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1 UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION In re: ENERGY CONVERSION DEVICES, INC., et al. 1, Debtors. Chapter 11 Case No (Jointly Administered) Judge Thomas J. Tucker MOTION OF JOHN MADDEN, LIQUIDATION TRUSTEE OF THE ENERGY CONVERSIONS DEVICES LIQUIDATION TRUST, PURSUANT TO BANKRUPTCY RULE 9019(a) FOR ENTRY OF AN ORDER APPROVING SETTLEMENT ENTERED INTO BETWEEN TRUST AND HTE, INC. John Madden, solely in his capacity as Liquidation Trustee (the Trustee ) for the Energy Conversion Devices Liquidation Trust (the Trust ) by and through his undersigned counsel, Foley & Lardner LLP, submits this motion (this Motion ), pursuant to Rule 9019(a) of the Federal Rules of Bankruptcy Procedure for entry of an order approving the settlement (the Settlement ) agreed to between the Trust and HTE, Inc., the alleged transferee of preferential payments (the Transferee ). In support of this Motion, the Trust states as follows: JURISDICTION AND VENUE 1. This Court has jurisdiction over this Motion pursuant to 28 U.S.C. 157 and 1334 and the Debtors confirmed Second Amended Joint Plan of Liquidation (the Plan ) (Dkt. No. 754). This is a core proceeding pursuant to 28 U.S.C. 157(b). Venue is proper before this Court pursuant to 28 U.S.C and The Debtors in these jointly administered cases are Energy Conversion Devices, Inc. (Case No ) and United Solar Ovonic LLC (Case No ) tjt Doc 2391 Filed 10/21/14 Entered 10/21/14 16:40:26 Page 1 of 5

2 2. The basis for the relief requested herein includes Rule 9019(a) of the Federal Rules of Bankruptcy Procedure. BACKGROUND FACTS 3. On February 14, 2012 (the Petition Date ), Energy Conversion Devices, Inc. ( ECD ) and United Solar Ovonic LLC ( USO and collectively with ECD, the Debtors ) each filed a voluntary petition for relief (the Cases ) pursuant to chapter 11 of title 11 of the United States Code (the Bankruptcy Code ). The Debtors managed their business and affairs as debtors-in-possession pursuant to 11 U.S.C and 1108 of the Bankruptcy Code until confirmation of the Plan. 4. Pursuant to the Plan: (a) the Debtors were substantively consolidated; (b) a Liquidation Trust was established to liquidate and distribute all remaining assets; and (c) a Liquidation Trustee and a Liquidation Trustee Oversight Committee were appointed to manage and oversee the Liquidation Trust. 5. Pursuant to Article V.G.4 of the Plan, the Trust retained the right to assert and compromise all claims and Causes of Action (as defined in the Plan) including without limitation claims to avoid and recover transfers pursuant to Bankruptcy Code sections 547, 548 and The Effective Date of the Plan was August 28, 2012 (the Effective Date ). 7. On February 11, 2014, the Trust filed an adversary proceeding against the Transferee (Case No ) (the Adversary Proceeding ) to recover alleged preferential transfers that were made by one or more of the Debtors to Transferee in the aggregate amount of $21, (the Transfers ). 8. The basis for the Adversary Proceeding was Section 547(b) of the Bankruptcy Code, which empowers the Trust to recover, on behalf of the Debtors bankruptcy estates, certain preferential payments made by the Debtors in the 90-day period prior to the Petition Date tjt Doc 2391 Filed 10/21/14 Entered 10/21/14 16:40:26 Page 2 of 5

