Case 2:13-bk NB Doc 714 Filed 07/02/15 Entered 07/02/15 15:10:55 Desc Main Document Page 1 of 12

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1 Case 2:13-bk NB Doc 714 Filed 07/02/15 Entered 07/02/15 15:10:55 Desc Main Document Page 1 of 12 Attorney or Party Name, Address, Telephone & FAX Nos., State Bar No. & Address Jonathan A. Shapiro (SBN ) jashapiro@mintz.com Joshua Thomas Foust (SBN ) jtfoust@mintz.com MINTZ LEVIN COHN FERRIS GLOVSKY AND POPEO PC 44 Montgomery Street, 36th Floor San Francisco, California Telephone: (415) Facsimile: (415) FOR COURT USE ONLY Meredith M. Leary (Admitted Pro Hac Vice) mmleary@mintz.com MINTZ LEVIN COHN FERRIS GLOVSKY AND POPEO PC One Financial Center Boston, MA Telephone: (617) Facsimile: (617) Individual appearing without an attorney Attorney for: Raymond Feeney UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA LOS ANGELES DIVISION In re: AWTR Liquidation, Inc., fka RHYTHM AND HUES, INC., Debtor(s) CASE NO.: 2:13-bk CHAPTER: 11 NOTICE OF LODGMENT OF ORDER IN BANKRUPTCY CASE RE: (title of motion 1 ): NOTICE OF MOTION AND MOTION FOR RELIEF FROM THE AUTOMATIC STAY UNDER 11 U.S.C. 362 (with supporting declarations) (ACTION IN NON-BANKRUPTCY FORUM) PLEASE TAKE NOTE that the order titled ORDER GRANTING MOTION FOR RELIEF FROM THE AUTOMATIC STAY UNDER 11 U.S.C. 362 (Action in Non-bankruptcy Forum) was lodged on (date) July 2, 2015 and is attached hereto as Exhibit 1. This order relates to the motion which is docket number Please abbreviate if title cannot fit into text field. This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California. December 2012 Page 1 F BK.NOTICE.LODGMENT

2 Case 2:13-bk NB Doc 714 Filed 07/02/15 Entered 07/02/15 15:10:55 Desc Main Document Page 2 of 12 PROOF OF SERVICE OF DOCUMENT I am over the age of 18 and not a party to this bankruptcy case or adversary proceeding. My business address is: Mintz Levin Cohn Ferris Glovsky and Popeo P.C 44 Montgomery Street, 36 th Floor San Francisco, CA A true and correct copy of the foregoing document entitled: NOTICE OF LODGMENT OF ORDER IN BANKRUPTCY CASE RE NOTICE OF MOTION AND MOTION FOR RELIEF FROM THE AUTOMATIC STAY UNDER 11 U.S.C. 362 (with supporting declarations) (ACTION IN NON-BANKRUPTCY FORUM) will be served or was served (a) on the judge in chambers in the form and manner required by LBR (d); and (b) in the manner stated below: 1. TO BE SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (NEF): Pursuant to controlling General Orders and LBR, the foregoing document will be served by the court via NEF and hyperlink to the document. On (date) 07/02/2015, I checked the CM/ECF docket for this bankruptcy case or adversary proceeding and determined that the following persons are on the Electronic Mail Notice List to receive NEF transmission at the addresses stated below: Ana B Acevedo aacevedo@omm.com Yolanda S Aguilar wayne.smith@warnerbros.com David E Ahdoot dahdoot@bushgottlieb.com, rsanthon@bushgottlieb.com Todd M Arnold tma@lnbyb.com Lorie A Ball LBall@robinskaplan.com Vivian Bodey vivian.bodey@irscounsel.treas.gov Lisa W Chao lisa.chao@doj.ca.gov Shawn M Christianson cmcintire@buchalter.com, schristianson@buchalter.com Gail L Chung GL@outtengolden.com, JXH@outtengolden.com;rmasubuchi@outtengolden.com, kdeleon@outtengolden.com Ronald Clifford rclifford@blakeleyllp.com, ecf@blakeleyllp.com, seb@blakeleyllp.com, info@ecf.inforuptcy.com Brian L Davidoff bdavidoff@greenbergglusker.com, kwoodson@greenbergglusker.com, calendar@greenbergglusker.com, jking@greenbergglusker.com Lisa Hill Fenning Lisa.Fenning@aporter.com, Jean.Kellett@aporter.com H Alexander Fisch Alex.Fisch@doj.ca.gov Anthony A Friedman aaf@lnbyb.com Scott F Gautier sgautier@robinskaplan.com Barry S Glaser bglaser@swesq.com, erhee@swesq.com Fredric Glass fglass@fairharborcapital.com Melanie Scott Green Melanie.green@usdoj.gov Brian T Harvey bharvey@buchalter.com, IFS_filing@buchalter.com, dbodkin@buchalter.com Michael C Heinrichs mheinrichs@omm.com James Andrew Hinds jhinds@jhindslaw.com, zbilowit@jhindslaw.com Ivan L Kallick ikallick@manatt.com, ihernandez@manatt.com Gary E Klausner gek@lnbyb.com Jeffrey A Krieger jkrieger@ggfirm.com Mary D Lane mal@msk.com, mec@msk.com Dare Law dare.law@usdoj.gov, ron.maroko@usdoj.gov John B Marcin jbm@marcin.com, kej@marcin.com C John M Melissinos jmelissinos@greenbergglusker.com Katie Nownes katie@omnimgt.com Danielle A Pham dpham@gordonsilver.com Courtney E Pozmantier cpozmantier@greenbergglusker.com David M Reeder david@reederlaw.com, jessica@reederlaw.com Victor A Sahn vsahn@sulmeyerlaw.com, agonzalez@sulmeyerlaw.com, agonzalez@ecf.inforuptcy.com; asokolowski@sulmeyerlaw.com, vsahn@ecf.inforuptcy.com Paul R Shankman pshankman@jhindslaw.com Brian E Shear shear@sposilco.com, croot@sposilco.com Claire E Shin cshin@greenbergglusker.com Lori Sinanyan lsinanyan@jonesday.com, lsinanyan@ecf.inforuptcy.com This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California. December 2012 Page 2 F BK.NOTICE.LODGMENT

