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					  Case 09-04032       Doc 65     Filed 10/01/10 Entered 10/01/10 15:58:23   Desc Main
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                        UNITED STATES BANKRUPTCY COURT
                             DISTRICT OF MINNESOTA


In re:                                                 JOINTLY ADMINISTERED UNDER
                                                             CASE NO. 08-46617:

         POLAROID CORPORATION, ET AL.,                           08-46617 (GFK)

                               Debtors.

         (includes:
         Polaroid Holding Company;                               08-46621 (GFK)
         Polaroid Consumer Electronics, LLC;                     08-46620 (GFK)
         Polaroid Capital, LLC;                                  08-46623 (GFK)
         Polaroid Latin America I Corporation;                   08-46624 (GFK)
         Polaroid Asia Pacific LLC;                              08-46625 (GFK)
         Polaroid International Holding LLC;                     08-46626 (GFK)
         Polaroid New Bedford Real Estate, LLC;                  08-46627 (GFK)
         Polaroid Norwood Real Estate, LLC;                      08-46628 (GFK)
         Polaroid Waltham Real Estate, LLC)                      08-46629 (GFK)

                                                                  Chapter 7 Cases
                                                              Judge Gregory F. Kishel


John R. Stoebner, Chapter 7 Trustee,

                                   Plaintiff,

-vs-                                                            ADV. No. 09-4032

Ritchie Capital Management, L.L.C.,
as administrative and collateral agent,
Ritchie Special Credit Investments, Ltd.,
Rhone Holdings II, Ltd., Yorkville
Investments I, L.L.C., and Ritchie Capital
Structure Arbitrage Trading, Ltd.,

                                    Defendants.

       AFFIDAVIT OF SANDRA SMALLEY-FLEMING IN SUPPORT OF THE MOTION
       OF JOHN R. STOEBNER, CHAPTER 7 TRUSTEE, FOR PARTIAL SUMMARY
                                JUDGMENT


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STATE OF MINNESOTA                    )
                                      ) ss.
COUNTY OF HENNEPIN                    )

       Sandra Smalley-Fleming, being duly sworn, deposes and states as follows: I am a partner

at the law firm of Lindquist & Vennum P.L.L.P., counsel for Plaintiff, John R. Stoebner, Trustee,

in the above matter. I submit this affidavit in support of the Trustee’s Motion for Partial

Summary Judgment. I verify that the facts set forth herein are true to the best of my personal

knowledge and belief.

       1.      Attached as Exhibit 1 is a copy of the Jury Verdict, Doc. No. 361, U.S. v. Petters

et al., Case No. 08-cr-00364 (D. Minn.).

       2.      Attached as Exhibit 2 is a copy of the plea agreement and sentencing stipulation

for Deanna Coleman.

       3.      Attached as Exhibit 3 is a copy of the plea agreement and sentencing stipulation

for Robert White.

       4.      Attached as Exhibit 4 is a copy of the plea agreement and sentencing stipulation

for James Wehmhoff.

       5.      Attached as Exhibit 5 is a copy of the Written Action in Lieu of Meeting of First

Board of Directors of Petters Company, Inc.

       6.      Attached as Exhibit 6 is a copy of the Deposition Transcript of Deanna Coleman,

pages 1, 23-25, 28-35, 51-57, 59-63, 65, 68-78, 80, 91-94, 99-100, 110-111, 142, 198, 220-227,

233-36.

       7.      Attached as Exhibit 7 is a copy of the Deposition Transcript of Robert White,

pages 1, 9-10, 77-79, 140-143, 148.

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       8.       Attached as Exhibit 8 is a copy of the Transcript of the criminal trial of Thomas

J. Petters, pages 526-530, 544-551, 562-564, 690, 703, 821, 1456-1458, 2037-2039, 2240-2242,

2284-2290, 2366, 3066-3067, 3042-3045, 3061, 3170, 3184.

       9.       Attached as Exhibit 9 is a copy of the Deposition Transcript of Mary Jeffries,

pages 1, 103, 107-08, 117-125, 128-29, 144, 180-181, 211, 244-46, 296-98.

       10.      Attached as Exhibit 10 is a copy of the Deposition Transcript of David Baer,

pages 1, 26, 609, 624, 644, 650-654, 714-717, 722-723, 789-792, 794.

