Stirling Steven E. Weinberger Kevin Breger 4800 North Scottsdale Road Suite 6000 Scottsdale, AZ 85251 Attorneys for Individual Plaintiffs and Trustee

STEVE BROWN & ASSOCIATES, LLC Steven J. Brown 1440 East Missouri, Suite 185 Phoenix, AZ 85014 Co-Counsel for Trustee

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CERTIFICATE OF SERVICE I hereby certify that on November 14, 2005, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Kevin A. Russell David S. Foster Nicholas B. Gorga LATHAM & WATKINS LLP [email protected] [email protected] [email protected] Attorneys for Defendants GTCR Golder Rauner, LLC, GTCR Fund VI, LP, GTCR VI Executive Fund, LP, GTCR Associates VI, Joseph P. Nolan, Bruce V. Rauner, Daniel Yih, David A. Donnini and Philip A. Canfield Don P. Martin Edward A. Salanga QUARLES & BRADY STREICH LANG, LLP [email protected] [email protected] Attorneys for Defendants GTCR Golder Rauner, LLC, GTCR Fund VI, LP, GTCR VI Executive Fund, LP, GTCR Associates VI, Joseph P. Nolan, Bruce V. Rauner, Daniel Yih, David A. Donnini and Philip A. Canfield Merrick B. Firestone Veronica L. Manolio RONAN & FIRESTONE, PLC [email protected] [email protected] Attorney for Defendant Michael Makings

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Richard A. Halloran Jon Weiss LEWIS & ROCA, L.L.P. [email protected] [email protected] Attorneys for Defendants David Eaton and AEG Partners LLC John Bouma James R. Condo Patricia Lee Refo SNELL & WILMER LLP [email protected] [email protected] [email protected] Attorneys for Kirkland & Ellis Steven J. Brown STEVE BROWN & ASSOCIATES, LLC Co-Counsel for Trustee [email protected]

__s/ Scot C. Stirling_______________________

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