ADMINISTRATIVE OFFICE OF THE 

UNITED STATES COURTS

WASHINGTON, D.C. 20544 

SECOND REPORT PURSUANT TO SECTION 202(e) OF THE

DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT

PUB. L. NO. 111-203 (2010)

JULY 2012 

 

iii

Table of Contents 

I. Introduction, 1

II. Executive Summary, 2

III. AOUSC Reports Under Title II, 3

A. Summary of First Report, 4

B. Scope of Second Report, 5

IV. Recent Developments, 5

A. Approved Rules Relating to the OLA, 6

B. Proposed Rules Relating to the OLA, 7

C. Bankruptcy Developments in 2011, 7

1. Lehman Brothers, 8

2. Washington Mutual, 9

3. MF Global, 10

V. Resolution of Claims for Financially Distressed Institutions, 11

A. Claims Resolution Under the Bankruptcy Code, 11

1. The Bankruptcy Claim, 12

2. Claims Objections and Litigation, 14

3. Separate Claims Process, 15

4. Claims Estimation, 17

5. Timing of Claims Objections, 18

B. Claims Resolution Under the OLA, 18

C. General Observations Regarding Claims Resolution Procedures, 19

VI. Preliminary Data Concerning Financial Institutions in Bankruptcy, 21

A. Data Project Methods and Work To Date, 21

B. Next Steps, 23

VII. Conclusion, 23

Appendices, 25

Appendix A: Terms Used in This Report, 27

Appendix B: Summary of Title II Studies by Other Agencies, 29

Appendix C: Claims Agent Order, 33

Appendix D: Case Management Order, 39

Appendix E: Claims ADR Procedures Order, 55

Appendix F: Bibliography, 141

 

1 

I. Introduction

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“the Act”)

introduced a broad array of regulatory reforms in the financial sector. Among those reforms is Title II of the Act, which provides a process for the identification and orderly 

liquidation of distressed, systemically important financial institutions. Title II also directs 

the Administrative Office of the United States Courts (AOUSC) to study the resolution of 

distressed financial institutions under Title 11 of the United States Code (the Bankruptcy 

Code). The AOUSC submitted its first report pursuant to section 202(e) of the Act on 

July 21, 2011 (“First Report”). The AOUSC now submits this second report in compliance with section 202(e)’s instruction that it summarize the results of its study in a report 

“[n]ot later than 1 year after the date of enactment of th[e] Act [and] in each successive 

year until the third year.”1 

This report proceeds as follows: 

• Part II provides an executive summary of the report’s primary findings and analysis with respect to the three issues identified for study in section 202(e) of the Act. 

• Part III describes the mandate for AOUSC reports and summarizes the First 

Report and the scope of the Second Report. 

• Part IV sets forth certain key developments relating to Title II of the Act since the 

First Report, including the regulations proposed to implement Title II and the 

handling of select distressed financial institutions during that time. 

• Part V focuses on a significant component of the resolution of distressed financial 

institutions—that is, the claims resolution procedure. This part analyzes the 

claims resolution procedure under the Bankruptcy Code and provides examples 

from select chapter 11 cases. This part also outlines the claims resolution procedure contemplated by Title II of the Act and, where relevant or useful, compares it 

to the federal bankruptcy scheme. 

• Part VI describes a data set being compiled by the Federal Judicial Center (FJC), 

at the request of the AOUSC Working Group. The data set will include information about the bankruptcy cases of certain large financial institutions filed between 2000 and 2010. Although the data collection is still in progress, the 

AOUSC Working Group anticipates that the data set will provide invaluable information for future studies of the resolution of distressed financial institutions. 

 The report concludes in Part VII by highlighting certain observations based on the 

narrative in Part V that are of particular relevance to the resolution schemes applicable to 

large, complex financial institutions. 

 

 1. Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, § 202(e)(2), 

124 Stat. 1376, 1449 (2010) [hereinafter Dodd-Frank Act]. The AOUSC appointed a Working Group to 

study the issues identified in section 202(e). A list of terms used in this report is set forth in Appendix A.
2 

II. Executive Summary

Section 202(e) of the Act directs the AOUSC to study three specific issues that primarily 

focus on the resolution of distressed financial institutions under the Bankruptcy Code: 

(1) “the effectiveness of chapter 7 or chapter 11 of the Bankruptcy Code in facilitating 

the orderly liquidation or reorganization of financial companies”; (2) “ways to make the 

orderly liquidation process under the Bankruptcy Code for financial companies more effective”; and (3) “ways to maximize the efficiency and effectiveness of the Court.”2

 The AOUSC determined that the best way to approach the section 202(e) study was 

to systematically and objectively evaluate the application of the liquidation and reorganization provisions of the Bankruptcy Code to financial institutions generally as well as to 

large, complex financial institutions that might qualify as “covered financial companies” 

under the Act. The First Report provided a broad overview of the resolution schemes potentially applicable to large, complex financial institutions. This report focuses on one 

particular and very critical component of those resolution schemes—that is, the claims 

resolution procedure. 

 As described in the First Report, many distressed financial institution cases involve a 

going-concern sale or asset liquidation. In such cases, the parties often focus on preserving value for the estates by pursuing claims, causes of action, and other assets on behalf 

of the estate and scrutinizing claims asserted against the estates. Increasing asset value 

and reducing the amount of allowed claims work in tandem to maximize returns to creditors. Consequently, an efficient and effective claims resolution procedure is important to 

both distressed firms and their creditors. 

 The Bankruptcy Code provides a structured yet flexible claims resolution procedure. 

The process involves an initial list of claims against the estate by the debtor in its schedules of assets and liabilities. Creditors and other parties in interest are provided an opportunity to file proofs of claim or interest against the estate within 90 days of the meeting of creditors in a chapter 7 case or by the court-established bar date in a chapter 11 

case. A creditor’s claim that is evidenced by a properly filed proof of claim is deemed 

allowed under the Bankruptcy Code unless or until the debtor, bankruptcy trustee, or 

other party in interest objects to the claim. 

 The basic structure for filing and preserving claims under the Bankruptcy Code provides certainty to parties impacted by a distressed firm. Creditors know the steps they 

need to take to preserve their claims and place the burden of going forward with the evidence on the debtor-in-possession or bankruptcy trustee. They also know that, to the extent a party files an objection and the dispute cannot be resolved consensually, it will be 

decided by the court. 

 Bankruptcy courts and debtors in large, complex bankruptcy cases have streamlined 

the claims resolution procedure by implementing a variety of special claims processes. 

These have included alternative dispute resolution procedures, expedited claims objections and settlement procedures, and omnibus objection procedures. As discussed in Part 

V.A.3, Lehman Brothers is using a combination of court-approved claims resolution pro-

 

 2. Id. § 202(e)(1)(B)(i)-(iii), 124 Stat. at 1448–49. Section 202(e)’s reference to “Court” presumably 

means the United States District Court for the District of Columbia under Title II of the Act but may mean 

the United States Bankruptcy Court, as discussed in Part V.E of the First Report. Administrative Office of 

the U.S. Courts, Report Pursuant to Section 202(e) of the Dodd-Frank Wall Street Reform and Consumer 

Protection Act of 2010 (July 2011) [hereinafter First Report].
3 

cedures to resolve approximately 67,000 claims originally filed in the aggregate amount 

of $1.2 trillion. Likewise, General Motors is using an alternative dispute resolution process to efficiently review and resolve the approximately 68,000 claims filed against its 

estate. In addition, the bankruptcy claims resolution procedure has been tailored to resolve present and future mass tort and products liability claims in a variety of large, complex chapter 11 cases. 

 The bankruptcy claims resolution process efficiently and effectively resolves the multitude of various claims asserted in bankruptcy court. While it can take multiple years to 

resolve the tens of thousands of claims frequently asserted in large, complex bankruptcy 

cases, the court is involved from the outset to facilitate the resolution process, and the 

parties understand the structured and clearly established procedures. The debtor also can 

employ a claims agent to efficiently manage the process. Moreover, the costs of the process are borne by the bankruptcy estate and ultimately the creditors, often providing the 

incentive to facilitate as timely a resolution as possible. 

 Notably, the Orderly Liquidation Authority (OLA) claims resolution procedure 

adopts certain aspects of the bankruptcy claims resolution procedure by, among other 

things, requiring creditors to file proofs of claim and allowing the Federal Depository Insurance Corporation (FDIC), as receiver, to object to claims. Unlike the bankruptcy 

claims resolution procedure, however, a creditor’s claim is deemed rejected unless the 

FDIC allows the claim within the 180-day review period, which can be extended by the 

consent of the parties. Once a creditor receives a notice of allowance or disallowance of 

claim from the FDIC (or the 180-day review period expires), the creditor may file a lawsuit on the claim in a district court of proper jurisdiction. The ex post judicial review process contemplated by the OLA is contrary to the centralized claims resolution procedure 

fostered by the Bankruptcy Code. 

 As discussed in detail in Part V.C, the efficiency of either the bankruptcy or the OLA 

claims resolution procedure may turn largely on the facts of the particular case and the 

parties managing the process. Nevertheless, the flexibility and concurrent court supervision inherent in the bankruptcy claims resolution procedure may allow that process to 

adapt more easily to the variety of distressed firms that require a claims resolution 

scheme. The information contained in this report and the data being collected by the Federal Judicial Center, described in Part VI, will allow further analysis in future reports of 

not only the claims resolution procedures, but also the general resolution schemes applicable to large, complex financial institutions. 

III. AOUSC Reports Under Title II

The First Report detailed the events preceding the Act, which included the failure or 

near-failure of several large, complex financial institutions, such as Bear Stearns, Lehman 

Brothers Holding Inc. (Lehman Brothers), Merrill Lynch, and the American International 

Group.3

 The Act effects a variety of changes in the regulation of financial institutions, 

financial products and services, and various market participants. Its stated goals are “[t]o 

promote the financial stability of the United States by improving accountability and 

transparency in the financial system, to end ‘too big to fail,’ to protect the American tax-

 

 3. See First Report Part III. 
4 

payer by ending bailouts, to protect consumers from abusive financial services practices, 

and for other purposes.”4 

 The Act addresses the financial distress of large, complex financial institutions and 

the related systemic concerns in several different provisions. The provisions most relevant to this report are Title I of the Act, Financial Stability, which creates the Financial 

Stability Oversight Council (FSOC); and Title II of the Act, OLA, which creates a regulatory process for the FDIC to act as receiver and liquidate certain covered financial 

companies.5 The FSOC determines if an entity (e.g., bank holding company, non-bank 

financial institution) is a covered financial company. If the FDIC is acting as a receiver, 

the OLA is the exclusive insolvency law applicable to that covered financial company. 

Accordingly, the Bankruptcy Code would not govern that covered financial company, 

and any bankruptcy case filed for that company would terminate upon the appointment of 

the FDIC as receiver.6

 In light of the new insolvency scheme created for covered financial companies under 

the Act, Title II mandates various studies to consider the implications of the new scheme 

and the existing alternatives to that scheme.7 This report relates to the study mandated by 

section 202(e) of the Act, “Study of Bankruptcy and Orderly Liquidation Process for Financial Companies.” 

 Section 202(e) requires the AOUSC to study the following three issues: 

(i) the effectiveness of chapter 7 or chapter 11 of the Bankruptcy Code in facilitating the orderly 

liquidation or reorganization of financial companies;

(ii) ways to maximize the efficiency and effectiveness of the Court [Title II defines “Court” to 

mean “the United States District Court for the District of Columbia, unless the context otherwise requires”];

(iii) ways to make the orderly liquidation process under the Bankruptcy Code for financial companies more effective. 

 Section 202(e) further requires the AOUSC to submit a report summarizing the results of the study “[n]ot later than 1 year after the date of enactment” of the Act—that is, 

July 21, 2011.8

 The AOUSC must file two subsequent annual reports in July 2012 and 

July 2013, and then a report “every fifth year after the date of enactment.”9 This report is 

the second of the three annual reports required by the Act. This part briefly describes the 

substance of the First Report and the scope of this second report. 

A. Summary of First Report 

The core contribution of the First Report is its systematic and thorough analysis of the 

key provisions of the Bankruptcy Code that likely would affect the reorganization or liquidation of a financial institution. It also summarizes key provisions of Title II of the Act 

 

 4. Dodd-Frank Act pmbl., 124 Stat. at 1376. 

 5. Id. §§ 111, 203, 124 Stat. at 1392, 1450. Section 111 creates the Financial Stability Oversight Council, and section 203 states the process by which the FDIC is appointed as receiver to liquidate certain bank 

holding companies and certain non-bank financial institutions. 

 6. Id. § 208, 124 Stat. at 1459. 

 7. Id. §§ 202(e)–(g), 216, 217, 124 Stat. at 1448–49, 1519–20. A summary of the Title II reports filed 

by the U.S. Government Accountability Office and the Board of Governors of the Federal Reserve System 

in July 2011 is included in infra Appendix B. 

 8. Id. § 202(e)(2), 124 Stat. at 1449. 

 9. Id.
5 

for purposes of comparison. It then explains the potential advantages and disadvantages 

of each resolution scheme in the context of large, complex financial institutions. 

 The First Report does not draw general conclusions about the “effectiveness” of the 

Bankruptcy Code in facilitating the “orderly” liquidation or reorganization of distressed 

financial institutions. Rather, it uses a combination of qualitative data (primarily interviews with restructuring professionals and United States judges and clerks of court) and 

case studies to consider the options available to resolve distressed financial institutions. 

The First Report also reviews several of the proposals suggested by commentators for 

better accommodating the resolution of financial institutions under the Bankruptcy Code. 

These proposals generally focus on mitigating the impact of any large, complex financial 

institution’s bankruptcy filing on the global economy and markets by, among other 

things, encouraging prebankruptcy planning, enhancing the involvement of the FDIC and 

other governmental agencies in the bankruptcy case, streamlining certain processes, 

and/or modifying the treatment of financial contracts in bankruptcy. 

 The research underlying the First Report suggests that many of the issues preceding 

the Act emerged not only because of the business attributes of large, complex financial 

institutions but also because of the dire economic conditions facing the United States and 

other countries beginning in late 2007. Accordingly, it likely was this confluence of circumstances—and not the Bankruptcy Code or any one particular issue—that created 

challenges for Lehman Brothers in its chapter 11 case and for the other financial institutions that failed or were resolved under the Bankruptcy Code or the Federal Deposit Insurance Act (FDIA). The First Report concludes that, on a preliminary basis, the Bankruptcy Code generally functions well to address corporate distress, including that of bank 

holding companies and non-bank financial institutions. 

B. Scope of Second Report 

Since completing the First Report, the AOUSC Working Group has continued to evaluate 

issues relevant to the resolution of distressed financial institutions. Specifically, the 

Working Group has (1) continued to monitor developments relating to Title II and the 

resolution of distressed financial institutions such as Lehman Brothers, Washington Mutual, and most recently, MF Global Holdings, Inc. (MF Global); (2) reviewed the most 

recent academic and financial literature on the implementation of Title II and related issues (a sample of these materials is provided in the Bibliography in Appendix F); 

(3) studied the claims resolution procedures applicable under both the Bankruptcy Code 

and the OLA; and (4) collected certain preliminary data on financial institutions that filed 

a case under the Bankruptcy Code between 2000 and 2010. This report summarizes the 

results or status of these various tasks. 

IV. Recent Developments

Although the OLA has not yet been invoked, several relevant events occurred during the 

last twelve months. For example, the FDIC and other federal agencies have worked to 

propose and, in some instances, approve the rules implementing Title II of the Act. Two 

of the financial institutions that filed bankruptcy cases before enactment of the Act—

Lehman Brothers and Washington Mutual—confirmed plans of reorganization under 

chapter 11 of the Bankruptcy Code. These plans, among other things, resolve various disputes surrounding the financial distress of each company and facilitate distributions to 
6 

creditors. In addition, MF Global filed a case under chapter 11 of the Bankruptcy Code in 

October of 2011; notably, the OLA was not invoked to resolve MF Global’s financial 

distress.10 This part discusses each of these relevant developments. 

A. Approved Rules Relating to the OLA

In the past year, the FDIC issued the final rule that established the framework for the 

claims resolution procedure under Title II of the Act.