3 9. Counsel for the Transferee contacted counsel for the Trust and explained the Transferee believed it had defenses to the Adversary Proceeding, but believed the matter could best be solved through a settlement rather requiring both parties to participate in costly and uncertain litigation (the Settlement ). 10. The Trust and the Transferee have agreed to the Settlement Agreement and Mutual Release (the Agreement ). The Agreement between the Trust and the Transferee is attached to this Motion as Exhibit The Agreement provides that (1) the Transferee will pay $5, to the Trust within 10 days after this Court enters an order approving the Settlement, and such order becomes final and non-appealable (the Settlement Payment ); (2) the Transferee waives all claims against the Trust, the Debtors, and their estates which arose prior to the Effective Date, including its right to file a claim under 502(h); (3) the Trust waives all claims against the Transferee under Bankruptcy Code Sections 502(d), 547, 548, and 550, and any other claims arising before the Effective Date; and (4) upon receipt of the Settlement Payment, the Parties will stipulate to the dismissal of the Adversary Proceeding with prejudice. RELIEF REQUESTED 12. By this Motion, the Trust seeks approval from this Court of the Settlement. BASIS FOR RELIEF REQUESTED 13. Rule 9019(a) of the Federal Rules of Bankruptcy Procedure governs compromise and settlement. Rule 9019(a) provides that [o]n motion by the trustee and after notice and a hearing, the court may approve a compromise or settlement. Fed. R. Bankr. Proc. 9019(a). 14. Accordingly, this Court has authority to approve the Settlement tjt Doc 2391 Filed 10/21/14 Entered 10/21/14 16:40:26 Page 3 of 5

4 15. The law favors compromise. The United States Supreme Court has ruled that [c]ompromises are a normal part of the process of reorganization. In administering reorganization proceedings in an economical and practical manner it will often be wise to arrange the settlement of claims as to which there are substantial and reasonable doubts. Protective Comm. for Indep. Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 424 (1968). 16. Further, as explained by the Sixth Circuit Court of Appeals, the role of the bankruptcy courts in settlements is as follows: In bankruptcy proceedings, as distinguished from ordinary civil cases, any compromise between the debtor and his creditors must be approved by the court as fair and equitable. Protective Committee for Independent Stockholders of TMT Trailer Ferry v. Anderson, 390 U.S. 414, 424, 88 S. Ct. 1157, 1163, 20 L. Ed. 2d 1 (1968); In re A&C Properties, 784 F.2d 1137, 1381 (9 th Cir.), cert. denied, 479 U.S. 854, 107 S. Ct. 189, 93 L. Ed 2d 122 (1986). In considering a proposed compromise, the bankruptcy court is charged with an affirmative obligation to apprise itself of the underlying facts and to make an independent judgment as to whether the compromise is fair and equitable. In re American Reserve Corp., 841 F.2d 159, (7 th Cir. 1987). Reynolds v. C.I.R., 861 F.2d 469, 473 (6 th Cir. 1988). 17. Although the bankruptcy court should not act as a mere rubber stamp, it also should not conduct a mini-trial on the merits of the settlement. In re Dow Corning Corp., 192 B.R. 415, 421 (Bankr. E.D. Mich. 1996)(quoting Drexel Burnham Lambert, 134 B.R. 493, 496 (Bankr. S.D.N.Y. 1991)). Rather, the court s obligation is to canvass the issues and see whether the settlement falls below the lowest point in the range of reasonableness. Id. 18. In the instant case, the Settlement is fair and equitable. The Settlement provides an acceptable settlement for both parties given their competing views of the matter and the uncertainty and burden of further litigation in the Adversary Proceeding. The Trustee, through tjt Doc 2391 Filed 10/21/14 Entered 10/21/14 16:40:26 Page 4 of 5

5 his professionals, has examined the Transfers and believes the Trust has valid claims. However, success is not guaranteed and the litigation costs would deplete the estate without providing additional value to the other creditors in the case. Given the Trust s limited resources, the Settlement is an appropriate exercise of the Trustee s business judgment and is beneficial to all of the creditors in the case. 19. The Settlement was negotiated and reached early in the litigation process such that minimal costs and judicial resources have been expended. 20. The Settlement is the product of good faith and arm s length bargaining between the Trustee and the Transferee. 21. Notice of this Motion will be served on the Master Service List. WHEREFORE, the Trust requests that this Court enter an Order, substantially in the form attached as Exhibit 1, approving the Settlement and granting any such other and further relief as this Court may deem just and proper under the law. Respectfully Submitted, FOLEY & LARDNER LLP By: /s/ Tamar N. Dolcourt John A. Simon (P61866) Tamar N. Dolcourt (P73425) 500 Woodward Ave., Ste Detroit, MI jsimon@foley.com tdolcourt@foley.com Counsel for the Liquidation Trustee of Energy Conversion Devices Liquidation Trust Date: October 21, tjt Doc 2391 Filed 10/21/14 Entered 10/21/14 16:40:26 Page 5 of 5

