10000000046

ALLIED SYSTEMS HOLDINGS, INC.

1 UNITED STATES BANKRUPTCY COURT

2 DISTRICT OF DELAWARE

3 - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

4 In re:

5 Chapter 11

6 ALLIED SYSTEMS HOLDINGS, INC., Case No. 12-11564(CSS)

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8 Alleged Debtor.

9 - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

10 In re:

11 Chapter 11

12 ALLIED SYSTEMS LTD. (L.P.), Case No. 12-11565(CSS)

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14 Alleged Debtor.

15 - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

16

17 United States Bankruptcy Court

18 824 North Market Street

19 Wilmington, Delaware

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21 May 22, 2012

22 4:13 P.M.

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VERITEXT REPORTING COMPANY212-267-6868 www.veritext.com 516-608-2400


1 B E F O R E :

2 HON CHRISTOPHER S. SONTCHI

3 U.S. BANKRUPTCY JUDGE

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25 ECR OPERATOR: LESLIE MURIN



1 HEARING re Expedited Motion of Petitioning Creditors for the

2 Appointment of a Trustee Pursuant to 11 U.S.C. §§ 105(a),

3 1104(a)(1) and 1104(a)(1)(Filed May 17, 2012, Docket No. 13)

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5 HEARING re Petitioning Creditors' Motion Pursuant to Del.

6 Bankr. L.R. 9006-1(e) for an Order Shortening Time for

7 Notice of the Hearing to Consider the Expedited Motion of

8 Petitioning Creditors for the Appointment of a Trustee

9 Pursuant to 11 U.S.C. §§ 105(a), 1104(a)(1) and

10 1104(a)(2)(Filed May 17, 2012, Docket No. 12)

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25 Transcribed by: William J. Garling



1 A P P E A R A N C E S :

2 TROUTMAN SANDERS, LLP

3 Attorney for Allied Systems Holdings, Inc., Debtor

4 600 Peachtree Street, NE, Suite 5200

5 Atlanta, GA 30308

6

7 BY: EZRA H. COHEN, ESQ. (TELEPHONIC)

8 JEFFREY W. KELLEY, ESQ. (TELEPHONIC)

9 MICHAEL JOHNSON, ESQ. (TELELPHONIC)

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11 RICHARDS, LAYTON & FINGER, P.A.

12 Attorney for Allied Systems Holdings, Inc., Debtors

13 One Rodney Square

14 920 North King Street

15 Wilmington, DE 19081

16

17 BY: CHRISTOPHER M. SAMIS, ESQ. (TELEPHONIC)

18

19 OFFICE OF THE UNITED STATES TRUSTEE

20 Attorney for the United States Trustee

21 844 King Street, Suite 2207

22 Lockbox 35


24

25 BY: DAVID L. BUCHBINDER, ESQ. (TELEPHONIC)



1 SCHULTE, ROTH & ZABEL, LLP

2 Attorney for BDCM Opportunity Fund II, LP, Creditor

3 919 Third Avenue

4 New York, NY 10022

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6 BY: ADAM C. HARRIS, ESQ. (TELEPHONIC)

7 ROBERT J. WARD, ESQ. (TELEPHONIC)

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9 YOUNG CONAWAY STARGATT & TAYLOR, LLP

10 Attorney for Yucaipa, Interested Party

11 Rodney Square

12 1000 North King Street


14

15 BY: MICHAEL R. NESTOR, ESQ. (TELEPHONIC)

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17 LATHAM & WATKINS, LLP


19 355 South Grand Avenue

20 Los Angeles, CA 90071

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22 BY: ROBERT A. KLYMAN, ESQ. (TELEPHONIC)

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1 KASOWITZ, BENSON, TORRES & FRIEDMAN LLP


3 Two Midtown Plaza, Suite 1500

4 1349 West Peachtree Street, N.W.

5 Atlanta, GA 30309

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7 BY: DAVID E. SPALTEN, ESQ. (TELEPHONIC)

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9 KASOWITZ, BENSON, TORRES & FRIEDMAN LLP


11 1633 Broadway

12 New York, NY 10019

13

14 BY: DAVID E. ROSS, ESQ. (TELEPHONIC)

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16 APPEARED TELEPHONICALLY:

17 ROBERT WARD, ESQ.

18 MICHAEL JOHNSON, ESQ.

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1 P R O C E E D I N G S

2 THE CLERK: All rise.

3 THE COURT: Please be seated.

4 Good afternoon, counsel, this is Judge Sontchi and

5 we're here on a status conference in Allied System Holdings

6 and Allied Systems Limited.

