SUPERIOR COURT OF THE STATE OF CALIFORNIA

Transcription

1 MURPHY ROSEN LLP 100 WILSHIRE BOULEVARD, SUITE 1300 SANTA MONICA, CA TELEPHONE ; FACSIMILE DAVID SIEGEL (State Bar No CRAIG VARNEN (State Bar No IRELL & MANELLA LLP 1800 Avenue of the Stars, Suite 900 Los Angeles, CA Telephone: ( Facsimile: ( Attorneys for John Spahi EDWARD A. KLEIN (State Bar No PAUL D. MURPHY (State Bar No DAVID E. ROSEN (State Bar No MURPHY ROSEN LLP 100 Wilshire Boulevard, Suite 1300 Santa Monica, California Telephone: ( Facsimile: ( Attorneys for John Spahi and Joseph Orlando SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES WEST DISTRICT MICHAEL REACH, a derivatively on behalf of Ocean Towers Housing Corporation, Plaintiffs, vs. JOHN SPAHI; JOSEPH ORLANDO; JOSEPH INCAUDO; OMAR SPAHI; DOROTHEA SCHIRO; JANET FULADIAN; SEIF ASCAR, individually and as Trustee of the Ascar Family Trust, dated July 5, 2012; APEX INVESTMENTS GROUP LTD., d/b/a APEX INVESTMENTS, INC.; CAVOUR PARTNERS LIMITED LLC; ENENSTEIN RIBAKOFF LA VINA & PHAM, A PROFESSIONAL CORPORATION; PATRICK AMBROSE; SHELDON STEIN; KAZOU "KAY" YOSHIKAWA; PETER ALEVIZOS; and DOES 5 to 100, inclusive,. -and - Defendants. OCEAN TOWERS HOUSING CORPORATION, California corporation Nominal Defendant CASE NO. SC [Hon. Lisa Hart Cole] EX PARTE APPLICATION OF JOHN SPAHI TO STAY PORTIONS OF THE JULY 9, 2018 ORDER APPOINTING RECEIVER AFTER HEARING AND PRELIMINARY INJUNCTION PENDING APPEAL Date: August 7, 2018 Time: 10:45 a.m. Dept: 9 Complaint Filed: June 3, 2015 EX PARTE APPLICATION TO STAY PORTIONS OF ORDER APPOINTING A RECEIVER PRINTED ON RECYCLED PAPER

2 MURPHY ROSEN LLP 100 WILSHIRE BOULEVARD, SUITE 1300 SANTA MONICA, CA TELEPHONE ; FACSIMILE TO ALL PARTIES AND THEIR COUNSEL OF RECORD: PLEASE TAKE NOTICE THAT on August 7, 2018, at 10:45 a.m., or as soon thereafter as the matter may be heard in Department 9 of the above-entitled Court, located at 312 N. Spring St., California, defendant John Spahi will, and hereby does, apply ex parte for an Order staying the following portions of the Court s July 9, 2018 Order Appointing Receiver After Hearing and Preliminary Injunction ( the Order pending resolution of the appeal of the Order filed by Mr. Spahi: 1. Paragraph 1 of the Order to the extent it provides that the Receiver shall remov[e] the current Ocean Towers Board of Directors ; 2. Paragraph 20(d(3 of the Order to the extent it provides that Defendants shall refrain from using any voting shares attributable to any Defendant or affiliate of any Defendant to block proposals submitted to shareholders by the Receiver ; and 3. Paragraph 22 of the Order, which provides that immediately upon filing of the Receiver s Oath and Bond, the Receiver shall notice and hold an election for new OTHC board members to replace the current board at the earliest possible date under and in conformity with applicable California law and the OTHC bylaws. The Receiver shall hold this election within four months of his appointment. This application is made pursuant to California Code of Civil Procedure section 918 and California Rules of Court , et seq., and is made on the grounds that good cause exists to stay these provisions of the Order pending appellate review of the Order because (1 the appeal presents substantial and important issues, and (2 failure to issue a stay is more likely to injure Defendant than issuance of a stay is likely to injure Plaintiff. Good cause exists to grant this relief on an ex parte basis because, given the Court s directive that an election occur within four months, and the apparent directive that the receiver shall immediately remove the current Ocean Towers board of directors, there is insufficient time to have this matter heard on a noticed motion. This application is based on this notice, the attached memorandum of points and authorities, the attached declaration of David E. Rosen, the pleadings and papers on file -2- PRINTED ON RECYCLED PAPER EX PARTE APPLICATION TO STAY PORTIONS OF ORDER APPOINTING A RECEIVER

3 in this action, and on such other and further evidence as this Court may consider at the hearing on this matter. Respectfully submitted, DATED: August 6, 2018 MURPHY ROSEN LLP By: Edward A. Klein Paul D.Murphy David E. Rosen Attorneys for Defendants John Spahi and Joseph Orlando MURPHY ROSEN LLP 100 WILSHIRE BOULEVARD, SUITE 1300 SANTA MONICA, CA TELEPHONE ; FACSIMILE PRINTED ON RECYCLED PAPER EX PARTE APPLICATION TO STAY PORTIONS OF ORDER APPOINTING A RECEIVER

4 MURPHY ROSEN LLP 100 WILSHIRE BOULEVARD, SUITE 1300 SANTA MONICA, CA TELEPHONE ; FACSIMILE MEMORANDUM OF POINTS AND AUTHORITIES I. PRELIMINARY STATEMENT On June 26, 2017, Plaintiff filed a motion for the appointment of a receiver ( the Motion. On July 9, 2018 this Court entered an Order Appointing Receiver After Hearing and Preliminary Injunction ( the Order. The Order not only appoints a receiver, but also grants additional relief that was not sought in the Motion, and on which Defendant was never provided a fair opportunity to brief or be heard. First, the Court authorized the receiver to remove the entire OTHC Board of Directors and expressly ordered the receiver, immediately upon filing the receiver s bond, to notice and hold an election for new OTHC board members to replace the current board. (Order, Ex. A, 1, 22. This relief was not even sought in the underlying action, let alone the Motion. And on numerous occasions prior to entry of the Order this Court made clear it did not believe it had the authority to grant such relief on the Motion: I don t know that I have the authority to change the constitution of the Board (Ex. C, p. 20:24-28; I don t even know how I could do it on a noticed motion, frankly (Ex. F, p. 22:22-23:12; I don t think it is something I m prepared to do sua sponte (Ex. G, p. 43:9-44:24. Second, the Court enjoined Defendants or affiliate of any Defendant from voting their shares against any proposal the receiver brings to the shareholders for a vote. (Order, 20(d(3. This is disenfranchisement. If the receiver takes action on behalf of OTHC, so be it. But if the receiver decides he wants to put something up for a vote of the OTHC shareholders, each shareholder is entitled to participate in that vote. Defendant should not have been denied his right to vote, particularly when such relief was not sought in the Motion, and Defendant was not provided an opportunity to be heard or present evidence on the issue. On July 23, 2018, Defendant filed a writ of mandamus seeking to overturn the Order or, alternatively, to overturn certain provisions of the Order. The writ was -4- PRINTED ON RECYCLED PAPER EX PARTE APPLICATION TO STAY PORTIONS OF ORDER APPOINTING A RECEIVER

5 MURPHY ROSEN LLP 100 WILSHIRE BOULEVARD, SUITE 1300 SANTA MONICA, CA TELEPHONE ; FACSIMILE denied on the grounds that the Order was immediately appealable. Thereafter, on August 2, 2018, Defendant filed a notice of appeal of the Order. By this application, in order to effectuate the automatic stay of California Code of Civil Procedure ( C.C.P. section 916(a, Defendant seeks to stay the following portions of the Order pending resolution of that appeal (collectively referred to as the ( Sua Sponte Rulings : 1. Paragraph 1 of the Order to the extent it provides that the Receiver (whether with or without Court approval may remov[e] the current Ocean Towers Board of Directors ; 2. Paragraph 20(d(3 of the Order to the extent it provides that Defendants shall refrain from using any voting shares attributable to any Defendant or affiliate of any Defendant to block proposals submitted to shareholders by the Receiver ; and 3. Paragraph 22 of the Order, which provides that immediately upon filing of the Receiver s Oath and Bond, the Receiver shall notice and hold an election for new OTHC board members to replace the current board at the earliest possible date under and in conformity with applicable California law and the OTHC bylaws. The Receiver shall hold this election within four months of his appointment. California Code of Civil Procedure section 918 grants this Court the discretion to stay the enforcement of any judgment or order. Good cause exists for this Court to exercise that discretion. First, the appeal presented substantial and important issues of (a the Court s authority to grant sua sponte relief without providing a meaningful opportunity to present evidence or be heard, (b the Court s authority to remove a board of directors as a provisional remedy, (c the Court s authority to rely on a special litigation committee report in appointing a receiver, and (d the circumstances under which the Court may disenfranchise a shareholder as a provisional remedy. Second, failure to issue a stay is more likely to injure Defendant than issuance of a stay is likely to injure Plaintiff. Specifically, the Order grants very broad powers to the Receiver that all but eliminate the power of the current board of directors. Because the current Board -5- PRINTED ON RECYCLED PAPER EX PARTE APPLICATION TO STAY PORTIONS OF ORDER APPOINTING A RECEIVER

6 MURPHY ROSEN LLP 100 WILSHIRE BOULEVARD, SUITE 1300 SANTA MONICA, CA TELEPHONE ; FACSIMILE is effectively powerless to make decisions for OTHC, no harm will come from staying the Sua Sponte Rulings until such time as Defendant s appeal can be heard. II. GOOD CAUSE EXISTS TO STAY THE SUA SPONTE RULINGS PENDING RESOLUTION OF THE APPEAL A. A Stay is Necessary to Enforce the Automatic Stay of C.C.P. 916(a. The filing of the notice of appeal of the Order automatically stayed the Sua Sponte Rulings pursuant to C.C.P Although Code of Civil Procedure section provides that an appeal generally does not stay an order that appoints a receiver, Defendant is not seeking to stay the receivership. Instead, Defendant seeks to stay the orders removing him from the OTHC board (both affirmatively and through a mandatory election of a new board and directing him to vote in accordance with the Receiver. These are mandatory injunctions under C.C.P. 916 and thus are stayed pending the appeal. See Paramount Pictures Corp. v. Davis ( Cal.App.2d 827, 836 ( [i]f an injunction compels a party to surrender a position he holds and which upon the facts alleged by him he is entitled to hold, it is mandatory. This rule has been enunciated in at least a dozen published cases. See, e.g., Byington v. Superior Court of Stanislaus County ( Cal.2d 68, 71; Clute v. Superior Court in and for City and County of San Francisco ( Cal. 15, In order to effectuate this automatic stay, and to resolve any dispute about the automatic stay, this Court should affirmative stay the Sua Sponte Rulings. Even if an automatic stay does not apply, this Court should issue a discretionary stay of the Sua Sponte Rulings pursuant to C.C.P. 918 pending resolution of the appeal. The purpose of a discretionary stay is to preserve the status quo pending appeal. People ex rel. San Francisco Bay Conservation & Development Com. v. Emeryville ( Cal.2d 533, 537. A discretionary stay is appropriate where (1 the appeal presents substantial issues, and (2 failure to issue a stay is more likely to injure the appellant than issuance -6- PRINTED ON RECYCLED PAPER EX PARTE APPLICATION TO STAY PORTIONS OF ORDER APPOINTING A RECEIVER

7 MURPHY ROSEN LLP 100 WILSHIRE BOULEVARD, SUITE 1300 SANTA MONICA, CA TELEPHONE ; FACSIMILE of a stay is likely to injure the respondent. Davis v. Custom Component Switches, Inc. ( Cal.App.3d 21, Both factors are present here. B. The Appeal Presents Substantial and Important Issues that Ought to be Resolved by the Appellate Court Before the Order is Implemented. The appeal presented substantial and important issues that go to the heart of Defendant s constitutional rights. First, the Sua Sponte Rulings violate Defendant s due process rights. [T]he United States Supreme Court has confirmed consistently that prejudgment orders affecting a party's rights in property entered without notice and an opportunity to be heard violate due process requirements. Koshak v. Malek ( Cal.App.4th 1540, See also, Kelly v. New West Federal Savings ( Cal.App.4th 659, 677 ( where the error results in denial of a fair hearing, the error is reversible per se. Denying a party the right to testify or to offer evidence is reversible per se (citations omitted; Menefee & Son v. Dep't of Food & Agric. ( Cal.App.3d 774, 781 ( at a minimum, due process requires notice and an opportunity for a hearing. Normally notice and an opportunity for a hearing must precede even a temporary deprivation of a property interest (citations omitted. Here, the inclusion of the Sua Sponte Rulings in the Order violated Petitioner s due process rights. None of the Sua Sponte Rulings were requested in the Motion. Furthermore, each of the Sua Sponte Rulings involve a fundamental right in Petitioner s property the right to sit on the Board that oversees his property and the right to vote his shares in his property. The due process violation is particularly egregious given that this Court acknowledged on several occasions that it could make no new orders in connection with the Motion without providing the parties an opportunity to present evidence and be heard: I don t have that motion in front of me (Ex. B, p. 63:6-21; I can t do these things without proper notice to the other side, and there was no proper notice to the other side (Ex. D, p. 32:16-33:8; even if I had the -7- PRINTED ON RECYCLED PAPER EX PARTE APPLICATION TO STAY PORTIONS OF ORDER APPOINTING A RECEIVER