6 EXHIBIT 1 Order Approving Motion tjt Doc Filed 10/21/14 Entered 10/21/14 16:40:26 Page 1 of 3

7 UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION In re: ENERGY CONVERSION DEVICES, INC., et al. 1, Debtors. Chapter 11 Case No (Jointly Administered) Judge Thomas J. Tucker ORDER APPROVING MOTION OF JOHN MADDEN, LIQUIDATION TRUSTEE OF THE ENERGY CONVERSIONS DEVICES LIQUIDATION TRUST, PURSUANT TO BANKRUPTCY RULE 9019(a) FOR ENTRY OF AN ORDER APPROVING SETTLEMENT ENTERED INTO BETWEEN TRUST AND HTE, INC. Upon the Trust s Motion Pursuant To Bankruptcy Rule 9019(a) For Entry Of An Order Approving Settlement Entered Into Between the Energy Conversion Devices Liquidation Trust and HTE, Inc., For The Recovery Of Preferential Payments (the Motion ), the Court having jurisdiction over this matter; notice of the Motion having been duly and properly given; no objections to the Motion having been filed; it further appearing that the Settlement as set forth in the Motion is fair and equitable and that the relief requested in the Motion is in the best interests of the Trust, the Debtors estates and the creditors, it is ORDERED that the Motion be, and hereby is granted in all respects. IT IS FURTHER ORDERED that the Settlement 2 between the Trust and HTE, Inc. is hereby approved. 1 The Debtors in these jointly administered cases are Energy Conversion Devices, Inc. (Case No ) and United Solar Ovonic LLC (Case No ). 2 Capitalized terms not defined herein shall have the meanings ascribed to them in the Motion tjt Doc Filed 10/21/14 Entered 10/21/14 16:40:26 Page 2 of 3

8 IT IS FURTHER ORDERED that the Trust shall be, and is hereby authorized to execute any and all other documents, releases or pleadings deemed necessary or appropriate by the Trust to effectuate the Settlement approved hereby tjt Doc Filed 10/21/14 Entered 10/21/14 16:40:26 Page 3 of 3

9 EXHIBIT 2 Notice of Motion and Opportunity to Object tjt Doc Filed 10/21/14 Entered 10/21/14 16:40:26 Page 1 of 3

10 UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION In re: ENERGY CONVERSION DEVICES, INC., et al. 3, Debtors. Chapter 11 Case No (Jointly Administered) Judge Thomas J. Tucker NOTICE OF TRUSTEE S MOTION FOR AN ORDER AUTHORIZING SETTLEMENT WITH HTE, INC. John Madden, solely in his capacity as Liquidation Trustee for the Energy Conversion Devices Liquidation Trust in the above-captioned chapter 11 cases, filed his motion for an order authorizing the settlement and release of claims with HTE, Inc. Your rights may be affected. You should read these papers carefully and discuss them with your attorney, if you have one in this bankruptcy case. (If you do not have an attorney, you may wish to consult one.) If you do not want the Court to grant the relief sought in the Motion, or if you want the court to consider your view on the Motion, within 21 days you or your attorney must: File with the Court a written response or an answer 4, explaining your position at: United States Bankruptcy Court 211 W. Fort Street, Suite 2100 Detroit, MI If you mail your response to the Court for filing, you must mail it early enough so that the Court will receive it on or before the date stated above. 3 The Debtors in these jointly administered cases are Energy Conversion Devices, Inc. (Case No ) and United Solar Ovonic LLC (Case No ). 4 Response or answer must comply with Fed. R. Civ. P. 8(b), (c) and (e) tjt Doc Filed 10/21/14 Entered 10/21/14 16:40:26 Page 2 of 3

