sdthq motion to supeona certain banks

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CHI 61,562,935v9 10-7-11

KEITH SHAPIRO, ESQ. Illinois Bar No. 6184374 NANCY A. PETERMAN, ESQ. Illinois Bar No. 6208120

GREENBERG TRAURIG, LLP 77 West Wacker Drive, Suite 3100 Chicago, Illinois 60601 Telephone: 312-456-8400 Facsimile: 312-456-8435 Email: [email protected] Email: [email protected]

Proposed Counsel for

Debtor and Debtor-in-Possession

BOB L. OLSON, ESQ. Nevada Bar No. 3783 GREENBERG TRAURIG, LLP 3773 Howard Hughes Parkway, Suite 400 North Las Vegas, Nevada 89169 Telephone: 702-792-3773 Facsimile: 702-792-9002 Email: [email protected]

UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF NEVADA

In re:

SHENGDATECH, INC.,

Debtor.

Case No. BK-11-52649 Chapter 11

DEBTOR’S MOTION FOR ENTRY OF

ORDER PURSUANT TO 11 U.S.C. 105(a),

RULES 2004 AND 9016 OF THE

FEDERAL RULES OF BANKRUPTCY

PROCEDURE AND RULES 2004,

5075(a)(2)(L) AND 9016 OF THE NEVADA

LOCAL RULES OF BANKRUPTCY

PRACTICE (I) AUTHORIZING THE

DEBTOR TO SERVE SUBPOENAS UPON

CERTAIN BANKS; (II) DIRECTING

SUCH BANKS TO PRODUCE

DOCUMENTS RELATING TO THE

BANK ACCOUNTS AND (III)

AUTHORIZING THE DEBTOR TO

EXAMINE A REPRESENTATIVE OF

EACH SUCH BANK

ShengdaTech, Inc., as debtor and debtor-in-possession (the “Debtor”) in the above-

captioned chapter 11 case (the “Chapter 11 Case”), hereby submits this motion (the “Motion”)

for entry of an order, substantially in the form attached hereto as “Exhibit A,” pursuant to section

105(a) of chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”), Rules 2004

Case 11-52649-btb Doc 157 Entered 10/07/11 12:51:17 of 27

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CHI 61,562,935v9 10-7-11 2

and 9016 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) and Rules

2004, 5075(a)(2)(L) and 9006 of the Nevada Local Rules of Bankruptcy Practice (the “Local

Rules”), (i) authorizing the Debtor to serve subpoenas (the “Subpoenas”) upon the Banks (as

defined below), substantially in the form attached hereto as “Exhibit B;” (ii) directing the Banks

to produce to the Debtor any and all documents, records, account statements, communications

and other information, as set forth in the Subpoena, relating to the Bank Accounts (as defined

below) upon service of the Subpoenas; and (iii) authorizing the Debtor to examine a

representative from each of the Banks. In support of the Motion, the Debtor respectfully states

as follows:

PRELIMINARY STATEMENT

1. The Debtor is working to preserve and maximize the value of its estate for the

benefit of all stakeholders. In connection therewith, the Debtor seeks an order compelling the

production of any and all documents, records, account statements, communications and other

information, as set forth in the Subpoena, relating to the Bank Accounts and authorizing the

Debtor to examine a representative from each of the Banks to obtain information with respect to

the Bank Accounts, including, without limitation, the amount of cash on deposit in the Bank

Accounts and the monies transferred to and from the Bank Accounts.

2. Upon information and belief, the account holders of the Bank Accounts are the

Debtor, Faith Bloom, and/or one or more of the PRC Subsidiaries (as defined below). The

Debtor’s equity in Faith Bloom and the PRC Subsidiaries is its principal asset, and the value of

these subsidiaries is the primary source of recovery for the Debtor’s creditors and shareholders.

As such, the Debtor must have complete financial information regarding the subsidiaries,

including the flow of cash into and out of the subsidiaries, to assess their financial condition.

3. In addition, as this Court knows, through the ongoing investigation of the Special

Committee of the Board of Directors of the Debtor (the “Special Committee”), it has been

determined that certain of the Debtor’s financial records may have been falsified in whole or in

part and that serious issues remain unanswered regarding the financial condition of the Debtor


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CHI 61,562,935v9 10-7-11 3

and its overall financial operations. Moreover, as disclosed to this Court, the Debtor currently

has, under its control, approximately $13 million in cash. Upon information and belief, as of

December 31, 2010, the Debtor and its subsidiaries had approximately $180 million cash. The

Debtor has been attempting since March 2011, when the Special Committee was formed, to

verify the cash. While the Special Committee and the Debtor have used, and continue to use,

their best efforts to obtain a true understanding of the financial affairs and cash position of the

Debtor and its affiliates, those efforts have been thwarted by former management of the Debtor.