8 MURPHY ROSEN LLP 100 WILSHIRE BOULEVARD, SUITE 1300 SANTA MONICA, CA TELEPHONE ; FACSIMILE authority to interfere with an election, which I would... certainly have it briefed, I don t really feel it would be appropriate at this juncture (Ex. E, p. 29: Second, the Order requires the removal of the entire board of directors and the election of a new board. There is no basis in law to support such provisional relief. In fact, this Court repeatedly acknowledged that (a it did not have the authority to remove Board members, and (b that issue was not before the Court: I don t know that I have the authority to change the constitution of the Board (Ex. C, p. 20:24-28; I don t even know how I could do it on a noticed motion, frankly (Ex. F, p. 22:22-23:12; I don t think it is something I m prepared to do sua sponte (Ex. G, p. 43:9-44:24; we re not at that point yet (Ex. H, p. 21:6-12. Defendant Alevizos (the party submitting the proposed order adopted by the Court argued that the trial court had the equitable power to remove Board members. While it is true that under certain circumstances the trial court has equitable discretion to remove a board member, as the cases cited by Defendant Alevizos make clear, such an order requires specific factual findings, which in turn, requires that there have been some form of trial. See, e.g., Brown v. N. Ventura Rd. Dev. Co. ( Cal. App. 2d 227, 232 and American Center for Education, Inc. v. Cavnar ( Cal.App.3d 476, 499. In fact, even Defendant Alevizos admits that [n]eedless to say, the Court should only remove board members after affording them an opportunity to be heard. (Ex. I, fn. 6. Third, the Court impermissibly relied on the SLC Report in appointing the receiver, essentially delegating its fact finding duty to the SLC and accepted the Report s opinions and conclusions in place of admissible evidence. A report by a special litigation committee is an internal corporate document used by the corporation s board of directors in deciding whether pursing claims are in the best interests of the corporation. See, e.g. Berzirdjian v. O Reilly ( Cal.App.4th 316, 328. Unlike a court of law charged with considering admissible evidence upon which to base a legal conclusion, the committee works solely on behalf of the corporation to determine -8- PRINTED ON RECYCLED PAPER EX PARTE APPLICATION TO STAY PORTIONS OF ORDER APPOINTING A RECEIVER

9 MURPHY ROSEN LLP 100 WILSHIRE BOULEVARD, SUITE 1300 SANTA MONICA, CA TELEPHONE ; FACSIMILE whether, considering all the factors (whether admissible or not, it is in the corporation s best interest to pursue, settle, or dismiss the claims. The SLC is not an independent adjudicatory body. The SLC s Report is intended to document the corporation s decision regarding how to respond to the derivative action. Nothing more. The Court should not have referenced it, much less relied upon it, in granting the Motion. Fourth, the right to vote is considered fundamental, preservative of other basic political rights, and, speaking generally, any alleged restriction that impinges on it demands careful or strict scrutiny. Hoffman v. State Bar of California ( Cal.App.4th 630, 640. Here, the first time the issue of denying Petitioner the right to vote against a receiver s proposal made to the shareholders was raised was the day the trial court signed the Order. In the more than one year that the Motion was pending, nobody ever raised the notion that Petitioner should be disenfranchised on issues raised by the Receiver, let alone gave it the careful scrutiny it deserves. Instead, the provision appeared out of nowhere the day of the final hearing in an alternate proposed order. And it appeared with no analysis whatsoever. No briefing or evidence of any kind was presented to explain the need for this provision. Even more concerning, the comments made by the Court during the July 9, 2018 hearing suggest that this punishment against Defendant for votes he cast as a director of OTHC: THE COURT: Do you know that the fact that your clients voted for an amendment to the bylaws to allow the SLC to go forward, then after the SLC Report came back as negative to your clients, that your clients then tried to withdraw the amendment to the bylaws? Do you think that might have anything to do with that section? (Ex. H, p (emphasis added. The fact that the Court does not like how Defendant voted on matters presented to the board (issues not even before the trial court on the Motion does not give the Court the authority to take away Defendant s fundamental voting rights as a -9- PRINTED ON RECYCLED PAPER EX PARTE APPLICATION TO STAY PORTIONS OF ORDER APPOINTING A RECEIVER

10 MURPHY ROSEN LLP 100 WILSHIRE BOULEVARD, SUITE 1300 SANTA MONICA, CA TELEPHONE ; FACSIMILE shareholder of OTHC. If fact, even Defendant Alevizos counsel the drafter of the offending language stated at the hearing that I think we can live without the voting shares provision. (Id. at p. 40. C. Failure to Issue a Stay is More Likely to Injure Defendant than Issuance of a Stay is Likely to Injure Plaintiff. Failure to issue a stay will cause substantial injury to Defendant as it will result in his being ousted from the OTHC board of directors and potentially compel him to vote in accordance with the wishes of the Receiver. These actions pertain to Defendant s fundamental property rights as well as his most basic Constitutional due process rights. Though purportedly cast as a provisional remedy, the Order permanently alters the status quo at OTHC. Moreover, Defendant cannot be adequately compensated for the infringement of his fundamental rights. In contrast, neither Plaintiff nor the Receiver will suffer any harm if the Sua Sponte Rulings are stayed pending appeal. The Order grants the Receiver wide ranging authority regarding the operation and management of OTHC. He has been granted the full powers of an equity receiver and complete power to operate and manage OTHC. (Order, 1, 4. The Order effectively replaces the current board of directors with the receiver, and renders the board powerless. Thus, there is nothing the existing board can do while the appeal is pending to damage Plaintiff. Under these circumstances, staying the Sua Sponte orders will in no way cause any injury to Plaintiff. III. GOOD CAUSE EXISTS TO GRANT THE REQUESTED RELIEF ON AN EX PARTE BASIS Good cause exists to grant this application on an ex parte basis because, given the Court s directive that an election must be completed within four months, there is insufficient time to have this matter heard on a noticed motion. Furthermore, in discussions with the receiver, he indicated his belief that section 1 of the Order could be interpreted to mean that his is directed to immediately remove the current Ocean -10- PRINTED ON RECYCLED PAPER EX PARTE APPLICATION TO STAY PORTIONS OF ORDER APPOINTING A RECEIVER

11 Towers board of directors. If correct, there is insufficient time to have the matter heard on a noticed motion prior to the time the receiver implements that directive. III. CONCLUSION For the foregoing reasons, Defendants respectfully request that this Court stay the Sua Sponte Rulings pending resolution of Defendant s appeal of the Order. Respectfully submitted, DATED: August 6, 2018 MURPHY ROSEN LLP 9 MURPHY ROSEN LLP 100 WILSHIRE BOULEVARD, SUITE 1300 SANTA MONICA, CA TELEPHONE ; FACSIMILE By: Edward A. Klein Paul D.Murphy David E. Rosen Attorneys for Defendants John Spahi and Joseph Orlando PRINTED ON RECYCLED PAPER EX PARTE APPLICATION TO STAY PORTIONS OF ORDER APPOINTING A RECEIVER

12 MURPHY ROSEN LLP 100 WILSHIRE BOULEVARD, SUITE 1300 SANTA MONICA, CA TELEPHONE ; FACSIMILE DECLARATION OF DAVID E. ROSEN I David E. Rosen, hereby declare as follows: 1. I am an attorney duly licensed to practice law in this Court, and am a partner at Murphy Rosen LLP, counsel of record for Defendant John Spahi. The facts set forth herein are personally known by me to be true and correct, and if called upon as a witness, I would so testify. 2. Attached hereto as Exhibit A is a true and correct copy of this Court s July 9, 2018 Order Appointing Receiver After Hearing and Preliminary Injunction ( the Order. 3. Attached hereto as Exhibit B is a true and correct copy of the relevant portions of the transcript of the September 6, 2017 hearing before this Court. 4. Attached hereto as Exhibit C is a true and correct copy of the relevant portions of the transcript of the September 20, 2017 hearing before this Court. 5. Attached hereto as Exhibit D is a true and correct copy of the relevant portions of the transcript of the March 9, 2018 hearing before this Court. 6. Attached hereto as Exhibit E is a true and correct copy of the relevant portions of the transcript of the March 23, 2018 hearing before this Court. 7. Attached hereto as Exhibit F is a true and correct copy of the relevant portions of the transcript of the June 6, 2018 hearing before this Court. 8. Attached hereto as Exhibit G is a true and correct copy of the relevant portions of the transcript of the June 12, 2018 hearing before this Court. 9. Attached hereto as Exhibit H is a true and correct copy of the relevant portions of the transcript of the July 9, 2018 hearing before this Court. 10. Attached hereto as Exhibit I is a true and correct copy of the relevant portions of the June 11, 2018 Response of OTHC Director Peter Alevizos to Nominal Plaintiff s Renewed Motion for Appointment of a Receiver. 11. On July 23, 2018, Mr. Spahi filed a Petition for Writ of Mandate related to the Order. On July 26, 2018, the Court of Appeal denied the writ on the grounds that -12- PRINTED ON RECYCLED PAPER EX PARTE APPLICATION TO STAY PORTIONS OF ORDER APPOINTING A RECEIVER

13 MURPHY ROSEN LLP 100 WILSHIRE BOULEVARD, SUITE 1300 SANTA MONICA, CA TELEPHONE ; FACSIMILE the Order is an appealable order. On August 2, 2018, Mr. Spahi filed a notice of appeal of the Order. 12. Good cause exists to grant the relief requested in this application on an ex parte basis because given the Court s directive that an election must be completed within four months, there is insufficient time to have this matter heard on a noticed motion. Furthermore, on July 30, 2018, I met with the Stephen Donell and his counsel, Robert Heller. During the meeting, there was some discussion about the meaning of section 1 of the Order providing that: The Receiver shall immediately take exclusive possession and control of OTHC and is ordered to care for and preserve OTHC pending disposition of the litigation and/or until further ORDER of the Court, including removing the current Ocean Towers Board of Directors. Mr. Donell indicated that the provision could be read that the Receiver shall immediately remove the current board. I explained that during the hearing the Court expressed the view the Receiver would only remove the Board upon further order of the Court. To the extent the Receiver ultimately interprets the section to provide him a mandate to immediately remove the current board, this provides further good cause to have this matter resolved on an ex parte basis. 13. On August 6, 2018, at approximately 9:45 a.m., I gave notice of this ex parte application by to all parties and their counsel. I true and correct copy of my is attached hereto as Exhibit J. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed this 6th day of August, 2018, at Santa Monica, California. DAVID E. ROSEN -13- PRINTED ON RECYCLED PAPER EX PARTE APPLICATION TO STAY PORTIONS OF ORDER APPOINTING A RECEIVER

14 EXHIBIT A

15 l JONA THAN E. ALTMAN (State Bar No STEPHEN T. MA YER (State Bar No MUNGER, TOLLES & OLSON LLP 350 South Grand Avenue 4 Fiftieth Floor Los Angeles, California Telephone: ( Facsimile: ( Attorneys for Defendants PETER ALEVIZOS 7 and SHELDON STElN FILED Superior Court of California county of I,.,os Angeles JUL qg 2018 ShcrflR, Cap,r, Exocuttve, Officer/Clerk By~, J;, ~ ' Deputy T. BJv11s 8 9 SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF LOS ANGELES 10 MICHAEL REACH, DERIVATIVELY ON 11 BEHALF OF OCEAN TOWE RS HOUSING CORPORATION, 12 Plaintiff, 13 vs. 14 JOHN SPAHI; JOSEPH ORLANDO; 15 JOSEPH INCAUDO; OMAR SPAHI; DOROTHEA SCHIRO; JANET FULADIAN; 16 SEIF ASCAR, individually and as Trustee of the Ascar Family Trust, dated July 5, 2012; 17 APEX INVESTMENTS GROUP LTD., d/b/a/ APEX INVESTMENTS INC.; CAVOUR 18 PARTNERS LIMITED LLC; ENENSTEIN RIBAKOFF LAVINA & PHAM, A 19 PROFESSIONAL CORPORA TJON; PATRICK AMBROSE; SHELDON STEIN; 20 KAZUO "KAY" YOSHIKAWA; PETER ALEVIZOS; and DOES 1 to 100, inclusive, 21 Defendants. 22 -and- 23 OCEAN TOWERS HOUSfNG 24 CORPORATION, a California corporation Case No. SC ORDER APPOINTING RECEIVER AFTER HEARING AND PRELIMINARY INJUNCTION [ Assigned for All Purposes] Judge: Dept.: Hearing Date: Time: Action Filed: Trial Date: Hon. Lisa Hart Cole 0 July 9, :00 PM June 3, 2015 Not Set 25 Nominal Defendant ORDER APPOINTING RECEIVER AFTER HEARING AND PRELIMINARY INJUNCTION

