Richard M. Cieri M. Natasha Labovitz Craig A. Bruens KIRKLAND … · M. Natasha Labovitz Craig A. Bruens KIRKLAND & ELLIS LLP 601 Lexington Avenue New York, New York 10022-4611 Telephone:

Hearing Date: July 14, 2011 at 9:45 a.m. (ET) Response Deadline: July 7, 2011 at 4:00 p.m. (ET)

Richard M. Cieri M. Natasha Labovitz Craig A. Bruens KIRKLAND & ELLIS LLP 601 Lexington Avenue New York, New York 10022-4611 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Counsel to the Debtors and Reorganized Debtors

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK

) In re: ) Chapter 11 ) CHEMTURA CORPORATION, et al., ) Case No. 09-11233 (REG) ) Reorganized Debtors. ) Jointly Administered )

REORGANIZED DEBTORS’ SUPPLEMENTAL OBJECTION

TO THE PROOFS OF CLAIM FILED BY S.H. DATA SITE PROTECTION CO., INC. (CLAIM NOS. 10926 AND 10936) PURSUANT TO SECTIONS 502(B) AND 502(E)(1)(B) OF THE BANKRUPTCY CODE

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TABLE OF CONTENTS

Jurisdiction .......................................................................................................................................2

Facts Relevant to This Supplemental Objection ..............................................................................3

Relief Requested ..............................................................................................................................5

Basis for Relief ................................................................................................................................5

A. The Disputed Claims Should Be Disallowed Pursuant to Section 502(e)(1)(B). ............................................................................................................5

i. The Disputed Claims Are for Reimbursement or Contribution. ..................6

ii. S.H. Data is “Liable with” Chemtura and GLCC to the Plaintiffs. .............6

iii. The Disputed Claims Are Contingent. .........................................................7

B. S.H. Data Has Failed to Provide Sufficient Documentation to Support the Disputed Claims. ......................................................................................................8

Reservation of Rights .......................................................................................................................9

Motion Practice ................................................................................................................................9

Notice ............................................................................................................................................10

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TABLE OF AUTHORITIES

Cases

Ashford v. Consolidated Pioneer Mortgage (In re Consolidated Pioneer Mortgage), 178 B.R. 222 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) .................................... 13

First Nat’l Bank of Fayetteville, Ark. V. Circle J. Dairy, Inc. (In re Circle J Dairy, Inc.), 112 B.R. 297 (Bankr. W.D. Ark. 1990) .................................................................................... 12

In re Alper Holdings USA, No. 07-12148, 2008 W.L. 4186333 (Bankr. S.D.N.Y. Sept. 10, 2008) .................................... 10

In re APCO Liquidating Trust, 370 B.R. 625 (Bankr. D. Del. 2007) ......................................................................................... 11

In re Chemtura Corp., 436 B.R. 286 (Bankr. S.D.N.Y. 2010) .................................................................... 10, 11, 12, 13

In re Drexel Burnham Lambert Group Inc., 148 B.R. 982 (S.D.N.Y. 1992) .................................................................................................. 10

In re Drexel Burnham Lambert Group, Inc., 146 B.R. 92 (S.D.N.Y. 1992) .................................................................................................... 11

In re GCO, LLC, 324 B.R. 459 (Bankr. S.D.N.Y. 2005) ...................................................................................... 10

In re Rockefeller Ctr. Props., 272 B.R. 524 (Bankr. S.D.N.Y. 2000) ........................................................................................ 9

In re Taylor, 363 B.R. 303 (Bankr. M.D. Fla. 2007) ...................................................................................... 13

In re Wedtech Corp., 85 B.R. 285 (Bankr. S.D.N.Y. 1988) ........................................................................................ 10

Mazzeo v. United States (In re Mazzeo), 131 F.3d 295 (2d Cir. 1997) ...................................................................................................... 12