4. The Debtor commenced this Chapter 11 Case to safeguard its assets, restructure

its business operations and allow the Debtor to continue its ongoing investigation of the financial

affairs of the Debtor. To accomplish these goals, the Debtor must have information relating to

the Bank Accounts so that it may verify the actual financial condition of Faith Bloom and the

PRC Subsidiaries, the cash position of the Debtor and all subsidiaries, and the use of the

proceeds of the bonds.

5. For the foregoing reasons, the Debtor respectfully submits that is entitled to the

discovery requested herein.

JURISDICTION AND VENUE

6. The Court has jurisdiction over this Motion pursuant to 28 U.S.C. §§ 157 and

1334. Venue is proper in this district pursuant to 28 U.S.C. § 1408.

7. This matter is core within the meaning of 28 U.S.C. § 157(b)(2). The statutory

bases for the relief requested herein are sections 105(a) of the Bankruptcy Code, Bankruptcy

Rules 2004 and 9016 and Local Rules 2004, 5075(a)(2)(L) and 9016.

BACKGROUND

A. Background and Operations

8. On August 19, 2011 (the “Petition Date”), the Debtor commenced this Chapter 11

Case by filing a voluntary petition for relief under chapter 11 of the Bankruptcy Code.


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CHI 61,562,935v9 10-7-11 4

9. The Debtor has continued in possession of its property and is operating and

managing its business as a debtor-in-possession pursuant to sections 1107(a) and 1108 of the

Bankruptcy Code.

10. On August 31, 2011, the Office of the United States Trustee appointed an official

committee of unsecured creditors (the “Committee”) in the Chapter 11 Case.

11. The Debtor is a Nevada corporation with its principal place of business in China.

On March 31, 2006, the Debtor consummated a share exchange pursuant to a Securities Purchase

Agreement and Plan of Reorganization with Faith Bloom Limited (“Faith Bloom”), which

remains the Debtor’s wholly owned subsidiary. Faith Bloom is the direct parent company of the

following entities formed under the laws of the People’s Republic of China: Shandong Haize

Nanomaterials Co., Ltd., Shandong Bangsheng Chemical Co., Ltd., Shaanxi Haize

Nanomaterials Co., Ltd., Zibo Jiaze Nanomaterials Co., Ltd. and Anhui Yuanzhong

Nanomaterials Co., Ltd. (collectively, the “PRC Subsidiaries”).

12. Other than Shandong Bangsheng Chemical Co., Ltd., which, upon information

and belief is not an operating entity, all of the other PRC Subsidiaries are operating entities (the

“PRC Operating Subsidiaries”). The PRC Operating Subsidiaries manufacture a specialty

additive known as nano-precipitated calcium carbonate, which is used in a variety of products to

enhance their durability and efficiency and is widely applied in the paint, paper, plastic and

rubber industries and used for building materials such as PVC. Neither the Debtor nor Faith

Bloom are operating entities.

13. The Debtor engaged KPMG, LLP (“KPMG”) as its independent certified public

accounting firm beginning in November 2008. In March 2011, KPMG informed the Debtor’s

audit committee of certain concerns arising during its incomplete audits of the Debtor’s

consolidated financial statements as of and for the year ended December 31, 2010. Among other

things, KPMG detailed information relating to its inability to confirm sales amounts, sales terms

and outstanding balances, as well as undisclosed related party transactions.


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CHI 61,562,935v9 10-7-11 5

14. On March 4, 2011, one day after KPMG notified the Debtor’s audit committee of

these potential discrepancies, the Debtor held a special meeting of its board of directors and, by

board resolution, created the Special Committee. The Special Committee was charged with

overseeing an internal investigation of the issues identified by KPMG and any other matters

deemed appropriate.

15. In connection with this investigation, the Special Committee instructed teams of

professionals to visit financial institutions holding the Debtor’s accounts in China in order verify

the Debtor’s cash accounts, but managers at the Debtors’ PRC Subsidiaries refused to cooperate

with the Debtor’s professionals during their visits to the Banks.