11 The rule clarifies that the avoidance powers of the FDIC as receiver are the same as the avoidance powers of a trustee 

under the Bankruptcy Code. Subpart B of the rule addresses the priorities of claims and 

provides that administrative expenses of the receivership are afforded first priority. The 

rule revised the definition of “amounts owed to the United States” to clarify that the obligations entitled to priority are the amounts advanced by the government to mitigate adverse financial effects of the entity’s failure. 

 The Federal Reserve and the FDIC also approved a final rule that requires certain 

large bank holding companies and non-bank financial companies designated by the 

FSOC for enhanced supervision by the Federal Reserve to submit a comprehensive plan 

for rapid and orderly resolution of the company under the Bankruptcy Code in the event 

of failure.12 The FSOC clarified that the covered non-bank financial companies are those 

entities with a 15-to-1 leverage ratio; $3.5 billion in liabilities on derivative contracts; 

$20 billion of outstanding loans and bonds issued; $30 billion in gross notional creditdefault swaps outstanding; or a ten percent ratio of short-term debt to assets.13 The periodic reports would be required for each bank holding company with assets of $50 billion 

or more. The first plans were due July 1, 2012. 

 In addition, the Federal Reserve and FDIC approved a similar rule for insured depository institutions with $50 billion or more in assets.14 The rule requires the covered institutions to submit an annual resolution plan to the FDIC. However, these institutions are not 

eligible to file bankruptcy and, as such, the plan must include an analysis outlining how 

the FDIC would proceed under the OLA process. The goals of the rules are essentially 

the same—requiring large financial institutions to submit resolution plans for orderly liquidation in the event of failure. Both rules require the institutions to submit nonconfidential executive summaries that provide the framework in the event of financial 

failure, detail material developments to the company or changes from the previously 

submitted plan, and describe actions taken to improve the plan and to mitigate risks of 

failure. 

 

10. See, e.g., Agustino Fontevecchia, Client Cash Reportedly Missing at MF Global; Debacle May 

Underline Case for Volcker Rule, Forbes, Oct. 31, 2011, 

http://www.forbes.com/sites/afontevecchia/2011/10/31/mf-global-the-fall-of-corzine-the-volcker-rule-andtoo-big-to-fail/ (discussing calls by commentators for the government to invoke the OLA and use MF 

Global as a test case).

11. Certain Orderly Liquidation Authority Provisions Under Title II of the Dodd-Frank Wall Street 

Reform and Consumer Protection Act, 76 Fed. Reg. 41,626 (July 15, 2011) (codified at 12 C.F.R. pt. 380). 

12. Resolution Plans Required, 76 Fed. Reg. 67,323 (Nov. 1, 2011) (codified at 12 C.F.R. pt. 243).

13. Authority to Require Supervision and Regulation of Certain Nonbank Financial Companies, 77 

Fed. Reg. 21,637, 21,643 (Apr. 11, 2012) (to be codified at 12 C.F.R. pt. 1310). 

14. Resolution Plans Required for Insured Depository Institutions with $50 Billion or More in Total 

Assets, 77 Fed. Reg. 3075 (Jan. 23, 2012) (to be codified at 12 C.F.R. pt. 360). 
7 

B. Proposed Rules Relating to the OLA

The FDIC proposed a rule to implement section 210(c)(16) of the OLA provisions that 

seeks to stabilize a failing financial group during its resolution.15 This section grants the 

FDIC, as receiver for a covered financial company (an entity deemed by the FSOC as 

posing a significant risk to U.S. financial stability), the power to enforce contracts of subsidiaries and affiliates of the covered financial company, notwithstanding the power of a 

third party to accelerate or terminate the contract. This proposed rule would allow enforcement of all contracts of all subsidiaries and affiliates of the covered financial company (CFC) that are “linked to” or “supported by” the CFC.16 

 The FDIC and the Department of the Treasury also proposed a rule establishing the 

maximum obligation the FDIC may incur during the resolution of a particular covered 

financial company under the OLA.17 In general, the FDIC may not incur obligations that 

exceed 10% of the total consolidated assets of the entity during the 30 days after appointment of the FDIC as receiver or obligations that exceed 90% of the total consolidated assets that are available for repayment during the 30-day period following the appointment of the FDIC as receiver. One significant difference between the bankruptcy 

process and the OLA is that in bankruptcy the owners and creditors bear the losses; under the OLA, the U.S. government bears the losses in the event that the obligations incurred by the FDIC as receiver go unsatisfied. 

C. Bankruptcy Developments in 2011 

As regulations continue to shape the OLA process, business bankruptcy filings decreased 

17% from calendar year 2010 to calendar year 2011.18 There were 9,772 chapter 11 business bankruptcy filings in 2011, compared with 11,744 in 2010.19 The largest of the filings was MF Global with $40.5 billion in assets, making it the eighth-largest bankruptcy 

filing of all time based on assets. Seventeen public companies with assets of more than $1 

billion completed their restructurings in bankruptcy through assets sales or confirmed 

plans, including Lehman Brothers and Motors Liquidation Company (formerly General 

Motors).20 In addition, Washington Mutual confirmed its chapter 11 plan in February 

 

15. Enforcement of Subsidiary and Affiliate Contracts by the FDIC as Receiver of a Covered Financial 

Company, 77 Fed. Reg. 18,127 (Mar. 27, 2012) (to be codified at 12 C.F.R. pt. 380).

16. A contract is “linked to” a covered financial company if it contains a qualified financial condition 

clause or any provision that grants a counterparty the right to “cause the termination, liquidation or acceleration of such contract based solely on the insolvency, financial condition, or receivership of the covered 

financial company.” The term “supported by” means when a covered financial company supports through 

guarantee or the undertaking of any similar financial assistance to an affiliate or subsidiary. Id. at 18,128.

17. Calculation of Maximum Obligation Limitation, 76 Fed. Reg. 72,645 (Nov. 25, 2011) (to be codified at 31 C.F.R. pt. 149).

18. http://www.uscourts.gov/Statistics/BankruptcyStatistics.aspx. Increasingly, individual debtors are 

filing under chapter 11 due to the debt limitations of chapter 13 eligibility. These statistics include only 

chapter 11 cases in which the predominant type of debt was business.

19. Id. 

20. Charles M. Oellerman & Mark G. Douglas, The Year in Bankruptcy: 2011, Jones Day (Jan. 2012), 

http://www.jonesday.com/newsknowledge/publicationdetail.aspx?publication=f3eb361f-8ef1-49f1-a01d899bdd18e1d1&RSS=true. 
8 

2012. The statuses of the Lehman Brothers, Washington Mutual, and MF Global cases 

are summarized below.21

1. Lehman Brothers 

Lehman Brothers and some of its affiliates filed chapter 11 cases in the United States 

Bankruptcy Court for the Southern District of New York on (or, with respect to certain 

affiliates, after) September 15, 2008. At the filing of the chapter 11 cases, Lehman 

Brothers was a holding company that directly or indirectly owned the equity of its debtor 

and non-debtor affiliates.22 Some of Lehman Brothers’ affiliates also filed bankruptcy or 

insolvency proceedings in foreign jurisdictions, and the Securities Investor Protection 

Corporation (SIPC) commenced an action against Lehman Brothers Inc. (LBI) under the 

Securities Investor Protection Act of 1970 (SIPA).23 The bankruptcy court approved the 

sale of LBI’s assets to Barclays Capital Inc. five days after the filing of the chapter 11 

case and one day after the SIPC commenced a SIPA proceeding against LBI.24

 The Lehman Brothers cases involved several significant events that culminated in a 

plan of reorganization that the bankruptcy court confirmed on December 6, 2011.25 These 

events included the sale of various financial and real estate assets; negotiations and settlements with the insolvency representatives of Lehman Brothers’ foreign affiliates; the 

negotiation of a collateral disposition agreement with JPMorgan Chase Bank, N.A. 

(JPMC), which provided banking and clearinghouse services to Lehman Brothers; the 

review and handling of approximately 1.2 million derivative transactions with approximately 6,500 counterparties; the management of investments in non-debtor domestic 

banks subject to regulation by the FDIC; and the review and handling of various prepetition transactions, including securitizations.26 

 Under the plan of reorganization, Lehman Brothers and its debtor affiliates emerged 

as reorganized debtors and retained their existing entity forms.27 A plan administrator is 

overseeing the continued liquidation of the reorganized debtors’ assets to facilitate distributions under the plan. Lehman Brothers’ plan of reorganization became effective on 

March 6, 2012, and distributions to creditors under the plan commenced on April 17, 

 

21. In re MF Global Holdings Ltd., No. 1:11-BK-15059 (Bankr. S.D.N.Y. Oct. 31, 2011); In re Washington Mut., Inc., No. 1:08-BK-12229 (Bankr. D. Del. Sept. 26, 2008); In re Lehman Bros. Holding Inc., 

No. 1:08-BK-13555 (Bankr. S.D.N.Y. Sept. 15, 2008).

22. See Debtors’ Disclosure Statement for Third Amended Joint Chapter 11 Plan of Lehman Brothers 

Holding Inc. & Its Affiliated Debtors Pursuant to Section 1125 of the Bankruptcy Code, In re Lehman 

Bros. Holding Inc., No. 1:08-BK-13555 (Bankr. S.D.N.Y. Sept. 1, 2011) [hereinafter Lehman Brothers 

Disclosure Statement]. A chart depicting the Lehman Brothers’ prepetition corporate structure is provided 

in Exhibit 19. Id. at 19-4. 

23. See id. at 19–20; see also 11 U.S.C. §§ 741–767 (2012).

24. Robert J. Rosenberg et al., Asset Sale Issues, Bankr. 2009: Views from the Bench (Am. Bankr. 

Inst., Alexandria, Va.), Oct. 2, 2009. 

25. In re Lehman Bros. Holdings Inc., No. 1:08-BK-13555 (Bankr. S.D.N.Y. Dec. 6, 2011). 

26. Lehman Brothers Disclosure Statement, supra note 22, at 24–42. For an additional discussion of 

the scope and management of Lehman Brothers’ derivative contracts, see First Report, supra note 2, at 34–

37. In addition, Lehman Brothers and its creditors’ committee commenced litigation against JPMorgan 

regarding certain prepetition transactions. See Lehman Brothers Disclosure Statement, supra note 22, at 27.

27. See Lehman Brothers Disclosure Statement, supra note 22, at 97.
9 

2012.28 Parties filed approximately 67,000 claims against the Lehman Brothers’ debtors 

in an aggregate amount of approximately $1.2 trillion.29 Early in the cases, Lehman 

Brothers estimated the actual amount of those filed claims at $740 billion.30 As of May 

2011, Lehman Brothers estimated the actual amount of allowed claims at $362 billion, 

and creditors are expected to receive approximately $65 billion under the terms of the 

Lehman Brothers’ plan.31

2. Washington Mutual 

Washington Mutual and its subsidiary WMI Investment Corp. filed chapter 11 cases in 

the United States Bankruptcy Court for the District of Delaware on September 26, 

2008.32 The day before Washington Mutual commenced its chapter 11 case, the FDIC 

(acting as receiver) took possession of the assets of Washington Mutual Bank (WMB) 

and immediately sold those assets to JPMC under the FDIA.33 WMB was, among other 

things, a significant originator of residential mortgages and “experienced significant deposit withdrawals of more than $16.7 billion, amounting to more than $2 billion per 

banking business day, in the ten days immediately prior to” the FDIC receivership.34 A 

significant portion of Washington Mutual’s chapter 11 cases concerned litigation involving the FDIC or JPMC and the prepetition transfer of WMB’s assets to JPMC. A global 

settlement of these litigation matters and the resolution of certain related issues cleared 

the path for confirmation of Washington Mutual’s plan of reorganization on February 23, 

2012.35

 

28. Lehman Brothers Chapter 11 Debtors Emerge from Bankruptcy and Set Initial Distribution Date, 

Bus. Wire, Mar. 6, 2012, http://www.businesswire.com/news/home/20120306006303/en/Lehman-BrothersChapter-11-Debtors-Emerge-Bankruptcy. 

29. Lehman Brothers Disclosure Statement, supra note 22, at 6-2 (Exhibit 6). As discussed further in 

infra Part V.A., parties may file a proof of claim against the debtor’s estate and that claim is deemed 

allowed in the amount asserted in the proof of claim unless and until the debtor-in-possession or 

bankruptcy trustee objects to the claim. As a result, the amount of claims asserted in proofs of claim often 

differs—sometimes significantly—from the amount actually due and owing from the debtor or allowed by 

the court through the claims resolution procedure.

30. Id.

31. Id.; see also Michael J. De La Merced, Lehman Estate Emerges from Bankruptcy, N.Y Times

Dealbook (Mar. 6, 2012, 8:07 PM), http://dealbook nytimes.com/2012/03/06/lehman-estate-emerges-frombankruptcy/. 

32. See Disclosure Statement for the Seventh Amended Joint Plan of Affiliated Debtors Pursuant to 

Chapter 11 of the United States Bankruptcy Code at 1, In re Washington Mutual, Inc., No. 1:08-BK-12229 

(Bankr. D. Del. Dec. 12, 2011) [hereinafter Washington Mutual Disclosure Statement]. “Prior to the Petition Date, WMI was a multiple savings and loan holding company that owned Washington Mutual Bank 

(‘WMB’) and, indirectly, WMB’s subsidiaries, including Washington Mutual Bank FSB (‘FSB’).” Id. at 1–

2. A corporate structure chart is provided at page 52 of the Washington Mutual Disclosure Statement.

33. Id. at 2.

34. Id. at 82.

35. Id. at 6–18 (discussing the events shaping the debtors’ seventh amended plan of reorganization). 

See also Findings of Fact, Conclusions of Law, and Order Confirming the Seventh Amended Joint Plan of 

Affiliated Debtors Pursuant to Chapter 11 of the United States Bankruptcy Code, In re Washington Mutual, 

Inc., No. 08-12229 (Bankr. D. Del. Mar. 19, 2012) [hereinafter Washington Mutual Confirmation Order]; 

Notice of (A) Entry of Order Confirming the Seventh Amended Joint Plan of Affiliated Debtors Pursuant to 

Chapter 11 of the United States Bankruptcy Code & (B) Occurrence of the Effective Date, In re
10

 Under Washington Mutual’s plan of reorganization, reorganized Washington Mutual’s primary assets include its equity interests in WMI Investments and certain assets 

recovered or created through the chapter 11 process.36 The plan contemplates the liquidation of these assets to facilitate distributions to creditors and shareholders under the plan. 

Washington Mutual’s plan of reorganization became effective on March 19, 2012.37

Creditors will receive an estimated $7 billion under the plan.38

3. MF Global 

MF Global and five of its affiliates filed chapter 11 cases in the United States Bankruptcy 

Court for the Southern District of New York on (or, with respect to certain affiliates, after) October 31, 2011.39 MF Global was “one of the world’s leading brokers in markets 

for commodities and listed derivatives.”40 In connection with its chapter 11 filing, the 

company disclosed approximately $41 billion in assets and $39 billion in debt.41 The 

company’s financial distress reportedly was caused, in part, by the European sovereigndebt crisis.42 MF Global was not declared a covered financial company subject to the 

OLA.43

 Also on October 31, 2011, SIPC commenced a SIPA case against MF Global Inc. 

(MFGI), MF Global’s broker-dealer operating subsidiary, in the United States District 

Court for the Southern District of New York.44 The SIPC trustee is liquidating MFGI’s 

 

Washington Mutual, Inc., No. 08-12229 (Bankr. D. Del. Mar. 19, 2012) [hereinafter Washington Mutual 

Confirmation Notice]. 

36. Washington Mutual Disclosure Statement, supra note 32, at 20. Reorganized Washington Mutual’s 

“only operating subsidiary . . . is a captive reinsurance company” that is being operated on a run-off basis.

Id. The plan splits the $140 estimated value of this captive reinsurance company between Washington 

Mutual’s creditors and shareholders. See Steven Church, WaMu Bankruptcy Judge to Approve $7 Billion 

Reorganization, Bloomberg Businessweek (Feb. 28, 2012, 8:25 AM), 

http://www.businessweek.com/news/2012-02-28/wamu-bankruptcy-judge-to-approve-7-billionreorganization html. 