16 Pending before the Court is Nominal Plaintiffs Motion to Appoint a Receiver (the 2 "Motion". The Court has read and considered the briefing submitted in connection with the 3 motion, and based on the authorities identified therein and on the arguments made by the parties at 4 hearings held on September 6, 201 7, September 20, 2017, at an informal working session held on 5 October 6, 2017, at a telephonic conference on June 6, 2018, and after oral argument at a hearings 6 held on June 12 and June 27, 2018, the Couit finds in this action between shareholders jointly 7 owning property, on the application of the Nominal Plajntiff, that such property is in danger of 8 being lost, removed, or materially injured under Code of Civil Procedure section 564(b(l, and 9 further finds a necessity to preserve the property or rights of the parties under Code of Civil 10 Procedure section 564(b(9, and for good cause shown, ORDERS as follows: Appointment and Qualification of the Receiver. Stephen J. Don ell is appointed 12 receiver (the "Receiver" for Ocean Towers Housing Corporation ("OTHC" immediately 13 effective upon filing a bond in accordance with Code of Civil Procedure section 567(b in the sum 14 of $10,000 to secure the faithful performance of his duties as the Receiver~ and subject to the 15 OTHC Special Litigation Committee ("SLC" retaining its authority to manage the disposition of 16 this and related litigation, or to transfer the management of the litigation to the Receiver, as set 17 forth in the OTHC Board Resolutions authorizing and empowering the SLC. The Receiver's Oath 18 and Bond shal l be filed with this Court on or before July 23, The Receiver shall immediately take exclusive possession and control of OTHC and is 20 ordered to care for and preserve OTHC pending disposition of the litigation and/or until further 21 ORDER of the Court, including removing the current Ocean Towers Board of Directors (the 22 "Board". The Receiver shall have the full powers of an equity receiver and shall solely be the 23 agent ofthjs Court, and as such: a. Is neutral; b. Acts for the benefit of all who may have an interest in the receivership property, including without limitation secured lenders and OTHC's shareholders; C. Holds assets for the Court and not for the plaintiff or the defendant. -2- ORDER APPOINTING RECEIVER AFTER HEARING AND PRELIMrNARY INJUNCTION

17 2. No Impairment of Secured Lenders' Rights and Collateral. Nothing in this 2 Order shall be interpreted to permit the Receiver to impair the collateral or otherwise interfere 3 with the rights of the OTHC's secured lendlers under OTHC' s loan agreements. The Receiver is 4 ORDERED to manage the OTHC's finances in a way that ensures secured lenders are paid timely 5 while simultaneously protecting the interests of OTHC's shareholders Receiver's Fees. The Receiver may charge OTHC for the Receiver' s services at 7 his usual hourly rate and/or the usual rates of the Receiver's staff as stated in the Receiver's 8 earlier-filed declaration General Duties. After qual ifying, the Receiver: a. Shall take possession of and manage ( 1 OTHC and OTHC' s real property 11 located at 201 Ocean Ave., Santa Monica, CA 90402; (2 all assets, including, but not limited to, 12 Defendants' chattel paper, all collateral accounts, all contracts, all deposit accounts, au real 13 property, all documents, all equipment, all fixtures, all general intangibles, all instruments, all 14 intellectual property, all inventory, all investment property (including without limitation 15 securities, all letter-of-credit rights, all liquid assets, all receivables, all records, all causes of 16 action (subject to the condition that OTHC's SLC retains its authority to manage the disposition of 17 this litigation and related litigation, or to transfer the management of the litigation to the Receiver, 18 as set fo1th in the OTHC Board Resolutions authorizing and empowering the SLC, and all 19 supporting obligations and all proceeds from any of the foregoing (collectively "Assets", and all 20 of Defendants' books and records relating thereto, wherever located, as the Receiver deems 21 necessary for OTHC's proper administration; and (3 debts and liabilities of OTHC b. C. Shall collect income from the Assets. Shall preserve and protect the Assets wherever located and incur and pay 24 the expenses necessary and proper to preserve and protect OTHC and its shareholders. 25 d. Shall take possession of OTHC' s bank accounts, wherever located, and 26 receive possession of any money on deposit in said bank accounts, and the receipt by the Receiver 27 for said funds shall discharge said bank from further responsibility for accounting to said account 28 holder for funds for which the Receiver shall give his receipt. -3- ORDER APPOINTING RECEIVER AFTER HEARING AND PRE LIMINARY INJUNCTION

18 e. May, with Court approval following noticed motion, bring or prosecute all 2 proper actions, before any court, board, or other tribunal, to collect monies owed to OTHC, subject 3 to the limitation that OTHC's SLC retains its authority to manage the disposition of this litigation 4 and related litigation, or to transfer the management of the litigation to the Receiver, as set forth in 5 the Board Resolutions authorizing and empowering the SLC. 6 f. May execute and prepare all documents and perform all acts, either in the 7 name of OTHC, as it is applicable, or in the Receiver's own name, which are necessary or 8 incidental to preserving, protecting, managing, and controlling the Assets, although the Receiver 9 must obtain Court approval prior to obtaining any loans or refinancing OTHC's debt. 10 g. May contact each of the accounts receivable debtors of OTHC or third party 11 collection agents of OTHC (together, the "Accounts Receivable Debtors" in order to advise them 12 not to send further accounts receivable payments to OTHC and to instruct the Accounts 13 Receivable Debtors to send any and all payments directly to the Receiver. 14 h. May employ servants, agents, employees, appraisers, guards, clerks, 15 accountants, attorneys, and management consultants to administer OTHC and to protect the 16 Assets, subject to the requirement that any third party property manager hired by the Receiver 17 must be approved by OTHC's secured lenders as set forth in OTHC's loan agreements; to 18 purchase materials, supplies and services and to pay therefore at the usual rate and prices out of 19 funds that shall come into his possession; to pay the reasonable value of said services out of the 20 proceeds of OTHC and its Assets; and that no risk or obligation incurred by said Receiver shall be 21 at personal risk or obligation of the Receiver, but shall be the risk or obligation of the OTHC; May change the locks at OTHC and its real property's common areas; Prohibited Agreements. The Receiver shall not enter into an agreement with any 24 party to this action about the administration of the receivership or about any post-receivership 25 matter Inventory. Within 30 days after qualifying, the Receiver shall file an inventory of 27 all property possessed under this order. The Receiver shall provide a copy of this inventory to 28 OTHC's lenders, Deutsche Bank Trust Company Americas, as Trustee for the Multifamily -4- ORDER APPOINTING RECEIVER AFTER HEARING AND PRELIMINARY INJUNCTION

19 1 Mortgage Pass-Through Certificates Series 2017-KJI 5, and U.S. Bank National Association, as 2 Trustee for the Multifamily Mortgage Pass-Through Certificates Series 2011-Kl 4, by and through 3 their servicers (collectively, "OTHC's lenders", currently represented by the Allen Matkins and 4 Polsinelli law firms Expenditures. The Receiver shall expend money coming into his or her possession 6 to operate and preserve the property and onjy for the purposes authorized in this order. Unless the 7 court orders otherwise, the Receiver shall tq the extent practical hold the balance in interests bearing accounts in accordance with Code of Civil Procedure section Monthly Accounting of Receiver's Income, Expenses, and Fees. a. The Receiver shall each month prepare and serve on the parties and 11 OTHC's lenders, but not file, an accounting of the income and expenses incurred in the 12 administration of the receivership property, including the Receiver's fees and expenses. 13 b. The Receiver may pay the receiver's own fees and expenses only by the 14 following procedures: (1 (2 (3 By serving on all parties a notice of intent to pay to which no objection is served on the Receiver within 20 days of the date the notice is served. By serving and filing a request for interim payment, which the court then approves. By obtaining and filing an agreement among all the parties approving the payment, which the court then approves (4 (5 Management. By filing the Receiver's final accounting and report, which the court then approves. The Receiver shall not reimburse the Receiver for the Receiver's general office administration expenses or overhead without court approval. These expenses include, for example, office supplies and employee payroll, benefits, and taxes. a. The Receiver shall operate the property and take possession of all accounts 26 relating to the property b. The Receiver may: -5- ORDER APPOINTING RECEIVER AFTER HEARING AND PRELIMINARY INJUNCTION

20 C. (1 (2 employ agents, employees, clerks, accountants, and property managers to administer the receivership property subject to the rights of the secured lenders, and subject to the requirement that any third party property manager hired by the Receiver must be approved by OTHC's secured lenders as set forth in OTHC's loan agreements, and purchase materials, supplies, and services reasonably necessary to administer the receivership property. The Receiver may do all the things, and incur the risks and obligations, 7 ordinarily done or incurred by owners of businesses and property similar to that possessed by the 8 Receiver; except the Receiver shall not make any capital improvements to the property without 9 prior Court approval Bank Accounts. The Receiver: a. May establish accounts at any financial institutions insured by an agency of l2 the United States government that are not parties to this proceeding; 13 b. Shall deposit in those accounts funds received in connection with the 14 receivership property; and 15 C. Shall deposit in interest-bearing accounts money not expended for 16 receivership purposes. l d. May use OTHC's Taxpayer Identification Number ('T IN" or "EIN". Court Instructions. The Receiver and the parties may at any time apply to this 19 court for further instructions and orders and for additional powers necessary to enable the Receiver 20 to perfom1 the Receiver's duties properly Insurance. 22 a. The Receiver shall determine upon taking possession of the property 23 whether there is sufficient insurance coverage. 24 b. The Receiver shall notify the insurer that the Receiver is to be named as an 25 additional insured on each insurance policy on OTHC and its prope.rty. 26 C. If the Receiver determines that OTHC does not have sufficient insurance 27 coverage, the Receiver shall immediately notify the parties and shall procure sufficient all-risk and 28 liability insurance on OTHC' s property (excluding earthquake and flood insurance. -6- ORDER APPOINTING RECEIVER AFTER HE ARING AND PRELIMINARY INJUNCTION

21 1 d. If the Receiver does not have sufficient funds to obtain insurance, the 2 Receiver shall seek instructions from the court on whether to obtain insurance and how it is to be 3 paid for Employment of Attorneys. 5 a. The Receiver may employ w1lawful detainer attorneys and eviction services 6 without a court order. 7 b. Before employing counsel not identified in Section 13(a above, the 8 Receiver shall apply to the court for an order. 9 c. Nothing in this Section 13 should be read to conflict with or invalidate the l O Court's ORDER that the OTHC SLC retains its authority to manage the disposition of this 11 litigation and related litigation, or to transfer the management of the litigation to the Receiver, as 12 set forth in the OTHC Board Resolutions authorizing and empowering the SLC Taxpayer ID Numbers. The Receiver may use any federal and state taxpayer 14 identification numbers relating to the property for any lawful purpose Duty To Turn Over Possession. Upon receipt of a copy of a recorded trustee's 16 deed upon foreclosure, the Receiver shall, without further order of the court, turn over possession 17 of the property to the party that successfully recorded the deed Receiver's Final Report and Account and Discharge. a. Motion required. Discharge of the Receiver shall require a Court order upon 20 noticed motion for approval of the Receiver's final report and account and exoneration of the 21 Receiver's bond. 22 b. Time. Not later than 60 days after the receivership terminates, the Receiver 23 shall file, serve, and obtain a hearing date on a motion for discharge and approval of the final 24 report and account. 25 C. Notice. The Receiver shall give notice to all persons of whom the Receiver 26 is aware who have potential claims against the receivership property. 27 d. Contents of motion. The motion to approve the final report and account and 28 for discharge of the Receiver shall contain the following: -7- ORDER APPOINTING RECEIVER AFTER HEARING AND PRELIMINARY INJUNCTION

