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

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BEUS GILBERT PLLC
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 LEAPSOURCE, INC., et al., 24 25 Counter Defendants. vs. MICHAEL MAKINGS, Counterclaimant, (Assigned to the Honorable Robert C. Broomfield) (Oral Argument Requested) Steven J. Brown / 010792 / [email protected] 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
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

PLAINTIFFS' RESPONSE TO DEFENDANTS' MOTION TO BAR PLAINTIFFS FROM ASSERTING UNDISCLOSED DAMAGES CLAIMS

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Plaintiffs submit this Memorandum and attached Declarations in opposition to Defendants' Motion to Bar Plaintiffs From Asserting Undisclosed Damages Claims. Defendants have moved the Court to bar Plaintiffs from offering evidence or advancing arguments in support of purportedly "undisclosed damages claims," by which they mean to bar all damages except the Individual Plaintiffs' severance claims. Defendants' motion should be denied. The Motion is based upon a false premise ­ that there are categories of "undisclosed damages claims" ­ and it both misrepresents and ignores the applicable rules and legal standards, as well as the facts.

9 10 11 12 13 14 15 16 17 18 made known to the other parties during the discovery process or in writing." The Advisory 19 20 21 22 23 24 25
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MEMORANDUM OF POINTS AND AUTHORITIES Rule 26(a)(1)(C) calls for "a computation of any category of damages claimed by the disclosing party, making available for inspection and copying as under Rule 34 the documents or other evidentiary material, not privileged or protected from disclosure, on which such computation is based, including materials bearing on the nature and extent of injuries suffered." Fed. R. Civ. Pro. 26(e)(1) provides for supplementation of disclosure statements in some circumstances, "if the additional or corrective information has not otherwise been

Committee Notes for the 1993 Amendments to Rule 26 provide: The obligation to supplement disclosures and discovery responses applies whenever a party learns that its prior disclosures or responses are in some material respect incomplete or incorrect. There is, however, no obligation to provide supplemental or corrective information that has been otherwise made known to the parties in writing or during the discovery process . . .

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(Emphasis added.) "The duty to supplement ... does not require an application of form over substance. ... In fact, both the Advisory Committee and leading commentators indicate that the incidental discovery, particularly during a deposition, of information ordinarily subject to supplementation satisfies the Rule 26(e)(1) duty as sufficiently as a formal filing." Coleman v. Keebler Company, 997 F. Supp. 1102, 1107 (N.D. Ind. 1998); Guzman v. Abbott Laboratories, 59 F. Supp.2d 747, 755 (N.D. Ill. 1999); 8 Wright, Miller & Marcus, FEDERAL PRACTICE AND PROCEDURE: CIVIL 2D § 2049.1 at 604 (2nd ed.1994). I. PLAINTIFFS' DAMAGES CLAIMS AND DISCLOSURES From the very beginning of this lawsuit, which was filed after the Defendants had

9 10 11 12 13 14 15 16 17 18 19 313 ("Under the direction and control of GTCR ... LeapSource agreed to fraudulently 20 21 22 23 24 25
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already dismantled LeapSource and put it into bankruptcy for liquidation, the Plaintiffs have charged the Defendants with the destruction of the entire business enterprise. See, e.g., Fourth Amended Complaint ¶¶ 243 and 244, alleging misconduct "culminating in the destruction and bankruptcy of LeapSource" and the destruction of LeapSource and of the Kirk-GTCR Joint Venture. The pleadings also include claims for failure to preserve the assets of the business enterprise for the benefit of creditors (the Trust Fund Doctrine claim), and specifically for the sale of the ICG assets for less than their fair value. See Fourth Amended Complaint ¶

convey its ownership interest in the ICG Division ... in exchange for forgiveness of the Company's $2.5 million note to Makings. ... exceeded the value of Makings unpaid note."). The value of the ICG Division greatly

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The Defendants' Motion reveals that the Defendants have understood that the Plaintiffs' damage claims include "the lost value of LeapSource and the Kirk-GTCR Joint Venture." Motion at 12, line 4. The evidence of that value has been disclosed to the Defendants, both in documents and in deposition testimony. While Plaintiffs' Rule 26 Initial Disclosures did not include a computation of damages, the Plaintiffs did provide the Defendants with the documents in their possession pertaining to their damages claims, including documents relating to the valuation and destruction of the entire LeapSource business enterprise, and to the value of ICG, including