3 Case 2:13-bk NB Doc 714 Filed 07/02/15 Entered 07/02/15 15:10:55 Desc Main Document Page 3 of 12 Alan D Smith adsmithperkinscoie.com, DocketLAperkinscoie.com, nsaldingerperkinscoie.com, bcosmanperkinscoie.com Lindsey L Smith IlsInbyb.com, Ilsecf.inforuptcy.com Angela J Somers asomersrctlegal.com, lbroussardrctlecial.com, abahrrctleqal.com Scott J Spolin spolinsposilco.com, meglicna United States Trustee (LA) ustpreoion16.la.ecfusdoi.00v Richard Lee Wynne riwynneionesday.com,siperrvionesday.com Barouir B Yeretzian byeretzianhindslaw.com, veretzianomail.com Service information continued on attached page 2. SERVED BY UNITED STATES MAIL: On (date) 07/02/2015 I served the following persons and/or entities at the last known addresses in this bankruptcy case or adversary proceeding by placing a true and correct copy thereof in a sealed envelope in the United States mail, first class, postage prepaid, and addressed as follows. Listing the judge here constitutes a declaration that mailing to the judge will be completed no later than 24 hours after the document is filed. Eric D. Madden, Esq. Reid Collins & Tsai LLP Thanksgiving Tower 1601 Elm Street, 42nd Floor Dallas, TX Attorneys for Solution Trust, as Trustee of the AWTR Liquidation Trust Anne M. Bahr, Esq. Reid Collins & Tsai LLP One Penn Plaza, 49th Floor New York, NY Attorneys for Solution Trust, as Trustee of the AWTR Liquidation Trust Michael Maher, Esq. Maher & Maher 6521 E. Waterton Avenue Orange, CA Attorneys for Defendant Prashant Buyyala El Service information continued on attached page 3. SERVED BY OVERNIGHT MAIL (state method for each person or entity served): Pursuant to F.R.Civ.P. 5 and/or controlling LBR, on (date) 07/02/2015 I served the following persons and/or entities by personal delivery, overnight mail service, or (for those who consented in writing to such service method), by facsimile transmission and/or as follows. Listing the judge here constitutes a declaration that personal delivery on, or overnight mail to, the judge will be completed no later than 24 hours after the document is filed. Honorable Neil Bason United States Bankruptcy Court Central District of California Edward R. Roybal Federal Building and Courthouse 255 E. Temple Street, Suite 1552 / Courtroom 1545 Los Angeles, CA ] Service information continued on attached page I declare under penalty of perjury under the laws of the United States that the for: oi is true and correct. July 2, 2015 Isabel Haas Date Printed Name cgnature This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California. norg.mhsar 9n19 Pant= F _2 RK_NOTICF_I nnnmfnt