Pearl-Phil GMT (Far East) Ltd. v. Caldor Corp., 266 B.R. 575 (S.D.N.Y. 2001) .................................................................................................. 12

Sherman v. Novak (In re Reilly), 245 B.R. 768 (2d Cir. BAP 2000); .............................................................................................. 9

Statutes

11 U.S.C. § 502(a) .......................................................................................................................... 5

11 U.S.C. § 502(e)(1)(B) .................................................................................................... 5, 6, 7, 8

28 U.S.C. § 1334 ............................................................................................................................. 2

28 U.S.C. § 1408 ............................................................................................................................. 3

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28 U.S.C. § 157 ............................................................................................................................... 2

28 U.S.C. § 157(b)(2) ..................................................................................................................... 2

Rules

Bankr. R. 3007 ................................................................................................................................ 6

Local Rule 9013-1(a) .................................................................................................................... 13

Chemtura Corporation (“Chemtura”), Great Lakes Chemical Corporation (“GLCC”)

and is debtor affiliates in these chapter 11 cases (collectively, the “Reorganized Debtors” and,

before the effective date of the chapter 11 plan of reorganization confirmed by the Court, the

“Debtors”) hereby object (the “Supplemental Objection”)1 to proofs of claim numbers 10926

and 10936 (the “Disputed Claims”) filed by S.H. Data Site Protection Co., Inc. (“S.H. Data”)

against Chemtura and GLCC, respectively. The Reorganized Debtors seek entry of an order,

substantially in the form attached hereto as Exhibit A, disallowing the Disputed Claims pursuant

to sections 502(b) and 502(e)(1)(B) of title 11 of the United States Code, 11 U.S.C. §§ 101-1532

(the “Bankruptcy Code”), Rule 3007 of the Federal Rules of Bankruptcy Procedure (the

“Bankruptcy Rules”) and this Court’s order approving claims objection procedures in these

chapter 11 cases [Dkt No. 1785] (the “Claims Procedures Order”). In support of the

Supplemental Objection, the Reorganized Debtors respectfully state as follows:

Preliminary Statement

1. The Disputed Claims, copies of which are annexed hereto as Exhibit B, are for

contribution and indemnity with respect to a prepetition personal injury lawsuit titled Debra Cole

Granger v. Fike Corporation, et al., Civil Action No. ESX-L-9598-08, which was filed against

Chemtura, GLCC, S.H. Data and Fike Corporation (collectively, the “Defendants”) in Essex

County Superior Court in New Jersey (the “Cole Granger Lawsuit”). The plaintiffs in the Cole

Granger Lawsuit are Debra Cole Granger, Aloma Wright, Paula Boone, Rhoda Campbell,

Valerie Bradbury and Vernon Bradbury (the “Plaintiffs”) and all but one of them have all filed

proofs of claim in the chapter 11 cases, some of which are still pending adjudication. Defendant

1 The Disputed Claims were previously subject to a prior objection of the Debtors by which the Disputed Claims were disallowed temporarily on the basis that they relate to pending litigation against the Debtors.

2

S.H. Data filed cross-claims for indemnity and contribution against Chemtura and GLCC in the

Cole Granger Lawsuit, and those cross-claims form the basis for the Disputed Claims.

2. In the Disputed Claims, S.H. Data asserts that, to the extent it is found liable to

the Plaintiffs, S.H. Data is entitled to indemnity or contribution from Chemtura and/or GLCC.

Because S.H. Data is co-liable with Chemtura and GLCC to the Plaintiffs,2 and because the

Disputed Claims are contingent to the extent that S.H. Data has not actually paid the Plaintiffs

any amount for which S.H. Data seeks indemnity and contribution, the Disputed Claims should

be disallowed in their entirety pursuant to section 502(e)(1)(B) of the Bankruptcy Code.

