Free Proposed Pretrial Order - District Court of Delaware - Delaware

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE
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In re: Oakwood Homes Corporation, et al., Debtors. OHC Liquidation Trust, Plaintiff, v. Credit Suisse (f/k/a Credit Suisse First Boston, a Swiss banking corporation), Credit Suisse Securities (USA), LLC (f/k/a Credit Suisse First Boston LLC), Credit Suisse Holdings (USA), Inc. (f/k/a Credit Suisse First Boston, Inc.), and Credit Suisse (USA), Inc. (f/k/a Credit Suisse First Boston (U.S.A.), Inc.), the subsidiaries and affiliates of each, and Does 1 through 100, Defendants.
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Chapter 11 Case No. 02-13396 (PJW) Jointly Administered

Civil Action No. 07-00799 (JJF)

[PROPOSED] PRE-TRIAL ORDER

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Pursuant to Rule 16.3(c) of the Local Rules of Civil Practice and Procedure of the United States District Court for the District of Delaware, the parties to the above-captioned proceeding (the "Proceeding") hereby submit the following proposed pre-trial order (the "Proposed PTO"): I. NATURE OF THE ACTION AND RELEVANT PLEADINGS 1. The plaintiff in the Proceeding is the OHC Liquidation Trust, by and through its duly appointed trustee, Alvarez & Marsal, LLC (the "Trust" or the "Plaintiff"). 2. The defendants in the Proceeding are Credit Suisse (f/k/a Credit Suisse First Boston, a Swiss banking corporation), Credit Suisse Securities (USA), LLC (f/k/a Credit Suisse First Boston LLC) ("CSS"), Credit Suisse Holdings (USA), Inc. (f/k/a Credit Suisse First Boston, Inc.), and Credit Suisse (USA), Inc. (f/k/a Credit Suisse First Boston (U.S.A.), Inc.) (collectively, the "Defendants" or "Credit Suisse"). 3. Defendant CSS filed four identical proofs of claim in the jointly-administered bankruptcy cases of Oakwood Homes Corporation ("Oakwood") and certain of its affiliates (collectively, the "Debtors" and together with the non-debtor affiliates, the "Oakwood Entities") as follows: (1) Proof of Claim No. 6118 filed as to the debtor in Bankruptcy Case No. 02-13397; (2) Proof of Claim No. 6119 filed as to the debtor in Bankruptcy Case No. 02-13396; (3) Proof of Claim No. 6120 filed as to the debtor in Bankruptcy Case No. 02-13393; and (4) Proof of Claim No. 6121 filed as to the debtor in Bankruptcy Case No. 02-13395 (collectively, the "Proofs of Claim"). 4. On November 13, 2004, the Trust commenced the Proceeding by filing an objection to the Proofs of Claim, which objection was coupled with ten counterclaims against the Defendants (the "Objection/Counterclaims"), in the United States Bankruptcy Court for the

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District of Delaware (the "Bankruptcy Court") [Bankr. Adv. Proc. No. 04-57060 (PJW) (hereinafter, "Adv. Proc."), Docket No. 1]. 5. Following briefing regarding the Defendants' motion to dismiss certain counts of the Objection/Counterclaims and the Bankruptcy Court's March 31, 2006 Memorandum Opinion denying the same [Adv. Proc. Docket No. 127], the Defendants filed their "Answer and Affirmative Defenses" (the "Answer" [Adv. Proc. Docket No. 132]). 6. Plaintiff subsequently filed a motion to withdraw the bankruptcy reference [Civil Docket No. 1], which motion was granted by the United States District Court for the District of Delaware, Farnan, J. (the "District Court" or the "Court") via an Order dated January 23, 2008 [Civil Docket No. 24]. 7. Of the claims originally pled in the Objection/Counterclaims, Plaintiff intends to try the following claims: · Claims to be Decided by a Jurya. b. c. Negligence. Breach of fiduciary duty. Breach of implied contract.

· Claims to be Decided by the Courta. b. Objection to CSS's Proofs of Claim. Avoidance and recovery of preferences from CSS pursuant to 11 U.S.C. §§ 547 & 550 with respect to amounts identified in paragraph 65. c. Avoidance and recovery of fraudulent transfers from CSS pursuant to 11 U.S.C. §§ 548 & 550 with respect to amounts identified in paragraph 65.

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d.

Equitable subordination of CSS's claims, if any are allowed, pursuant to 11 U.S.C. § 510(c).

II.

BASIS OF FEDERAL JURISDICTION 8. The Trust is the Debtors' successor in interest pursuant to the chapter 11 plan that was

confirmed in the Debtors' bankruptcy cases and the related Liquidation Trust Agreement dated April 13, 2004. The Proceeding involves causes of actions that either arise under title 11 of the United States Code (the "Bankruptcy Code") or were property of the Debtors' bankruptcy estates under 11 U.S.C. § 541(a). 9. As determined by the Bankruptcy Court, this is a "core" bankruptcy proceeding under 28 U.S.C. § 157(b)(2) [Adv. Proc. Docket No. 231]. Thus, this Court has original jurisdiction pursuant to 28 U.S.C. § 1334(b), and the Proceeding is properly before this Court pursuant to this Court's ability to withdraw the bankruptcy reference under 28 U.S.C. § 157(d). III. UNDISPUTED FACTS THAT REQUIRE NO PROOF 10. The following facts are agreed to be true by both parties and require no proof. The parties do not agree that all such facts are relevant. For convenience, the facts are grouped by topic, but inclusion of a fact within one particular topic does not preclude that fact's relevance to other topics. Moreover, the order and captioning of topics does not indicate agreement as to the order of trial or other scheduling issues, and the captions are to be used only for ease of reference. Background. 11. Oakwood was a publicly held corporation that was in the manufactured housing business. Oakwood was incorporated under the laws of North Carolina and had its principal place of business in Greensboro, North Carolina.

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12. The Oakwood Entities together were a vertically integrated manufactured housing company, which designed, manufactured, and sold mobile homes through their own retail distribution centers and through independent dealers. The Oakwood Entities also provided financing to certain of their customers. 13. During the period between 2001-2002, the primary corporate officers of the Oakwood Entities were: (i) Myles E. Standish ("Standish"); (ii) Douglas R. Muir ("Muir"); (iii) Robert A. Smith ("Smith"); and (iv) Suzanne H. Wood ("Wood"; and together with Standish, Muir, and Smith, the "Oakwood Management"). 14. During 2000 through 2002, Oakwood's board of directors consisted of: 2000 Kermit G. Phillips, II Clarence W. Walker H. Michael Weaver Francis T. Vincent, Jr. Sabin C. Streeter Dennis I. Meyer Roger W. Schipke Duane D. Daggett Standish Smith 2001 Kermit G. Phillips, II Clarence W. Walker H. Michael Weaver Francis T. Vincent, Jr. Sabin C. Streeter Dennis I. Meyer Roger W. Schipke Duane D. Daggett Standish Smith Standish Smith Sabin C. Streeter Dennis I. Meyer 2002 Kermit G. Phillips, II Clarence W. Walker H. Michael Weaver

15. Defendant CSS provides a broad range of investment banking services, including (i) asset-backed securitization underwriting and (ii) restructuring and financial advisory services. The Oakwood Entities' Securitizations.