7 There are quite a few people on the telephone and

8 I would urge you to please -- to mute your phones if you're

9 not actively speaking, to do your best not to talk over each

10 other, and to remember to identify yourself prior to every

11 time you speak.

12 And I would like to start by hearing from the

13 petitioning creditors.

14 MR. HARRIS: Good afternoon, Your Honor.

15 Adam Harris and Robert Ward from Schulte, Roth &

16 Zabel.

17 Your Honor, would you like to take appearances

18 from everybody before we get started or --

19 THE COURT: That would take -- that would take

20 longer than the hearing.

21 MR. HARRIS: Thank you, Your Honor.

22 Your Honor, we filed the involuntary petitions

23 last week as Your Honor knows, and the summons have been

24 served upon the alleged debtors in the case -- in the cases,

25 I should say.



1 In conjunction with the filing of the

2 involuntaries we've also filed a motion for the appointment

3 of a trustee, as well as a motion of entering an order

4 shortening time -- to set a hearing with respect to that

5 motion.

6 Last night, Your Honor, I believe, received a

7 response to the motion shortening time by the alleged

8 debtors as well as a motion to transfer venue of the cases

9 to the Northern District of Georgia.

10 Your Honor, since the responses were filed last

11 night, since the involuntaries were filed last week, we've

12 had an opportunity to speak with counsel for the alleged

13 debtors, Mr. Collins from Richards Layton, as well as

14 Messrs. Kelley and Cohen from Troutman Sanders.

15 Your Honor, the purpose of our suggestion of a

16 status conference, which we brought up late last week or

17 Monday, I can't remember which it was, was that we thought

18 it would be helpful to Your Honor in making decisions about

19 entering orders shortening time or otherwise setting

20 calendars to hear from the various parties as to the issues

21 that were likely to be brought before the Court and on which

22 the Court would be asked to rule.

23 Given certain of the statements that were made in

24 the alleged debtor's filings last night in some instances in

25 the redacted portion -- so I'm not going to talk about them



1 specifically -- I think that the -- many of the issues

2 related to whether orders could be -- relief could be

3 entered based upon the involuntary petitions and the issues

4 under 303 have in some sense been muted by intentions of the

5 company as expressed in their filings. And, obviously, I

6 would like to let Mr. Collins or his co-counsel from

7 Troutman Sanders address those issues.

8 To the extent those intentions are carried out in

9 the manner that they were described in both the filings and

10 as we discussed them with the alleged debtor's counsel

11 today, we think that the cases can move forward on --

12 hopefully on a more cooperative and consensual track. And

13 that there might not need to be any particular order or

14 scheduling order entered by Your Honor relative to our

15 trustee motion at this time.

16 I would like Your Honor to hear from Mr. Collins

17 or his co-counsel from Troutman Sanders on those issues and

18 would then like to have an opportunity to speak thereafter

19 based upon what they say.

20 THE COURT: All right. Let me hear from the

21 purported debtor.

22 MR. SAMIS: Good afternoon, Your Honor.

23 This is Chris Samis from Richards, Layton & Finger

24 on behalf of the alleged debtors.

25 Your Honor, with me on the phone are my co-counsel



1 in this matter, Jeffrey Kelley, Ezra Cohen, and Michael

2 Johnson, all with the Troutman Sanders firm.

3 Your Honor, pro hac vice motions are in process

4 for these gentlemen and we expect to submit them shortly.

5 In advance of these motions being reviewed by the Court and

6 pro hac orders being entered, for the limited purpose of

7 today's status conference, I would request that the Court

8 permit them to speak.

9 THE COURT: I'd be happy to do so, and I'd like to

10 express my personal thanks to you, Mr. Samis, for your

11 yeoman's work in getting the Court the documents I needed to

12 be prepared for today, but I'll hear from them.

13 MR. SAMIS: Your Honor, no problem. I was happy

14 to do so, and I also -- wanted to thank Your Honor for

15 accommodating us this afternoon in reviewing a pretty

16 voluminous docket on very short notice for this status

17 conference.