       11.      Attached as Exhibit 11 is a copy of the Application and Affidavit for Search

Warrant relating to Thomas J. Petters’ home and office.

       12.      Attached as Exhibit 12 is a copy of the Indictment, Doc. No. 79, U.S. v. Thomas

J. Petters et al., No. 08-cr-364 (D. Minn.).

       13.      Attached as Exhibit 13 is a copy of the Superseding Indictment, Doc. No. 196,

U.S. v. Thomas J. Petters et al., No. 08-cr-364 (D. Minn.).

       14.      Attached as Exhibit 14 is a copy of PGW’s Plea Agreement and Sentencing

Stipulation, U.S. v. Petters et al., Case No. 08-cv-05348 (D. Minn.).

       15.      Attached as Exhibit 15 is a copy of PCI’s Plea Agreement and Sentencing

Stipulation, U.S. v. Petters et al., Case No. 08-cv-05348 (D. Minn.).

       16.      Attached as Exhibit 16 is a copy of Government Exhibit No. 67 and 67A through

67E.

       17.      Attached as Exhibit 17 is a copy of Government Exhibit No. 68.

       18.      Attached as Exhibit 18 is a copy of the Deposition Transcript of Katherine

Dugan, pages 1, 20-21, 26-30, 43, 54-55, 82, 124.



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       19.     Attached as Exhibit 19 is a copy of the Deposition Transcript of James

Wehmhoff, pages 1, 15-16, 36-40, 75-78, 95.

       20.     Attached as Exhibit 20 is a copy of the transaction detail for Polaroid’s credits

and debits on May 22, 2008, and email correspondence supporting the same.

       21.     Attached as Exhibit 21 is a copy of the transaction detail for Polaroid’s credits

and debits on May 29, 2008, and email correspondence supporting the same.

       22.     Attached as Exhibit 22 is a copy of an email chain ending with an email between

Polaroid employee Mary Jeffries and Jim Wehmhoff on June 13, 2008.

       23.     Attached as Exhibit 23 is a copy of the transaction detail for Polaroid’s credits

and debits on August 1, 2008.

       24.     Attached as Exhibit 24 is a copy of the transaction detail for Polaroid’s credits

and debits on September 22, 2008, and email correspondence supporting the same.

       25.     Attached as Exhibit 25 are copies of a February 14, 2008 letter from JP Morgan

to Polaroid Holding Company and a February 15, 2008 letter from JP Morgan to David Baer,

PGW’s chief in-house legal counsel.

       26.     Attached as Exhibit 26 is a copy of an email chain culminating in an email from

Polaroid employees Mary Jeffries to Robert J. McDonough and others dated February 4, 2008.

       27.     Attached as Exhibit 27 is a copy of the Note Purchase Agreement dated February

19, 2008. This Exhibit is being filed under seal.

       28.     Attached as Exhibit 28 is a copy of the Note Purchase Agreement dated March

21, 2008.




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       29.      Attached as Exhibit 29 are copies of two promissory notes dated May 9, 2008

from Petters Company, Inc., Peters Group Worldwide, LLC, and Thomas J. Petters individually,

in the total amount of $12 million. This Exhibit is being filed under seal.

       30.      Attached as Exhibit 30 is a copy of the Deposition Transcript of Simon Root,

pages 1, 74-75, 117-118, 132-134, 147-148, 151-152, 154-159, 173-174, 177-178.

       31.      Attached as Exhibit 31 is a copy of the Deposition Transcript of John Kermath,

pages 1, 54, 68, 78, 179.

       32.      Attached as Exhibit 32 is a copy of the Deposition Transcript of Theodore

Martens, pages 1, 61-69.

       33.      Attached as Exhibit 33 are copies of various Allonges relating to the loans

between Ritchie and Thomas J. Petters, PGW and PCI. This Exhibit is being filed under seal.

       34.      Attached as Exhibit 34 is a copy of an email from Thane Ritchie to Tom Petters

dated August 28, 2008. This Exhibit is being filed under seal.

       35.      Attached as Exhibit 35 is a copy of an email from Michael Legamaro, Ritchie’s

counsel, to David Baer and Simon Root, Tom Petters and PGW’s outside legal counsel, dated

September 6, 2008.

       36.      Attached as Exhibit 36 is a copy of the Extension and Amendment Agreement.

This Exhibit is being filed under seal.

