Intellectual Property Transactions In

15th Annual Advanced Restructuring and Plan of Reorganization Conference in New York

November 14, 2016 – Union League Club, New York City

Copyright 2016. All Rights Reserved. Panelists

Hon. Kevin J. Carey U.S. Court, D. of Delaware

David Bart, CIRA, CDBV RSM US LLP

Mark Hayden Deloitte Advisory LLP

Robert Stark, Esq. Brown Rudnick LLP

Prof. Jack F. Williams, CIRA, Baker Tilly Virchow Krause, LLP CDBV

2 Introductions & Topics

The dramatic rise in intellectual property (IP) transactions occurring in a restructuring environment has generated many questions:

 What is intellectual property?

 What property rights are involved and can it be sold or transferred?

 What is the legal context for thinking about IP in ?

 Should IP be separated as unique assets or left as part of the overall business concern?

 What special issues arise in IP valuation?

3 THE WORLD OF IP TRANSACTIONS

4 What is IP?

 Tangible Asset: An asset that has a physical form -- includes both fixed assets, such as machinery, buildings and land, and current assets, such as inventory

 Intangible Asset: An asset that is not physical in nature – includes corporate intellectual property, goodwill and brand recognition -- it is the excess value of a going concern that exceeds tangible asset values, i.e. discounted cash flow or other income value less the appraised values of all other identifiable assets

 Intellectual Property: Defined legal rights to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce -- includes patents, trademarks, copyrights, business methodologies

5 Tangible v. Intangible Asset Values

Ocean Tomo’s most recent analysis of S&P 500 asset value composition was 2015

6 Current Trends

2015 witnessed a record level of 709,453 patent and application filings  Although the number of issued utility patents (the top light blue bar) decreased for the first time in a decade, design patents (shown in black) increased by approximately 10% (AcclaimIP)

7 Current Trends

AcclaimIP analyzed the top patent categories for 2015 Consumer products dominate (everything from furniture to footwear, lighting to tires) The largest categories remain audio/video, medical supply, computer equipment

8 IP as Collateral

IP is increasingly used as collateral for asset-based lending by bankers and financiers

 IP royalties and licensing fees increased from $60 billion in 1996 to over $185 billion by 2012 -- a compounded annual growth rate > 7%, even after including two significant recessionary periods in 2001 and 2009 (Kim, S. 2016, Jan./Feb. IP Asset Value as Collateral: The Increasing use of Patents as Collateral in Asset Based Lending, ABF Journal)

 From 1996-2005, nearly 21% of U.S. originated secured syndicated loans had been collateralized by intangible assets and property (Loumioti, M. 2012, Nov. 1. The Use of Intangible Assets as Loan Collateral)

9 IP as Collateral

The presence of IP is also increasing the amount of that can be borrowed

 40% of patenting firms in 2013 pledged patents as collateral at some point -- these firms performed 28% of all research and development and 22% of all patenting by Compustat companies in that year (Mann, W. 2015, April 27. Rights and Innovation: Evidence From Patent Collateral. UCLA Anderson School)

 Since 1980, approximately 16% of all domestic patents produced in the U.S. have been pledged as collateral at some point (Ibid.)

 The patenting companies were found to have raised more debt financing when creditor rights to the patents were strengthened (Ibid.)

10 IP’s Emerging Marketplace

Growth of secondary markets has brought further liquidity:

 Active secondary markets in IP have grown as well: Ocean Tomo, RPX, AST and other large patent aggregators

 Increasing liquidity has allowed lenders to regard patents as potential collateral

 Private “over-the-counter” transactions, bi-lateral transactions, and recognition of IP assets in mergers and acquisitions further demonstrate the recognition of a growing liquid marketplace

11 IP Has Entered the Restructuring Realm

IP has also made headlines in the restructuring realm

 Nortel’s 6,000 patents sold at a bankruptcy auction in June 2011 for $4.5 billion

 Kodak’s 1,700 digital imaging patents sold at a bankruptcy auction in February 2013 for $94 million

 However, projected vs. actual values indicate widely varied opinions on these assets

Projected Actual Nortel $1BB $4.5BB Kodak $2.2-2.6BB $94MM

12 Shifting Legal Environment

The legal environment is changing

 NPEs, non-practicing entities who hold a patent for a product or process but have no intention of developing it (patent trolls), accumulate patents and litigate potential infringements (2015 Patent Litigation Study. 2015, May. PwC)

 In 2014, jury decisions accounted for 67% of identified patent cases in last five years, and median jury awards were 31 times greater than median bench trial awards in the preceding five years

 Median award from 1995-2014 was approximately $5.4 million

 Appreciate the distinction between IP valuation and IP damages: the latter may significantly exceed the value of the former

 Europe is instituting fundamental reforms to patent protections

 EU states are in the process of rolling out a new European Patent with Unitary Effect and a single Unified Patent Court with divisions located throughout Europe – passed in 2013 by 25/28 EU states