37. See Washington Mutual Confirmation Notice, supra note 35. 

38. See Church, supra note 36. 

39. Michael J. De La Merced & Ben Protess, MF Global Files for Bankruptcy, N.Y. Times DealBook 

(Oct. 31, 2011, 10:21 AM), http://dealbook nytimes.com/2011/10/31/mf-global-files-for-bankruptcy/. 

40. Declaration of Bradley I. Abelow Pursuant to Local Bankruptcy Rule 1007-2 & in Support of 

Chapter 11 Petitions & Various First-Day Applications & Motions at 3, In re MF Global Holdings Ltd., 

No. 1:11-BK-15059 (Bankr. S.D.N.Y. Oct. 31, 2011).

41. See Robert Lenzer, Corzine Had MF Global Leveraged 80 to 1, Forbes, Oct. 31, 2011, 

http://www.forbes.com/sites/robertlenzner/2011/10/31/corzine-had-mf-global-leveraged-80-to-1/. Part of 

this shortfall relates to a dispute between MF Global Inc. (MFGI) and the joint special administrators for 

MF Global UK Ltd. concerning approximately $700 million of segregated customer funds. See Update to 

30.7 Customers: Trustee Calls for Litigation in the United Kingdom to Recover Approximately $700 

Million of Customer Property, Epiq Debtor Matrix (Apr. 18, 2012), 

http://dm.epiq11.com/MFG/Project#Section2 26. In addition, the SIPC trustee reportedly is considering 

litigation against certain former executives of the companies in connection with the funding shortfall. See

Nick Brown, MF Global Trustee May Sue Company Employees, Reuters, Apr. 12, 2012, available at

http://articles.chicagotribune.com/2012-04-12/news/sns-rt-us-mfglobal-hearingbre83b1g5-

20120412 1 trustee-james-giddens-mf-global-customer. 

42. See sources cited supra note 41.

43. See supra note 10 and accompanying text. 

44. In re MF Global Inc., No. 11-2790 (MG) SIPA (Bankr. S.D.N.Y. Oct. 31, 2011).
11

assets and distributing payments to MFGI’s commodities customers on a rolling basis 

pursuant to a claims resolution procedure approved by the bankruptcy court overseeing 

the SIPA case.45 In February 2012, the SIPC trustee disclosed an estimated $1.6 billion 

funding gap in these payments.46

 On November 22, 2011, the bankruptcy court appointed a chapter 11 trustee in MF 

Global’s chapter 11 cases. The chapter 11 trustee is in the process of reviewing and administering the estates. The bankruptcy court has denied one motion to convert the chapter 11 cases to SIPA-like proceedings under chapter 7 of the Bankruptcy Code, but certain of MFGI’s commodities customers continue to seek similar relief.47 MF Global’s liabilities include approximately $1.17 billion on revolving credit facilities and approximately $1.02 billion on unsecured notes.48 MF Global’s creditors’ committee and the 

chapter 11 trustee are working to identify potential value for MF Global’s creditors and 

have suggested the need for greater cooperation from the SIPC trustee.49

V. Resolution of Claims for Financially Distressed Institutions

As illustrated by the preceding status notes on the Lehman Brothers, Washington Mutual, 

and MF Global chapter 11 cases, the amount and resolution of creditors’ claims constitute 

the core of financial institution cases. This fact remains whether the financial institution 

is reorganized or liquidated and whether that process occurs under the Bankruptcy Code 

or the OLA. Accordingly, this part reviews the claims resolution procedures under the 

Bankruptcy Code and the OLA and provides some observations based on large, complex 

chapter 11 cases. 

A. Claims Resolution Under the Bankruptcy Code 

The financial distress of any company, including a financial institution, impacts numerous constituencies such as the company’s creditors (customers, suppliers, lenders, and 

employees) and shareholders. Creditors’ claims often are paid at a significant discount, 

and shareholders’ interests typically are eliminated. These results, in turn, can substantially impact the finances of the company’s creditors and shareholders. Therefore, the 

 

45. In re MF Global Inc., No. 11-2790 (MG) SIPA (Bankr. S.D.N.Y. Nov. 22, 2011); see also Kelsey 

Butler, MF Global Awaits Distribution Decision, The Deal Pipeline (Apr. 13, 2012, 12:42 PM), 

http://www.thedeal.com/content/restructuring/mf-global-awaits-distribution-decision.php (noting that SIPC 

trustee seeking authority to distribute $685 million to commodities customers and that U.S. commodities 

customers had received approximately 72% of their claims as of March 2012). 

46. See Ben Protess, MF Global Trustee Sees $1.6 Billion Customer Shortfall, N.Y. Times Dealbook 

(Feb. 10, 2012, 8:01 PM), http://dealbook nytimes.com/2012/02/10/mf-global-trustee-sees-1-6-billioncustomer-shortfall/. 

47. See, e.g., Nick Brown, MF Global Customers Seek to Streamline Liquidation, Reuters, Mar. 16, 

2012, http://www.reuters.com/article/2012/03/16/us-mfglobal-chapter-idUSBRE82F1EG20120316; In re 

MF Global Holdings, Ltd., No. 1:11-BK-15059 (Bankr. S.D.N.Y. Apr. 30, 2012). 

48. See Dynegy, Kodak, Rothstein, Madoff, MF Global: Bankruptcy, Bloomberg Businessweek

(Mar. 12, 2012, 12:49 PM), http://news.businessweek.com. 

49. See, e.g., First Status Report of Statutory Creditors’ Committee Concerning the State of the Estate 

Pursuant to Bankruptcy Code Section 1102(b)(3) at Exhibit A, In re MF Global Holdings, Ltd., No. 1:11-

BK-15059 (Bankr. S.D.N.Y. Apr. 5, 2012). For trustee’s position, see, e.g., Trustee’s Preliminary Report 

on Status of His Investigation & Interim Status Report on Claims Process & Account Transfers, In re MF 

Global Inc., No. 11-2790 (MG) SIPA (Bankr. S.D.N.Y. Feb. 6, 2012). 
12

procedures governing the assertion and resolution of claims and interests against a distressed company are vitally important to the overall resolution system. 

 The Bankruptcy Code embodies a centralized process for asserting, adjudicating, and 

allowing or disallowing claims. The process is systematic and designed to foster fair and 

efficient resolution of claims and interests.50 As described below, the Bankruptcy Code 

provides for the allowance of claims against and interests in the debtor. After the debtor 

identifies claims and interests in the debtor’s schedule of assets and liabilities and creditors file proofs of claims, parties are given a period of time as fixed in the plan to review 

these claims and file objections to them. There is a defined process for providing notice 

of, and an opportunity to be heard on, any objections to the claims, which are resolved by 

the bankruptcy court or a court-approved mechanism, such as mediation. The Federal 

Rules of Bankruptcy Procedure (“the Bankruptcy Rules”) and the local rules of the bankruptcy courts further facilitate this process by allowing omnibus objections to claims and 

streamlined procedures to resolve the thousands of claims filed in most large, complex 

bankruptcy cases. Under 28 U.S.C. § 156(c), the court may appoint a claims and noticing 

agent, payable from the estate and under the supervision of the clerk of court, to assist 

with the administrative aspects of the claims resolution procedure. This is typically done 

only in very large cases involving many claims. Such an agent may, among other things, 

(1) mail notices to the estates, creditors, and parties in interest; (2) provide computerized 

claims and objection database services; and (3) provide expertise, consultation, and assistance in claims processing and other administrative tasks, including, for example, assisting in preparation of the debtor’s schedules and statements of financial affairs and any 

amendments thereto.51 

1. The Bankruptcy Claim 

The Bankruptcy Code broadly defines a claim as: 

(A) right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, 

fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured; or

(B) right to an equitable remedy for breach of performance if such breach gives rise to a right to 

payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured.52

 The broad definition of “claim” was intended to reach all legal obligations, no matter 

how remote, and deal with them in the bankruptcy case.53 Bankruptcy only discharges 

 

50. Although this part focuses primarily on creditors’ claims asserted against a debtor’s bankruptcy 

estate, similar procedures govern the filing of proofs of equity interest and any objections to those equity 

interests. Fed. R. Bankr. P. 3002 (stating holders of claims and equity security interests must file to 

substantially comply with the Official Form and Bankruptcy Rule 3001). 

51. See Appendix C for a motion and order related to such an appointment. 

52. 11 U.S.C. § 101(5) (2012). 

53. See Ohio v. Kovacs, 469 U.S. 274, 279 (1985) (“[I]t is apparent that Congress desired a broad definition of a ‘claim’ . . . .” (citing S. Rep. No. 95-989, at 21 (1978), reprinted in 1978 U.S.C.C.A.N. 5787, 

5807–08; H.R. Rep. No. 95-595, at 309 (1977), reprinted in 1978 U.S.C.C.A.N. 5963, 6266)); In re

Chateaugay Corp., 944 F.2d 997, 1003 (2d Cir. 1991) (“Congress unquestionably expected this definition 

[of a claim] to have wide scope.”). 
13

“claims,” and a narrow definition of “claim” would undercut the “fresh start” policy so 

important to bankruptcy law.54 

 The starting point of a chapter 11 claims resolution procedure is the debtor’s schedules of assets and liabilities. The schedules, which consist of Official Forms, categorize 

the types of claims against the debtor. For example, Schedule D lists the debtor’s secured 

claims; Schedule E, the unsecured priority claims; and Schedule F, the unsecured claims. 

The claims listed on the schedules may be categorized as disputed, contingent, or 

unliquidated. 

 The schedule of liabilities filed pursuant to section 521(a)(1) of the Bankruptcy Code 

establishes prima facie evidence of the validity of the claim.55 It is the creditor’s responsibility to verify the accuracy of the claim listed on the schedule. If the debtor’s schedules 

list a claim as undisputed, liquidated, and not contingent—and the creditor agrees with 

the amount listed—the creditor is not required to file a proof of claim.56 Otherwise, the 

creditor must file a proof of claim by the deadline or bar date fixed by the court in order 

to participate in any distributions in the case.57 The court, for cause shown, may extend 

the time within which proofs of claim may be filed58 and may allow a creditor to file a 

claim after the deadline based on excusable neglect.59 A filed claim is deemed allowed 

unless a party in interest objects.60 

 Pursuant to Bankruptcy Rule 1009(a), the debtor may amend its schedules as a matter 

of right at any time before the case is closed. However, the debtor is required to give notice of the amendment to any affected party and the bankruptcy trustee. For example, if 

the schedules previously listed a claim as undisputed, liquidated, and noncontingent—and 

the debtor seeks to amend the schedules to list the claim as disputed—the debtor must 

give notice of the amendment to the creditor, since the latter will have to file a proof of 

claim pursuant to Bankruptcy Rule 3003(c). The creditor is allowed to amend its claim, 

provided that any new claims asserted in an amendment after the bar date “relate back” to 

a timely claim. 

 The allowance of claims facilitated by the filing of the debtor’s schedules and creditors’ proofs of claim is central to creditors’ rights in the bankruptcy case, including their 

right to vote on any plan of reorganization in a chapter 11 case and to receive distributions under a confirmed plan of reorganization or a court’s distribution order.61 Only 

holders of allowed claims generally are entitled to vote and receive distributions. The 

classification and valuation of an allowed claim also determine the amount of any distributions to be received by the creditor on account of such claim.62

 

54. In re Quigley Co., Inc., 383 B.R. 19, 25 (Bankr. S.D.N.Y. 2008).

55. Fed. R. Bankr. P. 3003(b). 

56. 11 U.S.C. § 1111(a) (2012). 

57. Fed. R. Bankr. P. 3003(c).

58. Id. 

59. See Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380 (1993).

60. 11 U.S.C. § 502(a) (2012).

61. Id. § 1126(a) (“The holder of a claim or interest allowed under section 502 of this title may accept 

or reject a plan.”).

62. In formulating the treatment of claims under a plan of reorganization, the Bankruptcy Code allows 

the debtor to classify and group claims with other similar claims. Section 1122(a) of the Bankruptcy Code 

allows classification of a claim only if the claim or interest is substantially similar to other claims or interests in the class. For example, one court held that the classification of bondholders with an indenture trustee 
14

2. Claims Objections and Litigation 

The bankruptcy trustee, debtor-in-possession, or any interested party may challenge a 

claim by filing an objection.63 Claims litigation may also be initiated when the trustee 

challenges a claim by objecting to the schedules themselves. Section 502 of the Bankruptcy Code provides the grounds for an objection. For example, a party in interest may 

object to a claim if the claim is unenforceable under non-bankruptcy law or to a claim for 

post-petition interest against an insolvent debtor.64 The creditor bears the ultimate burden 

of persuasion regarding the validity and amount of a claim. However, if the claim is executed and filed in accordance with the applicable Bankruptcy Rules, it establishes prima 

facie evidence of the validity and amount of the claim.65 As a result, the objecting party, 

generally the trustee, bears the burden of going forward with evidence to show that the 

claim should be disallowed, that is, expunged. 

 Bankruptcy Rule 3007 governs the procedure for objecting to a claim. The objection 

must be in writing and filed with the court, and a copy of the objection must be delivered 

to the claimant, the debtor or debtor-in-possession, and the trustee, at least 30 days prior 

to the hearing.66 The claim objection commences a contested matter governed by Bankruptcy Rule 9014. There is no requirement that the creditor file a response to the objection, because the objection is essentially an answer to the claim. If the objection does not 

involve a factual dispute or can be determined without the need to hear testimony or examine documentary evidence, such as when the claim was filed after the bar date or is 

duplicative of another claim, the court will generally adjudicate the objection summarily 

after the deadline for responding to the objection expires. If, however, the objection 

involves factual disputes going to its merits, such as when the debtor claims it does not 

owe the debt asserted in the claim, the claim objection is adjudicated like an ordinary 

civil lawsuit, subject to most of the rules that govern civil litigation.67

 Claim objections generally involve a dispute over a single claim as outlined above. 

However, under Bankruptcy Rule 3007(d), objections to more than one claim (up to 100 

claims) can be joined if one or more circumstances are present. The circumstances 

include 

(1) claims that duplicate other claims;

(2) claims that have been filed in the wrong case;

(3) claims that have been amended by subsequently filed proofs of claim; 

(4) claims that were not timely filed;

(5) claims that have been satisfied or released during the case in accordance with the [Bankruptcy] Code, applicable rules, or a court order; 

 

was not permissible because the trustee claims include post-petition interest, fees, and expenses while the 

claims of the bondholders are a matter of contract and cannot be altered by the court. In re Gillette Assocs., 

Ltd., 101 B.R. 866, 872–73 (Bankr. N.D. Ohio 1989); see also In re 11,111, Inc., 117 B.R. 471 (Bankr. D. 

Minn. 1990) (holding that claims arising from loans to debtor made in conjunction with stock purchases 

while creditors served as directors and officers of debtor were appropriately grouped in same class). 

63. 11 U.S.C. § 502(a) (2012); Fed. R. Bankr. P. 3007; see also 11 U.S.C. § 1107 (2012) (stating that 

the debtor-in-possession generally has all rights, other than a right to compensation, and duties as a trustee 

under this chapter). 

64. See 11 U.S.C. § 502(b)(1) (2012). 

65. Fed. R. Bankr. P. 3001(f).

66. Id. R. 3007(a). 

67. Id. R. 9014. 
15

(6) claims that were presented in a form that does not comply with applicable rules, and the objection states that the objector is unable to determine the validity of the claim because of the 

noncompliance;

(7) claims that are [ownership or shareholder] interests, rather than [creditor] claims; or

(8) claims that assert priority in an amount that exceeds the maximum amount under [section] 

507 of the [Bankruptcy] Code.

68

It is important to note that, unless the court orders otherwise, the Bankruptcy Rules do 

not permit omnibus claims objections against different entities where the objection is 

based upon grounds that go to the merits of the underlying claim and would typically be 

the subject of an independent lawsuit outside of bankruptcy. For example, it is common 

for the debtor to object to claims because the amounts asserted by the creditors do not 

comport with the debtor’s books and records, or because the debtor has a defense to 

payment. 

 Courts are empowered to, and in appropriate circumstances will, extend the permissible grounds to be cited or relied upon in omnibus objections.69 For example, a large 

group of employees may assert individual claims for severance pay based on the debtor’s 

severance policy or Worker Adjustment and Retraining Notification (WARN) Act claims 

based on the closing of the debtor’s facility. In those situations, the court will allow an 

omnibus objection but tailor the procedure to ensure that the creditors are not prejudiced 

by the use of an omnibus claims objection, especially when individuals are involved. For 

example, the court may limit each omnibus objection to 20 claims instead of the 100 

claims otherwise permitted,70 or send a one-page “particularized” notice along with the 

objection to each creditor to inform the creditor that the debtor has objected to the claim 

and where to locate the objection to his or her claim within the omnibus objection. 