       37.      Attached as Exhibit 37 is a copy of the Trademark Security Agreement. This

Exhibit is being filed under seal.




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       38.     Attached as Exhibit 38 is a copy of the Order for Entry of Preliminary Injunction,

Order Appointing Receiver, and other Equitable Relief, Doc. No. 12, U.S. v. Thomas Joseph

Petters et al., Case No. 08-5348 (D. Minn.).

       39.     Attached as Exhibit 39 is a copy of the Polaroid’s Ch. 11 Voluntary Petition,

Doc. No. 1, In re Polaroid Corporation, et al.., No. 08-46617 (Bankr. D. Minn.).

       40.     Attached as Exhibit 40 is a copy of an email chain culminating in an email from

Camille CheeAwai to Tom Petters and others dated February 3, 2008.

       41.     Attached as Exhibit 41 is a copy of the Deposition Transcript of Thane Ritchie,

pages 1, 22-24, 43, 45, 69, 75-78, 83-85, 115-125, 142-143, 147-153, 166-167, 175, 183-184,

186-187.

       42.     Attached as Exhibit 42 is a copy of an article entitled “When Hedge Funds Bar

the Door – Ritchie Capital Battles Investors, Holds Tight to $2 Billion” that appeared in the Wall

Street Journal on or about July 2, 2008.

       43.     Attached as Exhibit 43 are copies of an order instituting administrative and cease-

and-desist proceedings, making findings, and imposing remedial sanctions against Ritchie

Capital Management L.L.C. et al, and a corresponding press release from the U.S. Securities and

Exchange Commission.

       44.     Attached as Exhibit 44 is a copy of an email chain between Thane Ritchie and

George Johnson dated February 1, 2008.

       45.     Attached as Exhibit 45 is a copy of an email with attachments from David Baer

to Michael Legamaro dated February 1, 2008. This Exhibit is being filed under seal.




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       46.      Attached as Exhibit 46 is a copy of an email chain culminating in an email from

Thane Ritchie to Camille CheeAwai and others dated February 1, 2008. This Exhibit is being

filed under seal.

       47.      Attached as Exhibit 47 is a copy of an email chain culminating in an email from

David Baer to Michael Legamaro and others dated February 2, 2008. This Exhibit is being filed

under seal.

       48.      Attached as Exhibit 48 is a copy of an email chain culminating in an email from

Ritchie employee John Wappler to Thane Ritchie and others dated February 3, 2008. This

Exhibit is being filed under seal.

       49.      Attached as Exhibit 49 is a copy of the Deposition Transcript of John Wappler,

pages 1, 33, 40, 42-43, 46-47, 52, 68-69, 94-97, 126, 135-136, 150-151, 154-155, 168.

       50.      Attached as Exhibit 50 is a copy of an email chain culminating in an email from

John Wappler to Thane Ritchie and others dated February 3, 2008. This Exhibit is being filed

under seal.

       51.      Attached as Exhibit 51 is a copy of an email chain culminating in an email from

Thane Ritchie to John Kermath, Ritchie’s President, and others dated February 4, 2008. This

Exhibit is being filed under seal.

       52.      Attached as Exhibit 52 is a copy of an email from Greg Bell to Tom Petters dated

February 5, 2008.

       53.      Attached as Exhibit 53 is a copy of the complaint filed by Ritchie Special Credit

Investments, Ltd et al. against Thomas J. Petters et al. in the Circuit Court of Cook County,

Illinois, County Department, Law Division.



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       54.      Attached as Exhibit 54 are copies of several promissory notes from Peters Group

Worldwide, LLC and Thomas J. Petters individually, in the total amount of $146 million. This

Exhibit is being filed under seal.

       55.      Attached as Exhibit 55 is a copy of an email from Polaroid employee Mike

O’Shaughnessy to John Kermath dated February 19, 2008. This Exhibit is being filed under seal.

       56.      Attached as Exhibit 56 is a copy the Subordination Agreement dated February

19, 2008. This Exhibit is being filed under seal.

       57.      Attached as Exhibit 57 is a copy of the Termination Agreement dated February

26, 2008. This Exhibit is being filed under seal.

       58.      Attached as Exhibit 58 is a copy of the letter agreement between Petters

Company, Inc. and Ritchie Capital Management, Ltd. regarding Playstation 3 Purchase Order

from uBid, Inc. This Exhibit is being filed under seal.