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16. A significant percentage of the manufactured housing units Oakwood sold were financed by installment sale contracts or loans arranged by the Oakwood Entities, each of which provided for monthly payments generally over a period of five to thirty years. 17. The Oakwood Entities generally retained a security interest in the manufactured homes they financed, with the related loans documented either as installment sales contacts or as traditional mortgages (collectively, "RICs"). 18. The Oakwood Entities, at their retail sales operations and through various independent dealers (collectively, the "Retailers"), provided financing options to their customers through the Oakwood Acceptance Corporation, a debtor-affiliate of Oakwood ("OAC"). OAC originated certain RICs itself and also purchased on a non-recourse basis other RICs originated by the Retailers. OAC funded its ongoing originations and purchases of RICs by participating in public and private asset securitization transactions as generally described herein. 19. The Oakwood Entities' asset-backed securitizations would occur on an approximately quarterly basis, and typically included the pooling of a number of outstanding RICs, placement of the RICs into Real Estate Mortgage Investment Conduit ("REMIC") trusts, and the sale of interests in the REMIC trusts to public and private investors. 20. The securitization process would result in a descending series of levels or "tranches," many of which would be rated by an outside rating agency. The ratings for the rated tranches typically would range from investment grade to non-investment grade. 21. The lowest structured tranche of each series of securitizations was generally known as the "B-2" tranche. 22. In addition to the structured tranches, the securitizations would include a "residual" or "equity" tranche, which tranches were known as the "Class X" or "Class R" pieces.

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23. As part of the securitization process, OAC retained the contractual right to service all securitized RICs in exchange for a monthly fee. As part of its servicing duties, certain pooling and servicing agreements required OAC to make principal and interest advances to certain securitization trusts. OAC also was required to make recoverable advances to those trusts for reasonable and customary costs and expenses (including reasonable legal fees) incurred in the performance of OAC's servicing obligations. 24. The monthly fee and the other recoverable advances described in the prior paragraph were subordinated to certain other obligations. Accordingly, OAC sometimes did not actually receive any fee or advance reimbursement. 25. From time to time the Oakwood Entities were unable to sell the B-2 tranches of particular securitizations, and those B-2 securities remained owned by the Oakwood Entities. 26. Oakwood guaranteed the full payment of principal and interest on certain B-2 securities created during certain securitizations. 27. In connection with the securitizations described above, Oakwood used certain investment banks to provide underwriting services. Beginning in the early 1990s, the Oakwood Entities used Merrill Lynch as the securitization underwriter. Beginning in 1996 and continuing through the Petition Date, CSS provided securitization underwriting services to Oakwood. Merrill Lynch also participated as co-manager in certain of the Oakwood Entities' securitizations from 1996 through May 2002, but CSS was the lead manager for all such transactions. 28. The securitization-related services provided by CSS from time to time included the following: (i) analyzing and structuring the pools of receivables that would ultimately be securitized; (ii) marketing and placing the various tranches in each series of securitized receivables; (iii) testing the financial information contained in the securitization prospectuses;

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(iv) interfacing with the rating agencies regarding the securitization transactions; and (v) coordinating the closing process and post-closing follow-up tasks. 29. In exchange for its securitization underwriting services, CSS received an underwriting fee from the securitization proceeds calculated as a variable percentage of each tranche of a particular securitization. These securitization underwriting fees were negotiated by Oakwood and CSS based upon Muir's knowledge of fees for similar transactions in the market, and it was Muir's understanding that the fees were usual and customary in the market for these types of transactions. 30. Between January 1, 2001 and the Petition Date, CSS received the following fees with respect to the following specified securitization transactions: Date March 12, 2001 May 30, 2001 August 30, 2001 December 7, 2001 February 28, 2002 May 31, 2002 August 30, 2002 2001-B 2001-C 2001-D 2001-E 2002-A 2002-B 2002-C Series Size of the Series $226,864,000 $159,371,000 $203,944,000 $159,215,000 $138,810,000 $220,956,000 $194,647,000 Fee $797,945.00 $785,149.00 $626,029.00 $525,836.00 $430,816.00 $731,421.00 $705,049.65

TOTAL $1,303,807,000 $4,602,245.65 In each case, the fee was realized as a reduction in the proceeds payable to the respective securitization trust, a non-debtor. Defendants believe that all pre-September 2001 fees are irrelevant; Plaintiff disagrees. 31. In connection with its securitization underwriting services, CSS received and reviewed certain information from OAC that was not otherwise public for the purpose of, among

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other things, preparing disclosure materials for potential investors, including the historical loss experience of loans in the pool, prior repossession and foreclosure rates, and data about the credit quality of the underlying purchasers of the Oakwood Entities' products. 32. From approximately 1999 to the Petition Date, the Oakwood Entities' principal contact at CSS regarding the securitization underwriting services provided by CSS was Mr. Fiachra O'Driscoll ("O'Driscoll"). Summary of Certain Credit Facilities and Oakwood Debt. A. Revolving Facilities.

33. Prior to 2001, Oakwood maintained a revolving credit facility through a syndicate of banks; the primary lender was First Union, now known as Wachovia. This credit facility was retired in January 2002. Defendants had no role with respect to this facility. 34. The Oakwood Entities obtained a new $65 million revolving credit facility (the "Prepetition Bank Facility") established under that certain Loan and Security Agreement dated as of January 22, 2002, by and among certain of the Oakwood Entities, as borrowers, Foothill Capital Corporation, as a lender and agent for the lenders ("Foothill"), and certain other lenders specified therein. Although considered and approved in December 2000 by Oakwood's board of directors, the Prepetition Bank Facility was not finalized and complete until summer 2001 and was not executed until January 2002. Defendants had no role with respect to this facility. B. Senior Notes.

35. In 1999, Oakwood issued unsecured 7.875% Senior Notes in the aggregate principal amount of $125 million due March 2004, and unsecured 8.125% Senior Notes in the aggregate principal amount of $175 million due March 2009 pursuant to an Indenture and First Supplemental Indenture, both dated March 2, 1999, between Oakwood and Bank One, N.A.,

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formerly known as The First National Bank of Chicago. U.S. Bank National Association was substituted as Indenture Trustee on January 10, 2000. 36. Bank of America Securities underwrote the 2004 and 2009 bonds. The Defendants were not involved in the issuance of either the 2004 or the 2009 bonds. The Loan Purchase Facility. 37. Prior to 2001 the Oakwood Entities financed their initial originations of new RICs via a revolving "warehouse" facility with an affiliate of Bank of America ("BofA"). Although the original BofA facility was structured as a secured lending facility whereby funds advanced by BofA were secured by the underlying RICs the Oakwood Entities were financing, in the late 1990s the BofA facility was converted to a securitized credit facility or "loan purchase facility." 38. In or about mid-2000, BofA informed the Oakwood Entities that it no longer wished to provide its loan purchase facility on materially similar terms. 39. After being informed that BofA was unlikely to renew its facility, the Oakwood Entities attempted to locate a new source of temporary liquidity to fund their ongoing origination of RICs. 40. Following a series of discussions and negotiations, Defendant Credit Suisse, acting through its New York branch ("New York Branch") agreed to provide a three-year, $200,000,000 loan purchase facility (the "Loan Purchase Facility"). The Loan Purchase Facility closed in February 2001. 41. The Loan Purchase Facility was structured as a bankruptcy-remote, securitized credit facility. Under the Loan Purchase Facility, a special purpose trust ­ OMI Note Trust 2001-A ­ was created to purchase from OAC the RICs that were generated by manufactured housing sales. This trust generated funding to purchase the RICs by issuing secured notes to an affiliate of CSS.