16. In April 2011, KPMG informed the Debtor’s board of directors that, in its view,

the Debtor’s senior management had not taken timely and appropriate remedial actions with

respect to the discrepancies and/or unexplained issues relating to the Debtor’s financial records,

and that the continued lack of resolution would materially impact the financial statements for the

year ended December 31, 2010 and possibly prior periods. KPMG further informed the Debtor

that disclosures should be made and action should be taken to prevent future reliance on

KPMG’s previously issued audit reports related to the consolidated balance sheets of the Debtor

and its subsidiaries as of December 31, 2008 and 2009, and the related consolidated statements

of income, shareholders’ equity and comprehensive income, and cash flows for the years then

ended and the effectiveness of internal control over financial reporting as of December 31, 2008

and 2009. On April 29, 2011, KPMG formally resigned.

17. The events giving rise to the Chapter 11 Case are described in further detail in the

Declaration of Sheldon B. Saidman in Support of Debtor's First Day Motions [Docket No. 16]

(the “First Day Declaration”) which is incorporated herein by reference.

18. On August 19, 2011, the Special Committee appointed Michael Kang of Alvarez

& Marsal as the chief restructuring officer (“CRO”) of the Debtor. On September 2, 2011, the

Court entered a final order confirming Mr. Kang’s appointment as CRO.


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CHI 61,562,935v9 10-7-11 6

19. On September 2, 2011, the Court granted the Debtor’s request for a preliminary

injunction and enjoined the Debtor’s board of directors and shareholders from taking any action

to change the composition of the Special Committee or the appointment of the CRO or to

interfere with the Special Committee’s or the CRO’s internal investigation, prosecution of the

Chapter 11 Case or other actions conducted by the Special Committee and CRO.

B. The Banks

20. On information and belief, prior to the Petition Date, Faith Bloom and/or the PRC

Subsidiaries had accounts (including, without limitation, any open or closed accounts at each of

the Banks, the “Bank Accounts”) at the following banks (collectively, the “Banks”): (i) the Bank

of China; (ii) the Industrial and Commercial Bank of China; (iii) the Bank of Communications;

(iv) China Merchants Bank; and (v) the Agricultural Bank of China.1 Each of the Banks

maintain branch locations within the United States.

21. Prior to the Petition Date, the Special Committee attempted to obtain information

relating to the Bank Accounts. The Special Committee’s professionals issued letters to each of

the Banks instructing them to freeze the Bank Accounts based upon, among other things, the

issues identified by KPMG. Certain of the Banks briefly froze the Bank Accounts, but are no

longer honoring the requests to freeze the Bank Accounts.

22. Moreover, in order to obtain information relating to the Bank Accounts, the

Special Committee’s professionals attempted to visit certain of the Banks in China to obtain

information relating to the primary Bank Accounts. While visiting such Banks, the Special

Committee’s professionals received no cooperation from the legal representatives, who were

asked to accompany the Special Committee’s professionals to the Banks and bring the chops,

which are essentially the corporate seal, for each of the PRC Subsidiaries in order to demonstrate

the necessary corporate authority with respect to the Bank Accounts. In addition, the Special

1 A list of the Bank Accounts, together with the last four digits of the account number for each Bank

Account, is attached hereto as “Exhibit C.” The attached listing of Bank Accounts is as of December 31, 2010, is the most current listing of Bank Accounts and was provided by prior management.


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CHI 61,562,935v9 10-7-11 7

Committee’s professionals received no cooperation from the local branches for these Banks in

China.

23. The Debtor has sent letters to the legal representative of each PRC Subsidiary,

requesting that they deliver the chops for each PRC Subsidiary to the Debtor to enable them to

gain access to the Bank Accounts and has informed each of the legal representatives that they

should take no action without the approval of A. Carl Mudd, Sheldon B. Saidman or Michael

Kang, who comprise the officers and directors of Faith Bloom.

24. It is without question that the Debtor owns the PRC Subsidiaries and therefore has

the right to obtain the balances in the Bank Accounts and records of the transfers of funds into

and out from the Bank Accounts in order to trace the cash which is presently unaccounted for.

25. The Debtor is concerned that the legal representatives and/or prior management of

the Debtor may have already improperly transferred the cash or may be using the cash in the

Bank Accounts for improper purposes.

26. The Debtor does not intend to take the cash to the detriment of the operations of

the PRC Subsidiaries. The Debtor wants to ensure that available cash is being used for proper

purposes, including supporting the business operations of the PRC Subsidiaries, and needs to

obtain information from the Banks in order to continue the process of tracing the cash that should

be under the control of the Debtor.