 This new system is the biggest game-changer in European patent law in history -- bringing fundamental changes for patentees, defendants, their counsel, judges and everyone involved in patent litigation in Europe by creating homogenous EU-wide patent protection where it will become possible to obtain injunctions against infringing products across the entire EU with just one legal action

13 Shifting Legal Environment

In the U.S., there is also increasing recognition of the importance of intellectual property issues by the U.S. Supreme Court

 In 2014, the Supreme Court issued the greatest number of patent and intellectual property cases in its history, marked by nearly unanimous consent – 8/10 decisions were unanimous; all 6 patent decisions were unanimous and all but 1 reversed the U.S. Court of Appeals for the Federal Circuit. (Johnson, S.N. 2014, Aug. 27. Supreme Court Brief: The Roberts Court Gets Intellectual (Property). The National Law Journal)

14 LEGAL FRAMEWORK FOR IP VALUATION ISSUES IN BANKRUPTCY CASES

15 IP in Bankruptcy Cases

 Section 101(35A) of the United States Bankruptcy Code states: The term “intellectual property” means— (A) trade secret; (B) invention, process, design, or plant protected under title 35; (C) patent application; (D) plant variety; (E) work of authorship protected under title 17; or (F) mask work protected under chapter 9 of title 17; to the extent protected by applicable nonbankruptcy law;  Section 101(35A) excludes trademarks

16 Bankruptcy Law Perspectives on ’s IP

Bankruptcy Law Perspectives on the Debtor’s IP Assets:

 IP is an estate asset like any other estate asset.

 See U.S. v. Inslaw, Inc., 932 F.2d 1467, 1471 (D.C. Cir. 1991) (“It is undisputed that [Section 541(a)(1)] encompasses the debtor’s intellectual property, such as interests in patents, trademarks and copyrights.”).

 IP, therefore, must be included whenever bankruptcy law requires estate valuation.

 See In re Bernard Techs., Inc., 398 B.R. 526, 530-31 (Bankr. D. Del. 2008) (recognizing that the Trustee’s failure to account for the value of a Debtor’s assets, including its intellectual property, was problematic in a determination of ).

17 Bankruptcy Law Perspectives on Debtor’s IP

 IP is evaluated like other estate assets, following the Consolidated Rock mantra.

 See In re Bicoastal Corp., 164 B.R. 1009, 1017 (Bankr. M.D. Fla. 1993)(“the real value of intellectual property is its potential to generate income.”).

 Starting points for bankruptcy valuation:

 IP can have different valuation attributes, depending on circumstance.  In some circumstances, the debtor’s IP can be easily evaluated away from the business, as a standalone marketable asset-class.  In other circumstances, the IP loses all value attributes away from the debtor.

18 IP Licenses

 Chapter 11 estates can be constrained in their ability to use the Bankruptcy Code to exploit IP value, when leased from or to third-parties and the third-party does not consent

 Is the Debtor a Licensor or a Licensee?

19 IP Licenses – Debtor is Licensor

Where Debtor Is Licensor (i.e., third-party may use the debtor’s IP)

 Such licenses often qualify as executory contracts.

 License arrangements often fit within the Section 365 rubric of executory contracts, theoretically subject to rejection, assumption, or assumption and assignment. See In re Buildnet, Inc., 2002 WL 31103235 (Bankr. M.D. N.C. Sept. 20, 2002).

 Section 365(n):

 In the event of rejection, the non-debtor licensee may elect to treat the contract as (i) terminated or (ii) retain its license rights for the duration of the contract and any applicable extensions.

 If the licensee elects to treat the contract as terminated:

 Then the licensee loses its ability to use the content provided under the license, but has a damage claim against the debtor as an . See Section 365(n)(1)(A).

20 IP Licenses – Debtor is Licensor

 If a licensee elects to retain its rights:

 Then the licensee’s access to the licensed IP will continue, so long as the licensee continues to make royalty payments due or otherwise perform under the contract. See Section 365(n)(1)(B).

 Can the debtor’s IP be sold “free and clear” of the licensee’s rights under Section 365(n)?

 One court has held (albeit in a footnote) that a buyer of estate assets may take them “free and clear” of Section 365(n) rights, per Section 365(f). See In re Portrait Corp. of Amer., 406 B.R. 637, 640 n. 3 (Bankr. S.D.N.Y. 2009). This notion also finds support in a ruling by the Seventh Circuit Court of Appeals, that a Section 363(f) sale trumps a landlord’s possessory rights under Section 365(h). See Precision Indus., Inc. v. Qualitech Steel SBQ, LLC, 327 F.3d 537, 548 (7th Cir. 2003). But, another court reached the opposite ruling. See In re Crumbs Bake Shop, 2014 WL 5508177, at *5-7 (Bankr. D. NJ. Oct. 31, 2014)(under principles of statutory construction, the specific language of Section 365(n) should not be overcome by the more general language of Section 365(f).

