Free Declaration - District Court of Delaware - Delaware

Case 1:07-cv—OO480-JJF Document 12 Filed 10/O3/2007 Page 1 of 2
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
IN RE: Finova Group et ai.
Official Committee of Equity Securities )
Holders, ) Civil Action No. 07—480 (HF)
Appellant l
v. g Bankruptcy Case No. Ol-698
) AP 07-70
Finova Group Inc. and ) ,
Pinova Capital Corporation, )
Appellees. l
DECLARATION OF JAMES GADSDEN IN OPPOSITION T0 MOTION
FOR A STAY PENDING APPEAL
James Gadsden declares as follows:
I. I am a partner in the firm of Carter Ledyard & Milburn LLP, counsel for
The Bank of New York Trust Company, N.A.
2. Pursuant to the terms of the Agreement of Resignation, Appointment and
Acceptance effective November 1, 2004, The Bank of New York Trust Company, N.A. (the
“Successor Trustee") became successor trustee under the Indenture dated as of August 22, 2001
(the "Indenture"), between The Finova Group Inc. and the Bank of New York, as Trustee
pursuant to which more than $3.2 billion in principal amount of 7.5% Senior Secured Notes due
2009 (the ‘°Notes") were issued. Giving effect to the redemptions to date, $1,4%,165,520 in
principal amount ofthe Notes remain outstanding.
3. As counsel for the Successor Trustee, I have been monitoring the
proceedings resulting in the Order Granting Debtors’ Motion Requesting Clarification of
Confirmed Chapter 11 Plan, dated June 28, 2007 (the "Order"), which determined that the

Case 1:07-cv—OO480-JJF Document 12 Filed 10/O3/2007 Page 2 ot 2
Debtors are and will forever be insolvent.! The Order allows the Debtors to use the funds
presently in the segregated account, approximately $$1,228,000, to pay amounts due on the
Notes. The Bankruptcy Court stayed the Order until October 22, 2007. The Official
Committee of the Equity Security Holders (the "Equity Committee") has moved in this court
for a further stay pending appeal of the Order.
4. The Finova Group Inc. has adequately represented the position of the
Successor Trustee and the Noteholders in this dispute. In an effort to reduce expenses and
avoid the unnecessary duplication of effort, the Successor Trustee has abstained from tiling
separate pleadings.
5. The Successor Trustee now files this pleading to respond to the
suggestion by the Equity Committee that the Successor Trustee and Noteholders are indifferent
to the expeditious resolution of this dispute. It is obvious that the Noteholders have a strong
interest in a determination that allows the Debtors without further delay to distribute to the
Noteholders the $81 million in segregated funds that have accumulated since the first
distributions were made to Noteholders in 2004. Investment of the funds by the Debtors at
interest is not an adequate substitute for the return that the Noteholders might achieve if the
funds had been distributed to them.
I declare under penalty of perjury that the foregoing is true and correct.
Executed in New York, New York on Octoberg, 2007
; games Gadsden
l Although I appeared in the Bankruptcy Court as counsel for the Successor Trustee at hearings on the relief
sought by the Equity Committee in 2006, i was not served with the Equity Committees opening brief and motion on
this appeal. The Equity Co1nmittee’s notice of appeal identifies another firm as counsel for the Successor Trustee.
The Successor Trustee’s first notice ofthe Equity Committees argument that the Noteholders were indifferent to the
early distribution of the 5% holdback was my receipt ofthe Debtor's answering brief.
6232333.3 _2__

Case 1:O7—cv—OO480-JJF Document 12-2 Filed 10/O3/2007 Page 1 of 2
CERTIFICATE OF SERVICE
I, Jason M. Madron, do hereby certify that on October 3, 2007 a copy of the
foregoing Declaration of James Gadsden in Opposition to Motion for a Stay Pending
Appeal was served on the parties on the attached list and in the manner indicated thereon.

Jas M. Madron (Bar No. 4431)
Rrm-2.20s409-1

Case 1:O7—cv—OO480-JJF Document 12-2 Filed 10/O3/2007 Page 2 of 2
FINO VA Cagital Cnrgoratimz - Service List
Local via Hand Delivery / Non-Local via First Class Mail
David Buchbinder .
Off f h U ` d T . . .
844H{;;g gs SEE; 2§;a§GS mstcc William Sullivan
" 4 East St Street, Suite 400
Lockbox 35 W.] . DE 19801
wiimmgum, DE 19801 UsA ‘m‘“g“’“’
Howard A. Cohen Martin Bienenstock
Reed Smith LLP Weil, Gotshal & Manges LLP
1201 N. Market St., Suite 1500 767 Fifth Ave.
Wilmington, DE 19801 New York, NY 10153
Jonathan M. Landers, Esq. Mark D. Silverschotz
Robert J. Dakis, Esq. James Andriola
Gibson, Dunn & Crutcher LLP Anderson Kill & Olick, P.C.
200 Park Ave. 1251 Avenue of the Americas
New York, NY 10166 New York, NY 10020
J. Richard Tucker
Maron Marvel Bradley
& Anderson, P.A.
1201 North Market Street, Suite 900
Wilmington, DE 19801
LFI-3205898-1
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