BASIS FOR RELIEF

27. Bankruptcy Rule 2004(a) states that on “motion of any party in interest, the court

may order the examination of any entity.” Fed. R. Bankr. P. 2004(a). “Although Rule 2004 does

not define the term ‘party in interest,’ 11 U.S.C. § 1109 refers to parties in interest for purposes

of the right to be heard in a Chapter 11 case.” In re Summit Corp., 891 F.2d 1, 5 (1st Cir. 1989).

For these purposes, section 1109 of the Bankruptcy Code expressly provides that a “party in

interest” includes the debtor. Id. (citing 11 U.S.C. § 1109(b)); see, e.g., In re Pub. Serv. Co., 91

B.R. 198, 199 (Bankr. D.N.H. 1988) (granting debtor’s motion for discovery under Bankruptcy

Rule 2004); In re Sun Med. Mgmt., Inc., 104 B.R. 522, 524-25 (Bankr. M.D. Ga. 1989) (same);


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CHI 61,562,935v9 10-7-11 8

see also 9 Collier on Bankruptcy ¶ 2004.02[6] (15th ed. rev. 2006) (“Parties in interest in a

bankruptcy case generally include . . . the debtor . . . .”). Accordingly, the Debtor is a “party in

interest” entitled to seek discovery under Bankruptcy Rule 2004.

28. Granting a motion under Bankruptcy Rule 2004 is within the Court’s discretion.

In re Enron Corp., 281 B.R. 836, 840 (Bankr. S.D.N.Y. 2002) (“[T]he Court has the discretion to

grant a request for a 2004 examination . . .”) (citations omitted). Courts have recognized the

important role that Rule 2004 examinations play in the administration of a bankruptcy case. See

e.g., Credit Suisse Secs. (USA) LLC v. Official Comm. Of Unsecured Creditors (In re Refco,

Inc.), Case No. 06 Civ. 1888 (GEL), 2006 WL 1379616, (S.D.N.Y. May 16, 2006) (noting that

Rule 2004 examination by creditors’ committee was of central importance to the bankruptcy

case).

29. Courts permit the examination as long as it relates to “acts, conduct, or property

or to the liabilities and financial condition of the debtor, or to any matter which may affect the

administration of the debtor’s estate . . . .” Fed. R. Bankr. P. 2004(b). Thus, “Rule 2004

examinations are appropriate for revealing the nature and extent of the bankruptcy estate . . . and

for ‘discovering assets, examining transactions, and determining whether wrongdoing.” Enron,

281 B.R. at 840.

30. For the foregoing reasons, courts have consistently held that the range of

discoverable subject matter in a Rule 2004 examination has been construed as “‘unfettered and

broad.’” In re Dinubilo, 177 B.R. 932, 939 (E.D. Cal. 1993) (quoting In re GHR Energy Corp.,

33 B.R. 451, 453 (Bankr. D. Mass. 1983)). Indeed, the scope of inquiry can “‘legitimately be in

the nature of a ‘fishing expedition.’’” Northmount Assocs. v. W & S Invs., Inc. (In re W & S

Invs., Inc.), No. 91-35830, 1993 WL 18272, *2 (9th Cir. 1993) (quoting In re Wilcher, 56 B.R.

428, 433 (Bankr. N.D. Ill. 1985)).

31. Here, the scope of the discovery is reasonable and well within the parameters of

Bankruptcy Rule 2004 because the document requests and testimony that the Debtor seeks


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CHI 61,562,935v9 10-7-11 9

relates to the “property or to the liabilities and financial condition of the debtor, [and] . . .

matter[s] which may affect the administration of the debtor’s estate.” Fed. R. Bankr. P. 2004(b).

32. The equity of Faith Bloom and, consequently, the PRC Subsidiaries, is one of the

principal assets of the Debtor’s estate. The value of the Debtor’s equity interest in Faith Bloom

hinges upon the value of the PRC Subsidiaries and their cash resources. As the only operating

entities affiliated with the Debtor that conduct all of its manufacturing operations, the PRC

Subsidiaries are an integral part of the Debtor’s business operations. As such, the Debtor must

have complete financial information regarding the Bank Accounts to assess the assets and

liabilities of the PRC Subsidiaries and the movement of monies into and out of the PRC

Subsidiaries.