9 10 11 12 13 14 15 16 17 18 19 February and March of this year, copies of which are attached as Exhibits F through M to the 20 21 22 23 24 25
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the documents relating to the valuation and purchase of ICG for $10 million in January 2000, and to the sale of the ICG Assets in exchange for the forgiveness of a $2.5 million promissory note only one year later in March 2001. Many of those documents have since been the subject of deposition questions and testimony by the Plaintiffs, by the Defendants, and by third party witnesses as well. A. Individual Plaintiffs' Damage Claims From Lost Income and Expenses

After their Initial Disclosure Statement (and First and Second Supplements) were served on the Defendants, the Plaintiffs also served their Responses to Defendant GTCR's Second Set of Interrogatories (the First Set of Interrogatories to Plaintiff Tom Gilman) in

Defendants' Motion. Those responses included a comprehensive recitation of the Individual Plaintiffs' damages for lost income and out of pocket costs and other damages, in addition to their severance claims.

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For one example, Plaintiff Kelly Powers' response to Interrogatory No. 1 stated the following with regard to her individual damages, in addition to her severance damages: Prior to joining LeapSource in September 1999, Kelly Powers was a Senior Manager at Arthur Andersen earning $110,000 per year. Powers' career prospects at Arthur Andersen were very promising and she was expected to make partner in 2001. As an entry-level partner Powers was expected to earn at least $250,000 per year. In 2004 Powers was expected to make "equity" partner and was expected to earn at least $400,000 per year and participate in profit sharing. When she joined LeapSource Powers' salary was $150,000 per year; however, Powers was terminated from LeapSource without cause in March 2001. She was without employment until July 2001. Powers' past loss of income from the time that she was terminated until she found a new position was $50,000. She was also asked by Michael Makings to work for an additional week beyond her termination date. She has never been paid for that additional weeks work and is owed $2,885. In Powers' new position she earned a salary of $125,000 per year for her first year; for 2002 she earned $127,500 plus a $13,000 bonus; for 2003 she earned $150,000 plus a $16,000 bonus; for 2004 she earned $155,000 plus a $10,000 bonus; and for 2005 she expects to earn $155,000 plus a bonus, the amount of which is yet to be determined. Powers has also received $88,536 for stock options that she has been able to exercise while in her new position. Powers' Employment Agreement with LeapSource promised a severance package of $75,000 in the event of termination without cause. Powers has never been paid this severance. Powers paid $15,000 for shares of LeapSource stock that is worthless. Powers has also incurred attorney's fees and other expenses as a result of trying to enforce her rights as against the Defendants. Had Powers remained on at Arthur Andersen her career would not have been substantially impacted by its subsequent closure ­ Powers expected to find an equal or similar position at one of the remaining "Big 4" firms, just as her peers from Arthur Andersen had done. See Ex. J to Defendants' Motion at pp. 12-13 (emphasis added). Similarly detailed

information was provided for each of the Individual Plaintiffs (see Exhibits F through M to

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Defendants' Motion). It is not true that the amounts of the Individual Plaintiffs' damages other than loss of severance were not disclosed.1 B. Damages From the Destruction of LeapSource And the ICG Assets Sale

With respect to the damages from the destroyed value of LeapSource, and the sale of the ICG Assets for less than their actual value, the Plaintiffs have produced documents and there has been deposition testimony about all of those issues. The documents produced by the Plaintiffs include all of the valuation and purchase and sale documents from the purchase of ICG and the subsequent sale of the ICG assets to Defendant Makings, including:

10 11 12 13 14 15 16 17 18 Ernst & Young with respect to the acquisition of ICG in January 2000. 19 20 21 22 23 24 25 The Defendants have argued that the Individual Plaintiffs' damages must take account of the fact that Arthur Andersen was shut down in the fall of 2002. In fact, the Plaintiffs' answers to interrogatories have taken that fact into account; the closure of Andersen would not have substantially affected their earnings. See the last paragraph of Ms. Powers' interrogatory answers above.
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· Documents from the January 2000 acquisition of ICG for $10 million. · Documents from the March 2001 sale of ICG to Defendant Makings in exchange for the forgiveness of a $2.5 million promissory note. · GTCR's own internal memorandum indicating that, notwithstanding a claimed decline in value since the business was acquired for $10 million in January 2000, the ICG business was worth between $4 and $6 million in early 2001. · Audited financial statements and due diligence reports prepared by KPMG and