22 (] (2 Declaration or declarations. A declaration or declarations: (i stating what was done during the receivership, (ii certifying the accuracy of the final accounting, (iii stating the basis for the termination of the receivership (such as foreclosure or reinstatement, and (iv stating the basis for an order for the distribution of any surplus or payment of any deficit. Accounting summary. A summary of the receivership accounting, which shall include (i the total revenues received, (ii the total expenditures identified and enwnerated by major categories, (iii the net amount of any surplus or deficit, and (iv evidence of necessary supporting facts Bankruptcy-Nominal Plaintiff's Duty to Gi"e Notice. The Receiver must obtain 9 court approval prior to :filing for bankruptcy. If any party files an involuntary bankruptcy case IO against OTHC during the receivership, the Nominal Plaintiff shall give notice of the bankruptcy 11 case to the Receiver, to the Court, and to all pa11ics three (3 business days after the day on which 12 Nominal Plaintiff receives notice of the bankruptcy Bankruptcy-Recei\'er's Duties. If the Receiver receives notice that an 14 involuntary bankruptcy has been filed and part of the bankruptcy estate includes property that is 15 the subject of this order, the Receiver shall have the following duties: a. b. Turn over property if no relief from stay will be sought. The Receiver shall immediately contact the Nominal Plaintiff and SLC to determine whether either party intends to move in the bankruptcy court for an order for (I relief from the automatic stay, and (2 relief from the Receiver's obligation to turn over the property ( 11 U.S.C., 543. If neither party intends to make such a motion, the Receiver shall immediately turn over the property to the appropriate entity either to the trustee in bankruptcy if one has been appointed or, if not, to the debtor in possession and otherwise comply with 11 United States Code section 543. Remain in possession pending resolution. If either the ominal Plaintiff or the SLC intends to seek relief immediately from both the automatic stay and the Receiver's obligation to tum over the property, the Receiver may remain in possession and preserve the properly pending the ruling on those motions -8- ORDER APPOINTING RECEIVER AFTER HEARING AND PRELIMINARY INJUNCTION

23 1 2 (1 1 U.S.C., 543(a. The Receiver's authority to preserve the property shall be limited as fo1lows: 3 (1 The Receiver may continue to collect rents and other income; (2 (3 (4 The Receiver may make only those disbursements necessary to preserve and protect the property; The Receiver shall not execute any new leases or other long-term contracts; and The Receiver shall do nothing that would effect a material change in the circumstances of the property. c. Turn over property if no motion for relief is filed within IO days after notice of the bankruptcy. If either the Nominal Plaintiff or the SLC fails to file a motion within l O court days after his or her receipt of notice of the bankruptcy filing, the Receiver shall immediately turn over the property to the appropriate entity--either to the trustee in bankruptcy if one has been appointed or, if not, to the debtor in possession-and otherwise comply with 11 United States Code section 543. d. Retain bankruptcy counsel. The Receiver may petition the court to retain legal counsel to assist the Receiver with issues arising out of the bankruptcy proceedings that affect the receivership. 19. Failure to T urn Over Property. A Receiver who fails to turn over the property in accordance with this order shall not be paid for time and expenses after the date the Receiver should have turned the property over. 20. Preliminary Injunction. The Court ORDERS Defendants to do the following: a. b. Turn over property. Immediately turn over possession of OTHC and its Assets as described above to the Receiver when the appointment becomes effective, including any security deposits, prepaid rent, other rental or lease payments, and funds in property management bank accounts for the property. Turn over related items. Immediately tum over to the Receiver all keys, books, documents, and records relating to the property and advise the Receiver of federal taxpayer identification numbers relating to the property. c. Insurance. (1 Immediately advise the Receiver about the nature and extent of insurance coverage on the property; -9- ORDER APPOINTING RECEIVER AFTER HEARING AND PRELI MIN ARY INJUNCTION

24 (2 Immediately name the Receiver as an additional insured on each insurance policy on the property; and (3 DO NOT cancel, reduce, or modify the insurance coverage. d. Restraints. The Court ORDERS Defendants to refrain from: (1 (2 committing or permitting any waste on the property or any act on the property in violation of law or removing, encumbering, or otherwise disposing of any of the fixtures on the property; demanding, collecting, or in any other way diverting or using any of the rents from the property attributable to OTHC; l l (3 (4 (5 (6 interfering in any manner with the discharge of the Receiver's duties under this order, including by using any voting shares attributable to any Defendant or affiliate of any Defendant to block proposals submitted to the shareholders by the Receiver; filing any petition or declaration of bankruptcy on behalf of OTHC without prior approval from the Court; selling, transferring, disposing, encumbering, or concealing the property without a prior court order; and doing any act that will impair the preservation of the property or plaintiffs interest in the property THE COURT FURTHER ORDERS PLAINTIFF to immediately file a 16 preliminary injunction bond under Code of Civil Procedure section 529 in the amount of: $2, THE COURT FURTHER ORDERS that, immediately upon filing of the 18 Receiver's Oath and Bond, the Receiver shall notice and hold an election for new OTHC board 19 members to replace the current board at the earliest possible date under and in conformity with 20 applicable California law and the OTHC bylaws. The Receiver shall hold this election within four 2 1 months of his appointment. Tf tbe Receiver requires more time to notice and hold the election for 22 any reason, the Receiver may inform the Court of the reason for the delay and request additional 23 time. The Receiver may disqualify candidates in this election as well as current Board members 24 from service based on any failure to comply with the OTHC bylaws, including without limitation 25 failure to meet the requirements of a "Qua[ified Director" as set forth in those bylaws. The 26 Receiver shall notify the Court immediately after the completion of this election, and shall attempt 27 to arrange a conference with the Court at the earliest possible date to consider, in light of the 28 election, whether the Receiver should be terminated and the operation and management of OTHC -10- ORDER APPOINTING RECETVER AFTER HEARING AND PRELIMINARY INJUNCTION

25 returned to OTHC 's Board. An order to show cause as to why the receivership should not be 2 terminated is hereby scheduled for November 6, 2018, I 0:00 a.m. in Dept. 0 of the Santa Monica 3 Courthouse THE COURT FURTHER ORDERS that lhere shall be a 120-day stay on this 5 matter. 6 7 IT IS SO ORDERED. 8 DATED: July I I Hon.LilaHartcoie I 1- ORDER APPOINTING RECEIVER AFTER HEARING AND PRELIMINARY INJUNCTION

26 EXHIBIT B

27 1 SUPERIOR COURT OF THE STATE OF CALIFORNIA 2 FOR THE COUNTY OF LOS ANGELES 3 DEPARTMENT WE-O HON. LISA HART COLE, JUDGE MICHAEL REACH, DERIVATIVELY ON BEHALF 7 OF OCEAN TOWERS HOUSING CORPORATION, 8 9 PLAINTIFF, VS. CASE NO. SC JOHN SPAHI, ET AL., AND DOES 1 14 THROUGH 100, INCLUSIVE, DEFENDANTS REPORTER'S TRANSCRIPT OF PROCEEDINGS 20 WEDNESDAY, SEPTEMBER 6, :10 A.M NANCY K. BRINK, C.S.R. # OFFICIAL REPORTER PRO TEMPORE JOB NO Veritext Legal Solutions

28 63 1 WHAT'S THE CODE SECTION FOR THAT? 2 MR. WITTENBERG: WELL, YOU HAVE THE -- AGAIN, YOU'RE 3 EMPOWERED TO APPOINT SOMEBODY TO WATCH OVER THEM. 4 THE COURT: NO, I DON'T. THAT'S WHAT A RECEIVER IS 5 FOR. IT'S JUST A DIFFERENT WORD. 6 MR. WITTENBERG: WELL, YOU CAN APPOINT -- WELL, SO TO 7 APPOINT A MONITOR, YOU CAN DO IT -- CAN'T YOU APPOINT A 8 COURT MONITOR JUST TO OR CAN YOU ORDER THEM THROUGH AN 9 INJUNCTION YOU HAVE TO HAVE TRANSACTIONS BE APPROVED BY THE 10 COURT, SETTLEMENTS OF U.S. BANK LAWSUITS THE COURT: I DON'T HAVE THAT MOTION IN FRONT OF ME. 12 YOU WELL KNOW THAT I CAN'T ORDER A MANDATORY INJUNCTION IN 13 THE ABSENCE OF COURT TRIAL. 14 MR. WITTENBERG: YOUR HONOR, I'VE GIVEN YOU AN ORDER 15 WITH AN INJUNCTION. I DO THINK YOU HAVE THE INHERENT POWER 16 TO ACT IN THE INTEREST OF JUSTICE. 17 THE COURT: WELL, I APPRECIATE YOUR CONFIDENCE IN THE 18 POWERS THAT I HAVE. 19 MR. WITTENBERG: YOU DO. 20 THE COURT: BUT I DON'T BELIEVE THAT I HAVE THOSE 21 POWERS AND I DON'T INTEND TO OVERREACH MY POWERS. AND I 22 APPRECIATE YOUR CONCERN AND YOUR FRUSTRATION. BUT YOUR 23 FRUSTRATION IS BETTER FOCUSED AT SOMEONE OTHER THAN ME. I 24 WILL TELL YOU THAT QUITE HONESTLY. AND I WOULD THINK THAT 25 WOULD BE A MORE PROFESSIONAL WAY FOR YOU TO CONDUCT 26 YOURSELF. I'VE CLEARLY EXPRESSED MY SUSPICIONS ABOUT THAT. 27 I THINK YOUR FRUSTRATION SHOULD NOT BE FOCUSED ON ME. 28 MR. WITTENBERG: YOUR HONOR, I THINK THAT TRULY LAY Veritext Legal Solutions

29 EXHIBIT C

30 TRANSCRIPT OF PROCEEDINGS - 09/20/2017 Page CASE NUMBER: CASE NAME: SANTA MONICA, CALIFORNIA SC REACH V. SPAHI SEPTEMBER 20, DEPARTMENT 0 HON. LISA HART COLE, JUDGE 5 REPORTER: CYNTHIA E. LAMB, CSR TIME: 10:10 A.M. 7 APPEARANCES: 8 (As heretofore noted THE COURT: All right. Good morning. Call the 11 matter of Reach versus Spahi, SC Would Counsel 12 please state their appearances, starting with Counsel on 13 my left and every time you speak, please identify 14 yourself for our court reporter. 15 MR. TAITELMAN: Good morning, Your Honor. 16 Mike Taitelman representing the Nominal Plaintiff, 17 Michael Reach. 18 MR. WITTENBERG: Good morning, Your Honor. 19 Jeffrey Wittenberg also representing Plaintiff, 20 Michael Reach. 21 MR. ARONSON: Good morning, Your Honor. 22 Seth Aronson, O'Melveny & Myers, on behalf of the Special 23 Litigation Committee. 24 MR. GOLDBERG: Good morning, Your Honor. 25 Steven Goldberg, Manatt, Phelps & Phillips representing 26 the Nominal Defendant, Ocean Towers. 27 MR. ALTMAN: Good morning, Your Honor. 28 Jonathan Altman of Munger, Tolles & Olson for Defendants, DTI Court Reporting Solutions - Woodland Hills

31 TRANSCRIPT OF PROCEEDINGS - 09/20/2017 Page 19 1 have seen -- they have, you know, resigned and appointed 2 and resigned and appointed many different Directors. 3 So we could, perhaps, gets a court Order 4 appointing somebody that -- perhaps Mr. Altman who is 5 somebody who is a strong advocate for his client but I 6 found reasonable to deal with and he and I could perhaps 7 jointly work to select that person THE COURT: High praise, indeed, Mr. Altman. MR. ALTMAN: I am flattered, Your Honor. THE COURT: Let's let him finish, then. 11 MR. WITTENBERG: Yeah. So just to select somebody 12 to become a Board member, if we find one willing who will 13 work for the interests without conflict and be a Board 14 Member and still have the injunction, of course, but that 15 would be part of the Board. 16 THE COURT: Well -- I am sorry, Mr. Altman? 17 MR. ALTMAN: I was just going to say we have to that power to appoint a Board Member, I am not sure about 19 whether that exists. 20 It sounds to me like we would -- both 21 Mr. Wittenberg and the Defendants would have their hands 22 full and have some work to do to come to an agreement. 23 But I think we can probably come pretty close 24 and present the Court with a -- if there is a dispute 25 a fairly narrowly-tailored dispute that the Court can say 26 that or that. And that is what I think makes the most 27 sense as I am listening to the Court today. 28 THE COURT: Well, some of the points that DTI Court Reporting Solutions - Woodland Hills