3. Lastly, upon information and belief, S.H. Data may have entered into a settlement

of its liability with one or more of the Plaintiffs and paid money to the Plaintiffs pursuant to such

settlement. The Reorganized Debtors recognize that the Disputed Claims cannot be disallowed

under section 502(e)(1)(B) to the extent that S.H. Data has paid money to the Plaintiffs. If that is

the case, however, the Reorganized Debtors object to the Disputed Claims on the basis that S.H.

Data has failed to provide any documentation that would support a right of indemnity or

contribution relating to any settlement payment, including documentation that any such

settlement extinguished liability of the Debtors and preserved any right of contribution or

indemnity of S.H. Data under state law.

4. Based upon the foregoing, and as more thoroughly set forth below, the Disputed

Claims should be disallowed in their entirety.

Jurisdiction

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

1334. This matter is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2).

2 Chemtura and GLCC dispute any liability to the Plaintiffs and refer to co-liability herein solely for

purposes of section 502(e)(1)(B) of the Bankruptcy Code to address the Disputed Claims to the extent the underlying claims of the Plaintiffs are proven against S.H. Data.

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6. Venue is proper in this Court pursuant to 28 U.S.C. §§ 1408.

7. The bases for the relief requested herein are sections 502(e)(1)(B) of the

Bankruptcy Code, Bankruptcy Rule 3007 and the Claims Procedures Order.

Facts Relevant to This Supplemental Objection

8. On June 27, 2006, the Plaintiffs filed the Cole Granger Lawsuit against the

Defendants alleging that, on our about November 21, 2004, each of the Plaintiffs was exposed to

“noxious gases and fumes from the release of the FM 200 halon system [a fire suppressant

system]” in a public building in New Jersey, causing personal injury. (Complaint at ¶ 3, 4). The

Plaintiffs allege that Chemtura, GLCC and the other Defendants, “designed, manufactured,

distributed, sold, installed, leased, labeled and packaged” the FM 200 halon system responsible

for the Plaintiffs’ alleged injuries. The Plaintiffs assert claims for strict product liability, breach

of express and implied warranties, negligence, successor liability and punitive damages. See

generally Complaint.

9. S.H. Data filed an answer to the Cole Granger Lawsuit and included cross-claims

against Chemtura and GLCC, alleging that, to the extent S.H. Data is found liable to the

Plaintiffs, Chemtura and GLCC are liable to S.H. Data for indemnity and contribution.

10. On October 12 and October 13, 2009, counsel to the Plaintiffs, filed proofs of

claim in the Debtors’ chapter 11 cases on behalf of Debra Cole Granger (claim no. 2059), Aloma

Wright (claim no. 2050), Valerie Bradbury (claim no. 2057), Paula Boone (claim no. 2054) and

Rhoda Campbell (claim no. 2052) based on the Cole Granger Lawsuit (collectively, the “Cole

Granger Proofs of Claim”).3 The Cole Granger Proofs of Claim are attached hereto as

Exhibit C.

3 The Reorganized Debtors note that no proof of claim was filed on behalf of Vernon Bradbury, one of the

Plaintiffs.

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11. On October 30, 2009, S.H. Data filed the Disputed Claims in the Debtors’ chapter

11 cases seeking an unliquidated amount for indemnity and contribution on account of any

damages that the Plaintiffs may recover from S.H. Data in the Cole Granger Lawsuit.

12. On April 27, 2010, the Debtors objected to the claims filed on behalf of Paula

Boone and Rhoda Campbell as part of the Debtors’ Twenty-Fourth Tier I Omnibus Objection to

Certain Proofs of Claim (Amended and Superseded, Duplicate, Equity, Paid-In-Full, Insufficient

Documentation, Late-Filed, Reclassification, Books and Records and Wrong Debtor Claims)

[Dkt. 2577] (the “Omnibus Objection”), on the basis that the proofs of claim lacked sufficient

information or documentation to support the claims asserted therein. On May 18, 2010, the

claims filed on behalf of Paula Boone and Rhoda Campbell were expunged pursuant to an order

granting the Omnibus Objection [Dkt. No. 2705].