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42. As consideration for its provision of the Loan Purchase Facility, New York Branch received monthly interest payments, as well as a monthly fee of $416,666.67 (the "Monthly LPF Fee") from OMI Note Trust 2001-A. New York Branch received the Monthly LPF Fee in each month between March 2001 and the Petition Date ­ i.e., a total of twenty-one months of fees, or a sum of $8,750,000.07. 43. In connection with the Loan Purchase Facility, a CSS affiliate received a warrant to purchase 19.99% of Oakwood's common stock (the "Oakwood Warrant"). The Oakwood Warrant was exercisable from February 26, 2001 through February 26, 2009 at a price of $1.96875 per share. 44. The Oakwood Entities used the Loan Purchase Facility to obtain short-term liquidity to fund the origination of certain new RICs, before those receivables could be securitized. This funding under this facility provided the Oakwood Entities with liquidity to conduct their business operations. 45. If the Loan Purchase Facility had not been established or was not utilized, then the Oakwood Entities would have been unable to finance additional new RICs and generate operating liquidity. The "LOTUS" Transactions. 46. During the second half of 2001 and the first half of 2002, the Oakwood Entities engaged in four transactions through which certain B-2 securities and "Class X" certificates previously held on the Oakwood Entities' books were sold in a "resecuritization" transaction to an affiliate of Berkshire Hathaway Inc. ("Berkshire"). These four transactions were generally known by the code name "LOTUS" (collectively, the "LOTUS Transactions"). 47. In exchange for a note secured by the cash flows on the B-2 securities and Class X certificates, Berkshire paid a gross price equal to 55% of the par value of the B-2 securities. 10

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48. In return for their sale of the B-2 securities and the associated guarantees, the Oakwood Entities received, in the aggregate, approximately $80,410,166.35 (or 53% of par). 49. CSS served as underwriter and placement agent for each of the four LOTUS Transactions. 50. In exchange for its services with respect to the LOTUS Transactions, CSS received a fee from the proceeds equal to 2% of the face amount of the B-2 securities sold to Berkshire (the "LOTUS Fees"). 51. The details of the LOTUS Transactions and the LOTUS Fees are: Date August 14, 2001 February 14, 2002 March 12, 2002 June 14, 2002 Transaction LOTUS I LOTUS II LOTUS III LOTUS IV Principal Amount $111,117,295 $17,292,000 $8,993,000 $14,315,000 Fee $2,222,346.00 $345,840.00 $179,860.00 $286,300.00

TOTAL $151,717,295 $3,034,346.00 Defendants believe that all pre-September 2001 fees are irrelevant; Plaintiff disagrees. 52. Mr. Mark D. Millard ("Millard") was the Berkshire employee who was principally involved with the LOTUS Transactions. 53. O'Driscoll and Mr. Thomas Connors ("Connors") were the CSS employees who were principally involved with the LOTUS Transactions. 54. The Oakwood board of directors considered and approved the LOTUS Transactions. The Servicer Advance Facility. 55. In September 2001, CSS assisted the Oakwood Entities in structuring a $50,000,000 "servicer advance facility" with the Prudential Insurance Company (and certain of its affiliates) for the Oakwood Entities, which advance facility functioned to provide a temporary liquidity

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source for servicing costs that had to be advanced by OAC and other Oakwood entities with regard to existing REMIC trusts. This facility was approved by Oakwood's board of directors. 56. As consideration for structuring the "servicer advance facility" and for placing the related notes, CSS received a fee of $250,000.00 from the proceeds of the transaction. The Loan Assumption Program. 57. The Oakwood Entities, consistent with industry practice, historically used a loss mitigation technique generally referred to as a loan assumption program. 58. The loan assumption program was originally conceived as a method of reducing the number of repossessions recognized on a monthly basis, while also lowering the amount of losses incurred on a per-home basis. 59. The loan assumption program allowed a borrower or purchaser of a mobile home whose loan had become delinquent to arrange (either by itself or through the lender) for a thirdparty to assume the delinquent loan, thereby avoiding a complete default under the loan and a corresponding repossession of the underlying collateral. 60. Although the Oakwood Entities historically used a loan assumption program to some degree, in or about mid-2001 the Oakwood Entities began to use a variant of the program more extensively (the "LAP"). Oakwood's board of directors was generally aware of the use of a loan assumption program. 61. The Oakwood Management and Oakwood's board of directors chose to terminate the LAP as of June 30, 2002. 62. In July 2002, following the termination of the LAP, several Oakwood employees (Standish, Muir, and Smith), as well as representatives of Credit Suisse (Connors and O'Driscoll), prepared a presentation for, and traveled to Nebraska to meet with, Berkshire regarding (i) the effects of the LAP's discontinuation vis-à-vis the B-2 securities that Berkshire 12

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held as a result of the LOTUS Transactions; and (ii) the state of the manufactured housing industry in general, and the Oakwood Entities' business in particular, at the time. The Financial Advisory Contract. 63. On August 19, 2002, certain of the Debtors entered into a written agreement with CSS to provide restructuring and financial advisory services (the "RFA"). 64. The restructuring and financial advisory services were provided by a team within CSS's restructuring group, which team included Mr. Jared C. Felt ("Felt"). 65. In connection with this engagement, Oakwood made the following transfers to CSS: Date October 1, 2002 October 15, 2002 November 1, 2002 November 15, 2002 Nature August and September Retainer October Retainer and Expenses "Phase One Restructuring Transaction Fee" November Retainer and Expenses TOTAL TRANSFERS Transfer $300,000.00 $154,595.08 $1,205,833.50 $150,700.96 $1,811,129.54

66. On October 15, 2002, Standish, Muir, O'Driscoll, Felt, and Connors met with representatives of Berkshire, including Mr. Warren E. Buffett and Millard. 67. A restructuring proposal presented to Berkshire on October 15, 2002 was considered to be unacceptable and was rejected by Berkshire. Instead, Berkshire requested that the Oakwood Management attempt to sell the company.

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68. CSS and the Oakwood Entities treated the October 15, 2002 meeting with Berkshire as an "approach" for purposes of the RFA, and thus it was the basis for the November 1, 2002 transfer of $1,205,833.50 listed in the chart in paragraph 65. Andrew Davidson & Co. 69. As the Debtors approached bankruptcy, they desired to obtain an independent, thirdparty valuation of Oakwood's liability under its guarantees of certain B-2 securitization tranches, including those B-2 securities which were included in the LOTUS Transactions. Toward that end, CSS suggested, and Oakwood retained, Andrew Davidson & Co., Inc. ("Andrew Davidson"), an appraiser of asset-backed and mortgage-backed securities, to perform this analysis. 70. Employees of the Oakwood Entities and CSS, including Muir and O'Driscoll, assisted Andrew Davidson with its analysis of the guaranty claims related to the B-2 securities and the LOTUS Transactions. The Bankruptcy Filing. 71. On the evening of November 15, 2002, Berkshire signed a "non-binding letter of intent" relating to a proposed restructuring plan (the "BH Term Sheet"). 72. Thereafter on November 15, 2002 (the "Petition Date"), certain of the Debtors filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code. The remaining Debtors filed for chapter 11 protection on March 5, 2004. 73. One condition in the BH Term Sheet was that the Debtors obtain acceptable financing during their bankruptcy proceeding. 74. The filing of a bankruptcy petition was an event of default under the Loan Purchase Facility, which led to the automatic termination of that facility by its own terms. Accordingly, it was necessary for the Oakwood Entities to obtain a "waiver" of this event of default from New 14