 The establishment of specialized procedures for filing omnibus objections is generally 

addressed at the early stages of a case through a case management order.71 Bankruptcy 

Rule 3007(e) contains additional requirements in those situations where omnibus objections are permitted. These requirements are designed to ensure that the creditor receiving 

the objection understands its import and can easily locate the information regarding its 

claim and the reasons for the objection.72 

3. Separate Claims Process 

The nature or magnitude of the claims may warrant a separate claims resolution procedure. Such a process may include an arbitration or settlement conference component.73

The Lehman Brothers case provides two examples. First, Lehman Brothers obtained 

 

68. Id. R. 3007(d).

69. Id. R. 3007(c).

70. Id. R. 3007(e)(6). 

71. An example of a case management order, from In re Envirosolutions of N.Y., LLC, No. 1:10-BK11236 (Bankr. S.D.N.Y. June 11, 2010), is presented in Appendix D. 

72. See Kenneth M. Misken & Daniel F. Blanks, Amended Bankruptcy Rule 3007: Omnificent Omnibus Objections or Objectionable Annoyances?, Am. Bankr. Inst. J., May 2007, at 38, 39. 

73. See generally Ralph R. Mabey et al., Expanding the Reach of Alternative Dispute Resolution in 

Bankruptcy: The Legal and Practical Bases for the Use of Mediation and the Other Forms of ADR, 46 S.C. 

L. Rev. 1259 (1995); Jarrod B. Martin, A User’s Guide to Bankruptcy Mediation and Settlement Conferences (Oct. 2009), available at

http://works.bepress.com/cgi/viewcontent.cgi?article=1000&context=jarrod martin. 
16

bankruptcy court approval of a claims hearing and alternative dispute resolution (ADR) 

process for the approximately 67,000 proofs of claim filed against the bankruptcy estates, 

which claims were in addition to those scheduled by the debtors.74 This type of ADR process is common in large chapter 11 cases. For example, a similar ADR procedure was 

approved in the General Motors chapter 11 cases to resolve over 68,000 claims, 30,000 of 

which were litigation-based claims.75 ADR claims processes provide a streamlined process for the parties to negotiate and then mediate any differences over claims against the 

estate once an objection to the claim is filed.76 An example of a claims ADR procedures 

order is presented in Appendix E. 

 Second, Lehman Brothers developed a specialized settlement framework to resolve 

claims based on financial contracts (i.e., derivatives).77 This framework gave the parties 

broad discretion in determining a final and binding valuation. The framework enabled the 

settlement of $639 billion in derivatives claims against the Lehman Brothers’ bankruptcy 

estates within 1,268 days.78 The holders of these resolved, allowed claims received distributions under Lehman Brothers’ confirmed plan of reorganization.79

 Federal bankruptcy law provides the flexibility to implement unique claims processes 

while preserving the hallmark notice and hearing elements underlying the general claims 

resolution procedure designed to promote fairness to all parties.80 For example, it is quite 

common for a debtor who runs a chain of retail stores to face a substantial number of relatively minor tort claims arising from patrons slipping and falling in one of the debtor’s 

stores. These claims may be pending in numerous courts throughout the nation and would 

take years to resolve, delaying the completion of the chapter 11 case and the distribution 

to creditors. Under such circumstances, a bankruptcy court may establish a mandatory 

mediation program coupled with an optional arbitration program.81 Once the creditor 

participates in mediation, he or she may select binding arbitration or return to the tort 

 

74. Notice of Debtor’s Motion Pursuant to Section 105 of the Bankruptcy Code, Bankruptcy Rule 

9014, & General Order M-390 Authorizing the Debtors to Implement Claims Hearing Procedures & Alternative Dispute Resolution Procedures for Claims Against Debtors at 1, In re Lehman Bros. Holdings, Inc., 

No. 1:08-BK-13555 (Bankr. S.D.N.Y. Mar. 15, 2010). 

75. Monthly Operating Report for the Month Ended February 28, 2011, In re Motors Liquidation Co., 

No. 1:09-BK-50026, at 12–13 (Bankr. S.D.N.Y. Apr. 7, 2011). 

76. Mabey et al., supra note 73, at 1273 & n.41 (citing In re Child World, Inc., No. 92-B-20887 

(Bankr. S.D.N.Y. 1992); In re Caretta Trucking Inc., No. 92-29015 (Bankr. D.N.J.); In re St. Johnsbury 

Trucking Co., No. 93-B-43136 (Bankr. S.D.N.Y. 1994); In re Woodward & Lothrop Holdings, Inc., No. 

94-B-40222 (Bankr. S.D.N.Y.); and others).

77. For details of the settlement framework, see Legacy Asset Mgmt. Co., Derivatives Claims Settlement Framework (May 27, 2011), available at http://www.slideshare.net/oluoni/lbhi-may-27-2011-

derivatives-claims-settlement-framework.

78. Lehman Out of Bankruptcy, Reuters, Mar. 6, 2012, available at

http://www.thefiscaltimes.com/Articles/2012/03/06/Lehman-Out-of-Bankruptcy.aspx#page1. 

79. Id. 

80. 11 U.S.C. § 105 (2012) (allowing the court to enter into any judgment or order that is necessary or 

appropriate to carry out the provisions of Title 11). 

81. The bankruptcy court cannot adjudicate an objection to a personal injury or wrongful death claim, 

see 28 U.S.C. § 157(b)(2)(O), 157(b)(5) (2012), at least without the creditor’s express or implied consent.

See Stern v. Marshall, 131 S. Ct. 2594, 2606–08 (2011) (ruling that creditor had consented to the trial of his 

defamation claim in the bankruptcy court). In essence, such tort claimants retain their common law rights, 

including the right to trial by jury.
17

system to adjudicate the claim. The bankruptcy court can also estimate tort claims for 

certain purposes other than distribution, as discussed below. 

 Other examples include the asbestos and mass tort cases that present especially difficult claims resolution problems. In the case of the former, a typical asbestos debtor may 

face as many as 200,000 unliquidated personal injury claims.82 In such cases, the court 

will usually forgo the requirement of filing claims in the bankruptcy case because of the 

practical difficulties entailed in handling a large volume of personal injury and wrongful 

death claims that the court will not be able to liquidate for reasons discussed below.83 In 

these circumstances, the claims essentially “pass through” the bankruptcy and are channeled into a funded trust created under the plan of reorganization. The claimant can then 

submit his or her claim to the trust, which will determine whether and to what extent it 

should be allowed.84

4. Claims Estimation 

A key component of bankruptcy claims litigation and special claims resolution procedures is the power of the court to estimate a claim. Section 502(c) of the Bankruptcy 

Code authorizes a court to estimate a contingent or unliquidated claim, inter alia, where 

the actual liquidation “would unduly delay the administration of the case.”85 Estimation is 

especially important when a significant claim, or large number of claims, cannot be fixed 

within the time period necessary to permit the debtor’s reorganization. Estimation can be 

used for certain purposes even when the court lacks the ability to liquidate the claim, as 

in the case of personal injury or wrongful death claims. These purposes include determining the amount of the claim for voting purposes86 and determining whether the plan is 

feasible.87 

 The Bankruptcy Code and the Bankruptcy Rules guide the court’s resolution of 

claims estimation matters while permitting the court to tailor procedures to the particular 

claims at issue.88 Where the estimation is limited to no more than a few claims, the court 

will often adopt a procedure that includes an abbreviated presentation of evidence and 

legal argument. If the case involves hundreds or thousands of unliquidated claims, such 

 

82. See, e.g., In re Quigley Co., 437 B.R. 102, 112 (Bankr. S.D.N.Y. 2010).

83. See, e.g., In re Quigley Co., 383 B.R. 19, 24 (Bankr. S.D.N.Y. 2008). Examples include when 

claims cannot be fixed within the period necessary to permit reorganization or when the wrongful death 

claim arises after the plan is confirmed. 

84. 11 U.S.C. § 524(g)(1)(B) (2012); see Mark D. Plevin et al., The Future Claims Representative in 

Prepackaged Asbestos Bankruptcies: Conflicts of Interest, Strange Alliances, and Unfamiliar Duties for 

Burdened Bankruptcy Courts, 62 N.Y.U. Ann. Surv. Am. L. 271, 271 (2006) (“Section 524(g) allows the 

court, in connection with a Chapter 11 plan of reorganization, to enjoin future claimants from proceeding 

against the company in the tort system. Instead, those future claimants may find recourse for their injuries 

only by asserting a claim upon a trust established in connection with the bankruptcy, subject to the trust’s 

rules, procedures, and limitations.”).

85. 11 U.S.C. § 502(c)(1) (2012). 

86. See Fed. R. Bankr. P. 3018(a). 

87. See 11 U.S.C. § 1129(a)(11) (2012). 

88. See, e.g., Bittner v. Borne Chem. Co., 691 F.2d 134, 135–36 (3d Cir. 1982); Pension Benefit Guar. 

Corp. v. Enron Corp. (In re Enron), No. 04 Civ. 5499 (HB), 2004 WL 2434928, at *5 (S.D.N.Y. Nov. 1, 

2004); In re Ralph Lauren Womenswear, Inc., 197 B.R. 771, 775 (Bankr. S.D.N.Y. 1996). 
18

as in asbestos and other mass tort cases, courts may estimate all such claims at $1.00.89

Alternatively, where more precise information is available regarding the nature and potential amount of the claim, the claim can be estimated based on that information.90 

5. Timing of Claims Objections 

There is no deadline for objecting to claims except as may be fixed in the plan, which 

provides important flexibility depending on the circumstances of the case. For example, 

the claims review process may take longer than usual because of the number or complexity of the filed claims, or both. In the Lehman case, a substantial number of claims were 

based on derivatives contracts and required review by persons with special expertise. In 

addition, distributions are often contingent on the successful prosecution of pending or 

future lawsuits. Until then, there may be little if any money to distribute to creditors, and 

if the litigation is unsuccessful, there will be no meaningful distribution. In those circumstances, it would prove wasteful to review and object to claims until it becomes clear that 

assets are available for distribution. 

B. Claims Resolution Under the OLA

The FDIC finalized a rule that addresses claims allowance, claim priorities, and the 

avoidance powers of the agency in an OLA proceeding.91 The rule explicitly states that it 

seeks to harmonize the claims resolution powers of the FDIC as receiver under certain 

sections of the Act with the claims resolution process under the Bankruptcy Code. 

Creditors of a covered financial company thus should receive treatment in the OLA 

similar to that provided under the Bankruptcy Code.92 The treatment is not identical, 

however, and the procedures have yet to be tested. Notably, unlike the bankruptcy court, 

the FDIC reviews and determines the validity of claims without the consent of the 

affected creditors or a judicial determination.93 Any creditor disagreeing with the FDIC’s 

decision is limited to ex post judicial review. This process thus places the burden on the 

creditor to challenge the FDIC’s decision in federal district court, and it may only do so

after the FDIC renders its decision. 

 Subpart C of the rule addresses the claims resolution procedure under the OLA. The 

FDIC as receiver publishes a notice to advise creditors to file their claims by a bar date 

fixed no earlier than 90 days following the notice. Although under the Bankruptcy Code 

 

89. E.g., In re A.H. Robins Co., 880 F.2d 694 (4th Cir. 1989), cert. denied, 493 U.S. 959 (1989); Kane 

v. Johns–Manville Corp (In re Johns–Manville Corp.), 843 F.2d 636, 646 (2d Cir.1988).

90. In re Quigley Co., 346 B.R. 647, 654–55 (Bankr. S.D.N.Y. 2006) (estimating the amount of each 

claim in an asbestos bankruptcy based on the value ascribed to the particular claim under the proposed 

plan’s trust distribution procedures); see also Leonard P. Goldberger, Rock the Vote, Asbestos-Style, Am. 

Bankr. Inst. J., Dec. 2006/Jan. 2007, at 26. 

91. Certain Orderly Liquidation Authority Provisions Under Title II of the Dodd-Frank Wall Street 

Reform and Consumer Protection Act, 76 Fed. Reg. 41,626 (July 15, 2011) (codified at 12 C.F.R. pt. 380).

92. See, e.g., Continued Oversight of the Implementation of the Wall Street Reform Act: Hearing Before the S. Comm. on Banking, Housing, and Urban Affairs, 112th Cong. (2011) (statement of Martin J. 

Gruenberg, Acting Chairman, Federal Deposit Insurance Company), available at

http://www.fdic.gov/news/news/speeches/chairman/spdec0611.html (“Many aspects of the process are 

similar to that in bankruptcy—and creditors will be exposed to losses under the statutory priority of 

claims.”).

93. 76 Fed. Reg. at 41,629 (codified at 12 C.F.R. § 380.30). 
19

the debtor may initiate the claims resolution procedure by filing the schedules, the OLA 

process contemplates the initiation of the process by the creditors.94 Moreover, once the 

claims are received, the FDIC has 180 days (or longer if a creditor consents to an extension) to review the claims. The receiver determines whether to allow or disallow any 

given claim.95 The FDIC also may estimate the allowed value of contingent claims.96 The 

FDIC must provide creditors with notice of the allowance or disallowance of the claim. 

 Subpart C provides creditors with 60 days from the notice of claims disallowance or 

the expiration of the 180-day review period, whichever is earlier, to object to the FDIC’s 

determination. However, an objecting creditor may only challenge the FDIC’s decision 

after the fact by filing an action in a federal court of competent jurisdiction.97 The rule 

further provides that “unless the claimant has first exhausted its administrative remedies 

by obtaining a determination from the receiver regarding a claim filed with the receiver, 

no court shall have jurisdiction over” claims asserted against a covered financial 

company.98 

 The determination of secured claims under the OLA resembles the treatment of secured claims under the Bankruptcy Code. Nevertheless, the FDIC as receiver, again, is 

the party deciding in the first instance the value of the secured claim and whether to allow 

the secured creditor to repossess its collateral. The rule provides that the receiver will 

consent to a request to repossess collateral “unless [the receiver] decides to use, sell or 

lease the property, in which case it must provide adequate protection of the claimant’s 

security interest in the property.”99 In addition, the claims resolution procedure set forth 

in Subpart C does not apply to any claims or obligations transferred by the receiver to a 

bridge financial company under the OLA.100 

C. General Observations Regarding Claims Resolution Procedures 

As discussed in the First Report, some commentators criticize the bankruptcy process as 

too slow and inefficient to facilitate a timely resolution of large, complex financial institution cases. As with most generalizations, this critique is not accurate in many cases and 

represents an incomplete analysis of the process. The bankruptcy claims resolution procedure is a good example of how this critique is flawed. 

 Large distressed firms, whether in the financial or another industry, typically have 

tens of thousands of claims asserted against them. Although reviewing and processing 

each of these claims may delay the firm’s resolution, it is necessary to protect adequately 

the rights of creditors and ultimately preserve value for the estate. Congress developed 

the Bankruptcy Code to balance the competing interests of the debtor and creditors by 

providing a framework that facilitates the timely filing of claims, allowing debtors-inpossession or bankruptcy trustees to streamline the objections process, and protecting the 

 

94. Id. at 41,644 (codified at 12 C.F.R. § 380.32–.33).

95. Id. at 41,645 (codified at 12 C.F.R § 380.36).

96. Id. at 41,646 (codified at 12 C.F.R. § 380.39).

97. Id. at 41,645–46 (codified at 12 C.F.R. § 380.38) (stating that creditor may file a lawsuit with 

respect to its claim “in the district or territorial court of the United States for the district within which the 

principal place of business of the covered financial company is located” or continue a lawsuit filed prior to 

the commencement of the OLA “in the court in which the action was pending.”).

98. Id. (codified at 12 C.F.R. § 380.38(d)).

99. Id. at 41,629 (codified at 12 C.F.R. § 380.52). See also 12 C.F.R. § 380.51.

100. 76 Fed. Reg. at 41,628 (codified at 12 C.F.R. § 380.26).
20

rights of all parties with concurrent court supervision. This process is firm, yet flexible, 

fostering certainty without forcing all cases into a myopic approach that may work efficiently in some, but not all, of them. 