 Trademark Licenses:

 Section 365(n) does not apply to trademark licenses. Thus, a debtor may reject an executory trademark license, and leave the licensee with only a rejection damages claim.

21 IP Licenses – Debtor is Licensee

Where Debtor Is Licensee (i.e., debtor may use a third-party’s IP)

 Exclusive Licenses.

 IP licenses providing the debtor with an exclusive right to use the subject IP are generally not considered to be executory contracts because, under non-bankruptcy law, courts consider exclusive licenses to effect an assignment of the IP rights to the debtor; in other words, an exclusive license vests the debtor with a property interest in, and not just a personal license to use, the IP at issue. See In re Interstate Bakeries Corp., 751 F.3d 955, 958 (8th cir. 2014); In re Exide Techs., 607 F.3d 957, 963-64 (3d Cir. 2010). As such, a debtor may “freely transfer its rights” in exclusive licenses, without the licensor’s consent. In re Golden Book Family Entert., 269 B.R. 300 (Bankr. D. Del. 2001). And, if it does so, it may be able to transfer such rights free and clear of any continuing obligations to make royalty payments to the licensor. See In re Particle Drilling Techs., Inc., 2009 WL 2382030, at *3 (Bankr. S.D. Tex. July 29, 2009).

22 IP Licenses – Debtor is Licensee

 Non-Exclusive Licenses.

 A non-exclusive license does not vest a property right in the debtor; rather, it creates a personal right to use the IP, see Golden Book Family Entert, 269 B.R. 300, which the debtor could theoretically reject, assume, or assign under Section 365. But, the debtor’s Section 365 rights are compromised by Section 365(c), which prohibits assumption or assignment of any executory contract where the non-debtor party is given consent rights by “applicable law”, and denies such consent. Courts have uniformly held that copyright and patent law is such “applicable law” that disables assignment of non-exclusive licenses without the licensor’s consent. See, e.g., Harris v. Emus Records Corp., 734 F.2d 1329 (9th Cir. 1984); Everex Sys., Inc. v. Cadtrax Corp. (In re CFLC, Inc.), 89 F.3d 673 (9th Cir. 1996). But, what about assumption without assignment? Here, the circuits have split

 Majority View (the “Hypothetical” Test). The Third, Fourth, Ninth and Eleventh Circuits have held that 365(c) prohibits not only assignment of IP licensees (without the licensor’s consent), but also the assumption of such leases. The so-called hypothetical test says, if the debtor cannot assign the license, then it also cannot assume it. In re Sunterra Corp., 361 F.3d 257 (4th Cir. 2004); Perlman v. Catapult Entm’t, Inc. (In re Catapult Entm’t, Inc.), 165 F.3d 747 (9th Cir. 1999); In re James Cable Partners, Ltd. P’ship, 27 F.3d 534 (11th Cir. 1994); In re West Elecs., 852 F.2d 79 (3d Cir. 1988).

 Minority View (the “Actual” Test). The First Circuit and many lower courts disagree, holding that assumption is allowed, unless assumption is intended to facilitate a prohibited assignment. See, e.g., Institut Pateur v. Cambridge Biotech Corp., 104 F.3d 489 (1st Cir. 1997)

23 Lessons From The Case Law

IP Value Is Often Tied To The Opportunities That Are Available To Exploit It

 In re Bicoastal Corp., 164 B.R. 1009 (Bankr. M.D. Fla. 1993).

 The debtor was the successor to The Singer Company, historical maker of the Singer sewing machine. Years prior to its bankruptcy, the debtor had transferred away its asset-base to an entity controlled by Shinwa Company Limited, leaving only its ownership interest in the Singer trademark. The debtor agreed to license the trademark to Shinwa, in exchange for a royalty based on gross sales. But, almost immediately after singing the agreement, Shinwa defaulted, refusing to provide the debtor the promised royalty payments or promised information to enable calculation of same. Bicoastal then filed for bankruptcy, which was followed by a tangle of IP litigation across many US and foreign courts. The bankruptcy court ultimately found Shinwa liable to the estate for $150 million in damages. Shinwa, however, continued to appeal and otherwise maneuver to avoid payment. Eventually, a $93.8 million settlement was presented to the court for approval, which settlement would provide enough cash to satisfy all creditor claims but also required full conveyance of the trademark to Shinwa. The debtor’s equity holders objected vigorously. The bankruptcy court considered the settlement under the traditional Rule 9019 standard (i.e., does the settlement exceed “the lowest point in the range of reasonableness”), finding approval warranted for the following reasons: (1) the litigation against Shinwa was not entirely free of doubt, and failure to settle would mean continued litigation following the past trajectory; (2) there is no ready market for the trademark beyond Shinwa, given its control over historical Singer product lines; and (3) the objector’s expert witness had little experience valuing IP assets and, in turn, did not present a credible estimate of the trademark’s value.

