Case: HJB Doc #: 3183 Filed: 02/26/16 Desc: Main Document Page 1 of 7 UNITED STATES BANKRUPTCY COURT DISTRICT OF NEW HAMPSHIRE : : :

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1 Case HJB Doc # 3183 Filed 02/26/16 Desc Main Document Page 1 of 7 UNITED STATES BANKRUPTCY COURT DISTRICT OF NEW HAMPSHIRE x In re GT Advanced Technologies Inc., et al., Debtors x Chapter 11 Case No HJB Jointly Administered MOVANTS LIMITED OBJECTION TO DEBTORS AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE, DATED FEBRUARY 1, 2016 Thomas Gutierrez, Richard J. Gaynor, Raja Bal, Daniel Squiller, J. Michal Conaway, Kathleen A. Cote, Ernest L. Godshalk, Matthew E. Massengill, Mary Petrovich, Robert E. Switz, Noel G. Watson, Thomas Wroe, Jr., and Hoil Kim (collectively, Movants ), respectfully submit this limited objection to Debtors Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code, Dated February 1, 2016 ( Amended Plan ), ECF No In support of their Limited Objection, Movants submit as follows 1. Movants, who are interested, non-debtor third parties to this action, object to only one section of the Amended Plan, Section 16.3 (regarding the preservation of documents), on the grounds that it provides for potential relief that is barred by federal securities laws, runs afoul of the Federal Rules of Civil Procedure, and would be prejudicial to Movants rights against other non-debtor third parties. 1 The Debtors, along with the last four digits of each debtor s tax identification number, as applicable, are GT Advanced Technologies Inc. (6749), GTAT Corporation (1760), GT Advanced Equipment Holding LLC (8329), GT Equipment Holdings, Inc. (0040), Lindbergh Acquisition Corp. (5073), GT Sapphire Systems Holding LLC (4417), GT Advanced Cz LLC (9815), GT Sapphire Systems Group LLC (5126), and GT Advanced Technologies Limited (1721). The Debtors corporate headquarters are located at 243 Daniel Webster Highway, Merrimack, NH DB3/

2 Case HJB Doc # 3183 Filed 02/26/16 Desc Main Document Page 2 of 7 2. Based upon communications between counsel for Movants and counsel for Debtors, it is Movants belief that this issue will likely be resolved upon the future filing by Debtors of a further Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code, which the parties have agreed will contain a revised Section 16.3, which will provide as follows 16.3 Preservation of Documents Until a final order of judgment or settlement has been entered with respect to all defendants in the Securities Litigation and any other litigation initiated on or before the date that is six years after the Effective Date against the Debtors officers or directors (together with the Securities Ligation, collectively, the D&O Litigation ), the Debtors, the Reorganized Debtors, and/or any transferee of the Debtors or the Reorganized Debtors books, records, documents, files, electronic data (in whatever format, including native format), or any tangible objects shall preserve and maintain such books and records relevant or potentially relevant to the D&O Litigation consistent with the provisions of the Private Securities Litigation Reform Act and the Federal Rules of Civil Procedure, as if the Debtors or the Reorganized Debtors were parties to the applicable D&O Litigation. Notwithstanding the foregoing, if the Reorganized Debtors determine that they no longer have any need for such books and records, they may destroy or abandon such books and records only if permitted to do so as a result of a final, non-appealable order or orders of either the Bankruptcy Court or the court(s) in which the D&O Litigation is pending, entered after a hearing on reasonable notice to parties in interest, including counsel of record for all plaintiffs and defendants in the D&O Litigation. 3. Movants have no objection to a revised Section 16.3, Preservation of Documents, if Debtors modify that section as agreed, consistent with the language set forth above in Paragraph Nevertheless, if, for any reason, Debtors do not file an Amended Plan that changes in this manner the language of Section 16.3 contained in the currently filed version of the Amended Plan, Movants object to the existing language in Amended Plan Section 16.3, as more fully discussed below. 5. Movants are among the defendants named in a putative securities class action DB3/