13. On July 23, 2010, the Debtors objected to the claims filed on behalf of Aloma

Wright, Debra Cole Granger and Valerie Bradbury as part of the Debtors’ Second Omnibus

Objection to Certain Proofs of Claim (Pending Litigation Claims – Personal Injury) [Dkt. 3372]

(the “Second Pending Litigation Objection”), on the basis that the claims were subject to

pending litigation in which the Debtors disputed any liability.

14. On July 23, 2010, the Debtors also objected to the Disputed Claims as part of the

Debtors’ Omnibus Objection to Certain Proofs of Claim (Pending Litigation Claims – General)

[Dkt. 3370] (the “General Pending Litigation Objection”), seeking to temporarily disallow the

Disputed Claims because they were subject to pending litigation in order to avoid the claims

being deemed allowed under the Debtors’ chapter 11 plan.

15. On September 8, 2010, the Disputed Claims were temporarily disallowed

pursuant to an order granting the General Pending Litigation Objection [Dkt. No. 3826].

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16. On September 14, 2010, the claims filed on behalf of Aloma Wright, Debra Cole

Granger and Valerie Bradbury were temporarily disallowed pursuant to an order granting the

Second Pending Litigation Objection [Dkt. No. 3962].

17. As part of their ongoing claims reconciliation process, the Reorganized Debtors

have further reviewed the Disputed Claims and believe they should be disallowed in their

entirety as set forth below.

Relief Requested

18. By this Supplemental Objection, the Reorganized Debtors request that the Court

enter an order, substantially in the form attached hereto as Exhibit A, disallowing the Disputed

Claims in their entirety pursuant to sections 502(b) and 502(e)(1)(B) of the Bankruptcy Code.

Basis for Relief

19. A filed proof of claim is deemed allowed unless a party in interest objects thereto.

See 11 U.S.C. § 502(a). If an objection refuting at least one of the claim’s essential allegations is

asserted, the claimant has the burden to demonstrate the validity of the claim. See, e.g., Sherman

v. Novak (In re Reilly), 245 B.R. 768, 773 (2d Cir. BAP 2000); In re Rockefeller Ctr. Props., 272

B.R. 524, 539 (Bankr. S.D.N.Y. 2000).

A. The Disputed Claims Should Be Disallowed Pursuant to Section 502(e)(1)(B).

20. Section 502(e)(1)(B) of the Bankruptcy Code provides that courts “shall disallow

any claim for reimbursement or contribution of an entity that is liable with the debtor on or has

secured the claim of a creditor to the extent that . . . such claim for reimbursement or

contribution is contingent as of the time of allowance or disallowance of such claim for

reimbursement or contribution.” 11 U.S.C. § 502(e)(1)(B).

21. Courts apply a three-part test to determine whether a claim should be disallowed

under section 502(e)(1)(B): (1) “the claim must be for reimbursement or contribution”; (2) “the

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party asserting the claim must be liable with the debtor on the claim of a third party”; and (3)

“the claim must be contingent at the time of its allowance or disallowance.” In re Chemtura

Corp., 436 B.R. 286, 292–93 (Bankr. S.D.N.Y. 2010); In re Alper Holdings USA, No. 07-12148,

2008 W.L. 4186333, at *4 (Bankr. S.D.N.Y. Sept. 10, 2008) (quoting In re GCO, LLC, 324 B.R.

459, 465 (Bankr. S.D.N.Y. 2005)).

i. The Disputed Claims Are for Reimbursement or Contribution.