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· Plaintiff Christine Kirk testified at her deposition that Makings had admitted to receiving an offer from Deluxe to purchase the workflow software used by ICG for $4 million to $6 million. · Plaintiff Tom Gilman testified that, assuming annual revenues of approximately $ 3 million (from 2000 historical data), ICG was worth approximately $10.5 million. If the revenues were assumed to be $6 million for the year 2001 (an amount that was projected by Defendant Makings himself

8 9 10 11 12 13 14 15 16 17 the value of the business, and its reduced value as a result of the Defendants' misconduct. 18 19 20 21 22 23 24 25
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in early 2001, and all of the documents including such projections were also produced), the value of ICG in early 2001 was approximately $21 million. · There was also testimony and documentary evidence that Defendant Makings knew in early 2001 that the company was going into bankruptcy ­ so that he knew the $2.5 million unsecured note was worthless when he agreed to surrender the note in exchange for the ICG Assets. With respect to the destroyed value of the LeapSource business enterprise, the Plaintiffs have produced documents and there has been deposition testimony concerning both

With respect to the value of the business enterprise before the first reduction in force in early February 2001, the Plaintiffs produced: · A January 22, 2001 presentation to the LeapSource board of directors, reflecting a valuation of LeapSource at $2.00 per share, which implies a value of at least $64 million.

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· LeapPaks containing the monthly financial statements and other financial information for LeapSource (including ICG), as well as pro-forma projections up to 5 years into the future, were produced for each month from November 1999 through December 2000. · Forecasts, business valuations based on multiples of revenue, comparable company analysis prepared by nationally known investment bankers and underwriters Salomon Smith Barney. SSB projected a value of LeapSource at

8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Admittedly, these valuations were based upon projections of future revenues that LeapSource never achieved because it was shut down and bankrupted in 2001. However, these valuations also provided a range of relevant multiples of revenues that could be applied to LeapSource's actual revenues, and all of that information was provided to the Defendants.
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between $440 million and $528 million.2 · Forecasts, analysis of appropriate multiples of revenue with which to value LeapSource, comparable company analysis, BPO market analysis by nationally known investment bankers and underwriters Chase H & Q. · Forecasts, business valuations based on multiples of revenue, comparable company analysis by nationally known investment bankers and underwriters Robertson Stephens (valuing LeapSource at between $312.6 million and $373 million) and William Blair (between $281.25 million and $393.75 million). · LeapSource Board of Director Consents were provided whereby the Directors had established and adjusted the share values of the company. · Former LeapSource Controller Tina Rhodes also testified as to the valuation of LeapSource shares as of year-end 2000 (8,200,000 additional shares were

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issued to GTCR with a value of $16.4 million); the Plaintiffs have also produced the 31 December 2000 resolution by the LeapSource board, valuing the common stock at $2.00 per share as of that date. · Tom Gilman testified at his deposition that, in his opinion the entire business enterprise was worth approximately $125 million in early February 2001, including approximately $21 million for the value of the ICG business. After the first reduction in force (which Tom Gilman testified resulted in the loss of

8 CHC as a potential client, and impaired the value of the company for other potential 9 10 11 12 13 14 15 16 17 February, which caused the loss of CHC as a potential client. 18 19 20 21 22 23 24 25
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investors or purchasers of the business as a going concern): · Plaintiff Christine Kirk testified at her deposition that EDS had been negotiating for the purchase of LeapSource as a going concern, for a price in the range of $50 million. · Tom Gilman testified at his deposition that the entire business enterprise was worth $90 million in late February 2001, a reduction of $35 million from his earlier opinion of value, as a result of the first reduction in force in early

After GTCR terminated Christine Kirk as CEO (on 27 February 2001) and implemented a second reduction in force in early March 2001, the Plaintiffs have disclosed: · A March 6, 2001 proposal to purchase LeapSource for a price in the range of $5 to 15 million. This proposal was verified by former Exult employee Kevin Campbell during his deposition, by Christine Kirk at her deposition, and by