       59.      Attached as Exhibit 59 are copies of two promissory notes dated March 21, 2008,

from Peters Company, Inc. and Thomas J. Petters individually, in the total amount of $12

million. This Exhibit is being filed under seal.

       60.      Attached as Exhibit 60 is a copy of an email with attachments from Deanna

Coleman to Thane Ritchie dated March 20, 2008.

       61.      Attached as Exhibit 61 is a copy of an email chain culminating in an email from

Kenneth Rosenblum, Ritchie’s legal counsel, to Simon Root and others dated March 21, 2008.

       62.      Attached as Exhibit 62 is a copy of an email chain culminating in an email from

David Baer to Simon Root and others dated March 21, 2008.




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       63.     Attached as Exhibit 63 is a copy of an email chain culminating in an email from

Deanna Coleman to Simon Root and others dated March 21, 2008.

       64.     Attached as Exhibit 64 is a copy of uBid.com Holdings, Inc.’s Form 10-K for the

fiscal year ended December 31, 2007, pages 1 and 29.

       65.     Attached as Exhibit 65 is a copy of the Deposition Transcript of Michael

O’Shaughnessy, pages 1, 57.

       66.     Attached as Exhibit 66 is a copy of Government Exhibit No. 262.

       67.     Attached as Exhibit 67 is a copy of an email from Deanna Coleman to Tom

Petters and others dated June 30, 2008.

       68.     Attached as Exhibit 68 is a copy of an email chain culminating in an email from

John Wappler to Deanna Coleman and others dated July 3, 2008.

       69.     Attached as Exhibit 69 is a copy of an email chain culminating in an email from

John Wappler to Jim Wehmhoff dated July 9, 2008.

       70.     Attached as Exhibit 70 is a copy of an email chain culminating in an email from

David Baer to John Koneck dated August 4, 2008.

       71.     Attached as Exhibit 71 is a copy of the summons and complaint filed by Acorn

Capital Group, LLC against Thomas J. Petters in the United States District Court, Southern

District of New York, Case No. 08-cv-7236.

       72.     Attached as Exhibit 72 is a copy of an email chain culminating in an email from

Michael Legamaro to David Baer and others dated September 6, 2008.

       73.     Attached as Exhibit 73 is a copy of an email chain culminating in an email from

Tom Petters to Deanna Coleman dated September 4, 2008.



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        74.     Attached as Exhibit 74 is a copy of an email chain culminating in an email from

David Baer to John Koneck, Tom Petters and PGW’s outside legal counsel, dated September 4,

2008.

        75.     Attached as Exhibit 75 is a copy of an email chain culminating in an email from

Polaroid employee Scott Hardy to Polaroid employee Philippe Kalmbach and others dated

September 2, 2008.

        76.     Attached as Exhibit 76 is a copy of an email chain culminating in an email from

Michael Legamaro to Simon Root and others dated August 28, 2008.

        77.     Attached as Exhibit 77 is a copy of an email chain culminating in an email from

Kenneth Rosenblum to Simon Root and others dated August 28, 2008.

        78.     Attached as Exhibit 78 is a copy of an email chain culminating in an email from

Tom Petters to Thane Ritchie dated September 16, 2008.

        79.     Attached as Exhibit 79 is a copy of an email from Thane Ritchie to Tom Petters

dated September 18, 2008. This Exhibit is being filed under seal.

        80.     Attached as Exhibit 80 is a copy of the Security and Intercreditor Agreement.

This Exhibit is being filed under seal.

        81.     Attached as Exhibit 81 is a copy of a letter dated September 26, 2008 from

Ritchie Capital Management, LLC and others to Thomas J. Petters.

        82.     Attached as Exhibit 82 is a copy of the complaint filed by Ritchie Capital

Management, L.L.C. et al. against Mary Jeffries et al. in the United States District Court for the

Northern District of Illinois, Eastern Division, Case No. 09-cv-07228.




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        83.     Attached as Exhibit 83 is a rough copy of the Deposition Transcript of Mary

Jeffries, pages 1, 60.

        84.     Attached as Exhibit 84 is a copy of Government Exhibit 377-A.




                                                    e/ Sandra Smalley-Fleming
                                                          Sandra Smalley-Fleming

Subscribed and sworn to by me this
1st day of October, 2010.

 e/ Brenda K. Haberman
       Notary Public
My Commission Expires January 31, 2012




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