3 Case HJB Doc # 3183 Filed 02/26/16 Desc Main Document Page 3 of 7 pending in the U.S. District Court for the District of New Hampshire, entitled Levy v. Gutierrez et al., Case No. 14-cv JL (D.N.H.) (the Securities Litigation ). Plaintiffs in the Securities Litigation (the Securities Plaintiffs ) filed a consolidated amended complaint on July 20, Movants and the other defendants in the Securities Litigation all have filed motions to dismiss the Securities Plaintiffs consolidated amended complaint in its entirety, with prejudice. Briefing on Movants motions to dismiss is scheduled to be completed on March 2, Under the statute that governs the claims that the Securities Plaintiffs have asserted in the Securities Litigation i.e., the Private Securities Litigation Reform Act of 1995 (the PSLRA ) there is an automatic stay of all discovery in the Securities Litigation pending resolution of the Defendants motions to dismiss. 15 U.S.C. 78u-4(b)(3)(B). The PSLRA s mandatory discovery stay bars the Securities Plaintiffs from obtaining any discovery, absent an order in that case lifting the stay, which Securities Plaintiffs have neither sought nor obtained. Id. 7. As drafted, Section 16.3 of the Amended Plan potentially would provide Securities Plaintiffs full access to countless company documents and data, currently in the Debtors possession, to which Securities Plaintiffs would not otherwise be entitled under the PSLRA and the Federal Rules of Civil Procedure. Section 16.3 currently provides Preservation of Documents. Until a final order of judgment or settlement has been entered with respect to all defendants in the Securities Litigation, the Debtors, the Reorganized Debtors, and/or any transferee of the Debtors or the Reorganized Debtors books, records, documents, files, electronic data (in whatever format, including native format), or any tangible objects shall preserve and maintain such books and records relevant or potentially relevant to the Securities Litigation consistent with the provisions of the Private Securities Litigation Reform Act and the Federal Rules of Civil Procedure. If the Reorganized Debtors determine that they no longer have any need for such books and records, they shall give 10 days prior written notice to Lowenstein Sandler LLP and provide it with the opportunity to retrieve such books and records from the Reorganized Debtors. If such books and records are DB3/

4 Case HJB Doc # 3183 Filed 02/26/16 Desc Main Document Page 4 of 7 not retrieved within such 10 day period, the Reorganized Debtors are free to dispose of such books and records in their sole discretion. 8. If the currently pending Amended Plan is approved as proposed, Securities Plaintiffs may potentially be provided access to extensive discovery that the federal securities law expressly bars them from obtaining while the automatic discovery stay remains in force. 9. In a case governed by the PSLRA, as is the Securities Litigation, it is well established that a plaintiff is required to possess facts supporting its claims prior to filing a complaint. See, e.g., Sarantakis v. Gruttaduaria, No. 02-cv-1609, 2002 WL , at *1 (N.D. Ill. Aug. 5, 2002) (mandatory stay designed to avoid the situation in which a plaintiff sues without possessing the requisite information to satisfy the PSLRA s heightened pleading requirements, then uses discovery to acquire that information and resuscitate a complaint that would otherwise be dismissed ). Under the PSLRA, the mandatory stay may be lifted only if the Court finds that particularized discovery is necessary to preserve evidence or to prevent undue prejudice. 15 U.S.C. 78u-4(b)(3)(B). 10. Given the purpose of the PSLRA, [t]he burden of establishing the need for a partial lifting of the discovery stay, not surprisingly, is a heavy one. In re Fannie Mae Sec. Litig., 362 F. Supp. 2d 37, 38 (D.D.C. 2005). Consistent with that burden, courts rarely allow discovery prior to deciding the motion to dismiss without a showing that undue prejudice is due to unique, extenuating or exceptional circumstances. See, e.g., In re Vivendi Universal S.A. Sec. Litig., 381 F. Supp. 2d 129, 130 (S.D.N.Y. 2003) (denying motion to lift stay finding no exceptional circumstances that warrant[ed] lifting the stay ). Undue prejudice does not arise from Securities Plaintiffs impatience with the statutorily mandated stay. See Mori v. Saito, 802 F. Supp. 2d 520, 524 (S.D.N.Y. 2011) (denying motion to lift stay and noting [u]ndue prejudice does not arise... from a delay in the gathering of evidence because... delay DB3/