24 Lessons From The Case Law

Even Developmental IP Has Value

 In re Surfango, 2009 WL 5184221 (Bankr. D.N.J. Dec. 18, 2009).

 This debtor was in the business of manufacturing and selling motorized kayaks and surfboards. Years after incorporation, the company had filed patent applications, but still had not developed their operations or started generating income. So, it entered into an investment agreement with GVFI, under which GVFI would provide $5 million in equity capital and assume management. Sadly for GVFI, however, Surfango’s directors embezzled corporate funds, accelerating the company’s downward spiral. Shortly after its Chapter 11 filing, the debtor filed a plan that assigned no value to its patent applications, contending that their value was speculative until such time as the patents actually issued. At the confirmation hearing, the presented testimony that the patents were worthless and had value only in the context of a going concern. The Bankruptcy Court found this testimony to be “incredible” given that: (i) GVFI agreed to pay $5 million for 51% of the debtor’s stock (based primarily on the IP development potential); (ii) GVFI spent hundreds of thousands of dollars in legal fees (including after the petition date) in continued pursuit of the debtor’s ownership; and (iii) GVFI believed the products have a promising future that warrant further capital investment by them or others. The Court was also troubled by the fact that the plan proponents made “no attempt whatsoever to value the [debtor’s] intellectual property.” Confirmation was denied.

25 Lessons From The Case Law

The Uncertain Nature Of IP Value (And The Inherent Difficulty In Understanding The Underlying Art) Can Create Serious Challenges For /Stockholders Seeking To Challenge The Debtor's Proposed Valuation.

 In re Spansion, 421 B.R. 151 (Bankr. D. Del. 2009) (Carey, Bankr. J.).

 Spansion was a major developer of "flash" memory products that suffered financially (1) under a poor management team (terminated or resigned upon the company's bankruptcy filing) with an overly ambitious plan to build manufacturing plants in Asia (which, in turn, prompted an excessive debt-load), (2) over- exposure to the cellphone market, which was experiencing severely contracting margins, and (3) as a consequence of the worldwide slowdown in consumer spending during the Great Recession. At the time of Spansion's bankruptcy filing (March 2009), macroeconomic issues (as well as the business transition and total loss of management) made it very challenging to accurately project the company's future earnings capacity. As a result, Spansion's true inherent value -- based primarily on its IP portfolio -- was a matter of considerable disagreement over the course of the case. One of several valuation contests considered a motion by an ad hoc committee of stockholders seeking the appointment of an official equity committee. The ad hoc committee's valuation presentation rested on typical enterprise valuation methodologies, but was supplemented by (1) an aggressive terminal value growth assumption, essentially as a form of normalizing the company's performance extrapolating from the nadir of the Great Recession, (2) anticipated recoveries on large patent infringement claims, and (3) additional IP portfolio value. Each of these contentions were based on valuation theory and had business logic, but was not based on hard evidence. As such, the Bankruptcy Court held that the ad hoc committee had failed to carry its burden of proving that the debtor was not hopelessly insolvent.

26 Lessons From The Case Law

 In re Spansion, 426 B.R. 114 (Bankr. D. Del. 2010).

 The debtors eventually negotiated a plan of reorganization that delivered most distributable enterprise value to secured noteholders. This prompted the next level of the capital structure (senior unsecured noteholders) to offer to fund a new plan of reorganization that would cash out the secured noteholders, and deliver the residual stock value to the plan funders. This prompted the third level in the capital structure (subordinated unsecured noteholders) to interpose an aggressive plan objection, also on valuation grounds. Expert opinion advanced by the debtor and senior creditors took a conservative approach to enterprise value, while the subordinated noteholders advanced an expert opinion that seemed wildly optimistic by comparison. Given (again) the speculative nature of the subordinated noteholders' value perspective (reflective of the speculative nature of the debtor's IP value), the Bankruptcy Court found that it lacked sufficient evidentiary foundation to be reliable. To buttress their valuation supposition, the subordinated noteholders pointed to the trading levels of the senior notes (which must have been dramatically beyond par); but, without evidence of market efficiency, the court could not give this data much added weight. The debtor's valuation was, therefore, found to be more reliable, albeit in the face of contrary market perception.

27 Lessons From The Case Law

Can IP, Standing Alone (After, Say, Vesting In A "Patent Troll" SPV), Have Value In Excess Of Fair Market Value?

 In re Eastman Kodak, 2012 WL 2501071 (Bankr. S.D.N.Y. June 28, 2012).