4 Case 2:13-bk NB Doc 714 Filed 07/02/15 Entered 07/02/15 15:10:55 Desc Main Document Page 4 of 12 Exhibit 1

5 Main Document Page 51 of 12 8 Attorney or Party Name, Address, Telephone & FAX Nos., State Bar No. & Address Jonathan A. Shapiro (SBN ) jashapiro@mintz.com Joshua Thomas Foust (SBN ) jtfoust@mintz.com Mintz Levin Cohn Ferris Glovsky and Popeo PC 44 Montgomery Street, 36 th Floor San Francisco, California Telephone: (415) Facsimile: (415) FOR COURT USE ONLY FILED & ENTERED JUL CLERK U.S. BANKRUPTCY COURT Central District of California BY ghaltchi DEPUTY CLERK Meredith M. Leary (Admitted Pro Hac Vice) mmleary@mintz.com Mintz Levin Cohn Ferris Glovsky and Popeo PC One Financial Center Boston, Massachusetts Telephone: (617) Facsimile: (617) Movant appearing without an attorney Attorneys for Movant Raymond Feeney UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA LOS ANGELES DIVISION In re: AWTR Liquidation, Inc., fka RHYTHM AND HUES, INC. CASE NO.: 2:13-bk NB CHAPTER: 11 ORDER GRANTING MOTION FOR RELIEF FROM THE AUTOMATIC STAY UNDER 11 U.S.C. 362 (Action in Nonbankruptcy Forum) DATE: June 16, 2015 TIME: 2:00 p.m. COURTROOM: 1545 PLACE: 255 E. Temple Street, Los Angeles, CA Debtor(s). MOVANT: Raymond Feeney 1. The Motion was: Opposed Unopposed Settled by stipulation 2. The Motion affects the following Nonbankruptcy Action: Name of Nonbankruptcy Action: N/A Docket number: N/A Nonbankruptcy court or agency where the Nonbankruptcy Action is pending: N/A This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California. June 2014 Page 1 F RFS.NONBK.ORDER

6 Main Document Page 62 of 12 8 Proceeds from the Directors and Officers Coverage Section of Power Source Policy No.: issued by Executive Risk Indemnity, Inc., for the policy period January 26, 2012 to January 26, 2013 (hereinafter referred to as the Policy ) to be used for the claim filed as Claim No.: (hereinafter referred to as the Claim ). 3. The Motion is granted under 11 U.S.C. 362(d)(1). 4. As to Movant, its successors, transferees and assigns, the stay of 11 U.S.C. 362(a) is: a. Terminated as to the Debtor and the Debtor s bankruptcy estate as set forth in the Court s Tentative Ruling, a true and correct copy of which is attached as Exhibit 1 to this Order, and is incorporated herein as part of the Court s final ruling. b. Modified or conditioned as set forth in Exhibit 1 to the Motion. c. Annulled retroactively to the bankruptcy petition date. Any postpetition acts taken by Movant to enforce its remedies regarding the nonbankruptcy action do not constitute a violation of the stay. 5. Limitations on Enforcement of Judgment: Movant may proceed in the nonbankruptcy forum to final judgment (including any appeals) in accordance with applicable nonbankruptcy law. Movant is permitted to enforce its final judgment only by (specify all that apply): a. Collecting upon any available insurance in accordance with applicable nonbankruptcy law. b. Proceeding against the Debtor as to property or earnings that are not property of this bankruptcy estate. 6. This order is binding and effective despite any conversion of this bankruptcy case to a case under any other chapter of the Bankruptcy Code. 7. The co-debtor stay of 11 U.S.C. 1201(a) or 1301(a) is terminated, modified or annulled as to the co-debtor, on the same terms and conditions as to the Debtor. 8. The 14-day stay prescribed by FRBP 4001(a)(3) is waived. 9. This order is binding and effective in any bankruptcy case commenced by or against the Debtor for a period of 180 days, so that no further automatic stay shall arise in that case as to the nonbankruptcy action. 10. This order is binding and effective in any future bankruptcy case, no matter who the debtor may be, without further notice. This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California. June 2014 Page 2 F RFS.NONBK.ORDER