5 Case HJB Doc # 3183 Filed 02/26/16 Desc Main Document Page 5 of 7 is an inherent part of every stay of discovery required by the PSLRA. ) (citations omitted). 11. As drafted, Section 16.3 not only relieves Debtors and any successor entities from any burden to maintain documents potentially relevant to the Securities Litigation, but it also allows Securities Plaintiffs access to every document the Debtors, or their successor entities, determine that they no longer have any need for. See Section If such a determination is made prior to the disposition of Movants motions to dismiss in the Securities Litigation, Securities Plaintiffs would have access to documents and information they otherwise would statutorily be barred from accessing. Allowing Securities Plaintiffs access to such discovery would be an improper end run around the PSLRA. Angell Inv., L.L.C. v. Purizer Corp., No. 01-cv-6359, 2001 WL , at *2 (N.D. Ill. Oct. 31, 2001). 12. Furthermore, if the Amended Plan is entered as proposed, Securities Plaintiffs also would be provided unfettered access to company documents, which could include, among other things, documents that are (1) unrelated in any way to any matters at issue in the Securities Litigation, let alone relevant to any party s claim or defense and proportional to the needs of the Securities Litigation as required by Fed. R. Civ. P. 26(b)(1); (2) otherwise protected from disclosure by the attorney-client and/or work product doctrine (or other applicable privilege); (3) not responsive to any discovery request proffered by Securities Plaintiffs; (4) and/or subject to legitimate discovery objections on numerous grounds. Such a result would be unprecedented and unjust. 13. Movants are unaware of any authority supporting an order providing Securities Plaintiffs unrestricted access to company documents to which they are statutorily barred from accessing, and which may also be wholly irrelevant to the matters at issue in the Securities Litigation, otherwise protected from disclosure by privilege, and/or objectionable. To the contrary, federal securities law expressly bars them from obtaining those documents while the DB3/

6 Case HJB Doc # 3183 Filed 02/26/16 Desc Main Document Page 6 of 7 automatic discovery stay remains in force. 14. Movants propose that Section 16.3 of the Amended Plan be revised as set forth above in Paragraph 2, as agreed upon by counsel for Movants and counsel for Debtors. Movants understand that the revised language contained in Paragraph 2 has been negotiated with, contains changes proposed by, and is acceptable to counsel to the Securities Plaintiffs. Wherefore, for all of the foregoing reasons, Movants respectfully request that any order confirming the Amended Plan be modified to address the issues raised in this Limited Objection. Dated February 26, 2016 /s/_jordan D. Hershman Jordan D. Hershman (BNH07532) (admitted pro hac vice) Emily E. Renshaw MORGAN, LEWIS & BOCKIUS LLP One Federal Street Boston, MA Telephone (617) jordan.hershman@morganlewis.com emily.renshaw@morganlewis.com Brian J.S. Cullen (BNH07483) CULLENCOLLIMORE, PLLC 10 East Pearl Street Nashua, NH Telephone (603) Facsímile (603) bcullen@cullencollimore.com Counsel for Thomas Gutierrez, Richard J. Gaynor, Raja Bal, Daniel Squiller, J. Michal Conaway, Kathleen A. Cote, Ernest L. Godshalk, Matthew E. Massengill, Mary Petrovich, Robert E. Switz, Noel G. Watson, Thomas Wroe, Jr., and Hoil Kim DB3/

7 Case HJB Doc # 3183 Filed 02/26/16 Desc Main Document Page 7 of 7 CERTIFICATE OF SERVICE I, Jordan Hershman, hereby certify that on February 26, 2016 the foregoing Limited Objection was electronically served via ECF on all counsel of record registered in the abovecaptioned case. /s/ Jordan D. Hershman Jordan D. Hershman DB3/