 In January 2012, Kodak filed for Chapter 11 relief, having succumbed to the digital revolution in photography. One of Kodak’s largest assets was its digital imaging patent portfolio. Prior to its bankruptcy filing, Kodak retained an IP appraiser to value 1730 of the company’s digital imaging patents. The appraiser used a discounted cash-flow analysis, which estimated the expected income from monetizing Kodak’s patents through licensing and, if necessary, legal action. The appraiser present-valued the portfolio at $2.2 billion to $2.6 billion, an estimate that the appraiser characterized as “very conservative.” When added to the debtor's other asset appraisals (put into evidence in connection with DIP financing), the debtor reflected a substantial possibility of solvency. Shortly thereafter, an ad hoc committee of stockholders lodged a motion for the appointment of an official committee of equity security holders. At the hearing, the ad hoc committee pointed to this evidence as essentially the debtor's own admission of potential solvency. The Bankruptcy Court did not rule on the motion for several months, allowing the case to unfold and, after it became clear that the appraiser's estimate may not be a reliable reflection of the portfolio's fair market value, denied the requested appointment.

28 Lessons From The Case Law

 In re Eastman Kodak, 2013 WL 4413300 (Bankr. S.D.N.Y. Aug. 15, 2013).

 Fourteen months after denying the initial request for an official committee of equity security holders, another group of stockholders renewed the request. By this time, the debtor's IP portfolio had been marketed and, after an auction, resulted in a very disappointing final bid. Also by this time, a plan of reorganization had been filed, proposing very limited distributions to unsecured creditors. The stockholders submitted their own "back- of-the-envelope" assessment of the IP's revenue potential, if placed in an SPV (instead of sold). The court rejected this appraisal on Daubert grounds and, in turn, denied the motion.

29 Violating Third-Party IP Entitlements

What If The Post-Petition Debtor Violates A Third-Party’s IP Entitlements?

 Some courts have held that the automatic stay does, in fact, apply.

 Thus, a third-party claiming infringement is not free to initiate litigation against the debtor in a non-bankruptcy forum. See, e.g., In re Mahurkar Double Lumen Hemodialysis Catheter Patent Litigation, 140 B.R. 969 (N.D. Ill. 1992); In re Spansion, Inc., 418 B.R. 84 (Bankr. D. Del. 2009)(Carey, Bankr. J.).

 Other courts have reached the opposite conclusion.

 See, e.g., Hazelquist v. Guchi Moochie Tackle Co., 437 F.3d 1178 (Fed. Cir. 2006)(finding that each act of patent infringement gives rise to a separate cause of action and, therefore, a debtor court be sued for post- petition infringement); In the Matter of Certain Semiconductor Chips with Minimized Chip Package Size and Products Containing Same, 2009 ITC Lexis 841 (ITC June 3, 2009)("As“a governmental agency, the Commission has jurisdiction to determine whether the automatic stay applies to Section 337 proceedings. Preventing violation of domestic industries’ intellectual property rights falls squarely within the ‘regulatory power’ of a ‘governmental unit.’ Therefore, Section 337 falls within the exception of Section 362(b)(4).”).

30 INTELLECTUAL PROPERTY VALUATION METHODS

31 Multi-Period Excess Earnings Method

How does it work? Estimates value based on the present value of the excess earnings:

 Based on the principle that the value of an intangible asset is equal to the present value of the incremental after-tax cash flows attributable only to that asset

 To quantify the cash flows attributable solely to the subject intangible asset, contributory asset charges are typically applied to account for the use of and/or required return on other assets.

Key assumptions: 1. Technology Migration Curve 2. Development Expenses: related to new technology vs existing 3. Discount rate

Relief From Royalty Method

How does it work? Estimates value based on the cost savings as a result of not having to pay a royalty to another party for using the asset:

 Cost savings estimated by applying a royalty rate to the revenue attributable to the subject intangible asset

Key assumptions: 1. Royalty rate 2. Replacement rate 3. Discount rate Cost Approach – Replacement Cost Method

How does it work? Defined as the cost to recreate, at current prices, the utility of the subject intangible asset, using current materials, production standards, design, layout, and quality

 Considers costs related to tangible/intangible elements, human-capital efforts, overhead costs, etc.

 Adjusted for obsolescence (i.e. physical, functional, technological, economic)

Key assumptions: 1. Profit markup Specialized Methods

A number of specialized methods are available to value IP

 Most fall within the broader groupings of standard methodologies:  Cost approach  Income approach  Market approach  Relief from royalty approach

Specialized Methods

At least 30 methods are available to value IP depending on the situation:

Generally Accepted Specialized / Proprietary / Other

Brand Contribution Auction Method

Replacement Cost Decision Tree Analysis Methods

Reproduction Cost Brand Value Equation Method (BVE)

Technology Factor Matrix Competitive Advantage Technique

Venture Capital Monte Carlo Analysis

Relative Incremental Value Options Pricing Technique

Decremental Cost Savings Snapshots of Value

Enterprise Value Enhancement Subtraction Method / Benchmark Method

Imputed Income ValCalc Methodology

Income / Direct Capitalization Valmatrix Analysis

Income Differential Rules of Thumb

Liquidation Value Return on Assets Employed

Orderly Disposal Value Surrogate Measures Methods

Premium Pricing Analysis Ranking Methods

Profit Split Analysis Industry Standards Specialized Methods

Selection of specialized methods will depend on the circumstances, based on:

 Uniqueness of the asset  Data availability  Context, purpose and objective of the valuation  Analyst judgment

SUMMARY

38 Summary

In general, for most bankruptcy situations, four key questions must be addressed:

 What is intellectual property and is the debtor the owner, licensor or the licensee?