 For example, in the Lehman Brothers case, the period following the September 2008 

asset sale to Barclays Capital allowed the debtors to systematically review the 67,000 

claims asserted against the estates and implement a controlled liquidation of assets that 

ultimately increased the value available for distributions to creditors. As explained by 

Bryan Marsal of Alvarez & Marsal, one of Lehman Brothers’ professionals, “[t]he strategy of managing and maximi[z]ing the value of assets rather than liquidating quickly at 

fire sale values takes time and requires [professionals’] fees . . . but it will yield far 

greater returns for the creditors than all the costs of personnel and legal and professional 

services combined.”101 This process enabled Lehman Brothers to capture value in winding down the estate and to reduce significantly the number of allowed claims asserted 

against its estate to approximately $226 billion, with just $86 billion of claims still disputed as of April 2011.102 Lehman Brothers also made an initial distribution of $22.5 billion to 12,000 individual claimants, which it believes was “the largest initial distribution 

ever made by a company emerging from bankruptcy.”103

 Lehman Brothers was able to accomplish such a feat by using the bankruptcy claims 

resolution procedure and a variety of the special claims processes described above in Part 

V.A.3. As noted, Lehman Brothers used both an ADR process for ordinary claims and a 

tailored settlement framework for claims based on financial contracts. At least one commentator has observed that “under the . . . settlement framework, Lehman Brothers’ 

bankruptcy will be resolved in just over three years—a remarkable timeframe given that 

Enron’s resolution took a decade.”104 Lehman Brothers also, among other things, obtained court approval of a modified omnibus claims objection procedure that expanded 

the types of objections permitted in an omnibus filing and authorized “the Debtors, and 

other parties in interest, . . . to file Omnibus Claims Objections to no more than 500 

Claims at a time on the [p]ermitted [g]rounds . . . .”105 Notably, in each of these instances, 

the court authorized a single process that facilitated final resolution of the claims through 

a consensual settlement or a court determination. 

 Although the OLA adopts certain features of the bankruptcy claims resolution procedure, its bifurcated procedure and rigid format likely will produce outcomes very differ-

 

101. Telis Demos, Lehman’s US Bankruptcy Costs Top $1bn, Fin. Times, Nov. 23, 2010, 

http://www.ft.com/intl/cms/s/0/39d642a0-f699-11df-b434-00144feab49a.html#axzz1wOqlJAZx. 

102. Notice Regarding Initial Distributions Pursuant to the Modified Third Amended Joint Chapter 11 

Plan of Lehman Brothers Holdings Inc. & Its Affiliated Debtors at Exhibit B, In re Lehman Bros. Holding 

Inc., No. 1:08-BK-13555 (Bankr. S.D.N.Y. Apr. 11, 2012).

103. Press Release, Lehman Bros. Holdings Inc., Initial Distribution Percentages Announced for 

Lehman Brothers Holdings Inc. and Its Debtor Affiliates (Apr. 11, 2012), 

http://www.businesswire.com/news/home/20120411006191/en/initial-distribution-percentages-announcedlehman-brothers-holdings. 

104. Kimberly Summe, Misconceptions About Lehman Brothers’ Bankruptcy and the Role Derivatives 

Played, 64 Stan. L. Rev. Online 16, 21 (2011), available at

http://www.stanfordlawreview.org/online/misconceptions-about-lehman-brothers-bankruptcy. 

105. Amended Order Pursuant to Section 105(a) of the Bankruptcy Code & Bankruptcy Rules 3007 & 

9019(b) for Approval of Claim Objection Procedures at 3, In re Lehman Bros. Holding Inc., No. 1:08-BK13555 (Bankr. S.D.N.Y. Mar. 31, 2010).
21

ent from those possible under the Bankruptcy Code. The timeline contemplated by the 

OLA appears efficient, with 90 days to file claims, 180 days to review claims, and 60 

days for creditors to object to the FDIC’s resolution of claims, and it may prove efficient 

in proceedings involving small firms, firms with simple capital structures, or transfers of 

substantially all of the firms’ assets and liabilities to bridge financial companies. In other 

proceedings, however, the timeline likely will not be as clean or as efficient as it first 

appears. 

 In an OLA proceeding, the time for filing claims may be extended for certain types of 

claimants. Likewise, the 180-day review period may be extended with the consent of 

claimants. However, to the extent that the FDIC does not request or receive an extension 

of the review period and 180 days proves impractical for reviewing the tens of thousands 

of claims at issue, claims will automatically be deemed disallowed, placing the burden 

and cost of preserving claims on the claimants. In addition, those claimants then have the 

right to file litigation against the FDIC as receiver in potentially multiple district courts 

across the country. Accordingly, the facial simplicity of the OLA claims resolution procedure may dissipate depending on the circumstances of the proceeding and the capital 

structure of the covered financial company. In particular, the accelerated timetable may 

trigger a claims review process and civil litigation before it is apparent that there will be 

assets to pay those claims.

 In sum, the Bankruptcy Code appears to strike an appropriate balance in preserving 

value and protecting parties’ rights, even if the process takes longer than the approximately one-year process contemplated by the OLA. The concurrent involvement of the 

court in the bankruptcy claims resolution procedure—as opposed to the back-end court 

involvement contemplated by the OLA claims resolution procedure—can provide flexibility and efficiency in many large, complex bankruptcy cases. 

VI. Preliminary Data Concerning Financial Institutions in Bankruptcy

To assist in its study of the resolution schemes applicable to financial institutions, the 

AOUSC Working Group initiated an empirical data collection and analysis project. The 

goals of this effort are to develop a database of information to describe how financial institutions have proceeded through the bankruptcy system. This information is critical to 

understanding the effectiveness of chapter 7 and chapter 11 of the Bankruptcy Code in 

facilitating the orderly liquidation or reorganization of financial companies and in analyzing any proposed amendments to the Bankruptcy Code. This work is in its preliminary 

stages. 

A. Data Project Methods and Work To Date 

The FJC, at the request and with the assistance of the Working Group, is developing a 

database containing information about bankruptcies of large financial institutions. The 

data for this project come from a variety of sources. First, to identify the cases involving 

large financial institutions, FJC staff began compiling a data set of 1,848 large commercial bankruptcies filed between 2000 and 2010 using data from the Bankruptcy Research 

Database,106 New Generations Research,107 and the AOUSC. The Bankruptcy Research 

 

106. UCLA-LoPucki Bankruptcy Research Database (2010), http://lopucki.law.ucla.edu/. 
22

Database includes bankruptcies of publicly traded business debtors with more than $100 

million in assets (using 1980s dollars). The New Generations database includes cases 

meeting similar criteria, but also includes cases involving certain high-profile companies 

that otherwise would not have been included. The AOUSC data were compiled somewhat 

differently. AOUSC staff identified all chapter 11 business bankruptcies filed between 

January 1, 2000, and December 31, 2011. Those cases were then narrowed to cases involving more than $100 million in assets and more than 1,000 creditors, as reported by 

the debtor on the petition. Some of the remaining cases were related cases being jointly 

administered, so the cases were further reduced to only lead cases using CM/ECF. The 

cases derived from the three data sources significantly overlapped. 

 Starting with these 1,848 business cases, FJC staff looked up each case in the Public 

Access to Court Electronic Records (PACER) database to determine whether the debtor 

was a financial institution. The information on the type of business came from the Schedules or the Affidavit Filed in Support of First Day Motions. FJC staff used a broad definition of financial institution, reasoning that it would be easier to exclude cases from an 

overinclusive list than to add them. Included in the definition of financial institution for 

this project are the following types of companies: 

• bank or bank holding company; 

• financial services company; 

• mortgage company; 

• real estate investment/development/trust; 

• mutual fund; 

• savings and loan/thrift; 

• securities; and 

• investment fund/banking. 

Using the definition above, FJC staff found 132 bankruptcy cases involving financial institutions from 2000 to 2010, with the observations weighted heavily toward the latter 

half of the period. In the upcoming year, FJC staff will confirm the initial classification of 

the 2000–2010 cases as to whether they involved financial institutions or not.108

 The FJC staff, with input from the AOUSC Working Group, developed an online 

coding form to document information about each of these 132 cases from PACER. The 

coding form covers the following topics: 

• basic case information; 

• jointly administered cases; 

• type of business; 

• schedules and statements of financial affairs; 

• case conversion; 

• involvement of chapter 11 trustee and examiner; 

• claims, including omnibus objections and claims agents; 

• debtor-in-possession financing; 

 

107. New Generations Research, The Bankruptcy Yearbook & Almanac (2010), available at

http://bankruptcydata.com. 

108. Many cases filed before 2004 do not have files on PACER.
23

• use of cash collateral; 

• financial or derivative contracts; 

• sale of substantially all assets; 

• chapter 11 plans of reorganization or liquidation; and 

• case resolution and closing. 

 Bankruptcy cases involving financial institutions are complex cases that proceed in 

various ways through the bankruptcy system. It therefore was a challenge to develop a 

coding scheme that was simple enough to be reliably followed and at the same time 

produce adequate information. The coding form was designed to produce basic statistical 

information about the cases and document significant bankruptcy events so that subsets 

of cases can be identified for study of particular issues. 

 Five law school students coded cases in March and April 2012 under the supervision 

of FJC researchers. All five students had previously taken and performed well in a bankruptcy course. The FJC researchers and members of the AOUSC Working Group held an 

afternoon-long training session for the students and required 23% of the initial cases to be 

coded by more than one student. As of April 30, 2012, the students had coded 97 cases, 

of which 28 had been doubled-coded. 

 FJC researchers are using these preliminary data to (1) identify any limitations of the 

data available through PACER; (2) identify systemic coding errors that need to be eliminated in future coding; (3) make improvements to the coding form; and (4) develop a 

detailed coding manual. Among other things, this work involves comparing double-coded 

cases and, with reference to PACER records, reconciling differences between the two 

records for a given case; following up on feedback from the student coders about problems they encountered; examining basic descriptive statistics to identify patterns suggesting systemic coding errors, data limitations, and problems with the coding form; and 

verifying, with reference to PACER records, the coding of critical items of information 

and documenting the steps taken to locate that information in PACER. 

B. Next Steps 

During the upcoming year, FJC staff will revise the coding form and develop a detailed 

coding manual, as described above. Final coding of the bankruptcy cases involving financial institutions then will commence. To enhance the reliability of the data, all cases will 

be double-coded. With assistance from the AOUSC Working Group, FJC staff will 

reconcile differences between double-coded cases and subject the data to other 

verification processes, and will conduct substantive statistical analyses.109 It is anticipated 

that the data will be used in future reports to foster meaningful dialogue on the relevant 

issues. 

VII. Conclusion

A critical component of any resolution scheme is the process invoked to review and satisfy claims asserted against the distressed financial institution. Uncertainty in this process 

can cause some parties to withhold credit from financial institutions operating in the zone 

 

109. FJC staff members are also attempting to identify relevant sources of information, beyond 

PACER, that might prove useful to the Working Group.
24

of insolvency and others to demand payments or collateral from those financial institutions. Indeed, parties dealing with distressed financial institutions often do so hoping for 

the best but planning for the worst. 

 The bankruptcy claims resolution procedure allows creditors to assert their claims 

against the debtor’s estate with some certainty. Creditors know that that their claims will 

be allowed unless and until a party objects, that any claims objections will be resolved by 

the court or through a court-approved process, and that the authorization of distributions 

from the estate must anticipate and reserve funds for disputed claims. In addition, courts 

can fashion streamlined procedures to handle specific types of claims or facilitate 

omnibus objections to a multitude of claims. 

 Although the bankruptcy claims resolution procedure may take longer than the one 

year contemplated on the face of the OLA claims resolution procedure, the bankruptcy 

process is designed to preserve value and maximize returns to creditors. Whether an expedited procedure is warranted in any given case and whether speed comes at the sacrifice of firm value or creditors’ rights are questions that are beyond the scope of this report 

but that could be considered by the bankruptcy court based on the circumstances of the 

case.
25

Appendices

27

Appendix A: Terms Used in This Report

Act: Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 

ADR: Alternative Dispute Resolution 

AOUSC: Administrative Office of the United States Courts 

Bankruptcy Code: Title 11 of the United States Code 

CFC: Covered Financial Company 

CM/ECF: Case Management Electronic Case Filing System 

FDIA: Federal Deposit Insurance Act 

FDIC: Federal Depository Insurance Corporation 

First Report: Report Pursuant to Section 202(e) of the Dodd-Frank Wall Street Reform 

and Consumer Protection Act of 2010 

FJC: Federal Judicial Center 

FSOC: Financial Stability Oversight Council 

GAO: U.S. Government Accountability Office 

JPMC: JPMorgan Chase Bank, N.A. 

LBI: Lehman Brothers Inc. 

Lehman Brothers: Lehman Brothers Holding Inc. 

MFGI: MF Global Inc. 

MF Global: MF Global Holdings, Inc. 

OLA: Orderly Liquidation Authority 

PACER: Public Access to Court Electronic Records 

SIPA: Securities Investor Protection Act of 1970 

SIPC: Securities Investor Protection Corporation 

WMB: Washington Mutual Bank 

29

Appendix B: Summary of Title II Studies by Other Agencies

Board of Governors for the Federal Reserve System Report 

The Study on the Resolution of Financial Companies Under the Bankruptcy Code submitted by the Board of Governors for the Federal Reserve System highlighted key differences between the Bankruptcy Code and Title II OLA.1

 First, it noted the key difference 

in the overall purposes of the schemes. The Bankruptcy Code is designed to maximize 

returns for creditors while rehabilitating the finances of the debtor. In contrast, the OLA 

allows the FDIC to consider the likely impacts of the financial company on the United 

States economy and financial markets. It allows the FDIC to consider interests other than 

those of the debtor and creditor. 

 The second key difference, one highlighted in section V, is that the Bankruptcy Code 

is a judicial scheme, relying primarily on judicial interpretation of Title II. However, the 

OLA process is an administrative scheme not subject to judicial review except as provided by statute. The third key difference, as stated by the study, is the mechanism for 

funding the process. The chapter 11 process is normally funded by the debtor-in-possession, a private entity whose expenses receive priority over prepetition creditors when the 

assets are distributed. The administrative process normally requires the acting receiver—

in the OLA process, the FDIC—to fund the process. 

 The study then discussed the advantages and disadvantages of the Bankruptcy Code 

in an effort to shed light on the effectiveness of the Bankruptcy Code in systemic situations. The advantages listed by the report include the following: 

• the Bankruptcy Code provides legal certainty, offering a large body of established 

jurisprudence that is well articulated in advance and is applied in a predictable 

manner, particularly with respect to the relatively predictable application of creditor priorities and the “absolute priority rule”; 

• the Bankruptcy Code’s predictability helps ensure that risks are borne by those 

who contracted to bear them, encourages appropriate risk-taking measures by the 

would-be debtor and appropriate risk-monitoring measures by creditors, and 

ensures a reduction of moral hazard and an increase in market discipline; 

• the Bankruptcy Code provides the flexibility of permitting negotiations among 

stakeholders both before and after the filing of a petition; 

• the Bankruptcy Code permits judicial review by bankruptcy judges who have expertise in handling insolvency; 

• the Bankruptcy Code provides a process for distinguishing between a viable company and a company that has undergone a “fundamental rather than a financial 

failure,” and a “market-based judgment” as to the viability of an insolvent firm; 

• the Bankruptcy Code generally leaves in place those who are presumed to have 

the greatest expertise concerning the debtor’s operations and processes: the 

debtor’s management, which incentivizes early resolution of financial problems 

 

 1. Bd. of Governors of the Fed. Reserve Sys., Study on the Resolution of Financial Companies Under 

the Bankruptcy Code (2011), available at http://www federalreserve.gov/publications/otherreports/files/bankruptcy-financial-study-201107.pdf. 
30

prior to the filing of a bankruptcy petition, because management retains some 

certainty that it will not be immediately replaced; and 

• the Bankruptcy Code transfers control of the debtor to creditors having a stake in 

the optimal reorganization of the firm.2

 In contrast, the following were listed as disadvantages: 

• the Bankruptcy Code process takes too long for financial companies that, by their 

very nature, can suffer rapid and irretrievable loss of confidence and customers as 

well as rapid dissipation of asset values; 

• the Bankruptcy Code has no “bridge” company mechanism as would be available 

under the OLA; 

• the complexities of a systemic financial company, including the complexity of the 

financial instruments that are likely to be central in the insolvency of such a company, are beyond the general ability of bankruptcy judges to handle; 

• filing a petition under the Bankruptcy Code causes rapid runs on short-term financial instruments that systemic financial companies hold in large quantities, leading to “fire sales” of assets precipitously sold en masse in stressed financial markets and causing write-downs of similar assets held by other institutions, 

potentially creating further insolvencies; and 

• the Bankruptcy Code is focused on the interests of creditors, and has neither the 

goals nor the mechanisms to take into account externalities such as effects on 

outside parties or the financial system.3

 The study then discussed amendments to the Bankruptcy Code that could enhance the 

effectiveness of bankruptcy in systemic situations. These suggestions included establishing a special court of special masters to handle insolvencies of financial companies, authorizing a financial company’s primary regulator to take various actions in the bankruptcy proceeding, such as to commence an involuntary proceeding against the financial 

company, and facilitating the bankruptcy proceeding of a financial company. Finally, the 

study proposed section 363 amendments relating to the use and sale of real estate outside 

the normal course of business of the financial company. 