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Tom Gilman in his answers to GTCR Interrogatories (Exhibit F to Defendants' Motion, at pp. 12-13). · Tom Gilman's handwritten notes from a March 2001 telephone conversation with Joe Nolan of GTCR, when Mr. Nolan advised that GTCR had rejected a proposal that COMSYS invest $4 million in LeapSource in exchange for 10% ownership (which implies a business enterprise value of at least $40 million). These are only a small fraction of the documents and information disclosed to the

8 Defendants with respect to the valuation of the business enterprise, and of the ICG Assets. 9 10 11 12 13 14 15 16 17 18 19 Eaton. 20 21 22 23 24 25
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The parties have also obtained other documentation relating to these same issues through subpoenas to third parties. II. PLAINTIFFS' EXPERT DISCLOSURES The Plaintiffs' Initial Disclosures and answers to interrogatories indicated that the Plaintiffs expected to call a specially retained expert to testify with respect to the Plaintiffs' damages claims. When the time came to decide what specially retained expert opinion witnesses to use at trial, the Plaintiffs decided to use a single retained expert (Professor Geoffrey Hazard of the University of Pennsylvania Law School) to testify with respect to the ethical and standard of care issues bearing upon the conduct of Kirkland & Ellis and David

With respect to the Plaintiffs' other claims, including the Trustee's and the Individual Plaintiffs' damages claims, the Plaintiffs determined that the Plaintiffs themselves could be called to give opinion testimony, whether under Rule 701 (lay opinion testimony) or Rule

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702 (expert opinion testimony) of the Federal Rules of Evidence, and disclosed their intention to have the Individual Plaintiffs give opinion testimony at trial. After the Plaintiffs disclosed the identity and expert report of Professor Hazard, and their intent to present opinion testimony from the Individual Plaintiffs, counsel for Defendant Kirkland & Ellis inquired by telephone about the subjects of the opinion testimony by the Individual Plaintiffs. The Plaintiffs' counsel told K&E's counsel that the Individual

Plaintiffs would give opinion testimony about a number of subjects, and expressly advised that Tom Gilman would testify about the efforts to sell the business (and to find additional

9 10 11 12 13 14 15 16 17 18 2000 Amendments to Rule 701 states: 19 20 21 22 23 24 25 [M]ost courts have permitted the owner or officer of a business to testify to the value or projected profits of the business, without the necessity of qualifying the witness as an accountant, appraiser, or similar expert. See, e.g., Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153 (3rd Cir. 1993) (no abuse of discretion in permitting the plaintiff's owner to give lay opinion testimony as to damages, as it was based on his knowledge and participation in the day-to-day affairs of the business). Such opinion testimony is admitted not because of experience, training or specialized knowledge within the realm of an expert, but 11 investors for LeapSource), including the valuation issues described above. See attached Declaration of Scot Stirling. Each of the Individual Plaintiffs may testify as to his or her personal income and related losses and damages pursuant to FRE 701 and 702. Moreover, as part owners of the business, the Individual Plaintiffs are competent to testify about their own opinions of the value of the business. Mr. Gilman is thus qualified to testify with respect to the value of LeapSource and of the ICG division of that business, even without having to be qualified to give "expert" opinion testimony under FRE 702. The Advisory Committee Notes for the

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because of the particularized knowledge that the witness has by virtue of his or her position in the business ... Whether Mr. Gilman's testimony is regarded as lay opinion testimony under FRE 701, or expert opinion testimony under FRE 702, Mr. Gilman was not obligated to file a report. He is neither a "retained or specially employed expert" nor is he a "witness whose

5 6 7 8 9 10 11 12 13 14 15 16 None of them was retained or specially employed to provide expert testimony in the case, 17 18 19 20 21 22 23 24 25
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duties as an employee of the party regularly involve giving expert testimony."