7 Main Document Page 73 of Other (specify): See this Court s Tentative Ruling dated June 16, 2015, a true and correct copy of which is attached as Exhibit 1 to this Order, and is incorporated herein as part of the Court s final ruling. See also Mem. of Points and Authorities in Support of Movant Feeney s Mot. for Relief from the Automatic Stay [ECF No. 655] (requesting that the automatic stay be lifted so that Executive Risk Indemnity, Inc. and/or its authorized affiliates, agents, and representatives are authorized to advance all defense costs to be incurred by Movant in litigation of the Claim to Mintz Levin Cohn Ferris Glovsky and Popeo PC, pursuant to the Policy). The D&O Defendants, on a quarterly basis, are to obtain from Executive Risk Indemnity, Inc. and report to counsel for the Plaintiff the gross amount incurred by all D&O defense firms, excluding counsel for Defendants Hughes and Ts o (i.e., Spolin Cohen Mainzer LLP, or any successor counsel), for the defense of this matter. Any reporting D&O Defendant is authorized to agree with counsel for any other such defendant to report on their behalf. Hinds & Shankman LLP is the initial such designee, and any future designee may be selected by letter agreement among the relevant D&O Defendants, provided that a copy must be delivered to counsel for the Plaintiff. ### Date: July 2, 2015 This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California. June 2014 Page 3 F RFS.NONBK.ORDER

8 Main Document Page 84 of 12 8 Exhibit 1

9 Main Document Page 95 of 12 8 United States Bankruptcy Court Central District of California Los Angeles Judge Neil Bason, Presiding Courtroom 1545 Calendar Tuesday, June 16, 2015 Hearing Room :00 PM 2: AWTR Liquidation Inc Chapter 11 #11.00 Cont'd status conference re: Post confirmation fr , , , , , , , , , , 7/8/14, 9/16/14, 10/28/14,12/16/14, 3/3/15, 3/10/15, 5/12/15 Docket 41 Tentative Ruling: Revised Tentative Ruling for 6/16/15: Appearances required but telephonic appearances are encouraged if advance arrangements are made (see "Judges," "Bason, N.", "Instructions/Procedures"). (1) Overview. The matters presently before this court (calendar nos for 6/16/15 at 2:00 p.m.) involve relief from the automatic stay to litigate possible liability of former directors and officers ("D&O"). This court has already ruled that such relief should be granted, and the only question is whether such relief should or should not be conditioned on a requirement for reports of the dollar amount of attorney fees that have been incurred by the D&Os. The tentative ruling is to require such reporting, because: (a) the policy (that the debtor paid for) provides coverage to the debtor as well as the D&Os, so the debtor's liquidating trust (the "Trust") has an interest in the policy proceeds and a legitimate need to protect that interest; (b) although the policy provides for payment of defense costs, such costs should only be paid to the extent that they are "reasonable" (dkt. 667, PDF p. 43, Article II, section (C) of the D&O portion of the insurance policy); (c) the insurer, from an economic standpoint, may be indifferent whether the policy proceeds are consumed by costs of defense or by payments on account of any D&O acts or omissions, and it also could be sued by the D&Os for being too stringent with providing coverage so it may err on the side of being more generous (the case cited by movants demonstrates that denial of defense cost claims can subject insurers to litigation themselves, see Behnke v. State Farm General Ins. Co., 196 Cal. 6/16/2015 3:01:42 PM Page 162 of 177

10 Main Document Page 10 6 of 812 United States Bankruptcy Court Central District of California Los Angeles Judge Neil Bason, Presiding Courtroom 1545 Calendar Tuesday, June 16, 2015 Hearing Room :00 PM CONT... AWTR Liquidation Inc Chapter 11 App. 4th 1443 (2011)), therefore the insurer cannot be relied upon as the sole arbiter of what is reasonable, so there is a need for the Trust to monitor the costs of defense for reasonableness; and (d) the alleged privacy interests and litigation advantages are insufficient, for the reasons set forth below, to overcome the interests of the debtors' creditors in preserving whatever hope they have of recovering a portion of their legitimate claims. (2) Alleged privacy concerns. Pursuant to Cal. Ins. Code , "an insurance institution...shall not disclose any personal or privileged information about an individual collected or received in connection with an insurance transaction." [Emphasis added.] "Personal information" is defined as "any individually identifiable information gathered in connection with an insurance transaction from which judgments can be made about an individual's character, habits, avocations, finances, occupation, general reputation, credit, health, or any other personal characteristics." Cal. Ins. Code (s). The D&Os have not shown how the amount of attorney fees they have incurred in disputing liability for their alleged acts and omissions is "personal" information within the meaning of this statute. "Privileged information" is defined as "individually identifiable information that both (1) relates to a claim for insurance benefits or a civil or criminal proceeding involving an individual [and] (2) is collected in connection with or in reasonable anticipation of a claim for insurance benefits or civil or criminal proceeding involving an individual." Cal. Ins. Code (v). This definition is extremely broad, and potentially encompasses the amount of attorney fees at issue; but disclosure of privileged information by an insurance institution is permitted if such disclosure is pursuant to a facially valid judicial order, as would be the case here. Cal. Ins. Code section (h). Accordingly, it does not appear that the disclosure of the D&Os' defense cost claims would violate the Cal. Ins. Code under the current circumstances. (3) Allegedly unfair litigation advantage. The D&Os complain that production of their defense cost insurance claims to the Trust will provide the Trust with an unfair advantage in the underlying litigation, because the Trust will know if and when the D&Os are nearing the coverage limit under the insurance policy. This court is not persuaded. In bankruptcy cases many professionals have to disclose their ongoing fees and expenses, and 6/16/2015 3:01:42 PM Page 163 of 177