32 TRANSCRIPT OF PROCEEDINGS - 09/20/2017 Page 20 1 Mr. Brunsten made, which I thought were good points with 2 regard to the injunction, would be something along the 3 lines of -- and I don't remember it specifically -- but 4 something along the lines of severing of actions need to 5 be reviewed by the Court or someone 6 MR. ALTMAN: We propose that. 7 THE COURT: Yeah, and also that the Board Members 8 and the Defendants in this case not participate in the 9 buying or selling of any property during the period. 10 Those were two that stood out to me as being 11 most profound. And then, you know, an ancillary issue and I have mentioned this to you, Mr. Wittenberg, today 13 earlier and I think we have discussed it before, I 14 apologize if we haven't -- is at some point down the 15 line, if you want to call it for a special election, I 16 think that that would be the only way that the Board 17 Members who are of concern and if your analysis is 18 correct and the allegations you have made in previous 19 documents, not in the ones filed today is true, and the 20 allegation you made specifically is that the homeowners 21 are afraid of these people and they are afraid to cross 22 them, you know, maybe a special election with new, 23 independent Board Members world be successful. 24 I agree with Mr. Altman and I nodded my head 25 when he said it, I don't know that I have the authority 26 to change the Constitution of the Board at this juncture 27 but that is something that I would leave to you to 28 consider as a group. DTI Court Reporting Solutions - Woodland Hills

33 EXHIBIT D

34 Transcript of Proceedings Page1 1 SUPERIOR COURT OF THE STATE OF CALIFORNIA 1 APPEARANCES - CONTINUED: 2 FOR THE COUNTY OF LOS ANGELES 2 FOR DEFENDANT ORLANDO: Reach vs. Spahi, et al. 3 DEPARTMENT O HON. LISA HART COLE, JUDGE 3 LAW OFFICES OF WILLIAM S. BRUNSTEN, PC 4 BY: WILLIAMS. BRUNSTEN 5 MICHAEL REACH, DERIVATIVELY ON SC BEHALF OF OCEAN TOWERS HOUSING 6 CORPORATION, AND RELATED CASE 7 8 ' SC NOMINAL PLAINTIFF, vs. JOHN SP.AH!, ET AL., DEFENDANTS, AND OCEAN TOWERS HOUSING CORPORATION, A CALIFORNIA CORPORATION, NOMINAL DEFENDANT OLYMPIC BOULEVARD, SUITE 300 LOS ANGELES, CALIFORNIA ( FOR DEFENDANTS YOSHIKAWA, INCAUDO, AND AMBROSE: 7 LAW OFFICES OF RODNEY T. LEWIN BY: RODNEY T. LEWIN WILSHIRE BOULEVARD, SUITE 210 BEVERLY HILLS, CALIFORNIA ( FOR DEFENDANTS ALEVIZOS AND STEIN: 11 MUNGER, TOLLES & OLSON, LLP BY: JONATHAN E. ALTMAN SOUTH GRAND AVENUE, 50TH FLOOR LOS ANGELES, CALIFORNIA ( FOR DEFENDANT JOHN SPAHI: 15!RELL & MAN'ELLA, LLP BY: DAVID SIEGEL 16 CRAIG VARNEN AVENUE OF THE STARS, SUITE LOS ANGELES, CALIFORNIA REPORTER'S TRANSCRIPT OF PROCEEDINGS FRIDAY, MARCH 9, FOR THE SPECIAL LITIGATION COMMITTEE: 19 APPEARANCES: 20 FOR PLAINTIFF: WITTENBERG LAW, APC " O'MELVENY & MYERS, LLP BY: JEFFREY WITTENBERG 20 BY: SETH ARONSON WILSHIRE BOULEVARD, 12TH FLOOR MICHELLE C. LEU SANTA MONICA, CALIFORNIA SOUTH HOPE STREET 22 ( LOS ANGELES, CALIFORNIA MILLER BARONDESS, LLP BY: JAMES GOLDMAN 23 FOR NOMINAL DEFENDANT OCEAN TOWERS: 1999 AVENUE OF THE STARS, SUITE MANATT, PHELPS & PHILLIPS, LLP LOS ANGELES, CALIFORNIA BY: STEVEN M. GOLDBERG 25 ( WEST OLYMPIC BOULEVARD 26 (APPEARANCES CONTINUE ON FOLLOWING PAGE LOS ANGELES, CALIFORNIA REPORTED BY: JOSIANE B. GOLDMAN, CSR OFFICIAL REPORTER PRO TEMPORE Job No Page3 Page4 1 CASE NUMBER: SC ALEVIZOS AND SHELDON STEIN. 2 CASENAME: REACH VS. SPAHI 2 MR. VARNEN: GOOD MORNING. YOUR HONOR. CRAJG 3 SANTA MONICA, CALIFORNIA FRIDAY, MARCH VARNEN OF IRELL & MANELLA ON BEHALF OF DEFENDANT JOHN 4 DEPARTMENT O HON. LISA HART COLE. JUDGE 4 SPAHI. 5 REPORTER: JOSIANE GOLDMAN, CSR NO THE COURT: REALLY? 6 TIME: 9:52 A.M. 6 MR. SIEGEL: GOOD MORNING, YOUR HONOR. DAVID 7 APPEARANCES: AS HERETOFORE NOTED 7 SIEGEL OF IRELL & MANELLA FOR JOHN SPAHI. 8 8 THE COURT: REALLY? 9 9 MR. LEWIN: GOOD MORNING. RODNEY LEWIN APPEARING FOR DEFENDANTS YOSHIKAWA, AMBROSE, AND INCAUDO. 11 THE COURT: GOOD MORNING. I'll CALL THE MATTER 11 MR. BRUNSTEN: GOOD MORNING, YOUR HONOR. WILLIAM 12 OF REACH VERSUS SPAHI. SC AND IF COUNSEL 12 BRUNSTEN APPEARING FOR DEFENDANT JOSEPH ORLANDO. 13 WOULD BE KIND ENOUGH TO STAND IN A ROW SO THAT THE COURT 13 MR. GOLDBERG: GOOD MORNING, YOUR HONOR. STEVEN 14 REPORTER FROM CAN IDENTIFY WHO YOU ARE. AND IF YOU 14 GOLDBERG, MANATT, PHELPS & PHILLIPS, FOR OCEAN TOWERS AS 15 MENTION YOUR NAME BEFORE YOU SPEAK, THAT WOULD BE VERY 15 NOMINAL DEFENDANT IN THE DERIVATIVE ACTION. 16 HELPFUL TO HER. ALL RIGHT. DON'T BE SHY. 16 THE COURT: MR. SIEGEL, l'm ACTUALLY A LITTLE 17 MR. WITTENBERG: GOOD MORNING. YOUR HONOR. 17 SURPRISED TO SEE YOU HERE, BASED ON lhe REPORT THAT I 18 JEFFREY WITTENBERG FOR NOMINAL PLAINTIFF MICHAEL REACH. 18 RECEIVED FROM MR. BRUNSTEN, BUT - 19 MR. GOLDMAN: GOOD MORNING, YOUR HONOR. JAMES 19 MR. SIEGEL: GOOD MORNING. WE HOPE TO - 20 GOLDMAN FOR MR. REACH. 20 THE COURT: I DIDN'T KNOW YOU WERE DOING PRO BONO 21 MS. LEU: GOOD MORNING, YOUR HONOR. MICHELLE 21 WORKNOW. 22 LEU, O'MELVENY & MYERS, FOR OCEAN TOWERS SPECIAL 22 MR. SIEGEL: WE HOPE NOT TO. I DON'T PLAN TO, 23 LITIGATION COMMITTEE. 23 YOUR HONOR. 24 MR. ARONSON: GOOD MORNING. YOUR HONOR. SETH 24 THE COURT: WELL, I GUESS THAT REMAINS TO BE 25 ARONSON OF O'MELVENY & MYERS FOR THE SPECIAL LITIGATION 25 SEEN, DOESN'T IT? 26 COMMITTEE. 26 MR. SIEGEL: YES. AND WE HOPE TO HELP BRING THIS 27 MR. ALTMAN: GOOD MORNING, YOUR HONOR. JONATHAN 27 TO AN EFFICIENT AND REASONABLE CONCLUSION. IT SEEMS TO 28 ALTMAN OF MUNGER, TOLLES & OLSON FOR DEFENDANTS PETER 28 HAVE GONE ON A LONG TIME. Page2 Page 1.. 4