18 Your Honor, just very briefly, with respect to why

19 we're here today, the alleged debtors believe it's

20 appropriate to use this status conference to address not

21 only the motion to shorten on the trustee motion, but more

22 importantly in our view, the scheduling of our own venue

23 transfer motion, which we think deals with a real gating

24 issue in these cases.

25 So, Your Honor, with that as background, I turn



1 the balance of our presentation over to Mr. Kelley.

2 THE COURT: Very good.

3 Thank you.

4 MR. KELLEY: Good afternoon, Your Honor.

5 This is Jeff Kelley with Troutman Sanders in

6 Atlanta. Ezra Cohen is also, I think, on the line with us

7 now, but I'll do all the speaking, I believe.

8 By way of background, both Ezra and I were counsel

9 to Allied in the first Chapter 11 case of Allied in front of

10 Judge Mullins, here in Atlanta.

11 Your Honor, the filing of these petitions has

12 caused what Allied believes to be, as we set forth in our

13 papers, some unnecessary disruptions and potentially

14 significant damage to Allied's business and its value.

15 Our perspective on how this possibly could have

16 happened and the motives may be driving the petitioning

17 creditors is set forth in particular in the redacted

18 portions of our response to the motion to shorten time for

19 the hearing on the appointment of a trustee where we, among

20 other things, argue that we don't think that any emergency

21 has been shown and that the issues raised have been the

22 subject of the State Court litigations among the various of

23 the parties going back several years.

24 However, Your Honor, due to the filing that's

25 taken place, their -- the actions in this involuntary



1 petition -- involuntary petitions being filed, it does

2 appear very likely the subject to bankruptcy -- subject the

3 board approval, I should say, Allied's board approval, that

4 Allied will likely, in the future, convert these cases to

5 voluntary Chapter 11 cases, but the timing is not ripe today

6 for that. Allied needs a little time to make sure it has

7 adequate financing and cash collateral before it files its

8 other subsidiaries, its many other subsidiaries, along with

9 these two. Those subsidiaries are identified in our

10 response.

11 But, Your Honor, Allied's preferred forum is

12 Atlanta. That's where, as I mentioned, Allied's first case

13 was administered by Judge Mullins. That case is still open.

14 Although it's ready to be closed, it is still open. The

15 reasons that we think a transfer is appropriate are set

16 forth in the venue motion. I'm not going to argue that at

17 this point, but it's primarily the convenience of Allied's

18 very, very stretched-thin executive team, which is located

19 in Atlanta, not to mention Judge Mullins' familiarity with

20 most of the players in this case.

21 The first case was a very large case by Atlanta

22 standards, very intense, a lot of activity in that case, and

23 Judge Mullins had ample opportunity to learn a lot about

24 Allied, and for that matter, Yucaipa.

25 So, Your Honor, we ask that you rule on the venue



1 transfer motion as a gating matter before anything else gets

2 ruled on in this case, because we take the position and

3 believe and submit, that everything else that happens in

4 this case, including the trustee motion, should heard by the

5 Court that ultimately has the case, whether is that Your

6 Honor or a bankruptcy judge in Atlanta, probably Judge

7 Mullins.

8 Your Honor, due to the petitioning creditors'

9 actions we need to get these cases moving along in the right

10 direction, so we respectfully ask that the Court give

11 Allied's transfer motion consideration as soon as the

12 Court's schedule permits, and that's our position as to the

13 status of matters and proposed scheduling.

14 THE COURT: Well, the decision is Judge Mullins';

15 is it not?

16 MR. KELLEY: Would that be -- are you referring,

17 Your Honor -- this is Jeff Kelley, again -- to Bankruptcy

18 Rule 10014 (sic)?

19 THE COURT: (Indiscernible - 4:22:23).

20 MR. KELLEY: Yes, we did raise that, Your Honor,

21 in our papers, and technically that is correct because the

22 first case is still pending.

23 THE COURT: Okay.

24 Anyone else?

25 MR. HARRIS: Adam Harris -- sorry to interrupt.



1 I guess that would depend on whether the company

2 that was the subject of the case there is, in fact, the same

3 legal entity, which is the subject to the involuntary.

4 My understanding is that Allied Systems Holdings,

5 Inc. is a successor by merger to what was the reorganized

6 debtor, I guess, but it is not the same legal entity that

7 was the debtor in the case down there.

