George L. Miller, Trustee

Eight Penn Center, Suite 950

1628 John F. Kennedy Boulevard

Philadelphia, PA 19103

 

Phone: (215) 561-0950

Fax: (215) 561-0330

Email: [email protected]

 

 

January 30, 2009

 

STATUS UPDATE #21

 

NOTE: The Status Updates are cumulative.  Please read all twenty-one updates.

 

BANKRUPTCY COURT ADVERSARY

 

Discovery is expected to be completed shortly and all parties are required to file dispositive motions by July, 2009 to limit the matters to be argued at trial.  Greenwich still asserts its security interest which is disputed by the Trustee and is expected to be argued at trial.  I do not anticipate a trial date until the fall of 2009 or spring of 2010.

 

STATE COURT LITIGATIONS

 

Discovery is expected to be completed by March, 2009.  I expect the parties to participate in some form of settlement discussions.  While the trial ready date is May, 2009, and I will request a trial as soon as possible, the trial may not take place until after Labor Day.

 

The settlement with the Directors and Officers was approved by the Bankruptcy Court in October, 2008.  The settlement proceeds of $16,597,000 were primarily disbursed as follows:  $8,950,000 was paid to or reserved for Greenwich for an indemnification claim they assert as the DIP lender, $2,700,000 was disbursed to the Indenture Trustees as payment on account of their $40,000,000 Chapter 11 Super Priority Claim and the remainder was paid for or reserved for fees and expenses.

 

The IT Settlement described in Status Update 17 provides for $40,000,000 of funds to be paid by the Bankruptcy Trustee to the Indenture Trustee for distribution to the exchange offer creditors.  Accordingly, if you are an exchange offer creditor, please contact your appropriate Indenture Trustee with any questions on a distribution to creditors.  The Bankruptcy Trustee will not be directly distributing to individual exchange offer creditors and will have no information as to when the Indenture Trustees will make a distribution.