 Can the IP be sold or transferred?

 Should IP be separated as unique assets or left as part of the overall business concern?

 What special concerns arise with particular IP assets?

39 Questions/Discussion/Comments

THANK YOU FOR PARTICIPATING

40 Speaker Profiles

41 Honorable Kevin J. Carey United States Bankruptcy Court, District of Delaware

 Judge Carey has served on the Bankruptcy Court for the District of Delaware since December 9, 2005 (and was chief judge from 2008 to 2011), having first been appointed as a bankruptcy judge for the Eastern District of Pennsylvania on January 25, 2001. Judge Carey is immediate past Global Chairman of the Turnaround Management Association. He is on the Board of Directors of the American Bankruptcy Institute and is a member of the National Conference of Bankruptcy Judges. He is a member of the Third Circuit Judicial Council’s Facilities and Security Committee. He is a contributing author to Collier on Bankruptcy and Collier Forms Manual.

 Judge Carey is also a part-time adjunct professor in Temple University’s Beasley School of Law in Philadelphia, Pennsylvania and in the LL.M. in Bankruptcy program at St. John’s University School of Law in New York City, New York. He began his legal career in 1979 as law clerk to Bankruptcy Judge Thomas M. Twardowski, and then served as Clerk of Court of the Bankruptcy Court for the Eastern District of Pennsylvania. Judge Carey received his J.D. in 1979 from the Villanova University School of Law and his B.A. in 1976 from The Pennsylvania State University.

42 David Bart, CIRA, CDBV Senior Director, RSM US LLP

 David Bart has more than 25 years experience assisting businesses and their counsel in complex matters ranging from general consulting to commercial litigation. Assignments include strategic analysis and operational assessments involving restructuring, bankruptcy, workouts and commercial damages. He has provided financial and litigation consulting services, valuation services and testimony in cases involving commercial damages, solvency analysis, fraudulent transfers, business valuation, forensic accounting and financial investigations. His engagements include matters in the U.S. Bankruptcy Court, U.S. District Court and State Court as well as arbitration and mediation proceedings.

 David’s expertise includes strategic planning, feasibility analysis, financial and economic analysis, investigative accounting, statistical analysis, and business valuation involving both profit and non-profit entities. His services have resulted in business and financial restructuring, development of business and strategic plans, successful negotiation of credit support with as well as successful litigation outcomes.

43 David Bart, CIRA, CDBV Senior Director, RSM US LLP

 David is Chairman of the ABI Litigation Trust Task Force and the primary author of the Practitioner’s Guide to and Litigation Trusts. David is on the Board of Directors of the AIRA where he is Chairman of the Technical Issues and Standards Committee and was the primary author of the AIRA’s Standards for Distressed Business Valuation. He serves on conference planning committees for both the ABI and AIRA. David has published numerous articles and presentations and teaches seminars in his fields of expertise.

44 David Bart, CIRA, CDBV Senior Director, RSM US LLP

Professional Affiliations and Credentials

 Certified Insolvency and Reorganization  American Bankruptcy Institute Accountant  Association of Insolvency &  Certified in Distressed Business Restructuring Advisors Valuation  Association of Certified Fraud Examiners  Accredited Senior Appraiser  American Society of Appraisers  Certified Fraud Examiner  Business Valuation Association  Illinois CPA Society

Education

 Master of Business , finance and accounting, University of Chicago  Bachelor of Arts, anthropology and statistics, University of Chicago

45 Mark Hayden Partner, Deloitte Advisory LLP

 Mark Hayden is a Partner in the Valuation & Economic Modeling group of Deloitte Advisory LLP specializing in the delivery of corporate financial advisory and expert witness services. Mark regularly determines the value of businesses, common and preferred equity and intangible assets. In addition, Mark is retained to value financial derivatives and corporate debt. He has served as an independent appraiser for purposes of resolving third-party ownership disputes concerning the value of minority and controlling interests in closely held entities.

 Mark joined Deloitte in 2005, and during his tenure, he has performed several hundred valuations for U.S. GAAP financial reporting, complex gift & estate taxation as well as valuations for acquisitions and transfers. He has led integrated multidisciplinary valuation assignments which included fixed asset, real property, and intangible asset components; worked on domestic and global valuation assignments and testified on the value of businesses, business interests and intangible assets. He currently leads Deloitte Advisory’s national valuation dispute practice. He focuses his practice in consumer products, retail and distribution

46 Mark Hayden Partner, Deloitte Advisory LLP

 Prior to Deloitte Mark was a partner at Ernst & Young LLP in Los Angeles. While there Mark ran many large valuation projects for tax and financial reporting. He was appointed accounting arbitrator in complex working capital disputes, delivered damages testimony in civil litigation, provided valuation support in bankruptcy litigation and assisted financial services companies undergoing regulatory review.