22. The Disputed Claims are clearly for reimbursement or contribution because S.H.

Data asserts that it is seeking “contribution and indemnity” should the Plaintiffs recover any

damages from S.H. Data. See Ex. B (Disputed Claims) at 3. Courts have consistently

determined that “the concept of reimbursement includes indemnity.” In re Wedtech Corp., 85

B.R. 285, 289 (Bankr. S.D.N.Y. 1988) (finding that, because reimbursement includes indemnity,

“any claims for indemnification also fall within the scope of the first prong of § 502(e)(1)(B)”);

In re Drexel Burnham Lambert Group Inc. (“Drexel II”), 148 B.R. 982, 986 (S.D.N.Y. 1992).

Accordingly, the first prong of section 502(e)(1)(B) is satisfied.

ii. S.H. Data is “Liable with” Chemtura and GLCC to the Plaintiffs.

23. S.H. Data is co-liable with Chemtura with respect to the Cole Granger Lawsuit for

the purposes of section 502(e)(1)(B) of the Bankruptcy Code. As evidenced by the fact that

Chemtura and GLCC are S.H. Data’s co-defendants in the Cole Granger Lawsuit, S.H. Data is

“liable with” Chemtura and GLCC on the underlying claims to the extent the Plaintiffs’ claims

are valid. See, e.g., In re Drexel Burnham Lambert Group, Inc. (“Drexel I”), 146 B.R. 92, 102

(S.D.N.Y. 1992) (stating that co-liability is determined by “reference to the underlying third

party action”).

24. The Reorganized Debtors note that the co-liability requirement is satisfied even

though the claims filed on behalf of two of the Plaintiffs have been expunged and no proof of

7

claim was filed on behalf of one of the Plaintiffs. Three of the Plaintiffs have filed proofs of

claim that remain pending. In addition, as this Court and others have recognized, co-liability and

the application of section 502(e)(1)(B) do not require a pending primary claim as a prerequisite

to disallowing a secondary claim for contribution or indemnity. See In re Chemtura Corp., 436

B.R. at 295 (Holding that co-liability is interpreted broadly and has been construed to “require a

finding that the causes of action in the underlying lawsuit assert claims upon which, if proven,

the debtor could be liable but for the automatic stay.”) (emphasis added); In re APCO

Liquidating Trust, 370 B.R. 625, 634-35 (Bankr. D. Del. 2007) (“[T]he failure of KDHE to file a

claim does not alter the co-liability of the Debtors and the City to KDHE.”); In re Lull Corp.,

162 B.R. 234, 237-38 (Bankr. D. Minn. 1993) (finding co-liability for workers’ compensation

benefits even though no employee had yet filed an underlying proof of claim because “section

502(e) does not require that a proof of claim be filed in the proceeding to be liable with the

debtor.”).

25. The Cole Granger Lawsuit clearly alleges that Chemtura, GLCC and S.H. Data

are liable for the alleged personal injury suffered by the Plaintiffs. Accordingly, the co-liability

prong of section 502(e)(1)(B) is met.

iii. The Disputed Claims Are Contingent.

26. Generally, a claim is deemed contingent “if the debtor’s legal duty to pay does not

come into existence until triggered by the occurrence of a future event.” Pearl-Phil GMT (Far

East) Ltd. v. Caldor Corp., 266 B.R. 575, 580 (S.D.N.Y. 2001) (citing Mazzeo v. United States

(In re Mazzeo), 131 F.3d 295, 303 (2d Cir. 1997)). More specifically, in the context of claims

for indemnity or contribution as is the case here, this Court has recognized that a claim is

contingent “where the liability itself does not arise unless and until the payment is made to a

third party.” In re Chemtura, 436 B.R. at 297.

8

27. Here, the Disputed Claims are contingent because they are for indemnification

and contribution to the extent that S.H. Data has not, in fact, paid any damages to the Plaintiffs in

relation to the Cole Granger Lawsuit. Therefore, the contingency requirement of section

502(e)(1)(B) of the Bankruptcy Code is satisfied.