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York Branch if the Oakwood Entities were to have access to the Loan Purchase Facility after the Petition Date. 75. As of the Petition Date, the Oakwood Entities did not have a committed DIP financing facility, nor had they received a "waiver" of the event of default under the Loan Purchase Facility. Both a DIP facility and a "waiver" of default under the Loan Purchase Facility were secured by November 27, 2002. Post-Petition Events. 76. On November 18, 2002, Oakwood and its affiliated debtors filed the "Debtors' Motion Pursuant to §§ 365 and/or 363 of the Bankruptcy Code for Authority for Oakwood Acceptance Corporation to (I) Assume and Assign Servicing Agreements and Related Advance Receivables to, and Enter into Subservicing Agreement with, an Affiliate or, in the Alternative, (II) Reject Servicing Agreements" (the "Assumption Motion" [Bankr. Docket No. 20]). In the Assumption Motion, the Debtors requested authority pursuant to sections 365 and/or 363 of the Bankruptcy Code to assume certain pooling and servicing agreements associated with Oakwood's prior securitizations and the Loan Purchase Facility and to assign certain servicing rights and obligations to a new subsidiary. Specifically with respect to the Loan Purchase Facility, Oakwood sought to assume the Sale and Servicing Agreement, dated as of February 9, 2001 (the "SSA"). No Credit Suisse entity was a party to the SSA. 77. Following a hearing and amendments to the proposed order concerning the

Assumption Motion, and the filing of relevant documentation to effect the assumption and assignment of rights, the Bankruptcy Court entered an order that OAC was authorized to assume the SSA pursuant to Bankruptcy Code section 365. [See Bankr. Docket Nos. 228 & 298.] 78. Also on November 19, 2002, Oakwood filed the "Debtors Motion for Authority to (i) Honor Certain Pre-Petition Servicing and Related Obligations, (ii) Continue Securitizing 15

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Advance Reimbursement Rights in the Ordinary Course of Business, (iii) Continue Funding and Purchasing Retail Installment Sales contracts and Other Loans Originated by the Debtors in the Ordinary Course of Business, and (iv) Continue Securitizing such Contracts and Loans in the Ordinary Course of Business" (the "Ordinary Course Motion" [Bankr. Docket No. 21]). In the Ordinary Course Motion, among other relief, Oakwood requested the authority to "continue securitizing all RICs acquired by OAC by selling them . . . ultimately to the Warehouse Trust in the ordinary course of OAC's business and substantially in accordance with the Warehouse Facility Agreements, and . . . engaging in such other and further securitization-related activities as are within the ordinary course of Debtors' businesses." 79. Following consideration of the Ordinary Course Motion and a hearing, the

Bankruptcy Court granted the Oakwood Entities authority to continue to engage in certain securitization-related transactions. [See Bankr. Docket Nos. 41 & 86.] Notwithstanding this authorization, the Oakwood Entities did not actually complete any securitizations after the Petition Date. 80. By order entered on March 31, 2004, the Bankruptcy Court confirmed the Debtors' "Second Amended Joint Consolidated Plan of Reorganization of Oakwood Homes Corporation and Its Affiliated Debtors and Debtors in Possession" (the "Plan"). [See Bankr. Docket No. 3937.] The Plan became effective as to all but one of the Debtors on April 13, 2004, and for the remaining Debtor on April 27, 2004. 81. Pursuant to the Plan, the Debtors' remaining operating assets, subject to certain exceptions, were sold to Clayton Homes, Inc., a Berkshire subsidiary, for approximately $373 million, subject to certain offsets, and the Trust was created to wind-down the Debtors' estates.

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82. Alvarez & Marsal LLP is the duly appointed trustee of the Trust. Matthew E. Kvarda ("Kvarda") is the Alvarez & Marsal LLP employee who is principally responsible for winding-up the affairs of the Trust. IV. DISPUTED ISSUES OF FACT TO BE LITIGATED 83. The following constitute factual propositions that are disputed by one of the parties to the Proceeding and must be litigated at trial. If any such issues are found to be mixed issues of law and fact, or issues of law, then they should be considered as such. For the Plaintiff: 84. Note: In this section the Trust uses the term "Credit Suisse" to mean, collectively, all defendants. The Defendants contest the use of this term. 85. Are Defendants each part of the global financial services firm now known as the Credit Suisse Group? 86. In 1999-2001, did New York Branch consider several proposed credit transactions with the Oakwood Entities, including a $50,000,000 repurchase facility and a $75,000,000 reverse repurchase facility, and were both proposed facilities ultimately declined? 87. Were the credit proposals made with respect to the Oakwood Entities reviewed and analyzed by New York Branch's Credit Risk Management department ("CRM")? 88. Were the principal CRM personnel involved with the several Oakwood-related credit proposals, including the approved Loan Purchase Facility, Messrs. James Xanthos ("Xanthos") and Thomas P. Irwin ("Irwin")? 89. In addition to the Monthly LPF Fee, did New York Branch receive an additional, upfront fee of $2,500,000.00 upon the closing of the Loan Purchase Facility? 90. Is it correct that among the eligibility criteria for financing through the Loan Purchase Facility was the requirement that no more than 17.5% of any given pool of receivables could 17

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take the form of receivables generated by the Oakwood Entities' resale of repossessed properties ("Repo Refis")? 91. After requests from the Oakwood Entities in the summer of 2001 and the spring of 2002, did New York Branch agree to amend the eligibility requirements in the Loan Purchase Facility so that a larger percentage of receivables could be in the form of Repo Refis? 92. Were Xanthos and Irwin the principal members of CRM who were responsible for the evaluation of any proposed "waiver" of defaults under the Loan Purchase Facility, and/or the creation of a new, post-petition loan purchase facility in November 2002? Did they do so? 93. Were the Debtors insolvent at all relevant times, and what was the extent of their insolvency? 94. Were the Debtors sufficiently insolvent as of September 2001, and at all relevant times thereafter, such that the prospects of a return to solvency were minimal? 95. If the Debtors were sufficiently insolvent as of September 2001, and at all relevant times thereafter, such that the prospects of a return to solvency were minimal, should Credit Suisse reasonably have been aware of that fact? 96. Was there a relationship of trust, confidence, or loyalty between the Oakwood Entities and Credit Suisse in 2001-2002? 97. Did Credit Suisse possess superior knowledge, information, or expertise about the many financial transactions they structured for the Oakwood Entities? 98. Did the Oakwood Management reasonably rely on Credit Suisse to fully investigate and advise the Oakwood Management about, and to act in the Debtors' best interests regarding, the many complex financial transactions that permeated the parties' relationship?