 Currently the focus of his practice is in valuation of business and securities for tax and financial reporting as well as pre-deal advisory. He serves many public and private audit clients in the firm as a valuation specialist. He testifies on valuation and damages in civil disputes and serves as accounting neutral is post M&A disputes.

 He is a frequent presenter and author on valuation topics. He has delivered speeches and written articles on valuing businesses, securities and assets for a variety of purposes. His articles have been published in many professional journals and newsletters. Mark is active in charitable causes such as the MS Society. He is a Chartered Financial Analyst® (CFA) charterholder from the CFA Institute and an Accredited Senior Appraiser (ASA) from the American Society of Appraisers. He holds an Accreditation in Business Valuation from the AICPA.

47 Mark Hayden Partner, Deloitte Advisory LLP

Professional Affiliations and Credentials

 Certified Public Accountant  Business Valuation Committee of the  Chartered Financial Analyst AICPA  Accredited Senior Appraiser  American Society of Appraisers  Accreditation in Business Valuation  California CPA Society  USC Intellectual Property Planning Committee  Chartered Financial Analyst Committee

Education

 Master of Business Administration, University of California, Davis and CSU East Bay  Bachelor of Business Administration, Western Michigan University

48 Robert Stark, Esq. Partner, Brown Rudnick LLP

 Robert Stark focuses his practice on complex corporate restructuring, including in- court Chapter 11 cases and out-of-court workouts. He has extensive experience representing official and unofficial creditor/equity committees, debtors/borrowers, institutional investors, indenture trustees, and other significant parties-in-interest in large corporate insolvency matters.

 Robert led the Firm's representation of an official or significant ad-hoc creditor/equity committee in the restructuring of American Safety Razor, CEDC, Colt Defense, Delta Petroleum, Dolan Company, Endeavour International, Energy Conversion Devices, Evergreen International Aviation, Falcon Products, Fedders, Flying J/Big West Oil, Forest Oil, Green Field Energy Services, Green Valley Ranch Hotel and Casino, Hawkeye Renewables, InSight Health Services, Le-Nature’s, Lionel Trains, Millennium Labs, Minneapolis Star Tribune, Motor Coach Industries, Newark Group, NV Broadcasting, Oakwood Homes Corporation, Oneida, Owens Corning, Patriot Coal, Renewable Biofuels, Riverstone Networks, School Specialty, Spansion, Sports Authority, Synagro Technologies, TetraLogic Pharmaceuticals, TOUSA, Visteon, Washington Mutual and York Research.

49 Robert Stark, Esq. Partner, Brown Rudnick LLP

 Robert's debtor/borrower engagements include Keys Resort Investors and Wells Dairy (Blue Bunny Ice Cream), the principal owner of Centrix Financial, and the Special Committee of the Board of Directors of Allied Systems Holdings. He has also represented major creditor interests in the restructuring of The Atlantis Resort and Casino, C-BASS, Collins & Aikman, Delphi Corporation, Geokinetics, Investment Properties of America, LightSquared, SIRVA/North American Van Lines and Tribune Company. In addition, he represented post-consummation liquidating trusts in the Chapter 11 cases of Bethlehem Steel, Bricolage Capital, Geneva Steel, Hayes Lemmerz International, Le-Nature’s, Oakwood Homes Corporation and WCI Communities. Robert received several “Deal of the Year” citations from various organizations in connection with his case work.

50 Robert Stark, Esq. Partner, Brown Rudnick LLP

 Robert is cited in Best Lawyers in America, Benchmark Litigation, Chambers Global, Chambers USA, Global M&A Network: Top 100 Restructuring Professionals, Legal 500, Litigation Counsel of America (Fellow), Super Lawyers, and PLC Which Lawyer. The 2012 edition of Chambers USA includes the following client description of Robert: "He is an extremely good strategist; he is thinking two moves ahead; he has relentless drive and will do anything for his clients." The 2013 edition of Benchmark Litigation notes Robert's ability to steer "creditors through challenges once viewed as insurmountable." The 2013 edition of Legal 500 describes Robert as "tenacious and creative." In 2011, he was profiled in a National Law Journal article entitled, “Winning: Successful Litigators. Powerful Strategies.” In 2010, he was again the subject of a lengthy profile published by Bloomberg / BusinessWeek, wherein he was described by opposing counsel as a litigation "serial killer" but also "bottom-line and commercial oriented." In 2011, he was one of 12 attorneys named to the annual list of "Outstanding Restructuring Lawyers" published by Turnarounds & Workouts and, in five consecutive prior years, he was one of 12 attorneys named to that publication’s annual list of "Outstanding Young Restructuring Lawyers." In 2011, Robert was named "Restructuring Lawyer of the Year" at the Turnaround Atlas Awards.