8 Now, that all being said, Your Honor, we've had a

9 conversation with Mr. Kelley and Mr. Cohen and Mr. Samis

10 earlier today where we told them that we would be happy to

11 sit with them and try to better understand their views on

12 Atlanta as an appropriate venue versus -- versus Delaware

13 and take into account and discussing with them the interests

14 of all of the parties involved here, only one of which

15 really is located in Atlanta, the rest of whom are located

16 mostly in the Northeast corridor, but also in California and

17 Detroit and elsewhere.

18 And to the extent the Court is inclined to set a

19 hearing in connection with the venue transfer request, we

20 would only ask that we be given an opportunity to get with

21 the purported debtors and others to discuss this, and that

22 if a hearing need be held, that it would be held sometime

23 late next week rather than between now and the Memorial Day

24 weekend. I don't think that would prejudice the debtors at

25 all given the timetable they seem to be operating on



1 relative to their thoughts on when they would ultimately,

2 potentially convert these cases to voluntary Chapter 11s.

3 THE COURT: Do I take it --

4 MR. HARRIS: I --

5 THE COURT: I'm sorry.

6 Do I take it that you would -- were that to be the

7 case, you would hold your trustee motion in abeyance pending

8 the decision on the venue motion?

9 MR. HARRIS: We would, Your Honor.

10 THE COURT: Okay.

11 MR. NESTOR: Yes, Your Honor. Michael Nestor ,

12 Young Conaway on behalf of Yucaipa, and I'm on with Robert

13 Klyman from Latham & Watkins.

14 May we be heard briefly?

15 THE COURT: I'm sorry. I missed your client,

16 Mr. Nestor.

17 MR. NESTOR: It's Yucaipa.

18 THE COURT: Oh, very good.

19 Yes, Mr. Klyman.

20 MR. KLYMAN: Thank you, Your Honor.

21 For the record, Robert Klyman of Latham & Watkins,

22 LLP, on behalf of Yucaipa.

23 Your Honor, by way of background, Yucaipa is the

24 largest lender and shareholder and member of the board of

25 the alleged debtors and we have a direct economic material



1 -- economic interest in the outcome.

2 We would echo what Mr. Kelley said, that it's,

3 from our vantage point, very important to have the venue

4 determined first and foremost. If Your Honor determines

5 that it's appropriate for Judge Mullins to make the initial

6 decision we would be happy to go down there and get that

7 teed up on an expedited basis.

8 I believe that the debtor chose to file the motion

9 to transfer venue before your Court only because what's left

10 to be resolved in Atlanta is a motion to close the case, but

11 under the plain reading of the statute that may be the

12 more appropriate place for determination as to venue. We

13 just thought that since there was a trustee motion on an

14 expedited basis filed this was the natural venue to first

15 raise the issue. But as I said, at least from Yucaipa's

16 perspective, having the issue determined by Judge Mullins

17 would be a perfectly fine result on an expedited basis.

18 I would just add two other points. The first is

19 while my colleague, Mr. Harris, says that he needs more time

20 to sit down with the debtors, and maybe Yucaipa to

21 understand all there is about the venue in Atlanta, the fact

22 of the matter is that they did have sufficient time to do

23 that before they filed an involuntary. The filing of the

24 involuntary was their timing, not the debtor's, and the

25 reasons why venue's appropriate in Atlanta, I believe, are



1 spelled out in great detail in the motion to transfer venue.

2 So, although on behalf of Yucaipa, and I believe

3 Mr. Kelley would echo the sentiment, we are always happy to

4 sit down with Black Diamond and Mr. Harris. We do not

5 believe that that is a reason to delay a resolution of the

6 venue motion.

7 The alleged debtors are suffering, you know,

8 potential business issues while they are in limbo. They

9 want to tee up a process for obtaining financing and getting

10 on with the case in a manner that preserves value, both for

11 the enterprise as a whole and the secured lenders, including

12 Black Diamond in particular.

13 We would also ask Your Honor that while the venue

14 issue is being decided that Black Diamond actually withdraw

15 the trustee motion without prejudice with the ability to

16 refile it on an expedited basis if they'd like, with all

17 parties reserving their rights with respect to whether or

18 not the request for expedited hearing is appropriate before

19 whatever judge ultimately hears the case.