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99. Did the Oakwood Entities provide Credit Suisse with material non-public information unrelated to the receivables that were part of the securitization program and/or within the scope of the Loan Purchase Facility? 100. Based upon the multiplicity of positions occupied by Credit Suisse and their

affiliates ­ including as underwriter, de facto lender, financial advisor, and holder of a warrant for nearly 20% of Oakwood's equity ­ did the relationship between Credit Suisse and the Debtors advance beyond a mere arms-length business relationship? 101. 102. 103. Did Credit Suisse have a fiduciary relationship with the Oakwood Entities? Was Credit Suisse an "insider" of the Oakwood Entities? Did the Oakwood Management reasonably rely on Credit Suisse for financial

advice prior to August 19, 2002? 104. Did Credit Suisse affirmatively undertake the duty to act for, or to give financial

advice for, the Oakwood Entities' benefit prior to August 19, 2002? 105. Did Credit Suisse actually provide the Oakwood Entities with financial advice in

2001-2002 that was not the subject of any express contract between the parties? 106. Did Credit Suisse provide any such financial advice negligently or otherwise

breach their duties in connection with providing any such financial advice? 107. Did any breach of any non-contractual duty to provide financial advice by Credit

Suisse proximately cause damages to the Debtors and/or benefit Credit Suisse? 108. Were substantial losses to the Debtors resulting from the Oakwood Entities'

continuing use of securitization transactions, use of the Loan Purchase Facility, and/or participation in the LOTUS Transactions a reasonably foreseeable outcome for a party in the same position as Credit Suisse?

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109.

Did Credit Suisse ever separately consider or analyze (i) the net effect of the

Oakwood Entities' securitization program on the Oakwood Entities' long-term ability to pay their just debts or (ii) Oakwood's ability to satisfy the B-2 guarantees that were created in conjunction with certain securitizations? 110. Did Credit Suisse ever advise the Oakwood Management or Oakwood's board of

directors that the Oakwood Entities' continued use of the securitization program was not in the best interests of the company and/or its creditors? 111. Did any failure by Credit Suisse to investigate and advise regarding the effects of

continued securitizations and guarantees of B-2 securities proximately cause damages to the Debtors and/or benefit Credit Suisse? 112. Should Credit Suisse reasonably have been aware of the effects of the Oakwood

Entities' participation in the LOTUS Transactions? 113. Did Credit Suisse ever separately consider or analyze (i) the net effect of the

LOTUS Transactions on the Oakwood Entities' long-term ability to pay their just debts or (ii) Oakwood's ability to satisfy the liabilities that were created in conjunction with each of the LOTUS Transactions? 114. Did Credit Suisse ever advise the Oakwood Management or Oakwood's board of

directors that the Oakwood Entities' participation in the LOTUS Transactions was not in the best interests of the company and/or its creditors? 115. Did any failure by Credit Suisse to investigate and advise regarding the effects of

the LOTUS Transactions proximately cause damages to the Debtors and/or benefit Credit Suisse?

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116.

Should Credit Suisse reasonably have been aware of the effects of the Oakwood

Entities' use of the LAP? 117. Did Credit Suisse ever separately consider or analyze the net effect of the LAP on

the Oakwood Entities' long-term ability to pay their just debts? 118. Did Credit Suisse ever advise the Oakwood Management or Oakwood's board of

directors that the Oakwood Entities' participation in the LAP was not in the best interests of the company and/or its creditors? 119. Did Credit Suisse behave in a reasonable or reasonably prudent manner with

respect to the various "services" provided to the Oakwood Entities in 2001-2002? 120. Did any failure by Credit Suisse to behave in a reasonable or reasonably prudent

manner with respect to the various "services" provided to the Oakwood Entities in 2001-2002 proximately cause damages to the Debtors and/or benefit Credit Suisse? 121. Did Credit Suisse behave in manner consistent with their own compliance

manuals with respect to the various "services" provided to the Oakwood Entities in 2001-2002? 122. Did any failure by Credit Suisse to behave in manner consistent with their own

compliance manuals with respect to the various "services" provided to the Oakwood Entities in 2001-2002 proximately cause damages to the Debtors and/or benefit Credit Suisse? 123. Did Credit Suisse have financial incentives to keep the Oakwood Entities

operating and to delay recommending that Oakwood stop operating on a "business as usual" basis? 124. Did Credit Suisse behave in a self-dealing manner by elevating their own interests

above the Oakwood Entities' interests?

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125.

Did Credit Suisse's breaches of a fiduciary duty, breaches of an implied advisory

contract, and/or negligence constitute a substantial factor contributing to Credit Suisse's receipt of any or all of the fees listed in paragraphs 30, 42, 51, 56, 65, and 89? 126. To the extent that Oakwood Entities could be said to have "participated" in any of

the malfeasance in which Credit Suisse engaged for purposes of the in pari delicto doctrine, and to the extent that Credit Suisse is not precluded from taking advantage of that doctrine because they were "insiders" or otherwise, what is the relative allocation of responsibility and culpability as between the parties? 127. Did the RFA obligate Credit Suisse to use their best efforts to procure a DIP

financing facility and/or a post-petition "warehouse" or "loan purchase" facility prior to the Petition Date? 128. Did Credit Suisse have an independent, non-contractual duty to use their best

efforts to procure a DIP financing facility and/or a post-petition "warehouse" or "loan purchase" facility prior to the Petition Date? 129. Did Credit Suisse take all reasonable steps to procure a DIP financing facility

and/or a post-petition "warehouse" or "loan purchase" facility prior to the Petition Date? 130. Did any failure by Credit Suisse to use their best efforts to procure a DIP

financing facility and/or a post-petition "warehouse" or "loan purchase" facility prior to the Petition Date breach the RFA? 131. Did any failure by Credit Suisse to use their best efforts to procure a DIP

financing facility and/or a post-petition "warehouse" or "loan purchase" facility prior to the Petition Date proximately cause damages to the Debtors and/or benefit Credit Suisse?

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132.

Did Credit Suisse lead the Oakwood Management to believe that a "waiver" of

any defaults in the Loan Purchase Facility would be obtained prior to the Petition Date? 133. Did Credit Suisse misrepresent the fact that they would obtain an immediate

"waiver" of any defaults in the Loan Purchase Facility? 134. Did any misrepresentations by Credit Suisse about a "waiver" of any defaults in

the Loan Purchase Facility proximately cause damages to the Debtors and/or benefit Credit Suisse? 135. Did the condition in the BH Term Sheet that the Debtors obtain acceptable

financing during their bankruptcy proceeding mean that Berkshire insisted on Oakwood's access to (i) a DIP financing facility and (ii) a post-petition loan purchase or "warehouse" facility? 136. Did Credit Suisse mislead Berkshire that a committed DIP financing facility

and/or a post-petition "loan purchase" or "warehouse" facility had been finalized in order to induce Berkshire into executing the BH Term Sheet? 137. Did Berkshire's execution of the non-binding BH Term Sheet satisfy the terms of

the RFA such that the "phase two" restructuring fee was due and owing on the Petition Date? 138. 139. 140. 141. Did CSS contribute in any way to the Plan? Is CSS entitled to any additional compensation under the terms of the RFA? Did CSS engage in inequitable conduct? Did any inequitable conduct by CSS damage the Debtors' other creditors or confer

an unfair advantage on CSS? 142. Did the Debtors receive "less than a reasonably equivalent value" in exchange for

any of the transfers listed in paragraph 65?

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143.