Rule

26(a)(2)(A) and (B) require the following disclosures with respect to expert opinion testimony: (A) In addition to the disclosures required by paragraph (1), a party shall disclose to other parties the identity of any person who may be used at trial to present evidence under Rules 702, 703, or 705 of the Federal Rules of Evidence. (B) Except as otherwise stipulated or directed by the court, this disclosure shall, with respect to a witness who is retained or specially employed to provide expert testimony in the case or whose duties as an employee of the party regularly involve giving expert testimony, be accompanied by a written report prepared and signed by the witness. ... (Emphasis added.) Rule 26(a)(2)(B) has no application to any of the Individual Plaintiffs.

and when they were employed by LeapSource, their duties did not regularly involve giving expert testimony. Tom Gilman's deposition, which had been scheduled for July 14-15, was postponed at the request of counsel for Defendant Makings. At his deposition, Mr. Gilman testified about the efforts to sell LeapSource before the Defendants shut it down, and as described above about the value and decline in the business value as a result of the Defendants' conduct.

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At Mr. Gilman's deposition, he was asked whether he would be providing a report of his opinions. Although Mr. Gilman was not required to provide such a report, the Plaintiffs' counsel agreed to provide a written summary of Mr. Gilman's opinions. Counsel for certain of the Defendants questioned Mr. Gilman about his opinions with respect to the valuation issues described above, while counsel for Mr. Eaton and AEG Partners expressed a desire to question Mr. Gilman about his opinions after receiving the summary of Mr. Gilman's opinions. There should be no mistake about Mr. Gilman's role in this case. Mr. Gilman is a

9 10 11 12 13 14 15 16 17 18 a buyer for the business. Mr. Gilman was not specially retained to provide expert opinions, 19 20 21 22 23 24 25
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plaintiff in the case. He is a part owner of LeapSource, and was personally and substantially involved in the efforts to find additional investors for, or potential purchasers of, the business in 2000 and 2001. He has opinions about the value of the business, and about the damage done by the Defendants to the value of the business before they destroyed it and put it into bankruptcy. Those opinions concern the subject of discussions and documents generated by Mr. Gilman at the time of the events, including a presentation to the LeapSource board of directors, and a memorandum addressed to members of the LeapSource board of directors about the effect of the GTCR Defendants' conduct on the business, and on his efforts to find

and he is not required to provide a written report of any kind. The authorities cited by the Defendants to suggest that the Plaintiffs had some obligation to prepare expert reports for the Individual Plaintiffs is contrary to the plain language of Rule 26(a), and is not the law in the Ninth Circuit. The Defendants

acknowledge that the authority that they rely upon has been questioned in Navajo Nation v.

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Norris, 189 F.R.D. 610 (E.D. Wash. 1999). Defendants' Motion, p. 11 n. 4. The Norris Court emphasized the plain language of the two categories of expert witness identified by the rules who need to submit a report: "non-employees of a party especially retained or

employed for the particular case and one comprising employees of a party who regularly testify for the employer party." Id. at 612. In Norris, the Plaintiffs had indicated in their response to interrogatories that expert information and the substance of testimony would be disclosed. Plaintiffs then did not disclose expert reports but decided to use the expert testimony of tribal employees. The court ruled that because these employees' duties did not

9 10 11 12 13 14 15 16 17 18 the witness in question "is being called solely or principally to offer expert testimony." 19 20 21 22 23 24 25
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involve regularly giving expert testimony in court they were not required to provide reports based on FRCP 26(a)(2)(B). See also Piper v. Harnischfeger Corp., 170 F.R.D. 173 (D. Nev. 1997). The unreported case of Day v. Consolidated Rail Corp., 1996 WL 257654 (S.D.N.Y. May 15, 1996) is relied on by the Defendants to contend that Mr. Gilman (and the other Plaintiffs) should have submitted expert reports even though they have not been specially retained and their duties at LeapSource did not require that they regularly give expert testimony. Day is clearly distinguishable for a number of reasons. The Day court noted that

(Emphasis added). Id. at *3. That is not true of Mr. Gilman or any of the other Individual Plaintiffs. In fact, the Day court specifically acknowledged that: Although Rule 26(b)(4)(A), governing depositions of experts, appears to imply that some category of experts may be exempt from the report requirement, that exemption is apparently addressed to experts who are testifying as fact witnesses, although they may also express some expert opinions....