33. Moreover, the Special Committee has been unable to verify the amounts on

deposit at each of the Banks, thus rendering it impossible for the Debtor to understand its true

financial condition. The Debtor needs to understand whether the PRC Subsidiaries actually have

sufficient cash flow to support their operations. In addition, the Debtor must be able to trace the

cash that has been flowing through the Bank Accounts to verify the Debtor’s consolidated cash

position. The Debtor believes that, with access to the Bank Accounts, it will be able to follow

the flow of cash. As such, the Debtor has an immediate need for access to the Bank Accounts.

34. Finally, without this information, the Debtor cannot (i) determine the existence

and extent of possible causes of action against third parties and (ii) fully evaluate claims by or

against its estate. Therefore, the Debtor’s inability to obtain accurate and complete financial

information regarding the Bank Accounts is hampering its ability to properly administer its estate

for the benefit of its stakeholders.

35. For the foregoing reasons, the Debtor respectfully submits that it is entitled to the

discovery requested herein.

PROPOSED PROCEDURE

36. The Debtor proposes that (a) the Banks produce all documents, records, account

statements, communications and other information, as set forth in the Subpoena, relating to the


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CHI 61,562,935v9 10-7-11 10

Bank Accounts so as to be received by the Debtor’s proposed counsel no later than October 31,

2011 at 4:00 p.m. (Prevailing Pacific Time) (the “Document Production Deadline”) and (b) the

Banks each make available a representative for examination to take place at the offices of the

Debtor’s proposed counsel, located at The MetLife Building, 200 Park Avenue, New York, New

York 10166, at an agreed-upon date and time, but in no event later than fourteen (14) days from

the Document Production Deadline.

NO PRIOR REQUEST

37. No previous motion for the relief sought herein has been made by the Debtor to

this or any other court.

NOTICE

38. Notice of this Motion has been given to the following parties or, in lieu thereof, to

their counsel, if known: (a) the Banks, (b) the Office of the United States Trustee, (c) the Official

Committee of Unsecured Creditors appointed in this Chapter 11 Case, (d) the Special

Committee, and (e) those persons filing notices of appearance and requests for notice under

Bankruptcy Rule 2002 in this Chapter 11 Case. The Debtor submits that, in light of the nature of

the relief requested, no other or further notice need be given.

CONCLUSION

WHEREFORE, the Debtor respectfully requests that the Court enter an order,

substantially in the form attached hereto as “Exhibit A,” (i) authorizing the Debtor to serve the

Subpoenas upon the Banks, (ii) directing the Banks to produce to the Debtor any and all

documents, records, account statements and communications relating to the Bank Accounts upon

service of the Subpoenas; (iii) authorizing the Debtor to examine a representative from each of

the Banks; and (iv) granting such other and further relief as the Court deems just and proper

Dated: October 7, 2011

/s/Bob L. Olson BOB L. OLSON, ESQ. Nevada Bar No. 3783 GREENBERG TRAURIG, LLP


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CHI 61,562,935v9 10-7-11 11

3773 Howard Hughes Parkway, Suite 400 North Las Vegas, Nevada 89169 Telephone: 702-792-3773 Facsimile: 702-792-9002 Email: [email protected]

and

KEITH SHAPIRO, ESQ. Illinois Bar No. 6184374 NANCY A. PETERMAN, ESQ. Illinois Bar No. 6208120 GREENBERG TRAURIG, LLP 77 West Wacker Drive, Suite 3100 Chicago, Illinois 60601 Telephone: 312-456-8400 Facsimile: 312-456-8435 Email: [email protected] [email protected]




CHI 61,562,935v9 10-7-11

Exhibit A


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CHI 61,562,935v9 10-7-11

**PROPOSED ORDER** KEITH SHAPIRO, ESQ. Illinois Bar No. 6184374 NANCY A. PETERMAN, ESQ. Illinois Bar No. 6208120 GREENBERG TRAURIG, LLP 77 West Wacker Drive, Suite 3100 Chicago, Illinois 60601 Telephone: 312-456-8400 Facsimile: 312-456-8435 Email: [email protected] Email: [email protected]



BOB L. OLSON, ESQ. Nevada Bar No. 3783 GREENBERG TRAURIG, LLP 3773 Howard Hughes Parkway, Suite 400 North Las Vegas, Nevada 89169 Telephone: 702-792-3773 Facsimile: 702-792-9002 Email: [email protected]

UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF NEVADA

In re:

SHENGDATECH, INC.,

Debtor.