35 Transcript of Proceedings Page29 1 NAIVETE IN TiiESE AREAS IS A LITTLE EXTREME. TELL ME WHY 1 INFORMATION FROM THE BOARD MEMBERS ONL Y7 Reach vs. Spahi, et al. 2 YOU DON'T KNOW ANYTHING ABOUT ANYTHING WITH REGARD TO 2 MR. GOLDBERG: I -AS FOR MR. ORLANDO, THERE IS 3 OCEAN TOWERS. CAN YOU EXPLAIN THAT TO ME? 3 NO PL.ACE ELSE I CAN GET THE INFORMATION. THERE IS NO 4 MR. GOLDBERG: I DO KNOW CERTAIN THINGS, BUT 4 INDEPENDENT PERSON WHO'S GOING TO PROVIDE. AND, YES, 5 EVERYTHING COMES FUNNELED VIA THE PARTIES. MY MANDATE 5 YOU DID ORDER THE REPORT, AND MR. BRUNSTEN ASSUMED THE 6 IS TO REPRESENT THE CORPORATION AND THE BEST INTEREST OF 6 RESPONSIBILITY OF GETTING THAT INFORMATION FROM 7 THE SHAREHOLDERS, BUT ALL OF MY INFORMATION COMES FROM 7 MR. ORLANDO AND PRESENTING IT. I HAVE NO REASON TO 8 PARTIES WHO ARE REPRESENTED ALREADY WHO HAVE THEIR OWN 8 BELIEVE THAT INFORMATION IS CORRECT. 9 ATTORNEY. 9 THE COURT: WELL, I APPRECIATED TiiATYOU HAVE A 10 THE COURT: WELL, HAVE YOU SOUGHT INFORMATION? 10 MOTION TO BE RELIEVED AS COUNSEL SET NEXT MONTH. SO 11 MR. GOLDBERG: BASICALLY, WHAT I KNOW BY 11 MAYBE YOU FEEL THAT YOU'RE ON YOUR WAY OUT AND YOU DON'T 12 DEFINITION, IS FROM THE PEOPLE WHO ARE ALREADY TiiERE. 12 WANT THE DOOR TO HIT YOU AS YOU LEAVE, BUT l'm A LITTLE 13 THE COURT: HAVE YOU SOUGHT INFORMATION FROM 13 DISAPPOINTED, TO BE QUITE HONEST. I MEAN, JUST BECAUSE 14 ANYBODY ELSE? 14 MR. BRUNSTEN - 15 MR. GOLDBERG: l've GOT INFORMATION FROM ALL 15 MR. GOLDBERG: YEAH, I UNDERSTAND THAT, YOUR 16 COUNSEL. SOME OF IT - BUT ANYTHING THAT l'm AUTHORIZED 16 HONOR, AND I HAVE ETHICAL PROHIBITIONS AGAINST SAYING 17 TO DISCLOSE HAS BEEN DISCLOSED BY COUNSEL ALREADY. 17 FURTHER. Page30 18 MR. SIEGEL: YOUR HONOR - 18 MR. ARONSON: YOUR HONOR, MAY I BE HEARD? 19 THE COURT: HOLD ON A SECOND. l'm NOT ACTUALLY 19 THE COURT: YES. 20 NOT QUITE THROUGH WITH MR GOLDBERG. 20 MR. ARONSON: SETH ARONSON. I SAW THE PAPERS 21 SO YOUR OBLIGATION IS TO THE CORPORATION AND TO 21 THAT MANATT FILED TO BE RELIEVED AS COUNSEL. WE HAVE 22 THE SHAREHOLDERS. I SPECIFICALLY ASKED THE FEMALE 22 NOTHING TO DO WITH THAT, BUT I QUESTION HOW A 23 PARTNER WHO WAS ON LAST TIME FOR A REPORT, AND I DIDN'T 23 CORPORATION CAN GO WITHOUT COUNSEL. I DID NOT SEE ANY 24 GET ONE. WHAT I GOT WAS SOMETHING THROUGH MR. ORLANDO. 24 RECOMMENDATION OR SUGGESTION THAT NEW COUNSEL BE PUT IN. 25 DO YOU FEEL THAT THERE'S AN INDEPENDENT 25 A CORPORATION CANNOT BE IN PRO PER. 1rs NOT A PER, NOT 26 OBLIGATION ON BEHALF OF COUNSEL FOR THE CORPORATION, THE 26 A PERSON. SO--AND 1rs BEEN AWHILE SINCE l've LOOKED 27 SHAREHOLDERS, TO LOOK OUT FOR THE BEST INTEREST OF THE 27 AT THIS STATE LAW ISSUE, BUT I THOUGHT IT WOULD RESULT 28 CORPORATION AND THE SHAREHOLDERS AND RELY EXCLUSIVELY ON 28 IN A DEFAULT IF THE CORPORATION WENT UNREPRESENTED BY Page31 Page32 1 COUNSEL. SO I RAISE THAT ISSUE NOW. 1 THESE PEOPLE WERE ELECTED INITIALLY, KNOWING THEY WERE 2 MR. GOLDBERG: IF MY MOTION IS GRANTED, OF COURSE 2 ELECTED- 3 THE CORPORATION HAS TO HIRE NEW COUNSEL. 3 (SIMULTANEOUS SPEAKERS 4 MR. WITTENBERG: WHICH GIVES US MORE COST. AND 4 MR. WITTENBERG: THEY WEREN'T ELECTED. FROM -- 5 THERE WOULDN'T BE A DEFAULT. THEY'RE THE REAL PLAINTIFF 5 THAT'S WHAT l'm TELLING YOU, THERE'S EVIDENCE TO THAT. 6 IN TiilS CASE, YOUR HONOR. TiiERE'S NO DEFAULT. BUT THEY 6 THE COURT: THEY'RE BUDDIES. HOLD ON A SECOND. 7 DO NEED INDEPENDENT COUNSEL, WHICH THEY'VE NEVER HAD, 7 EXCUSE ME. EXCUSE ME. EXCUSE ME. I APPRECIATE YOUR B NOW ADMITTED, AND WE NEED TO FIGURE IT OUT. WHY DOES IT 8 ENTHUSIASM. THANK YOU VERY MUCH FOR IT. LET'S MAINTAIN 9 COME BACK TO THERE'S NO DISINTERESTED BOARD MEMBERS? WE 9 SOME DECORUM, IF WE COULD. 10 NEED SOMEBODY IN CHARGE - 10 MR. WITTENBERG: YOU HAVE AUTHORITY IN 11 THE COURT: COUNSEL, I AGREE WITH YOU. 11 MR. ALTMAN, IN MR. BRUNSTEN. THEY'VE ALL SAID SO. 12 MR. WITTENBERG: SO CAN WE DO THIS? LET ME 12 MR. LEWIN. IT'S CALLED THE LESSER REMEDY OF THE 13 PROPOSE THIS. I KNOW YOU'RE HESITANT TO DO A RECEIVER. 13 RECEIVER. YOU CAN DO IT. 14 EVEN THOUGH NOW THAT THEY'RE INSOLVENT ON THIS PUBLIC 14 THE COURT: WELL, YOU DO - I DON'T UNDERSTAND 15 RECORD, EVEN IF THEY PAY 250, THEY OWE ANOTHER 500 TO 15 WHAT A LESSER REMEDY OF A RECEIVER IS. 16 THESE OTHER GENTLEMEN. TiiE BANK CAN COME IN AT ANY 16 MR. WITTENBERG: IT IS - THIS IS THE LAW ON A 17 TIME, BECAUSE THEY'RE ALREADY IN BREACH OF THAT LOAN 17 RECEIVER: THE COURTS SAY IT IS A DRASTIC REMEDY, BUT IN 18 AGREEMENT BECAUSE THEY'RE INSOLVENT. WHAT ARE THEY 18 CERTAIN CIRCUMSTANCES, IT IS NOT. HOWEVER. IF THERE'S 19 TELLING THE LENDER? ARE THEY BEING HONEST, OR ARE THEY 19 SOMETHING LESS THAN A RECEIVER, ANYTHING, AN INJUNCTION, 20 DECEIVING THE LENDER, GIVING RISE TO MORE ADVERSE ACTION 20 ANYTHING LESS THAN A RECEIVER THAT YOU CAN DO, YOU 21 AGAINST THE H.O.A 21 SHOULD DO IT. THIS IS CALLED A MANDATORY INJUNCTION TO 22 THE THING TO DO IS GET AHEAD OF THE ISSUE, AND IF 22 DO AN ELECTION. IT IS LESS THAN A RECEIVER. 23 YOU DON'T WANT TO APPOINT A RECEIVER, OKAY. WHY DON'T 23 THE COURT: WHY DON'T WE DO THIS, WHY DON'T WE 24 WE GO Willi OUR SECOND PROPOSAL. LErs ORDER AN ELECTION 24 NOTICE THAT FOR A COUPLE OF WEEKS, AND - 25 IMMEDIATELY WHERE THE CURRENT BOARD MEMBERS CANNOT RUN 25 MR. WITTENBERG: LErS DO IT. 26 OR VOTE THEIR SHARES. WHY IS THAT LAUGHABLE? 28 THE COURT: COUNSEL CAN NOTICE A LESSER REMEDY - 27 THE COURT: WELL, BECAUSE l'm NOT SURE I CAN SAY 27 MR. SIEGEL: A MOTION TO CALL AN ELECTION? 28 THAT PEOPLE CAN'T RUN. IF THEY'RE NOMINATED - I MEAN, 28 THE COURT: - THAN A RECEIVER. WHATEVER HE'S Page

36 Transcript of Proceedings Reach vs. Spahi, et al. Page33 1 GOING TO DO, EITHER- HE HAD ANOTHER ISSUE THAT WAS 1 MR. SIEGEL: WELL, I THINK EVERYONE SHOULD BE 2 RAISED IN HIS PAPERWORK. WHICH WAS THE APPOINTMENT OF A 2 CONCERNED ABOUT THE PEOPLE'S MONEY. 3 MANAGER. 3 THE COURT: I THINK WE ALWAYS HAVE BEEN. 4 MR. WITTENBERG: CORRECT. 4 MR. SIEGEL: I APPRECIATE THE COURT CERTAINLY HAS 5 THE COURT: AND - TO MANAGE THE FINANCES. AND 5 MADE THAT CLEAR TODAY IN YOUR HONOR'S APPROACH. THE 6 THAT WAS NOT A BAD IDEA EITHER, BUT I CAN'T DO THESE 8 BOARD WILL HAVE TO HAVE AN ELECTION SHORTLY. ITS DUE. 7 THINGS WITHOUT PROPER NOTICE TO THE OTHER SIDE, AND 7 I UNDERSTAND THAT. I BELIEVE THAT THE BOARD UNDERSTANDS 8 THERE WAS NO PROPER NOTICE TO THE OTHER SIDE. 8 THAT AND THAT, IN COMPLIANCE WITH THE INJUNCTION, ANY 9 MR. SIEGEL: YOUR HONOR, THIS IS EXACTLY HOW WE 9 NOTICE HAS TO BE APPROVED BY THE S.L.C. 10 FIND OURSELVES, I THINK, IN THIS SITUATION WHERE THERE'S 10 THE COURT: I THINK THEY WOULD APPROVE THAT. 11 LOTS OF MONEY BEING SPENT AGAIN ON MORE LAWYERS, MORE 11 MR. SIEGEL: BUT IT HAS TO BE WRITTEN AND SHARED 12 MOTIONS. I APPRECIATE THERE NEEDS TO BE AN ELECTION OF 12 WITH THEM. 13 THE BOARD. 13 THE COURT: WELL, SOMEBODY HAS TO DO IT, BECAUSE 14 THE COURT: WELL, THERE IS ANOTHER OPTION THAT 14 IF 1rs 15 MONTHS-AND MY MATH ISN'T GREAT, BUT YOUR CLIENT COULD ACTUALLY, DO AND OTHER PEOPLE WHO 15 MONTHS IS THIS MONTH. 18 MIGHT BE ASSOCIATED WITH YOUR CLIENT, AND THAT IS TO 16 MR. SIEGEL: CORRECT. IT'S GOING - 17 WITHDRAW. 17 THE COURT: THE NOTICE SHOULD HAVE COME OUT LAST 18 MR. SIEGEL: WE UNDERSTAND. 18 MONTH. 19 THE COURT: AND IF THAT IS DONE, THEN THAT WOULD 19 MR. SIEGEL: CORRECT. I DID WANT 20 BE A VERY INEXPENSIVE RESOLUTION. SO I APPRECIATE YOU 20 THE COURT: BUT THE BOARD DIDN'T DO THAT. 21 BEING CONCERNED ABOUT THE FEES. IF YOU'RE TRULY 21 MR. SIEGEL: AND THIS WILL MAKE ME CERTAINLY 22 CONCERNED ABOUT THE FEES, MR. SPAHI AND THOSE ASSOCIATED 22 UNPOPULAR AMONG THE FEW OWNERS HERE, BUT I DO NEED TO 23 WITH MR. SPAHI CAN RESIGN, AND I THINK THAT WOULD 23 NOTE ON THE RECORD THAT THERE HAVE BEEN ELECTIONS FOR 24 RESOLVE MANY, MANY ISSUES THAT THIS BOARD HAS. 24 MANY YEARS. ALL HAVE BEEN CHALLENGED. 25 MR. SIEGEL: I UNDERSTAND AND APPRECIATE THAT 25 THE COURT: l'm AWARE OF THAT. 26 THATS AN ALTERNATIVE AS WELL, YOUR HONOR. 26 MR. SIEGEL: ALL HAVE BEEN CHALLENGED, AND ALL - 27 THE COURT: WELL, IF YOU'RE CONCERNED ABOUT 27 AS A RESULT OF THE THOSE CHALLENGES, AND AT EXPENSE TO Page34 28 MONEY, THATS WHAT I WAS ADDRESSING. 28 THE HOMEOWNERS, HAVE BEEN SUPERVISED BY STATE SUPERIOR 1 COURT JUDGES - Page35 1 Page36 WOULD RESIGN AND AGREE NOT TO RUN AGAIN, THEN I WOULD BE 2 THE COURT: I APPRECIATE THAT. 2 VERY HAPPY TO REVISIT THIS ISSUE. 3 MR. SIEGEL: - WHO HAVE CERTIFIED THE ELECTION 3 MR. BRUNSTEN: YOUR HONOR, ALONG THE LINES OF 4 RESULT. FIRST JUDGE-- 4 MR. ALTMAN'S STATEMENT, PERHAPS COUNSEL CAN TALK AND 5 THE COURT: COUNSEL, WE'VE BEEN THERE. YOU'RE 5 COME BACK, BECAUSE WE COULD SAVE A LOT OF MONEY AVOIDING 6 NEW, BUT WE ALL KNOW THAT, AND THATS WHY I SAID THAT 6 A COMPLEX MOTION FOR A MANDATORY INJUNCTION IF AT LEAST 7 THEY WERE ELECTED. SO I DON'T DISAGREE WITH YOU. BUT 7 ALL THE PARTIES WOULD STIPULATE WE'RE GOING TO HAVE AN 8 IF YOU REALLY DO WANT TO SAVE MONEY, RESIGNATIONS WOULD 8 ELECTION. 9 BE VERY HELPFUL. 9 THE COURT: THAT'S WHAT I JUST - WELL, l'm NOT 10 COUNSEL? MR. ALTMAN. 10 SURE l'm HAPPY WITH THAT. TELL YOU WHAT, WHY DON'T YOU 11 MR. ALTMAN: JONATHAN ALTMAN. YOUR HONOR, LET ME TAKE MY VERDICT, AND WHY DON'T YOU ALL GO - IF 12 MR. ALEVIZOS AND MR. STEIN AGREE WITH YOU ON THE 12 YOU HAVE A FEW MINUTES, WE CAN GO BACK INTO THE JURY 13 RESIGNATION ISSUE. MR. ALEVIZOS HAS, IN FACT, ASKED 13 ROOM AND CHAT ABOUT THIS AND SEE IF WE CAN BROKER A DEAL 14 MR. SPAHI TO STEP DOWN. I THINK THAT IS THE BEST WAY TO 14 ON THAT. 15 SAVE MONEY. 15 MR. SIEGEL: YOUR HONOR, WE'RE NOT GOING TO BE 16 THE ONE THING l'm WONDERING ABOUT IS, I THINK 16 ABLE TODAY TO STIPULATE THAT OWNERS IN THE CORPORATION 17 MR. WITTENBERG HAS DONE A LOT OF GOOD IN THIS CASE, I 17 CAN'T RUN OR PROMOTE A CANDIDATE, AND I DON'T THINK- I 18 THINK THERE'S NO QUESTION, BUT HE'S A VERY AGGRESSIVE 18 THINK THE COURT HAD IT RIGHT. I DON'T THINK THE COURT 19 LAWYER, WHICH IS GOOD, BUT IT DOES END UP COSTING A LOT 19 IS GOING TO INTERFERE WITH THAT FUNDAMENTAL RIGHT IN ANY 20 OF MONEY, BECAUSE EVERY TIME HE MOVES, FOR INSTANCE, 20 CORPORATION. THEY MAY - 21 WITH THE RECEIVER, THERE WAS A STRONG FEELING WITH THE 21 THE COURT: COUNSEL, I - HOLD ON A SECOND. 22 BOARD THAT A RECEIVER WOULD BE CATASTROPHIC AND COST A 22 MR. SIEGEL: -- ULTIMATELY AGREE, BUT I CAN'T 23 HUGE AMOUNT OF MONEY TO OPPOSE. NOW HE'S GOT ANOTHER- 23 REPRESENT THAT. 24 l'm WONDERING IF WE MIGHT COME BACK FOR A STATUS 24 THE COURT: I AGREE WITH YOU. YOU WERE THE ONE 25 CONFERENCE IN TWO OR THREE WEEKS ON THIS ELECTION ISSUE. 25 THAT WAS CONCERNED, AND YOU RAISED THE ISSUE OF MONEY 26 THE COURT: IF THERE'S A POSSIBILITY - IF 26 BEING SPENT ON LEGAL FEES PURSUANT TO MR. WITTENBERG'S 27 THERE'S A POSSIBILITY AND IF YOU'RE TELLING ME THAT 27 SUGGESTION, AND I WAS GIVING YOU A VERY CHEAP 28 THERE IS THE POSSIBILITY THAT CERTAIN BOARD MEMBERS 28 ALTERNATIVE TO THAT SUGGESTION. Page