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Id. at *2 (emphasis added). In every other case relied on by the Defendants, KW Plastics v. U.S. Can Co., 199 F.R.D. 687 (M.D. Ala. 2000); Prieto v. Malgor, 361 F.3d 1313 (11th Cir. 2004); and Minnesota Mining and Manufacturing. Co. v. Signtech USA, Ltd., 177 F.R.D. 459 (D. Minn. 1988), the witness was an employee of one of the parties who was called for the purpose of giving solely or principally expert testimony. That is not true of any of the Individual Plaintiffs in this case, who are parties and fact witnesses. There is no authority for the Defendants' suggestion that the Plaintiffs should be

9 10 11 12 13 14 15 16 17 18 19 Plaintiffs to comply with the Rule 26 requirement of a "computation of any category of 20 21 22 23 24 25
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precluded from providing expert testimony on the grounds that they have not submitted reports, when no such reports were required by Rule 26. In Ordon v. Karpie, 223 F.R.D. 33, 35 (D. Conn. 2004), the court said it had discretion to impose a report requirement, but there is no authority for exercising such discretion after the fact to preclude otherwise admissible opinion testimony by an individual plaintiff from whom no such report is required by Rule 26. The court in Ordon court ordered that a report be provided, but not that the testimony be excluded. III. THE DEFENDANTS' REFUSAL TO "MEET AND CONFER" Defendants are requesting evidentiary sanctions based on an alleged failure of

damages claimed by the disclosing party." Rule 37 provides the mechanism for compelling disclosure or seeking sanctions where a party claims that another party has failed to make a required disclosure. However, Rule 37(a)(2)(A) also requires "that the movant has in good faith conferred or attempted to confer with the party not making the disclosure in an effort to

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secure the disclosure without court action."

Defendants have failed to make this

certification, because they did not comply with the meet and confer requirement, and refused to do so when the Plaintiffs suggested it. Such a conference could have alleviated the necessity of court intervention on this matter. See Declaration of Steven E. Weinberger. Furthermore, the cases cited by Defendants are factually distinguishable, and none supports the sanctions the Defendants are asking the Court to impose in this case. In the case of Miksis v. Howard, 106 F.3d 754, 760 (7th Cir. 1997), the Court had established a discovery schedule on a personal injury case with an initial discovery cut-off of March 31st. The Defendants thereafter asked for two discovery deadline extensions, the first through June 30th. On July 28th Defendants asked for another extension for limited discovery. It was not until August 11th that Defendants moved the court to permit a medical examination of Plaintiff, and on August 24th they moved to continue the expert designation time to October 1st claiming that the expert witness opinions would be incomplete without the medical examination. The District Court did not rule on these motions until October 30th. Both motions were denied. On November 3rd Defendants designated their expert witnesses, with the trial scheduled to begin on November 6th. The Plaintiff moved to exclude Defendants' expert witnesses from testifying at trial, which was granted. In the case of Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1106 (9th Cir.), a misappropriation of trade secret case, Defendant's only damages expert witness was excluded from testifying at trial. Defendant Decker identified their damages expert witness

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on August 1, 1997, yet they did not provide the required expert witness written report for 2 ½ years, which was 2 years past the discovery cutoff and a mere 28 days before trial. Conclusion. For all of the foregoing reasons, Plaintiffs respectfully request that this Court deny Defendants' Motion. Alternatively, should this Court believe that a more definite computation of damages be made (and bearing in mind that the Plaintiffs have already agreed to prepare a written summary of the opinions of Tom Gilman before his deposition is completed, although no

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expert report from Mr. Gilman is required by Rule 26(a)), Plaintiffs ask that they be permitted to supplement their responses to the Defendant GTCR's interrogatories with respect to these damages issues. In any case, there is no need to modify the remaining pretrial schedule. Dated this 15th day of August 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 17

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CERTIFICATE OF SERVICE I hereby certify that on August 15, 2005, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a

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Notice of Electronic Filing to the following CM/ECF registrants: Kevin A. Russell Catherine E. Palmer 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

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I hereby certify that on August 15, 2005, I served the attached document by e-mail on the following, who are not registered participants of the CM/ECF System:

Steven J. Brown STEVE BROWN & ASSOCIATES, LLC Co-Counsel for Trustee [email protected] Catherine E. Palmer LATHAM & WATKINS LLP [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

s/Scot C. Stirling

Case 2:02-cv-02099-RCB Document 237 H:\Leapsource\PLEADINGS\Plaintiffs Opposition to Defendants Motion to Bar Damages (revised).doc Filed 08/15/2005

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