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Reed Smith, LLP 

Keith M. Aurzada, Esquire 

2850 N. Harwood Street, Suite 1500 

Dallas, TX 75201 

(214) 498-4279 

kaurzada@reedsmith.com

and 

Stonecipher Law Firm 

Eric A. Schaffer, Esquire 

125 First Avenue 

Pittsburgh, PA 15222 

(412) 391-8510 

eschaffer@stonecipherlaw.com

Counsel to UMB Bank, National Association, as indenture trustee 

IN THE UNITED STATES BANKRUPTCY COURT 

FOR THE NORTHERN DISTRICT OF TEXAS 

IN RE: 

GOODMAN NETWORKS,INC., 

Debtor. 

SCOTT M. SEIDEL, TRUSTEE, 

Plaintiff, 

v. 

HUDSON CLEAN ENERGY 

ENTERPRISES, et al. 

Defendants. 

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Case No. 22-31641-mv17 

Chapter 7 

ADVERSARY PROCEEDING 

NO: 23-03090-mvl 

RESPONSE OF UMB BANK, N.A., AS INDENTURE TRUSTEE, 

TO TRUSTEE’S EMERGENCY MOTION FOR 

TEMPORARY RESTRAINING ORDER AND OTHER RELIEF 

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UMB Bank, National Association, as indenture trustee (the “Indenture Trustee”), 

by its undersigned counsel, hereby files this Response to the Trustee’s Emergency Motion for 

Temporary Restraining Order, Expedited Discovery, and Preliminary Injunction, and respectfully states 

as follows. 

BACKGROUND 

1. On April 30, 2024, the Trustee filed his Emergency Motion for Temporary 

Restraining Order, Expedited Discovery, and Preliminary Injunction (the “TRO Motion”) in the 

above-captioned adversary action.1 

2. On May 2, 2024, upon notice and a hearing, the Court entered an Order setting the 

TRO Motion for hearing on May 14, 2024, and directing that any responses to the TRO Motion 

be filed by May 10, 2024. 

3. The Indenture Trustee files this Response to the TRO Motion for the purpose of 

clarifying the rights of the Indenture Trustee and the relationships between and among the 

Indenture Trustee and the parties to the above-captioned action. 

4. As more fully set forth below: 

a. the Indenture Trustee acts for the benefit of all Holders of the Notes and 

therefore takes no position on the merits of the TRO Motion; 

b. the Missing Bonds represent only a beneficial interest in the Notes and the 

Indenture Trustee does not know the owner of the Missing Bonds; 

c. any funds relating to the Missing Bonds must be held subject to the 

Indenture Trustee’s rights, claims, liens, and security interests; and 

d. the Indenture governs any cancellation of the Missing Bonds. 

 

1 Capitalized terms not defined in this Response have the meanings set forth in the TRO Motion, the 

Indenture, and the Security Agreement, as defined herein. 

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RIGHTS OF THE INDENTURE TRUSTEE AND RELATIONSHIPS 

UNDER THE INDENTURE AND RELATED DOCUMENTS 

5. As set forth in the TRO Motion and other pleadings filed in this bankruptcy case, 

the Debtor, the Indenture Trustee, and U.S. Bank National Association (the “Collateral Agent”) 

are parties to, inter alia, the Indenture (as amended, the “Indenture”), dated as of May 31, 2017, 

between and among the Debtor, the Indenture Trustee, and the Collateral Agent; and the Pledge 

and Security Agreement (the “Security Agreement”), dated as of May 31, 2017, by and among 

the Debtor, the Grantees, and the Collateral Agent. 

6. Pursuant to the Indenture and in accordance with the Security Agreement, the 

Debtor issued its 8% Senior Secured Notes due 2022 (the “Notes”) which Notes and all other 

amounts due under the Indenture are secured by liens on and security interests in certain assets of 

the Debtor and other Grantors as defined therein (together, the “Collateral”). 