37 EXHIBIT E

38 Transcript of Proceedings March 23, CASE NUMBER: 2 CASE NAME: SC REACH VS. SPAHI 3 SANTA MONICA, CALIFORNIA FRIDAY, MARCH 23, DEPARTMENT 0 HON. LISA HART COLE, JUDGE 5 REPORTER: HEATHER PITVOREC, CSR NO TIME: 1:46 P.M. 7 APPEARANCES: AS HERETOFORE NOTED 8 9 *** THE COURT: LET'S GO ON THE RECORD IN THE CASE 12 OF REACH VS. SPAHI, SC COUNSEL, PLEASE STATE THEIR APPEARANCES. 14 MR. WITTENBERG: GOOD AFTERNOON. JEFFREY 15 WITTENBERG FOR NOMINAL PLAINTIFF MICHAEL REACH. 16 MR. GOLDMAN: GOOD AFTERNOON, YOUR HONOR. 17 JAMES GOLDMAN OF MILLER BARONDESS FOR PLAINTIFF MICHAEL 18 REACH, NOMINAL PLAINTIFF. 19 MS. LEU: GOOD AFTERNOON, YOUR HONOR. 20 MICHELLE LEU FROM O'MELVENY & MYERS FOR SPECIAL 21 LITIGATION COMMITTEE OF OCEAN TOWERS. 22 MR. LAVAEE: GOOD AFTERNOON, YOUR HONOR. 23 MICHAEL LAVAEE FOR DIRECTORS YOSHIKAWA, INCAUDO, AND 24 AMBROSE. 25 MR. VARNEN: GOOD AFTERNOON, YOUR HONOR. 26 CRAIG VARNEN OF IRELL & MANELLA ON BEHALF OF DEFENDANT 27 JOHN SPAHI. 28 MR. ALTMAN: GOOD AFTERNOON, YOUR HONOR. U.S. Legal Support I 1

39 Transcript of Proceedings March 23, NOTICED OPEN MEETING OF THE BOARD. TABULATION RESULTS 2 OF THE ELECTION SHALL PROMPTLY BE REPORTED AND SHALL BE 3 RECORDED IN THE MINUTES OF THE NEXT BOARD MEETING. 4 SO WE CAN'T JUST SAY BY ACCLAMATION IT'S OKAY. 5 THIS FIAT -- 6 THE COURT: THANK YOU. 7 MR. WITTENBERG: AND LASTLY -- SORRY. THEIR 8 ELECTION PROCEDURES SAY THERE'S THREE UP FOR ELECTION 9 IN EVERY ODD-NUMBERED YEAR, AND FOUR UP FOR ELECTION IN 10 EVERY EVEN-NUMBERED YEAR. 11 WE'VE HEARD FROM COUNSEL THERE IS THREE UP 12 THIS YEAR, AND THERE WERE THREE UP LAST YEAR. THAT'S 13 SIX. WHERE IS THE SEVENTH? NONE OF THIS MAKES SENSE, 14 AND I KNOW IT 1 S HARD FOR YOU BECAUSE YOU DON'T HAVE ALL 15 OF THIS IN FRONT OF YOU, BUT I KEEP TELLING YOU, AND I 16 JUST LAY IT OUT THERE. AND I'M TRYING MY BEST. 17 THE COURT : I APPRECIATE YOU TELLING ME. I 18 LIKE KNOWING WHAT'S GOING ON. I DO NOT FEEL THAT IT 19 IS, EVEN IF I HAD THE JURISDICTION TO INTERFERE WITH AN 20 ELECTION, WHICH I WOULD PERSONALLY HAVE TO RESEARCH AND 21 CERTAINLY HAVE IT BRIEFED, I DON ' T REALLY FEEL IT WOULD 22 BE APPROPRIATE AT THIS JUNCTURE, AND I MEAN TODAY, FOR 23 ME TO INTERFERE. 24 MR. WITTENBERG, YOU NEED TO BEHAVE 25 PROFESSIONALLY. IF YOU'RE THAT UPSET WITH ME, YOU 26 SHOULD STEP OUTSIDE. 27 MR. WITTENBERG: I JUST FEEL LIKE YOU'RE GOING 28 TO SAY YOU'RE GOING TO LEAVE THINGS AS IS. BUT CAN'T U.S. Legal Support I 29

40 EXHIBIT F

41 Transcript of Proceedings Reach vs. Spahi, et al. 1 SUPERIOR COURT OF THE STATE OF CALIFORNIA 2 FOR THE COUNTY OF LOS ANGELES - SPRING STREET COURTHOUSE 3 DEPARTMENT NO. 9 HON. LISA HART COLE, JUDGE 4 5 MICHAEL REACH, DERIVATIVELY ON BEHALF OF OCEAN TOWERS 6 HOUSING CORPORATION, 7 Plaintiff, 8 vs. CASE NO. SC (Related to SS JOSEPH SPAHI, ET AL., 10 Defendants. 11 OCEAN TOWERS HOUSING 12 CORPORATION, a California Corporation, 13 Nominal Defendant REPORTER'S TRANSCRIPT OF PROCEEDINGS 17 TELEPHONIC HEARING 18 Wednesday, June 6, (ALL APPEARANCES VIA CONFERENCE CALL HON. LISA HART COLE, JUDGE 312 South Spring Street Department No. 9 Los Angeles, California (APPEARANCES CONTINUED ON NEXT PAGE. 26 Reported By: 27 DEBORAH L. STOUGH, CSR NO OFFICIAL PRO TEM COURT REPORTER 28 Job No Page 1

42 Transcript of Proceedings Reach vs. Spahi, et al. 1 have an impact on what kind of relief you were going to 2 give and in which case you were going to give it. 3 And so when we pointed that out, that's when 4 you said, your Honor, well, if you think you need that 5 injunctive relief that you're asking for or any other 6 provisional relief, just contact me and we'll set a 7 hearing to talk about that. 8 So the short answer to your question is it was 9 raised in the ex parte application last week, and based 10 on the fact that the SLC report was issued and given its 11 contents and let me just -- in that regard, what I'm 12 going to say now relates to both cases. 13 One of the recommendations of the SLC was that 14 Spahi and Orlando be removed immediately, immediately. 15 They said that word multiple times, and I think 16 they -- the reason why they said that was because -- and 17 Mr. Aronson will obviously correct me if he disagrees, 18 but the SL -- the judges were concerned, given the past 19 conduct of these guys, every day that they're in control 20 of the HOA involves a threat of additional irreparable 21 injury and 22 THE COURT: Under what legal authority can I 23 remove them? 24,~ MR. GOLDMAN : Well, you don' t have to remove 25 them if you grant a receiver. 26 THE COURT : Right. I understand that, but you 27 said that the recommendation was that they be removed 28 immediately. So I'm not aware of any legal mechanism by Page 22

43 Transcript of Proceedings Reach vs. Spahi, et al. 1 which I could go ahead and do that. 2 I am aware that I could enjoin them and issue 3 an injunction ancillary to the appointment of a 4 receiver. 5 MR. GOLDMAN : Your Honor, my point wasn't to 6 ask you to remove them. I agree with you that to remove 7 them on a telephonic conference call would not be 8 appropriate. 9 THE COURT: I don't even know how I could do it 10 on a noticed motion, frankly. 11 MR. GOLDMAN : Well, you don't have that in 12 front of you, but let me just finish. 13 The point was that the SLC made that -- the 14 point was let's think about the reason why the SLC made 15 that recommendation. They made the recommendation 16 because they can't -- these guys cannot be permitted to 17 maintain control through an election process, through 18 their current positions, whatever they are. That's why 19 we need a receiver, and that's why we need to stop the 20 election. 21 (Multiple parties speaking at the same time. 22 THE COURT: Counsel, please do not speak at the 23 same time. 24 MR. VARNEN: Plaintiff has gone on for a while. 25 It's Craig Varnen of Irell & Manella. Is it 26 appropriate -- is it my turn, your Honor? 27 THE COURT: Yes. I think that would be 28 appropriate. Go ahead. Page 23

44 EXHIBIT G

45 Transcript of Proceedings Reach vs. Spahi, et al. 1 SUPERIOR COURT OF THE STATE OF CALIFORNIA 2 COUNTY OF LOS ANGELES, WEST DISTRICT 3 DEPARTMENT WE-0 HON. LISA HART COLE, JUDGE MICHAEL REACH, DERIVATIVELY ON BEHALF OF OCEAN TOWERS HOUSING CORPORATION, 7 PLAINTIFF, 8 VS. CASE NO. SC RELATED TO: SS JOSEPH SPAHI, ET AL., 10 DEFENDANTS. 11 OCEAN TOWERS HOUSING CORPORATION, A 12 CALIFORNIA CORPORATION, 13 NOMINAL DEFENDANT REPORTER'S TRANSCRIPT OF PROCEEDINGS 16 SANTA MONICA, CALIFORNIA 17 JUNE 12, Reported By: 26 NANCY K. BRINK, C.S.R. # OFFICIAL REPORTER PRO TEMPORE 28 JOB NO Page 1

46 Transcript of Proceedings Reach vs. Spahi, et al. 1 YOU COULD DO A PRELIMINARY INiTIJNCTION HEARING ANY NUMBER OF 2 WAYS. YOU COULD DO IT ON THE PAPERS. THERE MAY BE ENOUGH 3 DOCUMENTATION TO GET TO LIKELIHOOD OF SUCCESS ON THE MERITS. 4 THE COURT HAS ALREADY COME VERY CLOSE TO FINDING IRREPARABLE 5 HARM. I'M NOT PROPOSING TO PREJUDGE SUCH A PRELIMINARY 6 INiTIJNCTION MOTION; I'M JUST SAYING IT WOULD BE WITHIN THE 7 S.L.C. 'S AUTHORITY AS HANDLING THE DERIVATIVE CLAIM TO MAKE 8 IT. 9 IF ONE COULD IN A MONTH OR 6 WEEKS HAVE SUCH A 10 HEARING, PUT EVERYONE TO THEIR PROOF, THEN THIS COURT COULD 11 DECIDE WHETHER THEY SHOULD BE REMOVED OR NOT. THAT COULD 12 AVOID THE RECEIVER AND THE PROBLEMS OF A RECEIVER. 13 NOW, I'M NOT GOING TO PRETEND THAT IT'S A 14 PERFECT SOLUTION. WHO KNOWS WHAT CAN OF WORMS YOU OPEN BY 15 DOING SOMETHING LIKE THIS? I DON'T KNOW. I HAVE SOME 16 CONCERNS ABOUT I'M REALLY SPEAKING FOR MY CLIENT, 17 MR. ALEVIZOS. HE HAS SOME CONCERNS ABOUT WHO WOULD BE LEFT 18 ON THE BOARD. BUT IT DOES APPEAR THAT THE BOARD MEMBERS 19 THEN WOULD BE FREE FROM MR. SPAHI'S INFLUENCE. MR. ORLANDO 20 WOULD BE GONE. AND YOU COULD HAVE AN OPERATIONAL BOARD THAT 21 MIGHT BE ABLE TO MANAGE THE BUILDING AND THEN HAVE AN 22 ELECTION. 23 YOU WOULD ALSO BE ENTITLED, I BELIEVE, TO BAR 24 MR. SPAHI FROM RUNNING AGAIN IF YOU ARE SO INCLINED AND IF 25 THE EVIDENCE SHOWED THAT. NOW -- OR SUSPEND HIM FROM 26 RUNNING AGAIN. 27 I THINK YOU COULDN'T REALLY REMOVE HIM UNTIL THE 28 CASE WAS OVER, UNTIL THE DERIVATIVE CLAIM IS OVER AND WE HAD Page 43

