MAY 2010 Update on Settlement

Approval of Claims Submitted

The Firm has received completed claim forms from some but not all members of the B Bondholder class. Some claims were sent to the Firm well after the August 17, 2009 deadline for submission. All claims have been reviewed by the Firm and where necessary, additional information or documentation was sought from Bondholders. All claims were then forwarded to the Trustee (Bank of America) for review and approval. It is expected that all claims which were timely filed will be accepted by the Trustee, and that most of the late claims will also be approved.

Distribution of $5 million Payment to Claimants

As stated in the document accompanying the claim forms sent to all known members of the Class for whom the Firm could locate a current address, the Firm expects to receive settlement funds in mid-June 2010. Approved claimants will receive checks according to the formula explained therein.

Foreclosure and Sale of the Mid-Continent Tower

The sheriff's sale of the Mid-Continent Tower and its seven-story parking garage originally scheduled for June 1, 2010 was withdrawn and will be rescheduled. Courthouse records state that the Sheriff's foreclosure appraisal of the Tower and Garage is approximately $17 million. If the Trustee does not accept the high bidder at the sale, the Trustee will bid in the Tower and Garage with the defaulted mortgage notes and attempt to sell the Tower and Garage at a better price through an advertised sale.

The Firm negotiated a provision in the Settlement Agreement which prohibits bidding the A Bonds for the purchase of the Tower and Garage, something that was permitted in the Bond Indenture. Thus, the sale of the Tower and Garage is expected to be a cash sale, benefitting current holders of B Bonds, each of whom should receive a proportional amount of 22% of the sale price.

The Progress of the Case seeking full payment on the B Bonds.

On March 12, 2010, Judge Friot, the federal judge handling the Brady case, the case in which the Firm is seeking full payment of principal and interest on the mature B Bonds, dismissed the case on the ground that Brady, the class representative, owned less than $75,000 in B Bonds, the amount required for federal diversity jurisdiction. Brady filed a Motion to alter or amend the Judgment, and to permit amendment to add an additional lead Plaintiff. Judge Friot denied this Motion on May 4, 2010. The Firm immediately filed a new complaint with an additional Class Representative whose holdings should survive any jurisdictional challenge. The Firm is vigorously advancing the case. We will post updates as appropriate.

UPDATE: Fairness Hearing Of September 21, 2009 

The Fairness Hearing held on September 21, 2009 went very well. No objections were made, and the Settlement Agreement was approved as drafted and signed by the Parties. The Court signed a Final Order in the case which triggers the 270-day period for Final Payment of Settlement Funds by the Trustee, as the Settlement Agreement provides.

The B Bond Claims are currently being reviewed by counsel for Bank of America. If the Bank of America disagrees with any of Class Counsel’s “approvals,” we will meet to attempt to resolve issues. If the Parties cannot agree, we will approach the Court for a methodology of resolution.

Foreclosure proceedings concerning the Mid-Continent Tower were initiated on September 21, 2009 after the Court signed the Final Order. It will take some months for those proceedings to unfold and for the Tower to be sold. Various uncertainties in that process make it impossible to predict when you will receive your portion of monies from that sale.

Updates will be provided on this site when necessary.