11 Main Document Page 11 7 of 812 United States Bankruptcy Court Central District of California Los Angeles Judge Neil Bason, Presiding Courtroom 1545 Calendar Tuesday, June 16, 2015 Hearing Room :00 PM CONT... AWTR Liquidation Inc Chapter 11 whatever marginal tactical advantage allegedly might be gained (by one side or the other from knowing how much its opponents are incurring) is outweighed in this instance by the need to protect the interests of all creditors, not just the interests of the D&Os. (4) Conclusion. This tentative ruling is in line with the cases cited in the opposition papers (dkt. 673) and strikes an appropriate balance between protecting the D&Os' ability to consume the policy proceeds in their defense and the creditors' interests in assuring that those proceeds are not squandered on unreasonable fees and expenses that would fall outside of the policy coverage but might be unrecoverable after the fact. The minor degree of monitoring requested in the opposition papers is reasonable and appropriate. This court further notes that the parties have not raised the issue of this court's order granting the prior motion of D&O T'so and Hughes for relief from stay to permit advancement of defense costs (dkt. 636). Because no party has requested monitoring of those defense costs for reasonableness, and that motion was granted in November 2014, at this time this court will not require reporting of defense costs advanced to T'so and Hughes pursuant to the D&O policy. If you do not appear, and the matter is not adequately resolved by consent, then you may waive your right to be heard on matters that are appropriate for disposition at this hearing. Tentative Ruling for 6/16/15: This court anticipates posting a tentative ruling at a later time. Revised Tentative Ruling for 5/12/15: Continue to 6/16/15 at 1:00 p.m., based on the written status report (dkt. 674), to be heard concurrently with the status conference in the adversary proceeding against certain insiders (Adv. No. 2:15-ap NB). No written status report is required for the continued status conference. Appearances are not required on 5/12/15. Tentative Ruling for 5/12/15: 6/16/2015 3:01:42 PM Page 164 of 177

12 Main Document Page 12 8 of 812 United States Bankruptcy Court Central District of California Los Angeles Judge Neil Bason, Presiding Courtroom 1545 Calendar Tuesday, June 16, 2015 Hearing Room :00 PM CONT... AWTR Liquidation Inc Chapter 11 This court anticipates posting a tentative ruling at a later time. Tentative Ruling for 3/10/15: Continue to 4/28/15 at either 1:00 p.m., to be concurrent with the status conference in the adversary proceeding against certain insiders (Adv. No. 2:15-ap NB). Appearances are not required on 3/3/15. Tentative Ruling for 3/3/15: Continue to 3/10/15 at 11:00 a.m., based on the written status report (dkt. 648) to be concurrent with the scheduled hearing on the motion to extend the deadline to object to certain insider claims (dkt. 645). This court anticipates that if appearances are not required on that motion, then this status conference will be continued 4/28/15 at either 1:00 p.m. or 2:00 p.m., whichever is concurrent with the status conference in the adversary proceeding against certain insiders (Adv. No. 2:15-ap NB). Appearances are not required on 3/3/15. Debtor(s): AWTR Liquidation Inc Party Information Represented By Brian L Davidoff Claire E Shin C John M Melissinos Jeffrey A Krieger Courtney E Pozmantier Danielle A Pham 6/16/2015 3:01:42 PM Page 165 of 177