Government Accountability Office Report 

The Act similarly required the U.S. Government Accountability Office (GAO) to report 

on the effectiveness of the Bankruptcy Code in resolving failed financial institutions. In 

July 2011, the GAO released a report that concluded that the Bankruptcy Code’s 

effectiveness in resolving complex financial institutions is unclear and offered some 

bankruptcy proposals to address some of the challenges but emphasized there is no 

consensus on the specifics of these proposals.4

 

 The GAO report emphasized the predictability and legal certainty of the Bankruptcy 

Code. The process is considered “predictable because it follows a long-standing legal tra-

 

 2. Id. at 6 (footnotes omitted).

 3. Id. at 7 (footnotes omitted). 

 4. U.S. Gov’t Accountability Office, GAO-11-707, Bankruptcy: Complex Financial Institutions and 

International Coordination Pose Challenges (2011), available at

http://www.gao.gov/assets/330/321213.pdf. 
31

dition, transparent because it occurs under judicial review, and equitable because assets 

are distributed either according to a strict ladder of creditor priorities or through negotiated settlements in which all parties can participate.”5

 In addition, the report noted that of 

the experts interviewed, the general consensus was that the length of the bankruptcy 

process was not an important criterion for judging bankruptcy’s effectiveness. In fact, the 

report cited Bank of Credit and Commerce International as an example of a lengthy 

bankruptcy process that resulted in increasing recoveries for the creditors. 

 The report listed several factors that increase the difficulty in measuring the effectiveness of the Bankruptcy Code during the failure of financial institutions. These 

factors are the lack of complex financial institutions filing bankruptcy due to alternative 

resolution requirements, government assistance to failing financial institutions (AIG and 

Long Term Capital Management), and the inability of insured depository institutions to 

file bankruptcy. Another limitation is the lack of data in assessing the effectiveness of the 

Bankruptcy Code even for those financial institutions that do file. 

 The report highlighted two major difficulties in the bankruptcy of large financial institutions—derivative contracts and these financial institutions’ organizational structures 

and interconnectedness. For example, in the Lehman bankruptcy, many separate entities 

all filed for bankruptcy. The filings were all consolidated under a single New York bankruptcy judge. The interrelationships were unwound in order to address the claims against 

the separate Lehman entities. The report noted that in some cases the separate entities can 

consolidate into one estate, allowing the court to disregard the separate identities of the 

entities. This process is known as “substantive consolidation” and was used in the 

chapter 11 reorganization of Drexel Burnham Lambert Group, Inc. 

 

 5. Id. at 21.

33

Appendix C: Claims Agent Order

1Unless otherwise defined herein, capitalized terms used herein shall have the

meanings ascribed to them in the Application.

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK

- - - - - - - - - - - - - - - - - - - - - - - - - - - - 

In re

RCN CORPORATION, et al., 

Debtors.

- - - - - - - - - - - - - - - - - - - - - - - - - - - -

x

:

:

:

:

:

:

:

x

Chapter 11 

Case No. 04-13638

(Jointly Administered)

ORDER UNDER 28 U.S.C. § 156(c) AND FED. R. 

BANKR. P. 2002 AUTHORIZING RETENTION OF BANKRUPTCY SERVICES LLC AS CLAIMS AND NOTICING AGENT FOR THE DEBTORS

Upon the application (the "Application")1 of the Debtors for entry of an

order under 28 U.S.C. § 156(c) and Fed. R. Bankr. P. 2002 authorizing the retention of

Bankruptcy Services LLC ("BSI") as Claims and Noticing Agent for the Debtors; and the

Court having reviewed the Application and the Jacobs Affidavit, and the Court being

satisfied with the representations made therein that BSI represents no interest adverse to

the Debtors' estates, that it is a "disinterested person," as that term is defined in Bankruptcy

Code section 101(14), as modified by Bankruptcy Code section 1107(b), and that its

retention is necessary and is in the best interests of the Debtors, their estates, their

creditors, and other parties in interest; and it appearing that notice of the Application was

04-13638-rdd Doc 13 Filed 06/03/04 Entered 06/03/04 12:32:30 Main Document 

 Pg 1 of 3
2

good and sufficient under the particular circumstances and that no other or further notice

be given; and upon the record herein; and after due deliberation thereon; and good and

sufficient cause appearing therefor, it is hereby 

ORDERED, ADJUDGED and DECREED that:

1. The Application is GRANTED.

2. Pursuant to 28 U.S.C. § 156(c) and Fed. R. Bankr. P. 2002 the

Debtors, as debtors-in-possession, are hereby authorized to retain BSI as Claims and

Noticing Agent, effective as of the Petition Date, in accordance with the Application, the

BSI Agreement and this order, and BSI is authorized to perform the services described

therein.

3. The Debtors are hereby authorized to pay, without further order of

this Court, the reasonable fees and expenses of BSI incurred in connection with services

rendered to the Debtors as Claims and Noticing Agent, as set forth in the BSI Agreement,

upon BSI's submission, on a periodic basis, of reasonably detailed invoices to the Debtors,

with a copy to the Office of the United States Trustee, counsel for the agent under the

prepetition credit facility, and counsel for any statutory committee appointed in these cases. 

BSI shall not be required to submit interim or final fee applications.

4. The fees and expenses of BSI incurred in the performance of

services in accordance with the BSI Agreement shall be treated as administrative expenses

04-13638-rdd Doc 13 Filed 06/03/04 Entered 06/03/04 12:32:30 Main Document 

 Pg 2 of 3
428940.13-New York S3A 3

of the Debtors' chapter 11 estates and be paid by the Debtors in the ordinary course of

business. Any dispute between BSI and the Debtors with respect to fees and expenses

may be presented to the Court for resolution thereof.

5. In the event these cases are converted to cases under chapter 7 of

the Bankruptcy Code, BSI will continue to be paid for its services until the claims filed in

the chapter 11 cases have been completely processed, and if claims agent representation is

necessary in the converted chapter 7 cases, BSI will continue to be paid in accordance

with 28 U.S.C. § 156(c) under the terms set forth herein and in the Application.

 

6. The requirement of Local Bankr. R. 9013-1(b) that any motion

filed shall be accompanied by a separate memorandum of law is satisfied by the Application.

Dated: New York, New York

June 3, 2004

/s/ ROBERT D. DRAIN

UNITED STATES BANKRUPTCY JUDGE

04-13638-rdd Doc 13 Filed 06/03/04 Entered 06/03/04 12:32:30 Main Document 

 Pg 3 of 3

39

Appendix D: Case Management Order

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK

------------------------------------------------------x 

In re : Chapter 11 

: 

EnviroSolutions of New York, LLC, et al.,

1

: 

 : Case No. 10-11236 (SMB) 

Debtors. : Jointly Administered

------------------------------------------------------x 

ORDER PURSUANT TO SECTIONS 105(a) AND 502 OF THE 

BANKRUPTCY CODE AND BANKRUPTCY RULE 3007(c) ESTABLISHING 

PROCEDURES FOR OMNIBUS OBJECTIONS TO CERTAIN CLAIMS

Upon consideration of the motion (the “Motion”) of the debtors and debtors in 

possession in the above-captioned cases (collectively, the “Debtors”) for entry of an order, 

pursuant to sections 105(a) and 502 of title 11 of the United States Code (the “Bankruptcy Code”) 

and Rule 3007(c) of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules

 

1

 The last four digits of the taxpayer identification numbers of the Debtors follow in parentheses: (i) 9304 

D’Arcy, LLC (9577); (ii) Advanced Enterprises Recycling, Inc. (9105); (iii) Ameriwaste, LLC (6130); 

(iv) Ashland Investments, LLC (7823); (v) Big Run Coal and Clay Company, Inc. (3540); (vi) BR Landfill, 

LLC (9154); (vii) BR Property Holdings, Inc. (2700); (viii) Capels Landfill, LLC (8598); (ix) Curtis Creek 

Recovery Systems, Inc. (9429); (x) Doremus Ave Recycling and Transfer, LLC (3439); 

”),

approving and authorizing procedures for omnibus objections to claims; and it appearing that the 

relief granted hereby is in the best interests of the Debtors, their creditors, their estates and parties 

in interest; and good and sufficient notice having been provided as set forth in the Motion; and the 

Court having reviewed the Motion; and the Court having determined that the legal and factual bases 

set forth in the Motion establish just cause for the relief granted herein; and upon all of the 

proceedings heard before the Court; and after due deliberation and sufficient cause appearing 

therefor, it is hereby

(xi) EnviroSolutions Holdings, Inc. (4890); (xii) EnviroSolutions Leasing, LLC (8801); 

(xiii) EnviroSolutions Logistics, LLC (9595); (xiv) EnviroSolutions of New York, LLC (7737); 

(xv) EnviroSolutions Real Property Holdings, Inc. (9014); (xvi) EnviroSolutions, Inc. (8726); (xvii) ETW, 

LLC (0832); (xviii) Furnace Associates, Inc. (3247); (xix) Potomac Disposal Services of Virginia, LLC 

(9877); (xx) Potomac Disposal Services of Virginia Real Property Holdings, LLC (7998); (xxi) River 

Cities Disposal, LLC (3920); (xxii) Solid Waste Transfer and Recycling, Inc. (6151); and (xxiii) STI RollOff, LLC (7081). The Debtors’ executive headquarters’ address is 11220 Asset Loop, Suite 201, 

Manassas, VA, 20109.
2

ORDERED, ADJUDGED AND DECREED that:

1. The Motion is granted to the extent set forth herein. 

2. Capitalized terms used but not otherwise defined herein shall have the 

meanings ascribed to them in the Motion. 

3. The Debtors are authorized to file objections to claims in accordance with 

the following procedures (the “Omnibus Objection Procedures

(A) Multiple proofs of claim may be objected to in a single objection (an 

“

”): 

Omnibus Objection

(B) Each Omnibus Objection should be sent to the party whose name 

appears in the address and notice block of each proof of claim (as 

such addresses may have been supplemented or amended pursuant to 

Bankruptcy Rule 2002(g)) and any counsel of record for such party 

and shall be accompanied by specialized notices of objection (the 

“

”). Each Omnibus Objection should include an 

exhibit identifying: (i) each claim subject to the Omnibus Objection; 

(ii) the name of the claimant asserting the claim; (iii) each claim

number from the claims register or other information identifying each 

claim subject to the Omnibus Objection; (iv) the name of the Debtor 

entity against which each claim is asserted; (v) the basis of the 

Omnibus Objection with respect to each claim; and (vi) the Debtors’ 

proposed treatment of each claim, including, if applicable, any related 

claim that will survive the Omnibus Objection.

Specialized Notices”), a form of which is annexed hereto as Exhibit 

A

(C) Each Specialized Notice should include a copy of the Omnibus 

Objection, but need not include any exhibits thereto or a copy of the 

relevant proof of claim. Each Specialized Notice must: (i) identify 

the particular claim or claims that are the subject of the Omnibus 

Objection; (ii) state the basis of the objection with respect to each 

such claim; (iii) describe the proposed treatment of the claim; (iv) 

identify the hearing date; (v) identify the response date and response 

procedures; (vi) inform such claimant and counsel of record (if any) 

that failure to respond by the Response Deadline (as defined below) 

or to appear on the return date of the Omnibus Objection may be 

deemed a waiver by such claimant of all rights to respond to such 

objection; (vii) describe how proofs of claim, the Debtors’ schedules 

and other pleadings in the Debtors’ chapter 11 cases may be obtained 

from the claims agent or the claims agent’s website; and (viii) 

. For claims that have been transferred, a Specialized Notice need 

be provided only to the person or persons listed as being the owner of 

such claim on the Debtors’ claims register as of the date the Omnibus 

Objection is filed. 
3

provide the contact information for the Debtor representative that the 

affected claimant may contact to discuss and/or resolve the objection 

to such claimant’s claim that is the subject of such Omnibus 

Objection in advance of any hearing or other proceeding with respect 

to the dispute. 

(D) Each Omnibus Objection will be set for an initial hearing no less than 

thirty (30) days after service of the Omnibus Objection. In the sole 

discretion of the Debtors, and after notice to the affected claimants, 

the hearing on any Omnibus Objection, or any claim(s) subject to any 

Omnibus Objection, may be adjourned to a subsequent hearing date. 

 

4. In addition to the grounds provided in Bankruptcy Rule 3007(d), the Debtors 

may include in Omnibus Objections those claims that the Debtors believe should be disallowed, 

reduced or reclassified, in whole or in part, because: (a) the claimed amount contradicts the 

Debtors’ books and records; (b) the claim does not include sufficient documentation to ascertain the 

validity of such claim; (c) the claim incorrectly asserts secured, administrative or priority status; or 

(d) the claim seeks recovery of amounts for which the Debtors are not liable; provided, however

5. Unless otherwise agreed by the Debtors in their sole discretion, the deadline 

for filing any response (a “

, 

the Debtors may not object in an Omnibus Objection to any personal injury tort or wrongful death 

claims on the bases set forth in (a) through (d) of this paragraph. 

Response”) to an Omnibus Objection shall be 4:00 p.m. (prevailing 

Eastern Time) on the date that is twenty (20) calendar days after the date the Omnibus Objection is 

served, or the next business date thereafter, if such date is not a business day (the “Response 

Deadline”). A Response shall be considered timely only if, prior to the Response Deadline, it is 

served in accordance with applicable Bankruptcy Rules, the Bankruptcy Code, the Local 

Bankruptcy Rules for the Southern District of New York, any order of this Court establishing 

omnibus hearing dates and/or case management and administrative procedures, filed with this 

Court, together with proof of service, and served so as to be actually received by the following 

parties: (a) counsel for the Debtors, Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New 
4

York, New York 10019, Attn: John C. Longmire, Esq. and Shaunna D. Jones, Esq.; (b) counsel to 

the administrative agent for both the Debtors’ debtor-in-possession credit facility and the Debtors’ 

prepetition senior secured credit facility, Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, 

New York, New York 10017, Attn: Morris J. Massel, Esq.; and (c) counsel to the Official 

Committee of Unsecured Creditors (the “Committee

6. No A Response shall may not be accepted or considered by the Court unless

if it includes excludes, among other things, the following: SMB 6/11/10

”), Squire, Sanders & Dempsey LLP, 221 E. 

Fourth St., Suite 2900, Cincinnati, Ohio 45202, Attn: Stephen D. Lerner, Esq. and Squire, Sanders 

& Dempsey LLP, 30 Rockefeller Plaza, New York, New York 10112, Attn: Sandra Mayerson, Esq. 

(A) an appropriate caption and the title and date of the Omnibus 

Objection to which the Response is directed; 

(B) the name of the claimant and the reference number of the relevant 

proof of claim; 

(C) a concise statement setting forth the reasons why the Court should 

not sustain the Omnibus Objection with respect to the affected 

claimant’s claim, including, but not limited to, the specific factual 

and legal bases upon which the claimant relies in opposing the 

Omnibus Objection; 

(D) copies of any documentation and other evidence upon which the 

claimant will rely in opposing the Omnibus Objection at a hearing or, 

if the claimant cannot timely provide such documentation and other 

evidence, a detailed explanation in the Response as to why it was not 

possible to provide such documentation and other evidence in a 

timely manner; and 

(E) the name, address, telephone number and, if applicable, facsimile 

number of a person authorized to reconcile, settle or otherwise 

resolve the claim on the claimant’s behalf. 