Case No. BK-11-52649 Chapter 11

ORDER PURSUANT TO 11 U.S.C. 105(a),

RULES 2004 AND 9016 OF THE

FEDERAL RULES OF BANKRUPTCY

PROCEDURE AND RULES 2004,

5075(a)(2)(L) AND 9016 OF THE NEVADA

LOCAL RULES OF BANKRUPTCY

PRACTICE (I) AUTHORIZING THE

DEBTOR TO SERVE SUBPOENAS UPON

CERTAIN BANKS, (II) DIRECTING

SUCH BANKS TO PRODUCE

DOCUMENTS RELATING TO THE

BANK ACCOUNTS AND (III)

AUTHORIZING THE DEBTOR TO

EXAMINE A REPRESENTATIVE OF

EACH SUCH BANK


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CHI 61,562,935v9 10-7-11

2

Upon the motion (the “Motion”)1 of ShengdaTech, Inc., as debtor and debtor-in-

possession (the “Debtor”) in the above-captioned chapter 11 case (the “Chapter 11 Case”),

seeking entry of an order, pursuant to section 105(a) of title 11 of the United States Code (the

“Bankruptcy Code”), Rules 2004 and 9016 of the Federal Rules of Bankruptcy Procedure (the

“Bankruptcy Rules”) and Rules 2004, 5075(a)(2)(L) and 9006 of the Nevada Local Rules of

Bankruptcy Practice (the “Local Rules”), (i) authorizing the Debtor to serve subpoenas (the

“Subpoenas”) upon the Banks (as defined below), substantially in the form attached as “Exhibit

B” to the Motion; (ii) directing the Banks to produce to the Debtor any and all documents,

records, account statements and communications relating to the Bank Accounts (as defined

below) upon service of the Subpoenas; and (iii) authorizing the Debtor to examine a

representative from each of the Banks; and the Court having jurisdiction to consider the Motion

and grant the requested relief in accordance with 28 U.S.C. §§ 157 and 1334; and consideration

of the Motion being core pursuant to 28 U.S.C. § 157(b); and venue being proper before this

Court pursuant to 28 U.S.C. § 1408; and the Court having reviewed the Motion; and it appearing

that notice of the Motion was good and sufficient under the circumstances and that no other or

further notice need be given; and it appearing that the document requests and testimony sought

from the Banks are within the scope of permissible discovery under Bankruptcy Rule 2004 and

that the requested relief is in the best interests of the Debtor’s estate and creditors; and after due

deliberation thereon; and good cause appearing therefor,

IT IS HEREBY ORDERED THAT:

1. The Motion is granted.

2. The Debtor is authorized to serve upon the Banks the Subpoenas, substantially in

the form attached as Exhibit B to the Motion.

3. The Banks, upon receipt of the Subpoenas, shall produce to the Debtor any and all

documents requested by the Subpoena no later than October 31, 2011 at 4:00 p.m. (Prevailing

Pacific Time) (the “Document Production Deadline”).

1 Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Motion.


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CHI 61,562,935v9 10-7-11

3

4. The Banks shall make available a representative for examination, which will take

place at the offices of the Debtor’s proposed counsel, located at The MetLife Building, 200 Park

Avenue, New York, New York 10166, at an agreed-upon date and time, but in no event later

than fourteen (14) days from the Document Production Deadline.

5. This Court shall retain jurisdiction with respect to any disputes that arise with

respect to this Order, or the Subpoena issued hereunder.

Respectfully prepared and submitted by:

/s/Bob L. Olson BOB L. OLSON, ESQ. Nevada Bar No. 3783 GREENBERG TRAURIG, LLP 3773 Howard Hughes Parkway, Suite 400 North Las Vegas, Nevada 89169 Telephone: 702-792-3773 Facsimile: 702-792-9002 Email: [email protected]

and

KEITH SHAPIRO, ESQ. Illinois Bar No. 6184374 NANCY A. PETERMAN, ESQ. Illinois Bar No. 6208120 GREENBERG TRAURIG, LLP 77 West Wacker Drive, Suite 3100 Chicago, Illinois 60601 Telephone: 312-456-8400 Facsimile: 312-456-8435 Email: [email protected] [email protected] Proposed Counsel for


# # #


CHI 61,562,935v9 10-7-11

CERTIFICATION OF COUNSEL PURSUANT TO LOCAL RULE 9021

In accordance with Local Rule 9021, counsel submitting this document certifies as follows:

The Court has waived the requirement of approval under LR 9021.