B. S.H. Data Has Failed to Provide Sufficient Documentation to Support the Disputed Claims.

28. For a proof of claim to be legally sufficient, it must (a) “be in writing;” (b) “make

a demand upon the debtor’s estate;” (c) “express the intent to hold the debtor liable for the debt;”

(d) “be properly filed;” and (e) “be based upon facts [that] would allow, as a matter of equity, . . .

the document [to be] accepted as a proof of claim.” First Nat’l Bank of Fayetteville, Ark. V.

Circle J. Dairy, Inc. (In re Circle J Dairy, Inc.), 112 B.R. 297, 299-300 (Bankr. W.D. Ark.

1990). Absent documentation, a proof of claim lacks prima facie validity. Ashford v.

Consolidated Pioneer Mortgage (In re Consolidated Pioneer Mortgage), 178 B.R. 222, 226

(9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996); In re Taylor, 363 B.R. 303, 308 (Bankr.

M.D. Fla. 2007) (“Attaching supporting documentation is mandatory prerequisite to establishing

a claim’s prima facie validity”).

29. The Reorganized Debtors object to the Disputed Claims (to the extent not

disallowed under section 502(e)(1)(B) of the Bankruptcy Code), because S.H. Data has failed to

provide adequate support or documentation to the Reorganized Debtors or the Court to determine

the validity or amount its Disputed Claims. In particular, upon information and belief, S.H. Data

may have settled its liabilities with some or all of the Plaintiffs. The Reorganized Debtors,

however, do not know the terms of any such settlement, do not have copy of any settlement, and

it is not even clear that S.H. Data is seeking recovery under the Disputed Claims for settlement

amounts that it has paid to the Plaintiffs. To the extent S.H. Data does seek recovery for

9

settlement amounts paid to the Plaintiffs, S.H. Data has not provided any contractual, statutory or

common law basis for its asserted rights of indemnity and contribution. Furthermore, S.H. Data

has not established that any settlement that it has entered into with the Plaintiffs extinguished any

liability of the Debtors to the Plaintiffs in order to preserve any state law right of contribution

that S.H. Data may have. See, e.g., In re Chemtura Corp., 436 B.R. at 298 (recognizing that

Illinois law prohibited a settling tortfeasor from asserting contribution claims against another

tortfeasor whose liability was not extinguished by the settlement). The Reorganized Debtors

reserve their rights to further address these issues in reply to the extent S.H. Data seeks recovery

from the Debtors on account of settlement amounts that it has paid and provides documentation

in support of such a claim.

Reservation of Rights

30. This Supplemental Objection is limited to the grounds stated herein.

Accordingly, it is without prejudice to the rights of the Reorganized Debtors or any other party in

interest to object to the Disputed Claims or any portion thereof on any ground whatsoever, and

the Reorganized Debtors expressly reserve all further substantive and/or procedural objections

they may have.

Motion Practice

31. This Supplemental Objection includes citations to the applicable rules and

statutory authorities upon which the relief requested herein is predicated and a discussion of their

application to this Supplemental Objection. Accordingly, the Reorganized Debtors submit that

this Supplemental Objection satisfies Rule 9013-1(a) of the Local Rules of Bankruptcy

Procedures for the Southern District of New York.

10

Notice

32. The Reorganized Debtors have provided notice of this Supplemental Objection to:

(a) the Office of the United States Trustee for the Southern District of New York; (b) counsel to

the statutory committee of unsecured creditors appointed in these chapter 11 cases; (c) counsel to

the statutory committee of equity security holders appointed in these chapter 11 cases; (d)

counsel to S.H. Data; and (e) all persons and entities that have formally requested notice by filing

a written request for notice pursuant to Bankruptcy Rule 2002 and the Local Bankruptcy Rules.

In light of the nature of the relief requested, the Reorganized Debtors respectfully submit that no

further notice is necessary.

WHEREFORE, the Reorganized Debtors respectfully request that the Court (a) enter an

order, substantially in the form attached hereto as Exhibit A, disallowing and expunging the

Disputed Claims; and (b) grant such other and further relief as is just and proper.