20 The -- it's, you know, tough enough for the

21 business and management to be dealing with an involuntary

22 and scrambling to catch up to make sure that the business

23 doesn't suffer the unnecessary stigma of a trustee motion,

24 which is not going to be heard for some period of time, is

25 something that, at least on Yucaipa's behalf, we would like



1 to avoid hanging over when we meet with customers and

2 vendors and the like, recognizing that this would not

3 prejudice Black Diamond's ability to refile at any time in

4 the future.

5 THE COURT: Well, I think that from what I had

6 read in the papers Black Diamond might take issue with your

7 comment that you're willing to sit down and talk to them,

8 but that wasn't my impression from what I read.

9 All right. Does anyone else care to make

10 comments?

11 MR. BUCHBINDER: Your Honor, this is Dave

12 Buchbinder from the U.S. Trustee's Office.

13 We are concerned about Rule 1014(b) and how it

14 applies here. If we do have the same debtor the rule would

15 seem to imply that anything pending here is stayed until the

16 Court in Atlanta rules otherwise or orders otherwise.

17 To the extent that an issue has been raised as to

18 whether or not this is the same debtor, Rule 1014(b),

19 Subdivision 4, says that if petitions commencing cases are

20 filed in different districts by regarding or against and Sub

21 4 is a debtor and an affiliate, if the new debtor is a

22 successor they may or may not be an affiliate.

23 And so what I'm getting at is I agree with the

24 parties that the threshold matter here is a ruling on either

25 Rule 1014(b)'s applicability or a ruling on the venue



1 motion, and it may be that the venue motion, if it were to

2 proceed here, requires the consent of the judge in Atlanta

3 because that's the case first filed, and the last thing I

4 think any of the parties on line would want would be a

5 ruling from this Court and then someone going back to

6 Atlanta saying the ruling here was void because of Rule

7 1014(b).

8 THE COURT: Thank you. I understand your

9 position.

10 I think it's less than clear whether this Court

11 has, without authority, to enter any order pending that

12 decision as opposed to simply making a decision on venue,

13 but I certainly appreciate your (Indiscernible - 4:30:31) I

14 think that's the most sophisticated response to some of the

15 complications that the Court is looking at in this case.

16 Anyone else?

17 MR. KELLEY: Yeah, this is Jeff Kelley, again, for

18 the alleged debtors.

19 I -- I would will also like to reiterate and state

20 for the alleged debtors that we're certainly willing -- I

21 don't know about -- you know, we are not Yucaipa, and

22 whatever was alleged and whether it's true or not about

23 Yucaipa's willingness to cooperate -- of course the alleged

24 debtors are willing to sit down and cooperate and talk with

25 their lenders at any time. We don't have to be subject to



1 an involuntary bankruptcy petition to do that; we're always

2 willing to do that, and we need -- and we know we need to

3 cooperate.

4 So, I just wanted to address the cooperation

5 issue, and to reiterate that however we do it, we would like

6 to try to get a decision as soon as the Court's calendar

7 permits on the venue transfer motion.

8 If I needed to go file something in front of Judge

9 Mullins I would. I don't want to unduly complicate this by

10 doing that. We did think that under the circumstances of

11 this case, this was the appropriate place to bring up the

12 venue transfer motion.

13 THE COURT: All right. What's the debtor's

14 position -- presuming I will schedule the venue transfer

15 motion to be heard expeditiously -- what's the debtor's

16 position on when that should occur?

17 MR. KELLEY: As soon as Your Honor's calendar

18 permits.

19 THE COURT: Okay. Can I --

20 MR. KELLEY: (Indiscernible - 4:32:09.)

21 THE COURT: -- can I transfer the case before

22 entry of an order for relief?

23 MR. KELLEY: We believe you can, Your Honor. This

24 is a -- under the strict ruling reading of 303(b) a case was

25 commenced --



1 THE COURT: Uh-huh.

2 MR. KELLEY: -- when the petitions were filed, and

3 we are seeking -- we filed a motion seeking the transfer of

4 a case.

5 THE COURT: Mr. Harris, anything?

6 MR. HARRIS: Your Honor, I mean I understand the

7 strict reading -- the way they're looking at it; on the

8 other hand, what would be the purpose of transferring venue

9 if the only thing the Court who is receiving it would do

10 would be then to be ruling on whether or orders for relief

11 should be entered or not unless there's going to be a ruling

12 that Your Honor can make if there's going to be a contested

13 involuntary. If there's not going to be a contested

14 involuntary and the debtors were to affirm that, then, you

15 know, there wouldn't be any issue with dealing with the

16 venue transfer in my mind.