47 Transcript of Proceedings Reach vs. Spahi, et al. 1 A DECISION. BUT A SUSPENSION, I THINK, IS WITHIN THE 2 COURT'S ABILITY AND POWER. 3 SO IT SEEMS TO ME THAT'S A -- IF WE'RE WORRIED 4 ABOUT A RECEIVER I'LL BE CANDID. MY CLIENT IS VERY 5 WORRIED FOR SOME OF THE REASONS YOU HEARD. BY THE WAY, HE'S 6 NOT RUNNING AGAIN. HE'S HAD, AS YOU CAN IMAGINE, THE NO 7 PAYING JOB OF BEING ON THIS BOARD OF DIRECTORS IS NOT THE 8 GLORY AND EXCITEMENT THAT HE'D HOPED FOR. 9 WITH THAT BEING SAID. HE'S WORRIED ABOUT THIS. 10 THIS IS ONE POSSIBILITY. I PUT IT BEFORE THE 11 COURT. 12 I KNOW MR. ARONSON AND -- NOBODY IS HERE FROM 13 THE S.L.C. SO I DON'T KNOW IF THEY'RE WILLING TO DO IT. 14 THEY'RE NOT BEING PAID. I MEAN, THERE ARE A LOT OF 15 PROBLEMS. BUT THIS IS A REAL WAY TO GIVE MR. SPAHI HIS 16 MOMENT IN COURT AND, IF IT'S APPROPRIATE, IF THE S.L.C. IS 17 RIGHT, TO GET HIM OFF THE BOARD. 18 THAT'S A SUGGESTION, YOUR HONOR. 19 THE COURT: ALL RIGHT. WELL, THANK YOU. I APPRECIATE 20 THAT. I DID READ YOUR FOOTNOTE MR. ALTMAN: IT'S A VERY LONG VERSION. 22 THE COURT: NO. IT'S GOOD. AND I APPRECIATE THAT. 23 AND I WAS INTRIGUED BY IT. BUT I DON'T THINK IT'S SOMETHING 24 I'M PREPARED TO DO SUA SPONTE. AND YOU'RE SUGGESTING THAT 25 IT'S SOMETHING THAT THE S.L.C. WOULD BE REQUIRED TO 26 INITIATE. I'M NOT SURE THAT THE S.L.C. IS IN A POSITION TO 27 DO MUCH MORE, GIVEN THE CIRCUMSTANCES AND THREATS THAT 28 TRUTHFULLY HAVE BEEN MADE TO THEM AND MANATT, ET CETERA. Page44

48 EXHIBIT H

49 Transcript of Proceedings Reach vs. Spahi, et al. 1 SUPERIOR COURT OF THE STATE OF CALIFORNIA 2 FOR THE COUNTY OF LOS ANGELES 3 4 DEPARTMENT NO. 9 HON. LISA HART COLE, JUDGE 5 6 MICHAEL REACH, DERIVATIVELY ON BEHALF OF OCEAN TOWERS HOUSING 7 CORPORATION, 8 PLAINTIFF, 9 vs. 10 JOHN SPAHI; JOSEPH ORLANDO; JOSEPH INCAUDO; OMAR SPAHI; 11 DOROTHEA SCHIRO; JANET FULADIAN; SEIF ASCAR, INDIVIDUALLY AND AS 12 TRUSTEE OF THE ASCAR FAMILY TRUST, DATED JULY 5, 2012; APEX 13 INVESTMENTS GROUP LTD., D/B/A APEX INVESTMENTS, INC.; CAVOUR 14 PARTNERS LIMITED LLC; ENENSTEIN RIBAKOFF LAVINA & PHAM, A 15 PROFESSIONAL CORPORATION; PATRICK AMBROSE; SHELDON STEIN; 16 KAZOU "KAY" YOSHIKAWA; PETER ALEVIZOS; AND DOES 5 TO 100, 17 INCLUSIVE, 18 DEFENDANTS. 19 AND 20 OCEAN TOWERS HOUSING CORPORATION, A CALIFORNIA 21 CORPORATION. 22 NOMINAL DEFENDANT. 23 CASE NO. SC REPORTER'S TRANSCRIPT OF PROCEEDINGS LOS ANGELES, CA JULY 9, REPORTED BY: CESAR RODRIGUEZ, CSR NO Job No Page 1

50 Transcript of Proceedings Reach vs. Spahi, et al. 1 TO SAY WAS I UNDERSTAND MY RAISED YOUR EYEBROWS. BUT 2 WHAT REALLY SHOULD HAVE RAISED YOUR EYEBROWS -- THIS WOULD 3 HAVE BEEN A MUCH BETTER WAY TO SAY IT. WHAT REALLY SHOULD 4 HAVE RAISED YOUR EYEBROW WAS PLAINTIFF'S SUBMISSION ON FRIDAY 5 -- OR ON THURSDAY, THEIR THURSDAY NIGHT SUBMISSION. BECAUSE 6 WHAT THEIR BRIEF SAYS IN ABSOLUTELY NO UNCERTAIN TERMS IS 7 THAT THE REASON THEY WANT A RECEIVER APPOINTED IS TO GET RID 8 OF THE BOARD AND ELECT A NEW BOARD. 9 THE COURT: COUNSEL, THAT'S REALLY -- I THINK THAT WHAT 10 THEY SAID IN THEIR BRIEF WAS THAT THERE WAS NO METHOD BY 11 WHICH THIS COURT COULD DO THAT. AND THERE ISN'T. AND WE'RE 12 NOT AT THAT POINT YET. THE REAL ISSUE IS BASED ON THIS SLC 13 REPORT, WHICH WAS HIGHLY NEGATIVE TO YOUR CLIENTS, WITH 14 REGARD TO BREACH OF THEIR FIDUCIARY DUTY AS DIRECTORS OF THIS 15 VERY SUBSTANTIAL ASSET. THERE WERE CONSEQUENCES TO THAT. IN 16 RESPONSE TO THAT, WHAT I HEARD FROM YOU IS HOW UNFAIR THE 17 PROCESS WAS. AND I APPRECIATE THAT YOU BELIEVE THAT AND I 18 APPRECIATE THAT MR. ARONSON AND THE SLC CHOSE TO REBUT THE 19 STATEMENTS AND CLARIFY. 20 I'M NOT HERE TO DECIDE WHETHER THE SLC REPORT HAS 21 FLAWS IN IT OR WHETHER IT'S THE PERFECT -- THE PERFECT 22 ANALYSIS OF THE SITUATION. BUT IT IS A PROCESS THAT YOUR 23 CLIENTS, PRIOR TO YOUR ARRIVAL IN THIS ACTION, CHOSE TO 24 PARTICIPATE IN. AND ALTHOUGH THE NOMINAL PLAINTIFF ASKED ME 25 NOT TO STAY THE LITIGATION, IT WAS YOUR SIDE OF THE TABLE AND 26 YOUR CLIENTS WHO REQUESTED THE STAY. 27 SO I'M FOLLOWING PROCEDURE. I'M NOT BIASED FOR 28 OR AGAINST EITHER SIDE. I'M FOLLOWING A PROCEDURE THAT, Page 21

51 Transcript of Proceedings Reach vs. Spahi, et al. 1 ALL OF THIS IS IT DOESN'T DEFINE WHAT THE PROPERTY MEANS. 2 DOES THIS PREVENT THE DEFENDANTS FROM REMODELING THEIR UNITS? 3 DOES IT PREVENT DEFENDANTS FROM SELLING THEIR UNITS? IF 4 MR. SPAHI DRIVES TOO FAST IN THE PARKING LOT, IS HE IN 5 VIOLATION OF THIS INJUNCTION? AGAIN, THIS IS EXTREMELY 6 OVERBROAD INJUNCTION THAT BORDERS ON AN AFFIRMATIVE 7 INJUNCTION. 8 (D (3, IF I'M READING IT CORRECTLY -- I'M GOING 9 TO SAY THAT FOR ALL OF THESE. I'M HAVING TROUBLE DECIPHERING 10 A LOT OF THESE. (D (3, WHICH IS LINES 13 TO TO 14 ON 11 PAGE 10, SEEMS TO PROHIBIT THE DEFENDANTS FROM USING ANY 12 VOTING SHARES ATTRIBUTABLE TO ANY DEFENDANT OR AFFILIATE OR 13 ANY DEFENDANT TO BLOCK PROPOSALS SUBMITTED TO THE 14 SHAREHOLDERS BY THE RECEIVER. IF I ' M READING THAT CORRECTLY, 15 THIS BARS THE DEFENDANTS FROM VOTING AGAINST ANY PROPOSAL 16 SUBMITTED BY THE RECEIVER. THAT SEEMS TO BE A VIOLATION OF 17 THE FIRST AMENDMENT RIGHTS, IT SEEMS TO BE DISENFRANCHISEMENT 18 OF THEIR RIGHT TO SHAREHOLDERS AND PROBABLY OTHER 19 CONSTITUTIONAL VIOLATIONS OF DUE PROCESS. 20 THE COURT : WHY DO YOU THINK THAT MIGHT BE IN THERE? 21 DO YOU HAVE ANY IDEA WHY THAT MIGHT BY IN THERE? 22 MR. ROSEN: YEAH, I DO. BECAUSE MY CLIENTS ARE BEING 23 TREATED AS BEING GUILTY BEFORE THEY'VE HAD A CHANCE TO 24 PRESENT EVIDENCE, YOUR HONOR. THAT'S TRULY HOW I BELIEVE. I 25 BELIEVE IT'S IN THERE. BECAUSE EVERYONE IS ASSUMING THE 26 TRUTH OF THE SLC REPORT, WHICH I PERSONALLY BELIEVE IS AN 27 INADMISSIBLE DOCUMENT. BUT I THINK THAT'S WHY IT'S THERE. 28 THE COURT : DO YOU KNOW THAT THE FACT THAT YOUR CLIENTS Page 29

52 Transcript of Proceedings Reach vs. Spahi, et al. 1 VOTED FOR AN AMENDMENT TO THE BYLAWS TO ALLOW THE SLC TO GO 2 FORWARD, THEN AFTER THE SLC REPORT CAME BACK AS NEGATIVE TO 3 YOUR CLIENTS, THAT YOUR CLIENTS THEN TRIED TO WITHDRAW THE 4 AMENDMENT TO THE BYLAWS? DO YOU THINK THAT MIGHT HAVE 5 ANYTHING TO DO WITH THAT SECTION? 6 MR. ROSEN: IF IT DOES, THEN IT'S TOTALLY WRONG AND 7 UNFAIR. LOOK, I'M NOT A CRIMINAL LAWYER, BUT I'M PRETTY SURE 8 THAT A CRIMINAL DEFENDANT ON TRIAL FOR MASS MURDER HAS THE 9 RIGHT TO VOTE UNTIL HE'S FOUND GUILTY. THIS IS A CIVIL CASE. 10 THE COURT: COUNSEL, LET'S TRY TO AVOID A HYPERBOLE. I 11 UNDERSTAND YOUR OBJECTION. I JUST ASKED IF YOU THOUGHT THAT 12 THAT PARTICULAR ISSUE HAD ANYTHING TO DO WITH THAT PARAGRAPH. 13 MR. ROSEN: AND MY ANSWER IS YES. BUT I THINK IT'S NOT 14 FAIR THAT WE'RE BEING -- THAT THE SLC IS BEING TREATED AS 15 TRUE AND BINDING AND DISPOSITIVE. 16 THE COURT: THANK YOU. I APPRECIATE IT. ANYTHING 17 ELSE? 18 MR. ROSEN: YES. (D (4, STILL ON PAGE 10, LINES THROUGH 16. "RESTRAINS DEFENDANTS FROM FILING ANY PETITION 20 OR DECLARATION OF BANKRUPTCY ON BEHALF OF OTHC." 21 NOW, I'M NOT SURE IF THIS IS REFERRING TO FILING 22 A VOLUNTARY BANKRUPTCY PETITION OR AN INVOLUNTARY BANKRUPTCY 23 PETITION. IF IT'S VOLUNTARY, THAT'S FINE. IF IT'S 24 INVOLUNTARY, I THINK THE CREDITORS OF A CORPORATION HAVE THE 25 RIGHT AT SOME POINT TO PUT A COMPANY IN BANKRUPTCY. 26 THE COURT: WHAT DOES THIS HAVE TO DO WITH YOUR CLIENT? 27 IT'S SAYING YOUR CLIENTS CAN'T, ON BEHALF OF OTHC PUT OTHC 28 INTO BANKRUPTCY. THAT'S WHAT IT SAYS. YOU THINK THAT'S Page 30