7. If a timely Response to an Omnibus Objection is filed in accordance with the 

procedures described above and the Debtors determine that discovery is needed to address such 

Response, the initial hearing may be converted into a status conference (as to the relevant claim) 
5

during which the parties may request that the Court issue a scheduling order to facilitate the 

resolution of the objection as to such claim. 

8. Each claim objection included in any Omnibus Objection as to which the 

claimant timely and properly files a Response will constitute a separate contested matter, as 

provided in Bankruptcy Rule 9014. The Debtors may, in their discretion and in accordance with 

other orders of this Court or the provisions of the Bankruptcy Code and Bankruptcy Rules, seek to 

settle the priority, amount and validity of such contested claims. 

9. If no timely Response is filed and served in response to an objection to a 

claim that is subject to any Omnibus Objection, the Debtors may submit to the Court, at or prior to 

the scheduled hearing, a form of order sustaining the Omnibus Objection with respect to such 

claim. A failure by a claimant to file a proper and timely Response in compliance with the 

procedures specified herein shall be deemed a waiver by such claimant of all rights to respond to 

such Omnibus Objection, and consent by such claimant to the relief requested in the Omnibus 

Objection with respect to such claimant’s proof of claim. 

The failure to file a timely response or appear on the return date may result in 

the granting of the relief sought in the objection. SMB 6/11/10 

10. The Debtors shall be permitted to file a reply to any Response (including by 

submitting evidence in opposition to such Response and the related proof of claim) no later than 

two (2) business days before the hearing with respect to the relevant Omnibus Objection. 

11. The assertion of a particular ground for objecting to a claim shall not 

preclude the Debtors from asserting additional appropriate grounds for objecting to such claim, 

either in the same objection or subsequent objections. 
6

12. The Omnibus Objection Procedures approved herein expressly are subject to 

any modified claims objection procedures that may be set forth in any confirmed plan or plans of 

reorganization for the Debtors. 

13. Nothing contained in this order shall be construed as modifying or denying 

the standing of any other party in interest, including, but not limited to, the Committee, to object to 

any proof of claim or equity interest filed in these chapter 11 cases.

14. This Court shall retain jurisdiction to hear and determine all matters related 

to this Order and the implementation hereof. 

15. The requirements of Rule 9013-1 of the Local Bankruptcy Rules for the 

Southern District of New York are waived. 

Dated: New York, New York

 June 11, 2010 

 /s/ STUART M. BERNSTEIN

UNITED STATES BANKRUPTCY JUDGE

HONORABLE STUART M. BERNSTEIN
EXHIBIT A

Specialized Notice
John C. Longmire 

(A Member of the Firm)

Shaunna D. Jones 

Jennifer J. Hardy

WILLKIE FARR & GALLAGHER LLP

787 Seventh Avenue 

New York, New York 10019 

(212) 728-8000 

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK

------------------------------------------------------x 

In re : Chapter 11 

: 

EnviroSolutions of New York, LLC, et al.,

1

: 

 : Case No. 10-11236 (SMB) 

Debtors. : Jointly Administered

------------------------------------------------------x 

YOU ARE RECEIVING THIS NOTICE BECAUSE THE PROOF(S) OF CLAIM 

LISTED HEREIN THAT YOU FILED AGAINST ONE OF MORE OF THE DEBTORS 

IN THE ABOVE-CAPTIONED CHAPTER 11 CASES ARE SUBJECT TO THE [__] 

OMNIBUS OBJECTION. 

NOTICE OF THE DEBTORS’ [ ] OMNIBUS OBJECTION TO CLAIMS

YOUR RIGHTS MAY BE AFFECTED BY THE [ ] 

OMNIBUS OBJECTION. THEREFORE, YOU SHOULD READ THIS NOTICE, 

INCLUDING THE [__] OMNIBUS OBJECTION AND OTHER ATTACHMENT(S), 

CAREFULLY AND DISCUSS THEM WITH YOUR ATTORNEY. IF YOU DO NOT 

HAVE AN ATTORNEY, YOU MAY WISH TO CONSULT ONE. 

 PLEASE TAKE NOTICE that the debtors and debtors in possession in the 

above-captioned cases (collectively, the “Debtors”) have filed the Debtors’ [__] Omnibus 

Objection to Claims (the “[ ] Omnibus Objection

 

1

 The last four digits of the taxpayer identification numbers of the Debtors follow in parentheses: (i) 9304 D’Arcy, 

LLC (9577); (ii) Advanced Enterprises Recycling, Inc. (9105); (iii) Ameriwaste, LLC (6130); (iv) Ashland 

Investments, LLC (7823); (v) Big Run Coal and Clay Company, Inc. (3540); (vi) BR Landfill, LLC (9154); 

”) with the United Sates Bankruptcy Court 

(vii) BR Property Holdings, Inc. (2700); (viii) Capels Landfill, LLC (8598); (ix) Curtis Creek Recovery 

Systems, Inc. (9429); (x) Doremus Ave Recycling and Transfer, LLC (3439); (xi) EnviroSolutions Holdings, 

Inc. (4890); (xii) EnviroSolutions Leasing, LLC (8801); (xiii) EnviroSolutions Logistics, LLC (9595); 

(xiv) EnviroSolutions of New York, LLC (7737); (xv) EnviroSolutions Real Property Holdings, Inc. (9014); 

(xvi) EnviroSolutions, Inc. (8726); (xvii) ETW, LLC (0832); (xviii) Furnace Associates, Inc. (3247); 

(xix) Potomac Disposal Services of Virginia, LLC (9877); (xx) Potomac Disposal Services of Virginia Real 

Property Holdings, LLC (7998); (xxi) River Cities Disposal, LLC (3920); (xxii) Solid Waste Transfer and 

Recycling, Inc. (6151); and (xxiii) STI Roll-Off, LLC (7081). The Debtors’ executive headquarters’ 

address is 11220 Asset Loop, Suite 201, Manassas, VA, 20109.
2

for the Southern District of New York [Docket No. [__]] (the “Bankruptcy Court”). A copy of 

the [__] Omnibus Objection is annexed hereto as Exhibit A

 PLEASE TAKE FURTHER NOTICE that a hearing (the “

. By the [__] Omnibus Objection, the 

Debtors are seeking to [disallow and expunge/reduce/reclassify] claims on the grounds that the 

claims are [_________]. 

Hearing

 PLEASE TAKE FURTHER NOTICE that the Hearing, in the Debtors’ sole 

discretion, may be adjourned to a subsequent date. If the Hearing is adjourned, you will receive 

notice of such adjournment. 

”) to 

consider the [__] Omnibus Objection has been scheduled before the Honorable Stuart M. 

Bernstein, United States Bankruptcy Judge, in Room 723 of the United States Bankruptcy Court, 

Alexander Hamilton United States Custom House, One Bowling Green, New York, New York 

10004-1408 on [___] [_], 201[_], at 10:00 a.m. (prevailing Eastern Time), or as soon thereafter 

as counsel can be heard. 

 PLEASE TAKE FURTHER NOTICE that on June [__], 2010, the Bankruptcy 

Court entered an Order Pursuant to Sections 105(a) and 502 of the Bankruptcy Code and 

Bankruptcy Rule 3007(c) Establishing Procedures for Omnibus Objections to Certain Claims 

[Docket No. [__]], by which the Bankruptcy Court approved procedures for filing Omnibus 

Objections to claims in connection with the above-captioned chapter 11 cases. 

 PLEASE TAKE FURTHER NOTICE that by the [___] Omnibus Objection, 

the Debtors seek to [disallow and expunge/reduce/reclassify] claims, including your claim(s), 

listed below in the [“Claim to be Disallowed”] row, but [do not seek to alter/allows your claim in 

the amount] listed in the [“Surviving Claim”] row. 
3

TO: [Claim Number] [Claim Amount] [Reference 

Objection] 

[Claimant Name] [Claim to be 

Disallowed]

[Claimant Address] [Surviving Claim]

Critical Information for Claimants Choosing to 

File a Response to the [ ] Omnibus Objection

Who Needs to File a Response: If you oppose the [disallowance/reduction/reclassification] of 

your claim(s) listed above and if you are unable to resolve the [__] Omnibus Objection with the 

Debtors before the Response Deadline (as defined below), then you must file and serve a written 

response (a “Response”) to the [__] Omnibus Objection by the Response Deadline. If you do 

not oppose the [disallowance/reduction/reclassification] of your claim(s) listed above, then you 

do not need to file a written Response to the [__] Omnibus Objection and you do not need to 

appear at the hearing. 

Contents of Response

 

: Each Response must contain, at a minimum, the following: 

1. an appropriate caption and the title and date of the Omnibus Objection to which 

the Response is directed;

2. the name of the claimant and the reference number of the relevant proof of claim;

3. a concise statement setting forth the reasons why the Court should not sustain the 

Omnibus Objection with respect to the affected claimant’s claim, including, but 

not limited to, the specific factual and legal bases upon which the claimant relies 

in opposing the Omnibus Objection; 

4. copies of any documentation and other evidence upon which the claimant will rely 

in opposing the Omnibus Objection at the Hearing or, if the claimant cannot 

timely provide such documentation and other evidence, a detailed explanation in 

the Response as to why it was not possible to provide such documentation and 

other evidence in a timely manner; and

5. the name, address, telephone number and, if applicable, facsimile number of a 

person authorized to reconcile, settle or otherwise resolve the claim on the 

claimant’s behalf. 

Response Deadline: Responses, if any, to the relief requested in the [__] Omnibus Objection 

must actually be received by the Notice Parties (as defined below) on or before [ ] [ ], 

[201_] (the “Response Deadline”). 
4

Notice Parties: Your Response will be deemed timely only if a copy of the Response is filed with 

the Bankruptcy Court, together with proof of service, and is served so as to be actually received

on or before the Response Deadline by the following parties (collectively, the “Notice Parties”): 

1. Counsel for the Debtors: 

 Willkie Farr & Gallagher LLP 

 787 Seventh Avenue 

 New York, New York 10019 

 Attn: John C. Longmire, Esq. and 

 Shaunna D. Jones, Esq. 

2. Counsel to the administrative agent for both the Debtors’ debtor-in-possession 

credit facility and the Debtors’ prepetition senior secured credit facility:

 Simpson Thacher & Bartlett LLP 

 425 Lexington Avenue 

 New York, New York 10017 

 Attn: Morris J. Massel, Esq. 

3. Counsel to the Official Committee of Unsecured Creditors: 

 

 Squire, Sanders & Dempsey LLP 

 221 E. Fourth St., Suite 2900 

 Cincinnati, Ohio 45202 

 Attn: Stephen D. Lerner, Esq. 

 

 - and - 

Squire, Sanders & Dempsey LLP 

30 Rockefeller Plaza 

New York, New York 10112 

Attn: Sandra Mayerson, Esq. 

 

IF YOU FAIL TO SERVE A TIMELY RESPONSE IN COMPLIANCE WITH THE 

PROCEDURES SET FORTH ABOVE, THE DEBTORS MAY PRESENT TO THE 

BANKRUPTCY COURT AN APPROPRIATE ORDER GRANTING THE RELIEF 

REQUESTED IN THE [__] OMNIBUS OBJECTION WITHOUT FURTHER NOTICE

TO YOU, AND THE RELIEF REQUESTED IN THE [_] OMNIBUS OBJECTION MAY 

BE GRANTED BY THE BANKRUPTCY COURT WITHOUT A HEARING. 

THE RESPONDING PARTIES ARE REQUIRED TO ATTEND THE HEARING, AND A 

FAILURE TO ATTEND IN PERSON MAY RESULT IN RELIEF BEING GRANTED OR 

DENIED BY DEFAULT. 
5

EACH CLAIM SUBJECT TO THE [__] OMNIBUS OBJECTION AS TO WHICH THE 

CLAIMANT FILES A TIMELY RESPONSE SHALL CONSTITUTE A SEPARATE 

CONTESTED MATTER AS CONTEMPLATED BY BANKRUPTCY RULE 9014, AND 

ANY ORDER ENTERED BY THE BANKRUPTCY COURT WILL BE DEEMED A 

SEPARATE ORDER WITH RESPECT TO SUCH CLAIM. 

Additional Information

Requests for Information: You may obtain copies of the [__] Omnibus Objection using the 

Bankruptcy Court’s Internet Website at http://www.nysb.uscourts.gov. A login and password to 

the Court’s Public Access to Court Electronic Records (“PACER”) are required to access this 

information and can be obtained through the PACER Service Center at 

http://www.pacer.psc.uscourts.gov. Further, additional proofs of claim, copies of the Debtors’ 

schedules and other pleadings in the Debtors’ chapter 11 cases may be obtained by accessing the 

Debtors’ website at http://www.kcclcc.net/EnviroSolutions. Such documents may also be 

obtained by written request (at your cost) to the Debtors’ claims agent at the following address 

and telephone number:

Kurtzman Carson Consultants LLC 

2335 Alaska Ave. 

El Segundo, CA 90245 

(877) 660-6614 

Reservation of Rights: Nothing in this Notice or the [__] Omnibus Objection constitutes a 

waiver of the Debtors’ right to assert any claims, counterclaims, rights of offset or recoupment, 

preference actions, fraudulent-transfer actions or any other claims against you or to estimate your 

claim or to object to it on any basis other than that set forth in the [__] Omnibus Objection. 

Unless the Bankruptcy Court allows your claims or specifically orders otherwise, the Debtors 

have the right to object on any grounds to the claims (or to any other claims or causes of action 

you may have filed or that have been scheduled by the Debtors) at a later date. In such event, 

you will receive a separate notice of any such objections.

Remainder of Page Intentionally Left Blank 
6

Contact Information: Should you wish to discuss and/or attempt to resolve your claim(s) subject 

to the [__] Omnibus Objection in advance of the Hearing or other proceeding with respect to the 

dispute, please contact: 

Willkie Farr & Gallagher LLP 

787 Seventh Avenue 

New York, New York 10019 

Attn: Jennifer J. Hardy 

(212) 728-8000 

Dated: New York, New York 

[___] [__], 2010

WILLKIE FARR & GALLAGHER LLP

787 Seventh Avenue 

New York, NY 10019 

(212) 728-8000 

55

Appendix E: Claims ADR Procedures Order

C:\NRPORTBL\US_ACTIVE\FALABELL\43316011_1.DOC

UNITED STATES BANKRUPTCY COURT 

SOUTHERN DISTRICT OF NEW YORK 

---------------------------------------------------------------x

:

In re : Chapter 11 Case No. 