This is a chapter 7 or 13 case, and either with the motion, or at the

hearing, I have delivered a copy of this proposed order to all

counsel who appeared at the hearing, any unrepresented parties who appeared at the hearing, and each has approved or disapproved

the order, or failed to respond, as indicated below:

This is a chapter 9, 11, or 15 case, and I have delivered a copy of this proposed order to all counsel who appeared at the hearing, any

unrepresented parties who appeared at the hearing, and each has

approved or disapproved the order, or failed to respond, as indicated below:

I certify that I have served a copy of this order with the motion, and

no parties appeared or filed written objections.

# # #


CHI 61,562,935v9 10-7-11

Exhibit B


CHI 61,614,552

SCHEDULE A

DOCUMENT RIDER

Pursuant to Federal Rules of Bankruptcy Procedure 7030 and 7034 and Federal Rules of

Civil Procedure 30 and 34, You are hereby directed to produce all Documents relating to any

Accounts held or formerly held, whether now open or closed, in the name of ShengdaTech, Faith

Bloom, Shangdong Haize, Shangdong Bangsheng, Shanxi Haize, Zibo Jiaze, and/or Anhui

Yuanzhong, including but not limited to Account No. [###########] in the name of

[ACCOUNT HOLDER]. Without limiting the foregoing, this Subpoena includes within its

scope the following Documents which shall be produced in separate groups by account number:

1. Copies of all bank statements for all Accounts of the Companies.

2. Records reflecting all transfers of funds into and out of all Accounts of the

Companies.

3. Copies of all checks relating to all Accounts of the Companies.

4. All account applications, signature cards or other indentifying information,

powers of attorney, corporate resolutions, and related information for all Accounts of the

Companies.

5. Copies of any correspondence relating to all Accounts of the Companies.

6. Copies of all account agreements for all Accounts of each of the Companies.

7. Copies of all W-8BEN forms or related documents relating to all Accounts of the

Companies.

8. Copies of all suspicious activity, currency transaction, or other regulatory reports,

or records relating to all Accounts of the Companies.


CHI 61,614,552 2

9. Records showing any amounts charged against all Accounts of the Companies

representing payments on any obligations to You, as well as any fees, charges, or expenses

debited from all Accounts of the Companies by You.

10. Copies of records showing loans or other obligations which were or could have

been repaid from all Accounts of the Companies.

11. Copies of any loan agreements or statements and related Documents made

between the You and any of the Companies regarding any type of borrowing or lending

agreement.

12. Copies of any Documents or records relating to any logins and/or online activity

and/or transactions relating to the Accounts by the Companies, or any of their Representatives,

on or through any of Your websites and/or online banking portals.

13. Copies of any Documents or records sufficient to identify the individuals who

logged into and/or conducted any online activity and/or transactions related to the Accounts on

or through any of Your websites and/or online banking portals.

14. Copies of all emails relating to the Accounts sent from You to the Companies, or

any of their Representatives. If such emails were not retained, please state so.

15. Copies of all emails relating to the Accounts sent from any of the Companies, or

any of their Representatives, to You. If such emails were not retained, please state so.

16. Copies of all Documents or records relating to any agreements between You and

Andrew Chen, Xiangzhi Chen, or Anhui Guo or any other Representatives with respect to any of

the Accounts.


CHI 61,614,552 3

17. Copies of all Documents, emails or records relating to any communications

between You and Andrew Chen, Xiangzhi Chen, or Anhui Guo, each in their individual

capacities, with respect to the Accounts.

DEFINITIONS AND INSTRUCTIONS

A. The following definitions apply to these requests:

1. “Accounts” means any checking account, deposit account, demand account,

negotiable order of withdrawal account, time deposit account, savings account,

passbook account, money market deposit account, share-draft account, loan account,

letter of credit, brokerage account, investment account, swap, interest swap, currency

swap, stock swap, bond swap, credit default swap, bond, stock, warrant, note, security

interest, negotiable instrument, safe deposit box, futures, commodities, annuities,

insurance products or any other similar financial product offered by You to

individuals or entities, that are held or were held, whether now open or closed, in the

name of any of the Companies, whether individually, jointly with any other person or

entity, as power of attorney, as trustee of any trust, as custodian and/or agent of any

corporate entity or in any other capacity.

2. “Anhui Yuanzhong” means Anhui Yuanzhong Nanomaterials Co., Ltd., and

includes any predecessors or successors.

3. “Companies” means ShengdaTech, Faith Bloom, Shangdong Haize,

Shangdong Bangsheng, Shanxi Haize, Zibo Jiaze, and Anhui Yuanzhong.

4. “Document” shall include, without limitation, all matters encompassed within

Federal Rule of Civil Procedure 34(a).