New York, New York /s/ Craig A. Bruens Dated: June 23, 2011 Richard M. Cieri

M. Natasha Labovitz Craig A. Bruens

KIRKLAND & ELLIS LLP 601 Lexington Avenue New York, New York 10022-4611 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Counsel to the Debtors and Reorganized

Debtors

K&E 19031186.5

Exhibit A

Proposed Order

Hearing Date: July 14, 2011 at 9:45 a.m. (ET) Response Deadline: July 7, 2011 at 4:00 p.m. (ET)

K&E 19031186.5

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK

) In re: ) Chapter 11 ) CHEMTURA CORPORATION, et al., ) Case No. 09-11233 (REG) ) Reorganized Debtors. ) Jointly Administered )

ORDER DISALLOWING AND EXPUNGING THE PROOFS OF CLAIMS FILED BY S.H. DATA SITE PROTECTION CO., INC. (CLAIM NOS. 10926 AND 10936)

PURSUANT TO SECTIONS 502(B) AND 502(E)(1)(B) OF THE BANKRUPTCY CODE Upon the Reorganized Debtors’ Supplemental Objection to the Proofs of Claim Filed By

S.H. Data Site Protection Co., Inc. (Claim Nos. 10926 and 10936) Pursuant to Section

502(e)(1)(B) of the Bankruptcy Code (the “Supplemental Objection”)2 filed by Chemtura

Corporation (“Chemtura”), Great Lakes Chemical Corporation (“GLCC”) and their debtor

affiliates in these chapter 11 cases (collectively, the “Reorganized Debtors” and, before the

effective date of the chapter 11 plan confirmed by the Court, the “Debtors”) requesting entry of

an order disallowing proofs of claim numbered 10926 and 10936 (the “Disputed Claims”)

pursuant to sections 502(b) and 502(e)(1)(B) of title 11 of the United States Code

(the “Bankruptcy Code”) and Rule 3007 of the Federal Rules of Bankruptcy Procedure

(the “Bankruptcy Rules”); and consideration of the Supplemental Objection and the relief

requested therein being a core proceeding pursuant to 28 U.S.C. §§ 157 and 1334; and venue

being proper before this Court pursuant to 28 U.S.C. §§ 1408; and due and proper notice of the

Supplemental Objection having been provided; and it appearing that no other or further notice

need be provided; and the Court having determined that there exists just cause for the relief

granted herein and that such relief is in the best interest of the Debtors, their estates, creditors 2 Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the

Supplemental Objection.

2 K&E 19031186.5

and stakeholders and all other parties in interest; and upon the arguments and testimony

presented at the Hearing before the Court, and any responses to the Supplemental Objection

having been withdrawn, resolved or overruled on the merits; and after due deliberation and

sufficient cause appearing therefore, it is hereby ORDERED that:

1. The Supplemental Objection is granted.

2. The Disputed Claims are hereby disallowed and expunged in their entirety on the

bases that (a) the contingent unliquidated portions of the Disputed Claims are disallowed

pursuant to section 502(e)(1)(B) of the Bankruptcy Code and (b) to the extent any portion of the

Disputed Claims is not disallowed under section 502(e)(1)(B), such portion of the Disputed

Claims is disallowed for insufficient documentation and/or failure to establish a claim under

applicable state law.

3. The terms and conditions of this Order shall be immediately effective and

enforceable upon entry of the Order.

4. This Court retains jurisdiction with respect to all matters arising from or related to

the implementation of this Order.

New York, New York Dated: _________________, 2011 Honorable Robert E. Gerber

United States Bankruptcy Judge

K&E 19031186.5

Exhibit B

The Disputed Claims (Claim Nos. 10926 and 10936)

K&E 19031186.5

Exhibit C

The Cole Granger Proofs of Claim