11 You must also mail a copy to: Tamar N. Dolcourt, Esq. Foley & Lardner, LLP 500 Woodward Ave., Suite 2700 Detroit, MI If a response or answer is timely filed and served, the clerk will schedule a hearing on the Motion and you will be served with a notice of the date, time and location of the hearing. If you or your attorney do not take these steps, the Court may decide that you do not oppose the relief sought to the Motion and may enter an order granting that relief. FOLEY & LARDNER LLP By: /s/ Tamar N. Dolcourt John A. Simon (P61866) Tamar N. Dolcourt (P73425) 500 Woodward Ave., Ste Detroit, MI jsimon@foley.com tdolcourt@foley.com Counsel for the Liquidation Trustee of Energy Conversion Devices Liquidation Trust Date: October 21, tjt Doc Filed 10/21/14 Entered 10/21/14 16:40:26 Page 3 of 3

12 EXHIBIT 3 Required Brief Not Applicable tjt Doc Filed 10/21/14 Entered 10/21/14 16:40:26 Page 1 of 1

13 EXHIBIT 4 Certificate of Service tjt Doc Filed 10/21/14 Entered 10/21/14 16:40:26 Page 1 of 3

14 UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION In re: ENERGY CONVERSION DEVICES, INC., et al. 1, Debtors. Chapter 11 Case No (Jointly Administered) Judge Thomas J. Tucker CERTIFICATE OF SERVICE I hereby certify that on October 21, 2014, I electronically filed the Motion of John Madden, Liquidation Trustee of the Energy Conversion Devices Liquidation Trust, Pursuant to Bankruptcy Rule 9019(a) For Entry of an Order Approving Settlement Entered into Between Trust and HTE, Inc. for the Recovery of Preferential Payments (the Motion ), with the Clerk of the Court which sends notice by operation of the court s electronic filing service to all ECF participants registered to receive notice in this case. The Trustee has engaged a Noticing Agent, which will serve this Motion and file a subsequent Proof of Service after it has performed the service. I hereby further certify that on October 21, 2014, I also served the Motion on HTE, Inc., through its counsel, via Federal Express, at the following addresses: HTE, Inc. c/o Dennis W. Loughlin Warner Norcross & Judd LLP 2000 Town Center, Suite 2700 Southfield, Michigan The Debtors in these jointly administered cases are Energy Conversion Devices, Inc. (Case No ) and United Solar Ovonic LLC (Case No ) tjt Doc Filed 10/21/14 Entered 10/21/14 16:40:26 Page 2 of 3

15 FOLEY & LARDNER LLP By: /s/ Tamar N. Dolcourt John A. Simon (P61866) Tamar N. Dolcourt (P73425) 500 Woodward Ave., Ste Detroit, MI Counsel for the Liquidation Trustee of Energy Conversion Devices Liquidation Trust Date: October 21, tjt Doc Filed 10/21/14 Entered 10/21/14 16:40:26 Page 3 of 3