To the extent that the Debtors received any value in exchange for any of the

transfers listed in paragraph 65, did CSS take such transfers in "good faith"? 144. Were any of the transfers listed in paragraph 65 transfers of an interest of the

Debtors in property? 145. Were any of the transfers listed in paragraph 65 made for or on account of an

antecedent debt? 146. Did any of the transfers listed in paragraph 65 enable CSS to receive more than

CSS would have received in a hypothetical chapter 7 case if the transfers had not been made? 147. Did Credit Suisse represent that, or behave as if, the various Credit Suisse entities

performing services or otherwise interacting with the Oakwood Entities were doing so, in effect, as a single entity? For the Defendants: 148. During 2000 through 2002, Oakwood's operations and strategic planning were

directed by experienced senior management and a sophisticated outside board of directors. Credit Suisse did not direct, control, or otherwise unduly influence Oakwood's strategy or operations. 149. Credit Suisse was hired by Oakwood to provide securitization underwriting

services and it performed this work for Oakwood properly and well. Oakwood's senior management and board of directors considered and approved of the securitization transactions as a method to generate liquidity. CSS was compensated for its securitization underwriting services through an underwriting fee that was deducted from the proceeds of an offering before the proceeds were paid to a non-debtor trust. Oakwood did not pay CSS additional fees for securitization underwriting services.

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150.

During the period 2001 and 2002, Oakwood encountered financial difficulties

similar to those of its competitors, as a result of problems in the manufactured housing industry and the economy in general. Oakwood's financial problems and risks were well known to its management and board, and indeed were widely discussed by public investment analysts. 151. Oakwood had relationships with a variety of banks and had access to any type of

advice and analysis it required. 152. As Oakwood tried to overcome the financial challenges it faced, Credit Suisse

stood by it loyally, continuing to provide its expertise in securitization transactions in support of the strategy adopted by the company's management and board of directors. Credit Suisse did not, in its continued provision of these services, provide any advice or services that was detrimental to Oakwood. Likewise, Credit Suisse exercised reasonable care in carrying out its work for Oakwood; its performance of these obligations met Oakwood's needs and expectations. 153. In 2000, following Bank of America's decision to withdraw its securitized credit

facility, Oakwood requested that CSS assist in securing a new facility. CSS assisted in the arrangement of a new securitized credit facility provided by an affiliate of CSS (the "Loan Purchase Facility"). The Loan Purchase Facility provided that payment of a program fee, and all principal and interest payments were paid by the non-debtor trust established by the facility. Oakwood did not pay fees on the Loan Purchase Facility. Oakwood sought and obtained the Bankruptcy Court's approval to assume the Loan Purchase Facility and its related agreements in the Oakwood bankruptcy proceedings. 154. At Oakwood's request in 2001, Credit Suisse assisted Oakwood in structuring the

Lotus transaction, which provided Oakwood with much-needed liquidity. Oakwood's board of directors duly considered and approved the Lotus transaction. Similar to its fees associated with

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other Oakwood securitization offerings, CSS retained an agreed underwriting fee from the proceeds of the Lotus transaction offerings. CSS was not paid additional fees by Oakwood for its assistance in the Lotus transactions. The fees received by CSS for its role in structuring the Lotus transaction on behalf of Oakwood were reasonable and customary. 155. During 2001 through August 2002, Credit Suisse was not obligated to provide

services to Oakwood beyond those called for in its underwriting agreements. Beginning in 2001, Credit Suisse repeatedly suggested to Oakwood that it should hire Credit Suisse to provide it with more general financial advice with respect to its overall business strategy, but Oakwood repeatedly declined to do so, until August 2002. Oakwood did not request additional financial advisory services until August 2002, when Oakwood formally engaged CSS's restructuring group to provide restructuring services. 156. CSS did not enter into a contract, express or implied, to provide any restructuring

or financial advisory services to Oakwood until August 19, 2002 when the parties signed a contract for the provision of restructuring services. (the "August 2002 Contract.") CSS performed its obligations under the August 2002 Contract in a competent fashion. V. DISPUTED ISSUES OF LAW TO BE LITIGATED 157. The following issues constitute legal propositions that are disputed by the parties.

If any such issues are found to be mixed issues of fact and law, or issues of fact, then they should be considered as such. For the Plaintiff: 158. The Trust believes the following issues of law are disputed and must be decided

or otherwise resolved before or at trial. 159. Note: In this section, the Trust again uses the term "Credit Suisse" to mean,

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160.

Defendants' General Objections: Defendants object to Plaintiff's aggregation of

separate Credit Suisse legal entities into a single Defendant. As Plaintiff has made no veil piercing or alter-ego allegations, Plaintiff must prove all elements of each of its causes of action against each named Defendant. 161. Choice-of-law: What state's substantive law should apply to any issues that

require reference to a body of non-bankruptcy law? Plaintiff's Position and Authorities Pursuant to the "most significant relationship" test contained in sections 6 and 145 of the Restatement (Second) of Conflict of Laws ­ which is used by Delaware's courts and should thus be used here, see Teleglobe Commc'ns Corp. v. BCE, Inc. (In re Teleglobe Commc'ns Corp.), 493 F.3d 345, 358-59 (3d Cir. 2007) ­ New York state plainly has the "most significant relationship" to the Proceeding. As admitted by the Defendants in their motion to dismiss the Objection/Counterclaims: Given the presence and business of all named U.S. Defendants in New York, the presence of a New York choice of law clause each agreement governing the relationships among the parties, and the absence of any substantive allegations relating to any jurisdiction other than New York, New York law applies to the . . . state law claims . . . . [Adv. Proc. Docket No. 22 at p. 28.] The Defendants' prior analysis is further buttressed by the facts that (i) the vast majority of the misconduct underlying the Proceeding stems from actions or inactions by Credit Suisse employees in New York City and (ii) the relationship between Credit Suisse and the Oakwood Entities was centered in New York. Consequently, the choice-of-law analysis requires reference to New York law as the applicable body of non-bankruptcy law. Notwithstanding any suggestions to the contrary by the Defendants, this same analysis applies to Plaintiff's breach of fiduciary duty claim. See, e.g., Huber v. Taylor, 469 F.3d 67 (3d Cir. 2006) (in action for breach of fiduciary duty, court applied "most significant relationship" test and 27

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concluded that it required application of the law of the state in which the fiduciary was located and performed the actions giving rise to the plaintiffs' claims for breach). Defendants' Position and Authorities Defendants agree that New York law governs common-law-based claims and defenses. Defendants contend that, insofar as the nature and extent of the fiduciary duties of Oakwood's board of directors are relevant, North Carolina law governs that aspect of the case as Oakwood was a corporation organized under the laws of North Carolina. 162. Was Credit Suisse an "insider" of the Debtors?