A. The Indenture Trustee Acts for All Holders 

7. The Indenture Trustee acts for all Holders of the Notes. The Indenture recites on 

page 1 that the Indenture Trustee and the Collateral Agent act “for the equal and ratable benefit 

of the Holders (as defined) of [the Notes].” Consistent with this recital, at the May 2, 2024, 

hearing the Indenture Trustee stated and the Trustee agreed that the TRO Motion seeks no relief 

against the Indenture Trustee and that the proposed Order does not impose any obligations 

beyond the terms of the Indenture and related documents. Accordingly, the Indenture Trustee 

takes no position with regard to the merits of the TRO Motion and does not propose to 

participate in the May 14 hearing other than to respond to any questions that may be posed the 

regarding the Indenture or the indirect holding system. 

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B. The Missing Bonds Represent Only A Beneficial Interest In The Notes And 

The Indenture Trustee Does Not Know The Owner Of The Missing Bonds 

8. Under the terms of the Indenture and in accordance with Article 8 of the Uniform 

Commercial Code, the Missing Bonds represent only a beneficial interest in the Notes, and the 

Indenture Trustee does not know the owner of the Missing Bonds. 

9. Determining the interest represented by the Missing Bonds begins with definitions 

set forth in the Indenture. 

a. Section 1.01 of the Indenture defines “Holder” as a Person in whose name 

a Note is registered. 

b. Section 1.01 defines “Global Notes” as the Global Notes deposited with or 

registered in the name of the Depository. 

c. “Depository” means the Person specified in Section 2.03. Section 2.03 

identifies the Depository as Depository Trust Company (“DTC”) and 

identifies the Indenture Trustee as the Registrar for the Bonds. 

d. DTC acts for its “Participants,” defined in Section 1.01 of the Indenture as 

Persons which have an account with DTC.2

 

e. A Person who holds a beneficial interest in a Global Note through a 

Participant is defined in Section 1.01 is an “Indirect Participant.” 

10. The Indenture Trustee affirms that, in accordance with the terms of the Indenture, 

the Debtor issued Global Certificates which are held by and registered solely in the name of 

Cede & Co., as nominee of DTC.3

2

 DTC holds securities through the book-entry system on behalf of financial institutions that contract to 

become DTC “participants.” See, e.g., 15 U.S.C. § 78(b). See also Royal Park Invs. SA/NV, 2017 WL 1331288, *6 

(S.D.N.Y. 2017) (Securities are “legally held only in the name of a DTC nominee, on behalf of various participant 

banks and brokerage firms, whose own customers, in turn, are usually the ultimate beneficial owners of the 

securities.”). Section 2.13 of the Indenture provides that the Indenture Trustee and its Agents have no responsibility 

for any actions taken or not taken by the Depository. 3

 See also U.C.C. § 8-207 (issuer or indenture trustee may treat the registered owner as the person 

exclusively entitled to exercise rights and power). 

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11. Under the indirect holding system and the Indenture, DTC is the sole Holder of 

the Notes. As stated at the May 2, 2024, hearing, the Indenture Trustee cannot identify the 

beneficial holder of the Missing Bonds. 

12. Article 8 confirms that the Missing Bonds represent only a beneficial interest in 

the Notes. Article 8 defines such an interest as a “securities entitlement,” and the holder of such 

interest has no ownership interest in the Notes. DTC is a “securities intermediary” for holders of 

securities entitlements, and such persons are “entitlement holders.” See U.C.C. § 8-102(a)(7, 14, 

17). As the legal and registered Holder of the Notes, Cede & Co. has the only ownership interest 

as to which the Indenture has direct knowledge. See U.C.C., Art. 8, Prefatory Note, § I.D. 

13. DTC participants act for their customers—typically brokers. The participants 

hold “security entitlements,” as opposed to actual securities, for the benefit of their customers. 

Each DTC participant is an entitlement holder, holding a security entitlement to a pro rata share 

of the security held by DTC in its capacity as the participant’s securities intermediary. As 

entitlement holders, DTC’s participants do not have a “claim to a specific identifiable thing”; 

rather, the participants’ security entitlements constitute “a package of rights and interests” that 

the participants have against DTC—the participants’ securities intermediary—and the security 

held by DTC. U.C.C. § 8-503 cmt. 1. DTC has “no insight into” the relationship between each 

participant and its customers. Royal Park Invs. SA/NV v. U.S. Bank Nat’l Ass’n, 324 F. Supp. 3d 

387, 391-92 (S.D.N.Y. 2018); see also UCC § 8-505, Official Comment 1. 