16 EXHIBIT 5 Affidavits Not Applicable tjt Doc Filed 10/21/14 Entered 10/21/14 16:40:26 Page 1 of 1

17 EXHIBIT 6 Settlement Agreement and Release of Claims tjt Doc Filed 10/21/14 Entered 10/21/14 16:40:26 Page 1 of 5

18 SETTLEMENT AGREEMENT AND MUTUAL RELEASE This Settlement Agreement and Mutual Release is entered into by and among the Energy Conversion Devices Liquidation Trust (the Trust ), and HTE, Inc. (the Transferee ) this day of October, WHEREAS, commencing on February 14, 2012 (the Petition Date ), Energy Conversion Devices, Inc. and United Solar Ovonic LLC (collectively the Debtors ) filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code (the Bankruptcy Code ); and WHEREAS, on July 30, 2012, the Court confirmed the Debtors Second Amended Joint Plan of Liquidation Under Chapter 11 of the Bankruptcy Code (the Plan ), and the Effective Date of the Plan occurred on August 28, 2012; and WHEREAS, pursuant to Article V.G.4 of the Plan, the Trust retained the right to assert and compromise all claims and Causes of Action (as defined in the Plan) including without limitation claims to avoid and recover transfers pursuant to Bankruptcy Code sections 547, 548 and 550; and WHEREAS, on February 11, 2014, the Trust filed an adversary proceeding against the Transferee (Case No ) (the Adversary Proceeding ) to recover preferential transfers that were made by one or more of the Debtors to Transferee in the aggregate amount of $21, (the Transfers ); and avoidable; and WHEREAS, the Transferee asserts that some or all of the Transfers are not tjt Doc Filed 10/21/14 Entered 10/21/14 16:40:26 Page 2 of 5

19 WHEREAS, both parties have concluded that the compromise and settlement embodied herein ( Settlement Agreement ) is in each of their the best interests considering, among other things, the cost, expense and delay associated with litigating the disputed matters and issues, the result of which is uncertain. Transferee: NOW, THEREFORE, IT IS HEREBY AGREED, by and among the Trust and 1. The Trust shall file a motion pursuant to Federal Rule of Bankruptcy Procedure 9019 with the Bankruptcy Court for the Eastern District of Michigan requesting approval of the Settlement Agreement (the 9019 Motion ). 2. The Transferee shall deliver to Foley & Lardner LLP an executed copy of this Settlement Agreement. Within 10 business days after the order approving the 9019 Motion becomes final and non-appealable, the Transferee shall pay $5, (the Settlement Amount ), either by a check made payable to Energy Conversion Devices Liquidation Trust or by wire transfer to the Trust s counsel. 3. Upon execution of this Settlement Agreement and timely and complete payment of the Settlement Amount (the Effective Date ), the Trust shall be deemed to have waived and released any and all claims that they may have against Transferee under Bankruptcy Code sections 502(d), 547, 548 and 550, and/or any and all other claims which arose prior to the Effective Date. 4. On the Effective Date, Transferee shall be deemed to have waived and released any and all claims that it may have against the Debtors, their estates, and the Trust, for tjt Doc Filed 10/21/14 Entered 10/21/14 16:40:26 Page 3 of 5

20 any claims arising prior to the Effective Date. The parties hereby stipulate that Transferee has not previously filed any claim in Debtors bankruptcy case. 5. Transferee shall not file any proofs of claim in the Debtors Chapter 11 cases in connection with the Settlement Amount pursuant to the Bankruptcy Code Section 502(h), and any such claim shall be deemed immediately expunged without any further Order of the Bankruptcy Court. 6. Upon receipt of the Settlement Payment, the Trust and the Transferee shall stipulate to an order dismissing the Adversary Proceeding with prejudice. 7. This Settlement Agreement may be executed in multiple counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same agreement. The Stipulation of Settlement shall be binding upon and shall inure to the benefit of the parties hereto and their legal representatives, predecessors, successors and assigns, including any Chapter 11 or Chapter 7 trustee(s), plan trustee(s), administrator(s) and any committees. 8. It is expressly understood and agreed that the terms hereof, including the recital paragraphs and headings, are contractual and that the agreement herein contained and the consideration contemplated hereby is to compromise disputed claims and avoid litigation, and that no statement made herein, payment, or release or other consideration given shall be construed as an admission by any of the parties hereto of any kind or nature. 9. Each party and signatory to this Settlement Agreement represents and warrants to each other party hereto that such party or signatory has full power, authority and tjt Doc Filed 10/21/14 Entered 10/21/14 16:40:26 Page 4 of 5

21 legal right and has obtained all approvals and consents necessary, to execute, deliver and perform all actions required under this Settlement Agreement. DATED: October, 2014 By: John Madden Liquidation Trustee Energy Conversion Devices Liquidation Trust By: Daniel Reed President HTE, Inc tjt Doc Filed 10/21/14 Entered 10/21/14 16:40:26 Page 5 of 5