17 But there seems to be a timing issue in some

18 respects as to the desire to go to a forum and then deal

19 with the involuntary and conversion at a later date, and not

20 even, frankly, confirmed, but they said subject to board

21 approval -- and I think the word used was "likely" convert,

22 where that would basically put us in a position of

23 litigating the involuntaries in a jurisdiction in which we

24 didn't file them.

25 THE COURT: All right. So, what I'm -- I'm going



1 to see if I can make sure I understand what I'm hearing.

2 And what I'm hearing from Mr. Harris is, at least

3 for the immediate future, he's not pressing the trustee

4 motion, and again, would like to open and we'll continue in

5 a dialogue concerning how this case will go forward, whether

6 it go forward here in Delaware or whether it get filed or

7 transferred to some other jurisdiction.

8 What I'm hearing from the debtor is that -- and

9 its supporters -- that the only thing they want me to decide

10 what venue the case should (indiscernible - 4:34:18) once

11 that decision has been made they'll be in a position,

12 perhaps, to make a decision on whether agree to agree to an

13 entry of order for relief or not.

14 Is that right -- I want to make sure -- is that a

15 gating issue or do you (indiscernible - 4:34:39)?

16 MR. KELLEY: This is Jeff Kelley.

17 It's my opinion that the two are unrelated in my

18 view. Allied Systems needs to make a decision, and the

19 (indiscernible - 4:34:50), Your Honor, is I just don't have

20 the board sitting here with me, that -- which because of the

21 filing of the involuntary petitions we will be consenting,

22 we just do not wish to have a crash landing into a voluntary

23 Chapter 11. We want to make sure that our financing is all

24 lined up and we want to do it as neatly as possible with the

25 right message to all of our constituencies, many of whom are



1 on the phone.

2 So, I don't think the two are related, Your Honor.

3 The fiduciary decision of deciding to go ahead and enter

4 into a voluntary 11 is independent of the venue motion.

5 THE COURT: Right.

6 MR. KELLEY: We just -- we wanted to make -- to

7 bring the venue motion before your Court in a very early

8 time to let you know that it was an issue. We were faced

9 with an emergency filing for appointment of a trustee. We

10 didn't think that if Your Honor was not going to keep the

11 case, not presupposing at all what Your Honor's decision

12 will be, that Your Honor would want to be the one deciding

13 whether to appoint a trustee --

14 THE COURT: Okay.

15 MR. KELLEY: -- so we brought this motion to your

16 attention promptly.

17 THE COURT: Very good. And I understand you would

18 like Mr. Nestor to withdraw, but, of course, I can't make

19 him withdraw it.

20 I will offer a comment. I think as presented in

21 its -- or in the papers that the trustee motion is not

22 particularly persuasive, of course, all those motions

23 require a development of facts and it's somewhat difficult

24 to figure it out from the actual papers.

25 What I'd like to do in this case and what I will



1 do is let's have a hearing on the venue transfer motion on

2 Thursday, May 31st. (Indiscernible - 4:36:44 reschedule

3 that, I'm available throughout the day with -- I do have to

4 take a break in the late morning, so I won't be available

5 until say 10:30, if we started in the morning, or I'm

6 available 12:30 going forward whether we take a break or we

7 start in the afternoon.

8 I know there are a lot of people who are going to

9 be interested and when the timing on that is going to be, so

10 if people want me to simply state a time I will and we'll

11 basically try to figure it out.

12 But, I think regardless of whether this is going

13 to be withdrawn or filed an 11 or what have you, I have a

14 responsibility to decide very quickly where -- what the

15 venue should be. And it very well may be at the end of that

16 Mullin hearing my answer is going to be, I can't make that

17 decision because Judge Mullins is going to make that

18 decision.

19 But if it is appropriate for this Court to have a

20 hearing on transfer venue, then one of the possibilities may

21 be that this Court doesn't have the power, or the

22 possibility is this Court decides it has that power and

23 makes a decision. Either way, I need to hear from the

24 parties and the facts and law to make that call.

25 Is there any comment on that?



1 MR. HARRIS: Your Honor, it's Adam Harris.

2 That's all fine with us, just two

3 questions/comments.