14. The brokers similarly are entitlement holders who hold securities entitlements 

against their participants. The brokers hold these security entitlements for their customers, 

which may be other brokers or the ultimate investors. 

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15. The ultimate investors also are entitlement holders, each having an entitlement to 

a pro rata share of the undivided interest of its securities intermediary (its broker) in the broker’s 

entitlement to a pro rata share in its participant’s pro rata interest in the actual security. 

16. The investor in the Missing Bonds does not own any Notes and, under Article II 

of the Indenture and U.C.C. Article 8, it has no direct right to payment on account of the Notes. 

See generally Indenture, Article II. 

C. Funds Must Be Held Subject To UMB’s Rights, 

Claims, Liens, and Security Interests 

17. In accordance with the Indenture and the Security Agreement, any amounts that 

may be payable on account of Notes or any interest therein constitute Collateral, subject to the 

liens and security interests of the Indenture Trustee and the Collateral Agent. 

18. Under the terms of the Indenture, the Indenture Trustee and the Collateral Agent 

retain a first priority interest, also know as a “charging lien,” giving them a first priority right to 

payment of fees, expenses, and other amounts payable under the terms of the Indenture.4

19. In accordance with the Indenture and the Security Agreement, any Order granting 

the TRO Motion should confirm that any distributions made on account of the Missing Bonds 

and paid into the registry of the Court remain subject to the liens and security interests of the 

Indenture Trustee and the Collateral Agent. 

 

4

 See Indenture § 6.10. See also Indenture § 7.07 (the Company must pay fees and expenses of the Indenture 

Trustee, including costs and expenses relating to enforcement of the Indenture, and the Indenture Trustee holds a 

Lien prior to the Notes on money held or collected by the Trustee; Indenture §§ 7.01(e) and 7.02(f) (Indenture 

Trustee has no obligation to expend or risk its own funds or incur any liability absent, inter alia, indemnity 

satisfactory to the Trustee); 

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D. Cancellation of Bonds 

20. Section 2.11 of the Indenture governs cancellation of Notes surrendered to the 

Indenture Trustee for that purpose. Any cancellation of the Missing Bonds must follow the 

procedure set forth in the Indenture. 

21. Consistent with the preceding section of this Response, if and when the Court 

determines that the Missing Bonds should be cancelled, any funds relating to the Missing Bonds 

and paid into Court should be returned to the Indenture Trustee for distribution in accordance 

with the Indenture. 

CONCLUSION 

21. For reasons set forth above, any Order granting the TRO Motion should provide 

that funds paid into the registry of the Court are held subject to the rights, claims, liens, and 

security interests of the Indenture Trustee and the Collateral Agent, that upon cancellation of the 

Missing Bonds any such funds should be returned to the Indenture Trustee for distribution in 

accordance with the Indenture, and that nothing in such Order imposes any obligations on the 

Indenture Trustee or the Collateral Agent beyond the terms of the Indenture and related 

documents. 

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By: /s/ Keith M. Aurzada 

Keith M. Aurzada 

Texas Bar No. 24009880 

Reed Smith, LLP 

2850 N. Harwood Street, Suite 1500 

Dallas, TX 75201 

(214) 498-4279 

kaurzada@reedsmith.com 

and 

By: /s/ Eric A. Schaffer 

Eric A. Schaffer, Esquire 

Stonecipher Law Firm 

125 First Avenue 

Pittsburgh, PA 15222 

(412) 391-8510 

eschaffer@stonecipherlaw.com 

Counsel to UMB Bank, National 

Association, as indenture trustee 

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CERTIFICATE OF SERVICE 

I hereby certify that on May 10, 2024, a true and correct copy of the 

above foregoing document was served via the Court’s Electronic Case Filing 

(ECF) system on all parties registered to receive electronic service through 

same. 

/s/ Keith M. Aurzada_________ 

Keith M. Aurzada 

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