Plaintiff's Position and Authorities Yes; although this is primarily a factual question for the jury, the evidence demonstrates that the multitude of roles occupied by Credit Suisse, as well as the full extent of the parties' history, led the parties' relationship to advance well beyond an arms-length commercial relationship, and instead become one that merits heightened scrutiny. See, e.g., 11 U.S.C. § 101(31); S. Rep. No. 989, 95th Cong., 1st Sess. 25 (1978), reprinted in 1978 U.S.C.C.A.N. 5787, 5819, 6269; Floyd v. Hefner, No. 03-5693, 2008 U.S. Dist LEXIS 25642, at *109-12 (S.D. Tex. Mar. 31, 2008); Lucent Techs., Inc. v. Shubert (In re Winstar Commc'ns, Inc.), No. 06-147, 2007 WL 12332185, at *2-3 (D. Del. Apr. 26, 2007); Stanziale v. Pepper Hamilton LLP (In re Student Fin. Corp.), 335 B.R. 539, 547 (D. Del. 2005); Three Flint Hill Ltd. P'ship v. Prudential Ins. Co. (In re Three Flint Hill Ltd. P'ship), 213 B.R. 292, 297-300 (D. Md. 1997); Hirsch v. Va. Tarricone (In re A. Tarricone, Inc.), 286 B.R. 256, 261-66 (Bankr. S.D.N.Y. 2002); Schreiber v. Emerson (In re Emerson), 244 B.R. 1, 31-34 (Bankr. D.N.H. 1999); In re Locke Mill Partners, 178 B.R. 697, 700-02 (Bankr. M.D.N.C. 1995); In re Allegheny Int'l, Inc., 118 B.R. 282, 297-99 (Bankr. W.D. Pa. 1990). Defendants' Position and Authorities 28

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Defendants object insofar as insider status is primarily a question of fact rather than a question of law. To the extent insider status is a legal question, Defendants do not satisfy the statutory criteria for insider status under the Bankruptcy Code, nor any other standard for insider status however derived. Moreover, given the nature of claims and defenses here, insider status has no application to any issues in this case. 163. doctrine? Plaintiff's Position and Authorities Yes; the relationship between the parties, as well as Credit Suisse's affirmative decision to undertake actions and provide services and advice that they otherwise may have had no legal duty to provide, gave rise to an duty of reasonable care. See, e.g., Indian Towing Co. v. United States, 350 U.S. 61, 69 (1955); Stagl v. Delta Airlines, Inc., 52 F.3d 463, 469-70 (2d Cir. 1995); Breeden v. Generali U.S. Branch (In re Bennett Funding Group), No. 96-70196, 1997 Bankr. LEXIS 2366, at *57-59 (Bankr. N.D.N.Y. Dec. 19, 1997); Balaber-Strauss v. N.Y. Tel. (In re Coin Phones, Inc.), 203 B.R. 184, 200-01 (Bankr. S.D.N.Y. 1996); Palka v. Servicemaster Mgt. Servs. Corp., 83 N.Y.2d 579, 585-87 (1994); Parvi v. Kingston, 41 N.Y.2d 553, 559-60 (1977). Defendants' Position and Authorities This is a question for the Court rather than a jury to decide. It is Plaintiff's burden to establish the existence, nature, and duration of any alleged fiduciary duty on the part of any of the Defendants, and for the Court to instruct the jury as to any such duty and its scope. Weigand v. Univ. Hosp. of N.Y. Univ. Med. Ctr., 659 N.Y.S.2d 395, 397 (Sup. Ct. 1997); De Angelis v. Lutheran Med. Ctr., 462 N.Y.S.2d 626 (1983). Defendants' relationships, if any, with Oakwood were grounded in contracts, whether expressly providing for services, or documenting transactions arranged by Credit Suisse. Where the parties' relationship is grounded in 29 Did Credit Suisse owe the Debtors a duty of care for purposes of the negligence

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agreements, extra-contractual duties are not imposed on that relationship. See, e.g., ClarkFitzpatrick, Inc. v. Long Island R.R. Co., 516 N.E.2d 190, 194 (N.Y. 1987); TD Waterhouse Investors Servs., Inc. v. Integrated Fund Servs., Inc., No. 01 Civ. 8986, 2003 WL 42013 (S.D.N.Y. Jan. 6, 2003). 164. In the event that Credit Suisse owed the Debtors a duty of care, did Credit Suisse

breach that duty? Plaintiff's Position and Authorities Yes; although this is primarily a factual question for the jury, the evidence demonstrates that Credit Suisse's conduct was not reasonable or prudent under the circumstances, was inconsistent with the customs and practices of the relevant industry, violated the standard of care used in the relevant industry, and was at odds with Credit Suisse's internal policy manuals. See, e.g., Stagl v. Delta Airlines, Inc., 52 F.3d 463, 469-70 (2d Cir. 1995); Thropp v. Bache Halsey Stuart Shields, Inc., 650 F.2d 817, 820 (6th Cir. 1981); Grant Thornton, LLP v. FDIC, 535 F. Supp. 2d 676, 709 (S.D.W. Va. 2007); Colo. Capital v. Owens, 227 F.R.D. 181, 187 (E.D.N.Y. 2005); Havas v. Victory Paper Stock Co., 49 N.Y.2d 381, 385-88 (1980). Defendants' Position and Authorities Breach of a duty of care is factual issue for the trier of fact to resolve, based upon evidence of an appropriate standard of care. 165. Did Credit Suisse occupy a fiduciary relationship vis-à-vis the Debtors such that

fiduciary duties arose for Credit Suisse? Plaintiff's Position and Authorities Yes; although this is primarily a factual question for the jury, the evidence demonstrates that the relationship between the parties was sufficiently close that it gave rise to fiduciary duties of care and loyalty on Credit Suisse's part. See, e.g., Lumbermens Mut. Cas. Co. v. Franey Muha Alliant 30

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Ins. Servs., 388 F. Supp. 2d 292, 305-06 (S.D.N.Y. 2005); Scott v. Dime Sav. Bank of N.Y., FSB, 886 F. Supp. 1073, 1078 (S.D.N.Y. 1995); McCory v. Goldberg, 810 F. Supp. 539, 548 (S.D.N.Y. 1993); CBS, Inc. v. Ahern, 108 F.R.D. 14, 25 (S.D.N.Y. 1985); EBC I, Inc. v. Goldman Sachs & Co., 5 N.Y.3d 11, 19-22 (2005); Pergament v. Roach, 838 N.Y.S.2d 591, 59394 (N.Y. App. Div. 2007); Sergeants Benevolent Ass'n Annuity Fund v. Renck, 796 N.Y.S.2d 77, 79-81 (N.Y. App. Div. 2005); Frydman & Co. v. Credit Suisse First Boston Corp., 708 N.Y.S.2d 77, 79 (N.Y. App. Div. 2000); Wiener v. Lazard Freres & Co., 672 N.Y.S.2d 8, 13-15 (N.Y. App. Div. 1998); Apple Records, Inc. v. Capitol Records, Inc., 529 N.Y.S.2d 279, 281-83 (N.Y. App. Div. 1988); RESTATEMENT (SECOND) OF TORTS § 874, cmt. a, cmt. b. (1979). Defendants' Position and Authorities Plaintiff asserts that one or more of the Defendants had a fiduciary duty to Oakwood in connection with all activities associated with Oakwood at the relevant times; Defendants dispute that assertion. This is a question for the Court rather than a jury to decide. It is Plaintiff's burden to establish the existence, nature, and duration of any alleged fiduciary duty on the part of any of the Defendants, and for the Court to instruct the jury as to any such duty and its scope. Weigand v. Univ. Hosp. of N.Y. Univ. Med. Ctr., 659 N.Y.S.2d 395, 397 (Sup. Ct. 1997); De Angelis v. Lutheran Med. Ctr., 462 N.Y.S.2d 626 (1983). Defendants further object that the cited cases do not support any fiduciary duty on the part of Credit Suisse. A fiduciary duty arises under New York law wherever one person is under a duty to act for or give advice for the benefit of another upon matters within the scope of the relation. New York law recognizes no general fiduciary duty as between a bank and its creditor, or an underwriter and issuer. During 2001 and 2002, and following its bankruptcy, Oakwood used the securitization services of CSS, for which CSS earned agreed fees in connection with ABS securitizations and the loan purchase facility.