4 One is, can we set a time for filing responses of

5 maybe a day before the hearing? And that ties into my

6 suggestion that we hold the hearing, if Your Honor's

7 available, at 2 o'clock in the afternoon. That way parties

8 can get in and out the same day, including potentially

9 flying up from Atlanta to the extent they need to do that,

10 rather than doing something early in the morning where

11 people may feel compelled to come in the night before --

12 just the cost issue. I think if we do the 2 o'clock, then

13 we can try to get the responses by noon the day before. If

14 that's too tight, we can probably do it a little sooner than

15 that.

16 THE COURT: All right.

17 MR. KELLEY: Your Honor --

18 THE COURT: Go ahead. Sorry, go ahead.

19 MR. KELLEY: -- this is Jeff Kelley.

20 The date of the hearing is fine, and we would ask

21 that, if possible, the response date be set a little sooner

22 than that to give us a little bit more time to read it, and

23 we appreciate and agree with Mr. Harris' suggestion that the

24 hearing start at 2 o'clock.

25 THE COURT: All right.



1 MR. HARRIS: Your Honor, we can do the response

2 5:00 p.m., Tuesday, the 29th, I guess that would be.

3 THE COURT: Well, that's what I was about to say.

4 All right. We'll have a hearing May 31st at

5 2:00 p.m. on the venue motion.

6 Responses are due to -- by no later than 5:00 p.m.

7 on the 29th, which is Tuesday. (Indiscernible - 4:39:46)

8 transfer motion and no other motions.

9 Anything else?

10 And -- I'm sorry, in the pending, at least the

11 (indiscernible - 4:40:00) I'm going to hold the trustee

12 motion in abeyance.

13 MR. HARRIS: That's fine, Your Honor.

14 Thank you.

15 THE COURT: Okay.

16 MR. SAMIS: Your Honor, this is Chris Samis.

17 For the record, just to be absolutely clear, we do

18 actually have a pending motion to seal in connection with

19 our venue motion, so I would ask that that be heard at the

20 hearing, as well.

21 THE COURT: Well, I was about to say that.

22 UNIDENTIFIED SPEAKER: (Indiscernible - 4:40:19)

23 Your Honor, with respect to certain matters that were

24 contained in our statement in support of trustee motion.

25 MR. HARRIS: Your Honor, I don't think there's any



1 opposition from either side to those -- Chris, unless you

2 guys have some issues with ours -- so we might be able to

3 submit orders and not -- and avoid a hearing on those.

4 THE COURT: All right. Well, here's where we'll

5 go with that. I was about to say this actually, but I

6 appreciate being reminded.

7 To the extent there are (indiscernible 4:40:46)

8 confidentiality or seal of motions, obviously, we'll hear

9 those motions in relation to the venue motions, and if there

10 aren't any objections and you want to send out a stipulated

11 order, that's fine with the Court; however you want to play

12 it.

13 But let's limit it to the venue motion and the

14 related file under seal motions, et cetera.

15 MR. SAMIS: Thank you, Your Honor.

16 I'll -- we'll discuss that with Mr. Harris and

17 we'll get it worked out.

18 MR. HARRIS: All right. Great. Thank you.

19 THE COURT: Very good.

20 Anything else?

21 MR. BUCHBINDER: Your Honor, this is Dave

22 Buchbinder, again.

23 It might be -- I'm sort of concerned about 1014(b)

24 here, as I know everyone else is, and I wouldn't want

25 everyone to end up in another forum and fighting about what



1 applied here or didn't apply here.

2 It seems to me that that threshold issue in the

3 venue motion is whether or not Rule 1014(b) applies based

4 upon the comment that we maybe are not dealing with the same

5 debtor.

6 If the Court were to find that we weren't, then we

7 we'd be looking at what I'll call a traditional change of

8 venue motion, the motion that was filed. But if the Court

9 were to find that one of the four types of entities

10 described in Rule 1014(b) is the -- and type of entity we're

11 dealing with, I think the rule doesn't give the Court any

12 discretion except to move the case back to Atlanta.

13 So we might want to deal with 1014(b) first, and

14 as further backup, the parties might all want to agree, and

15 at least for purposes of the venue motion, they're not going

16 to invoke this rule or the Court may want to independently

17 consult with Judge Mullins, who may want to issue an order

18 allowing this Court to rule on the venue motion so that the

19 record is clear and that a lot of unnecessary time is

20 perhaps not wasted downstream litigating these matters.