CHI 61,614,552 4

5. “Faith Bloom” means Faith Bloom Ltd. and includes any predecessors or

successors.

6. “Relating to” means, directly or indirectly, referring to, mentioning,

describing, pertaining to, arising out of or in connection with or in any way legally,

logically, or factually connected with the matter discussed.

7. “Representatives” includes any employees, agents, representatives, advisors,

officers, legal representatives, authorized representatives, associates, predecessors,

successors, assigns, affiliates, subsidiaries or entities acting on behalf of, or

purporting to act on behalf of, any of the Companies.

8. “Shangdong Bangsheng” means Shangdong Bangsheng Chemical Co., Ltd.,

and includes any predecessors or successors.

9. “Shangdong Haize” means Shangdong Haize Nanomaterials Co., Ltd., and

includes any predecessors or successors.

10. “Shanxi Haize” means Shanxi Haize Nanomaterials Co., Ltd., and includes

any predecessors or successors.

11. “ShengdaTech” means ShengdaTech, Inc., and includes any predecessors or

successors.

12. “You” or “Your” means [BANK RECEIVING SUBPOENA] and includes

any employees, agents, officers, legal representatives, authorized representatives,

associates, predecessors, successors, assigns, affiliates, subsidiaries or entities acting

on behalf or under control of You.

13. “Zibo Jiaze” means Zibo Jiaze Nanomaterials Co., Ltd., and includes any

predecessors or successors.


CHI 61,614,552 5

B. The singular includes the plural and vice versa; the words “and” and “or” shall be

both conjunctive and disjunctive; the word “all” means “any and all”; the word “any” means any

and all”; the word “including” means “including without limitation.”

C. If You are aware of any document or information requested herein that has been

lost, discarded, or destroyed, the document or information so lost, discarded, or destroyed shall

be identified as completely as possible, including the following information: (1) the author, (2)

recipient, (3) date, (4) subject matter, (5) type of document or record, (6) date of disposal, (7)

manner of disposal, (8) person authorizing the disposal, and (9) person disposing of the

document or information.

D. If any document or information is not produced under a claim of privilege or for

any other basis, the information or document shall be identified as completely as possible,

including the following information: (1) the reason for withholding the document or information,

(2) a brief description of the privileged or protected information, including (i) the date of the

document or information, (ii) the number of pages, attachments, or appendices, (iii) the authors,

preparers, or participants, (iv) the names of each person who was sent or shown a copy of the

document or information, (v) the present custodian of the document or information, and (vi) the

subject matter of the document or information, the type of Document; and (2) the request to

which this document or information relates.

E. These requests cover all documents, information, or items in Your possession,

custody, or subject to Your control, wherever located, including that which You have the power

to obtain.


CHI 61,614,552 6

F. The requests pertain to the time period beginning when any bank accounts held by

the Company were opened through the present.

G. All electronically stored information should be produced in native format.


CHI 61,562,935v9 10-7-11

Exhibit C


CHI 61,562,935v9 10-7-11

Bank PRC Subsidiary Last Four Digits

of the Bank Account(s)

Shangdong Haize Nanomaterials Co., Ltd.

#2014


#3001

Shangdong Bangsheng Chemical Co., Inc.

#1001

Shangdong Bangsheng Chemical Co., Inc.

#5001

Anhui Yuanzhong Nanomaterials Co., Ltd.

#0450

Anhui Yuanzhong Nanomaterials Co., Ltd.

#9762

Shaanxi Haize Nanomaterials Co., Ltd.

#3001


#1014

Zibo Jiaze Nanomaterials Co., Ltd.

#2014


#3001

Bank of China 410 Madison Avenue New York, NY 10017


#8651


#0274

Zibo Jiaza Nanomaterials Co., Ltd.

#9693

Industrial and Commercial Bank of China 725 Fifth Avenue, Fl. 20 New York, NY 10022-2570


#5818


#1345

Bank of Communications 1 Exchange Plaza, Fl. 31 New York, NY 10006-3098

Faith Bloom Ltd. 2102 Faith Bloom Ltd. Fixed Deposit Account (no

account number given)

China Merchants Bank 535 Madison Avenue New York, NY 10022


#3610 Agricultural Bank of China 45 Rockefeller Plaza, #2500 New York, NY 10111-2594


sdthq motion to supeona certain banks

Documents

shandong bangsheng

shaanxi haize

online banking

zibo jiaze

prevailing

shangdong

shangdong

anhui yuanzhong