51 Robert Stark, Esq. Partner, Brown Rudnick LLP

 Robert’s "first chair" trial and appellate work have resulted in opinions of high precedential value including (among many others): In re Visteon Corp., 612 F.3d 210 (3rd Cir. 2010) (described by a leading legal commentator as "the most important [Section] 1114 case ever rendered"); In re Oakwood Homes Corp., 449 F.3d 588 (3rd Cir. 2006); In re Green Field Energy Services, Inc., 2015 WL 5146161 (Bankr. D. Del. 2015); In re School Specialty, Inc., 2013 WL 1838513 (Bankr. D. Del. 2013); In re Patriot Coal Corp., 482 B.R. 718 (Bankr. S.D.N.Y. 2012); In re Eastman Kodak Co., 2012 WL 2501071 (Bankr. S.D.N.Y. 2012); In re Tribune Company, 2011 Bankr. Lexis 4128 (Bankr. D. Del. 2011); In re Washington Mutual, Inc., 442 B.R. 314 (Bankr. D. Del. 2011); In re Spansion, Inc., 421 B.R. 151 (Bankr. D. Del. 2009); In re Oakwood Homes Corp., 394 B.R. 352 (Bankr. D. Del. 2008); In re Oneida Ltd., 351 B.R. 79 (Bankr. S.D.N.Y. 2006); and OHC Liquidation Trust v. U.S. Fire Ins. Co., 2006 WL 2578907 (Bankr. D. Del. 2006).

52 Robert Stark, Esq. Partner, Brown Rudnick LLP

 Robert has also published extensively on bankruptcy and restructuring topics. He was the lead editor of the 400-page legal treatise Contested Valuation in Corporate Bankruptcy (Matthew Bender 2011), part of the Collier on Bankruptcy monograph series. He also contributed chapters to the Collier Bankruptcy Practice Guide (Matthew Bender 2014) and Bankruptcy Business Acquisitions (Amer. Bankr. Inst. 2006). He has also written articles (cited in published appellate and trial court opinions) appearing in the American Bankruptcy Law Journal, Bankruptcy Strategist, Business Lawyer, California Bankruptcy Journal, Journal of Bankruptcy Law and Practice, Journal of Corporate Renewal, Journal of Corporation Law, Norton Bankruptcy Law Journal, Pratt’s Journal of Bankruptcy Law and the Real Estate Finance Journal. In addition, he has delivered papers, been an invited speaker and guest lectured at numerous restructuring seminars (both domestic and abroad) and graduate schools of high academic esteem, including programs sponsored by the American Bankruptcy Institute, Columbia Business School, Georgia State University Law School, NYU Stern School of Business, University of Pennsylvania Law School, University of Texas School of Law, and the New York City Bar Association.

53 Robert Stark, Esq. Partner, Brown Rudnick LLP

Bar Admissions

 New York  New Jersey  US District Courts for the Southern and Eastern Districts of New York  US District Court for the District of New Jersey  US District Court for the Eastern District of Michigan  US Court of Appeals for the Third Circuit

Education

 Juris Doctor, Vanderbilt University Law School  Bachelor of Arts, Lafayette College

54 Prof. Jack F. Williams, PhD, CIRA, CDBV Principal, Baker Tilly Virchow Krause, LLP

 Jack F. Williams is a tenured Full Professor at Georgia State University College of Law and the Center for Middle East Studies in Atlanta, Georgia. He teaches and/or conducts research in the areas of bankruptcy and business reorganizations, mergers and acquisitions, forensic accounting, commercial law and damages models, corporate finance, capital markets, fraud and anti-corruption, Islamic banking and finance, taxation, public finance, and law and statistics. Williams is also a Principal in the Restructuring, Disputes & Valuation Advisory Services Group with Baker Tilly Virchow and Krause, LLP.

 Williams is the Association of Insolvency and Restructuring Advisors Scholar in Residence. He also served as the inaugural Robert M. Zinman American Bankruptcy Institute (ABI) Scholar in Residence in 2001 and returned to that post in 2008. In 2009, Williams was recognized by the ABI with its Annual Service Award (2009), honoring the ABI member whose contributions over the past year have been extraordinary. He is a Fellow in the American College of Bankruptcy.

55 Prof. Jack F. Williams, PhD, CIRA, CDBV Principal, Baker Tilly Virchow Krause, LLP

Professional Affiliations and Credentials

 Certified Insolvency and Reorganization  American Accounting Association Accountant  American Bankruptcy Institute  Certified in Distressed Business  American Economic Association Valuation  Association of Certified Fraud Examiners  Association of Insolvency & Restructuring Advisors  American Statistical Association

Education

 Doctor of Philosophy, archaeology, University of Leicester  Juris Doctor, George Washington University College of Law  Bachelor of Arts, University of Oklahoma

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