21 It's just a suggestion.

22 THE COURT: Well, I'm not at all sure that I agree

23 that if there's a pre-existing case there is no choice but

24 to transfer venue. I'm not sure I agree with your

25 interpretation of the statute.



1 And the point I was trying to make in connection

2 with the hearing is that I intend to consider the 1014

3 issues in connection with the venue transfer motion, but I

4 think I have to do so based on the facts, and it sounds to

5 me like there may be a factual issue at play here about

6 1014.

7 If I find that I have a situation where there's a

8 pre-existing case and that Judge Mullins, or whoever has

9 that case has the decision, I mean, I think it would be

10 nonetheless helpful to combine the motions, because if I

11 decide no then I can decide it on the merits; if I decide

12 yes I can kick it to Judge Mullins, but I can also make,

13 perhaps, observations that he would find helpful.

14 So I'm going to have the whole hearing the same

15 day, okay?

16 MR. BUCHBINDER: Well, I wasn't -- this is Dave

17 Buchbinder.

18 I wasn't suggesting to not have the hearing the

19 same day.

20 THE COURT: Oh, okay.

21 Thank you, I'm sorry. I --

22 MR. BUCHBINDER: I was just simply suggesting that

23 in terms of order, the 1014(b) issue might be first.

24 THE COURT: Well, that's something for the parties

25 to work out in how they're going to run their hearing, but I



1 certainly would hope that the parties -- and I know they

2 will, because I know you all -- will figure out a

3 professional and logical way to do it.

4 Okay. So the hearing will be May 31st at

5 2:00 p.m.

6 Responses due by 5:00 on the 29th, which is

7 Tuesday.

8 All right. Anything else?

9 All right. We're adjourned.

10 MR. HARRIS: That's it from the petitioning

11 creditors, Your Honor.

12 Thank you.

13 THE COURT: Okay. We're adjourned then.

14 Thank you.

15 MR. KELLEY: The debtors thank you, Your Honor.

16 MR. BUCHBINDER: On behalf of the U.S. Trustee,

17 thank you, Your Honor.

18 (Whereupon these proceedings were concluded at

19 4:44 P.M.)

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1 C E R T I F I C A T I O N

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3 I, William J. Garling, certify that the foregoing transcript

4 is a true and accurate record of the proceedings.

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10 Veritext

11 200 Old Country Road

12 Suite 580

13 Mineola, NY 11501

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15 Date: 5/24/2012

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UNITED STATES BANKRUPTCY COURTDistrict of Delaware

In Re:Allied Systems Holdings, Inc.2711 Centerville RoadSuite 400Wilmington, DE 19808

Chapter: 11

EIN: 58−0360550

Case No.: 12−11564−CSS

NOTICE OF FILING OF TRANSCRIPT AND OF DEADLINES RELATED TO RESTRICTION ANDREDACTION

A transcript of the proceeding held on 5/22/2012 was filed on 5/25/2012 . The following deadlines apply:

The parties have 7 days to file with the court a Notice of Intent to Request Redaction of this transcript. Thedeadline for filing a request for redaction is 6/15/2012 .

If a request for redaction is filed, the redacted transcript is due 6/25/2012 .

If no such notice is filed, the transcript may be made available for remote electronic access upon expiration of therestriction period, which is 8/23/2012 unless extended by court order.

To review the transcript for redaction purposes, you may purchase a copy from the transcriber (see docket forTranscriber's information) or you may view the document at the clerk's office public terminal.

Clerk of CourtDate: 5/25/12

(ntc)

Notice Recipients

District/Off: 0311−1 User: Brandon Date Created: 5/25/2012

Case: 12−11564−CSS Form ID: ntcBK Total: 7

Recipients of Notice of Electronic Filing:ust United States Trustee [email protected] Christopher M. Samis [email protected] Christopher M. Samis [email protected] Mark D. Collins [email protected]

TOTAL: 4

Recipients submitted to the BNC (Bankruptcy Noticing Center):adb Allied Systems Holdings, Inc. 2711 Centerville Road Suite 400 Wilmington, DE 19808aty Ezra H. Cohen Troutman Sanders LLP Bank of America Plaza 600 Peachtree Street Suite

5200 Atlanta, GA 30308−2216aty Jeffrey W. Kelley Troutman Sanders LLP 600 Peachtree St. NE, Suite 5200 Atlanta, GA 30308

TOTAL: 3

10000000046

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