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Commencing August 15, 2002, Oakwood retained CSS as its financial advisor pursuant to the RFA. Each of these relationships was carefully delineated and gave rise to no generalized fiduciary duty to Oakwood as Plaintiff claims. Flickinger v. Harold Brown & Co., 947 F.2d 595, 599 (2d Cir. 1991); Aaron Ferer & Sons Ltd. v. Chase Manhattan Bank, 731 F.2d 112, 122 (2d Cir. 1984); HF Mgmt. Servs. LLC v. Pistone, 34 A.D.3d 82, 84 818 N.Y.S.2d 40, 42 (1st Dep't 2006; Village on Canon v. Bankers Trust Co., 920 F. Supp. 520, 532 (S.D.N.Y. 1996); Compania Sud-Americana v. IBJ Schroder Bank & Trust Co., 785 F. Supp. 411, 426 (S.D.N.Y. 1992); Argonaut P'ship L.P. v. Bankers Tr. Co. Ltd., 96 Civ. 1970, 2001 U.S. Dist. LEXIS 7100, at *9 (S.D.N.Y. May 30, 2001); Sumitomo Corp. v. Chase Manhattan, 99 Civ. 4004, 2000 U.S. Dist. LEXIS 15707, at *8-9 (S.D.N.Y. Oct. 30, 2000); Prestancia Mgmt Group., Inc. v. Virginia Heritage Found., II LLC, No. Civ A. 1032-S, 2005 WL 1364616, at *5 (Del. Ch. May 27, 2005); HF Mgmt. Servs. LLC v. Pistone, 34 A.D.3d 82, 84 818 N.Y.S.2d 40, 42 (App Div. 2006); EBC I Inc. v. Goldman, Sachs & Co., 832 N.E.2d 26, 31 (N.Y. 2005). 166. Assuming Credit Suisse owed the Debtors fiduciary duties, did Credit Suisse

breach the duty of care? Plaintiff's Position and Authorities Yes; although this is primarily a factual question for the jury, the evidence demonstrates that, as discussed above, Credit Suisse's conduct fell well below the standard of care applied in the negligence context, let alone the more heightened standard that must be used by corporate fiduciaries. See also, e.g., Hanson Trust PLC v. ML SCM Acquisition Inc., 781 F.2d 264, 273-77 (2d Cir. 1986); Colo. Capital v. Owens, 227 F.R.D. 181, 189 (E.D.N.Y. 2005); Alberts v. Tuft (In re Greater Se. Cmty. Hosp. Corp.), 353 B.R. 324, 339-43 (Bankr. D.D.C. 2006). Defendants' Position and Authorities Breach of a fiduciary duty is a factual issue for the trier of fact to resolve. 32

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167.

Assuming Credit Suisse owed the Debtors fiduciary duties, did Credit Suisse

breach the duty of loyalty? Plaintiff's Position and Authorities Yes; although this is primarily a factual question for the jury, the evidence demonstrates that Credit Suisse engaged in a consistent course of self-dealing intended to enrich themselves without due consideration of whether the proposed transactions were harmful to the Debtors. Likewise, Credit Suisse consistently profited while breaching the duty of care. See, e.g., Alberts v. Tuft (In re Greater Se. Cmty. Hosp. Corp.), 353 B.R. 324, 344-49 (Bankr. D.D.C. 2006); Birnbaum v. Birnbaum, 73 N.Y.2d 461, 466 (1989); Alpert v. 28 Williams St. Corp., 63 N.Y.2d 557, 569-73 (1984); Meinhard v. Salmon, 249 N.Y. 458, 463-64 (1928); Flaum v. Birnbaum, 508 N.Y.S.2d 115, 122 (N.Y. App. Div. 1986); Foley v. D'Agostino, 248 N.Y.S.2d 121, 128 (N.Y. App. Div. 1964); Lippman v. Shaffer, 836 N.Y.S.2d 766, 778-79 (N.Y. Sup. Ct. 2006). Defendants' Position and Authorities Breach of a duty of loyalty is a factual issue for the trier of fact to resolve. 168. Was there an implied advisory contract between Credit Suisse and the Oakwood

Entities prior to August 19, 2002? Plaintiff's Position and Authorities Yes; although this is primarily a factual question for the jury, the evidence demonstrates that the course of dealing between the parties establishes the existence of a relationship akin to an implied contract that gave rise to a duty to provide reasonable financial advice on the part of Credit Suisse. See, e.g., Baltimore & Ohio R.R. Co. v. United States, 261 U.S. 592, 597 (1923); Jemzura v. Jemzura, 36 N.Y.2d 496, 503-04 (1975); In re Boice, 640 N.Y.S.2d 681, 682-83 (N.Y. App. Div. 1996); Mirchel v. RMJ Sec. Corp., 613 N.Y.S.2d 876, 878 (N.Y. App. Div. 1994). 33

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Defendants' Position and Authorities The existence of an implied contract is a factual issue for the trier of fact to resolve. 169. If there was an implied advisory relationship akin to an implied contract between

Credit Suisse and the Oakwood Entities prior to August 19, 2002, did Credit Suisse breach it? Plaintiff's Position and Authorities Yes; although this is primarily a factual question for the jury, the evidence demonstrates that, as discussed above, the advisory services provided by Credit Suisse prior to August 19, 2002 were completely unreasonable and inadequate under the circumstances. Defendants' Position and Authorities Breach of an implied contract is a factual issue for the trier of fact to resolve. 170. Did any negligence, breach of fiduciary duty, or breach of implied contract

proximately cause damages to the Debtors? Plaintiff's Position and Authorities Yes; although this is primarily a factual question for the jury, the evidence demonstrates that Credit Suisse's conduct directly caused at least $50,000,000 of harm to the Debtors, and that such injury was the reasonably foreseeable result of Credit Suisse's conduct. See, e.g., Bear Stearns & Co. v. Daisy Sys. Corp. (In re Daisy Sys. Corp.), 97 F.3d 1171, 1176-77 (9th Cir. 1996); Stagl v. Delta Airlines, Inc., 52 F.3d 463, 473-74 (2d Cir. 1995); Grant Thornton, LLP v. FDIC, 535 F. Supp. 2d 676, 710-14, 725-29 (S.D.W. Va. 2007); Colo. Capital v. Owens, 227 F.R.D. 181, 18990 (E.D.N.Y. 2005); Mauney v. Boyle, 865 F. Supp. 142, 147-48 (S.D.N.Y. 1994); Comeau v. Rupp, 810 F. Supp. 1127, 1143-44 (D. Kan. 1992); Bell v. N.Y. City Health & Hosps. Corp., 456 N.Y.S.2d 787, 796-97 (N.Y. App. Div. 1982); Greenstein, Logan & Co. v. Burgess Mktg., Inc., 744 S.W.2d 170, 186-88 (Tex. Ct. App. 1987). Defendants' Position and Authorities 34

Case 1:07-cv-00799-JJF

Document 109

Filed 06/09/2008

Page 36 of 58

DRAFT: For discussion purposes only; not binding on any party

Proximate cause is a factual issue for th