:

MOTORS LIQUIDATION COMPANY, et al., : 09-50026 (REG) 

 f/k/a General Motors Corp., et al. : 

:

Debtors. : (Jointly Administered) 

:

---------------------------------------------------------------x

ORDER PURSUANT TO 11 U.S.C. § 105(a) 

AND GENERAL ORDER M-390 AUTHORIZING IMPLEMENTATION OF 

ALTERNATIVE DISPUTE PROCEDURES, INCLUDING MANDATORY MEDIATION

Upon the Motion, dated January 11, 2010 (the “Motion”),1

 of Motors Liquidation 

Company (f/k/a General Motors Corporation) and its affiliated debtors, as debtors in possession 

(collectively, the “Debtors”), for an order, pursuant to section 105(a) of title 11, United States 

Code and General Order M-390, for authorization to implement alternative dispute procedures, 

including mandatory mediation (the “ADR Procedures”), all as more fully set forth in the 

Motion; and due and proper notice of the Motion having been provided, and it appearing that no 

other or further notice need be provided; and the Court having found and determined that the 

relief sought in the Motion is in the best interests of the Debtors, their estates, creditors, and all 

parties in interest and that the legal and factual bases set forth in the Motion establish just cause 

for the relief granted herein; and after consideration of the response pleadings filed and after due 

deliberation and sufficient cause appearing therefor, it is 

1

Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in 

the Motion, the Omnibus Reply of the Debtors to Objections to Debtors’ Motion for Entry of Order Pursuant to 11 

U.S.C. § 105(a) and General Order M-390 Authorizing Implementation of Alternative Dispute Resolution 

Procedures, Including Mandatory Mediation, and in the ADR Procedures annexed to the Order as Exhibit “A.”
C:\NRPORTBL\US_ACTIVE\FALABELL\43316011_1.DOC 2 

ORDERED that the Motion is granted as provided herein; and it is further 

ORDERED that notwithstanding anything to the contrary in the Motion, the ADR 

Procedures2, as set forth in Exhibit A to the Order, are approved as provided herein with respect 

to (a) personal injury claims, (b) wrongful death claims, (c) tort claims, (d) product liability 

claims, (e) claims for damages arising from the rejection of an executory contract or unexpired 

lease with a Debtor under section 365 of the Bankruptcy Code (excluding claims for damages 

arising from the rejection of executory contracts that relate primarily to environmental matters), 

(f) indemnity claims (excluding tax indemnity claims relating to leveraged fixed equipment lease 

transactions and excluding indemnity claims relating to asbestos liability), (g) lemon law claims, 

to the extent applicable under section 6.15 of the Master Sale and Purchase Agreement by and 

between the Debtors and NGMCO, Inc., dated as of June 1, 2009, and as amended (the “MPA”),

(h) warranty claims, to the extent applicable under section 6.15 of the MPA, and (i) class action 

claims (the “Initial Subject Claims”); and it is further 

ORDERED that notwithstanding anything to the contrary in the Motion, the 

Motion with respect to (a) tax claims (including tax indemnity claims relating to leveraged fixed 

equipment lease transactions), (b) indemnity claims relating to asbestos liability, and (c) all other 

Unliquidated/Litigation Claims that are not Initial Subject Claims (collectively, the “Adjourned

Subject Claims”) shall be adjourned to April 8, 2010 at 9:45 a.m., and the rights of all holders of 

Adjourned Subject Claims and the Debtors with respect to the Motion are fully preserved; and it 

is further 

2

A blacklined version of the ADR Procedures reflecting the limitation of applicability of the ADR Procedures to the 

Initial Subject Claims and certain other modifications to the ADR Procedures filed with the Motion is annexed 

hereto as Exhibit “B.”
C:\NRPORTBL\US_ACTIVE\FALABELL\43316011_1.DOC 3 

ORDERED that, notwithstanding anything to the contrary in the Motion or the 

ADR Procedures, the ADR procedures shall not apply to claims filed by the United States of 

America or its agencies; provided, however, nothing shall preclude the Debtors from seeking in 

the future by separate motion alternative dispute resolutions in connection with any such claims; 

and it is further

ORDERED that, notwithstanding anything to the contrary in the Motion or the 

ADR Procedures, the ADR Procedures shall not apply to claims filed by state and tribal 

governments concerning alleged environmental liabilities; provided, however, nothing shall 

preclude the Debtors from seeking in the future by separate motion alternative dispute 

resolutions in connection with any such claims; and it is further 

ORDERED that, notwithstanding anything to the contrary in the Motion or the 

ADR Procedures, the United States of America, nor any state or tribal government shall be in 

any way bound by any determination made pursuant to the ADR Procedures as to any other party 

or claim subject to the ADR Procedures, including any determination with respect to the amount, 

classification, disallowance, or type of claim; and it is further 

ORDERED that, annexed to this Order as Exhibit “C” is a revised schedule of 

mediators (the “Schedule of Mediators”). Within ten (10) days from the entry of this Order, the 

Debtors shall provide counsel to the Ad Hoc Committee with a schedule of caps for each 

mediator that any Designated Claimant can be surcharged for non-binding mediation in 

connection with the ADR Procedures (each a “Sharing Cap”); and it is further 

ORDERED that, the Debtors from time to time may modify the Schedule of 

Mediators, in consultation with the Ad Hoc Committee, by filing a revised Schedule of 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316011_1.DOC 4 

Mediators with this Court and providing counsel to the Ad Hoc Committee with the Sharing Cap 

for each additional mediator added to the Schedule of Mediators; and it is further 

ORDERED that, the Debtors are authorized to waive the obligation to share costs 

of non-binding mediation in their sole discretion to the extent the Designated Claimant 

establishes, to the satisfaction of the Debtors, that sharing of such expenses would constitute a 

substantial hardship upon the Designated Claimant; and it is further 

ORDERED that, within thirty (30) days from the date of entry of this Order (the 

“Capping Period”), any holder of an Unliquidated/Litigation Claim that is an Initial Subject 

Claim filed against any of the Debtors may request the Debtors to initiate the ADR Procedures 

for such Unliquidated/Litigation Claim by sending a letter (each a “Capping Proposal Letter,”

the form of which is annexed to this Order as Exhibit “D”) to the Debtors indicating a 

willingness to cap its Unliquidated/Litigation Claim at a reduced amount (the “Claim Amount 

Cap”); provided, however, that with respect to any claim for amounts resulting from the 

rejection of an executory contract that is rejected pursuant to an order entered after the date of 

this Order, a Capping Proposal Letter will be deemed timely if it is received within thirty (30) 

days of the entry of the order authorizing such rejection; and it is further

ORDERED that, upon receiving a Capping Proposal Letter, the Debtors will, if, 

and only if, the Claim Amount Cap is accepted by the Debtors, initiate the ADR Procedures by 

designating the Unliquidated/Litigation Claim in accordance with the ADR Procedures and will 

indicate in the ADR Notice that the Claim Amount Cap has been accepted; and it is further 

ORDERED that, if the Claim Amount Cap is accepted by the Debtors, the Claim 

Amount Cap will become binding on the Designated Claimant, and the ultimate value of his or 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316011_1.DOC 5 

her Unliquidated/Litigation Claim will not exceed the Claim Amount Cap. To the extent the 

Debtors accept the Claim Amount Cap, the Debtors will be responsible for all fees and costs 

associated with any subsequent mediation. If the Claim Amount Cap is not accepted, the 

Debtors will notify the Designated Claimant that the Claim Amount Cap has been rejected, and 

the Claim Amount Cap will not bind any party and shall not be admissible to prove the amount 

of the Unliquidated/Litigation Claim; and it is further 

ORDERED that, within one month after the Capping Period has expired, the 

Debtors will provide to (i) counsel for the statutory committee of unsecured creditors (the 

“Creditors’ Committee”), and (ii) counsel for the United States of America, a privileged and 

confidential report containing information on the status of the Unliquidated/Litigation Claims 

(the “Committee Report”). The Debtors shall provide both the Creditors’ Committee and the 

United States of America with an updated Committee Report once a month; and it is further 

ORDERED that the following notice procedures are hereby approved: 

1. Within three (3) days of entry of this Order, the Debtors shall cause to be 

mailed a copy of this Order to all known holders of Initial Subject Claims 

that are subject to the ADR Procedures. 

2. The Debtors shall post a form of the Capping Proposal Letter on the 

website established by GCG for the Debtors’ cases: 

www.motorsliquidationdocket.com;

and it is further 

ORDERED that the Debtors are authorized to take any and all steps that are 

necessary or appropriate to implement the ADR Procedures with respect to the Initial Subject 

Claims, including, without limitation, by implementing any arbitration awards or settlements 

with respect to Designated Claims achieved under the terms of the ADR Procedures; provided,

however, that nothing in this Order or the ADR Procedures, shall obligate the Debtors to settle or 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316011_1.DOC 6 

pursue settlement of any particular Designated Claim; further provided that any such settlements 

may be pursued and agreed upon as the Debtors believe are reasonable and appropriate in their 

sole discretion, subject to the terms and conditions set forth in the ADR Procedures; and it is 

further

ORDERED that, if litigation of an Unresolved Designated Claim in a forum other 

than this Court is required for any of the reasons forth in Section II.E.3 of the ADR Procedures 

(as determined by this Court), then the Stay shall be modified subject to the terms and conditions 

set forth in Section II.E.4 of the ADR Procedures. Any such modification of the Stay shall be 

solely to the extent necessary to permit the liquidation of the amount of such Unresolved 

Designated Claim in the appropriate forum. If the Debtors fail to file a Notice of Stay 

Modification or a Stay Motion for any reason with respect to an Unresolved Designated Claim, 

as set forth in Section II.E.4 of the ADR Procedures, the Stay shall remain in effect with respect 

to such Unresolved Designated Claim, and the Designated Claimant may seek a determination of 

this Court regarding whether the Stay must be modified to permit litigation in a non-bankruptcy 

forum as set forth in Section II.E.3 of the ADR Procedures; and it is further 

ORDERED that nothing contained in this Order shall be deemed to preclude any 

party in interest from objecting to any Designated Claim to the extent such entity has standing to 

assert an objection in accordance with Bankruptcy Code and applicable law; and it is further 

ORDERED that nothing contained in this Order shall alter the Creditors’ 

Committee’s rights set forth in this Court’s Order Pursuant to 11 U.S.C. § 105(a) and Fed. R. 

Bankr. P. 3007 and 9019(b) authorizing the Debtors to (i) File Omnibus Claims Objections and 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316011_1.DOC 7 

(ii) Establish Procedures for Settling Certain Claims, entered on October 6, 2006 [Docket No. 

4180]; and it is further 

ORDERED that nothing in the ADR Procedures, including the ADR Injunction 

set forth therein, shall preclude the holder of a Designated Claim from commencing or 

continuing an action against a non-debtor party; and it is further 

ORDERED that Rule 408 of the Federal Rules of Evidence shall apply to all 

aspects of the Capping Proposal Letter, the ADR Procedures, and the Committee Report; and it 

is further 

ORDERED that this Court shall retain jurisdiction to hear and determine all matters arising from 

or related to this Order and the ADR Procedures.

Dated: New York, New York 

 February 23, 2010 

s/ Robert E. Gerber

United States Bankruptcy Judge 
Exhibit A

The ADR Procedures
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UNITED STATES BANKRUPTCY COURT 

SOUTHERN DISTRICT OF NEW YORK 

---------------------------------------------------------------x

:

In re : Chapter 11 Case No. 

:

MOTORS LIQUIDATION COMPANY, et al., : 09-50026 (REG) 

 f/k/a General Motors Corp., et al. : 

:

Debtors. : (Jointly Administered) 

:

---------------------------------------------------------------x

ALTERNATIVE DISPUTE RESOLUTION PROCEDURES

The alternative dispute resolution procedures (the “ADR Procedures”) adopted 

in the chapter 11 cases of Motors Liquidation Company (f/k/a General Motors Corporation) 

(“MLC”) and its affiliated debtors, as debtors in possession (collectively, the “Debtors”), are set 

forth below: 

I. CLAIMS SUBJECT TO THE ADR 

PROCEDURES AND ADR INJUNCTION

A. Claims Subject to the ADR Procedures

1. The claims subject to the ADR Procedures (collectively, the “Designated

Claims”) include any and all claims (other than an Excluded Claim as defined below) designated 

by the Debtors under the notice procedures set forth below that assert or involve claims based on 

one or more of the following theories of recovery, whether or not litigation previously has been 

commenced by the claimant: (a) personal injury claims, (b) wrongful death claims, (c) tort 

claims, (d) product liability claims, (e) claims for damages arising from the rejection of an 

executory contract or unexpired lease with a Debtor under section 365 of the Bankruptcy Code 

(excluding claims for damages arising from the rejection of executory contracts that relate 

primarily to environmental matters), (f) indemnity claims (excluding tax indemnity claims 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 2 

relating to leveraged fixed equipment lease transactions and excluding indemnity claims relating 

to asbestos liability), (g) lemon law claims, to the extent applicable under section 6.15 of the 

Master Sale and Purchase Agreement by and between the Debtors and NGMCO, Inc., dated as of 

June 1, 2009, and as amended (the “MPA”), (h) warranty claims, to the extent applicable under 

section 6.15 of the MPA, and (i) class action claims (“Class Claims”). The Debtors may 

identify as a Designated Claim any proof of claim asserted in these cases, other than Excluded 

Claims as defined in Section I.B below, if the Debtors believe, in their business judgment and 

sole discretion, that the ADR Procedures would promote the resolution of such claim and serve 

the intended objectives of the ADR Procedures. 

2. The holders of the Designated Claims are referred to herein as the 

“Designated Claimants.”

B. Excluded Claims

The Debtors shall not identify as a Designated Claim any proof of claim within 

any of the following categories (collectively, the “Excluded Claims”): (a) claims for which the 

automatic stay under section 362 of title 11 of the United States Code (the “Bankruptcy Code”)

was modified by prior order of this Court (the “Bankruptcy Court”) to allow the litigation of 

the claim to proceed in another forum; (b) claims asserted in liquidated amounts of $500,000 or 

less; (c) asbestos-related claims; (d) environmental claims that constitute prepetition unsecured 

claims (including claims for damages arising from the rejection of executory contracts that relate 

primarily to environmental matters); and (e) claims subject to a separate order of the Bankruptcy 

Court providing for arbitration or mediation. Notwithstanding the foregoing, any of the 

Excluded Claims, any disputed postpetition administrative expenses, and any claims or 

counterclaims asserted by the Debtors may be submitted to the ADR Procedures by agreement of 

the applicable Debtor and the applicable claimant or by further order of the Bankruptcy Court. 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 3 

C. The ADR Injunction

Upon service of the ADR Notice (as defined below) on a Designated Claimant 

under Section II.A.1 below, such Designated Claimant (and any other person or entity asserting 

an interest in the relevant Designated Claim) shall be enjoined from commencing or continuing 

any action or proceeding in any manner or any place, including in the Bankruptcy Court, seeking 

to establish, liquidate, collect on, or otherwise enforce the Designated Claim(s) identified in the 

ADR Notice other than (1) through these ADR Procedures, or (2) pursuant to a plan or plans 

confirmed in the applicable Debtors’ chapter 11 cases (collectively, the “ADR Injunction”).

Notwithstanding the forgoing, the Debtors shall not be precluded from seeking to estimate any 

Designated Claim not subject to an accepted Claim Amount Cap in connection with confirmation 

or consummation of a plan or plans confirmed in the applicable Debtors’ chapter 11 cases, or 

preclude the Designated Claimant from seeking estimation of its Designated Claim solely for 

voting purposes in connection with confirmation of a plan or plans confirmed in the applicable 

Debtors’ chapter 11 cases. The ADR Injunction shall expire with respect to a Designated Claim 

only when that Designated Claim has been resolved or after the ADR Procedures have been 

completed as to that Designated Claim. Except as expressly set forth herein or in a separate 

order of the Bankruptcy Court, the expiration of the ADR Injunction shall not extinguish, limit, 

or modify the automatic stay established by section 362 of the Bankruptcy Code or any similar 

injunction that may be imposed upon the confirmation or effectiveness of a plan or plans in the 

applicable Debtors’ chapter 11 cases (a “Plan Injunction”), and the automatic stay and the Plan 

Injunction shall remain in place to the extent then in effect. 
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II. THE ADR PROCEDURES

A. Offer Exchange Procedures

The first stage of the ADR Procedures will be the following offer exchange 

procedures, requiring the parties to exchange settlement offers and thereby providing an 

opportunity to resolve the underlying Designated Claim on a consensual basis without any 

further proceedings by the parties (the “Offer Exchange Procedures”). Rule 408 of the Federal 

Rules of Evidence shall apply to the ADR Procedures. Except as permitted by Rule 408, no 

person may rely on, or introduce as evidence in connection with any arbitral, judicial, or other 

proceeding, any offer, counteroffer, or any other aspect of the ADR Procedures. 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 5 

1. Designation of Designated Claims and Settlement Offer by the Debtors

(a) At any time following the entry of an order approving the ADR 

Procedures (the “ADR Order”) and subject to the terms and conditions in Sections I.A and I.B 

above, the Debtors may designate a Designated Claim for resolution through the ADR 

Procedures by serving upon the Designated Claimant, at the address listed on the Designated 

Claimant’s most recently filed proof of claim or amended proof of claim, as well as to any 

counsel of record in these cases for the Designated Claimant, the following materials 

(collectively, the “ADR Materials”): (i) a notice that the Designated Claim has been submitted 

to the ADR Procedures (an “ADR Notice”),1 (ii) a copy of the ADR Order, and (iii) a copy of 

these ADR Procedures. For transferred claims, the Debtors also will serve a copy of the ADR 

Materials on the transferee identified in the notice of transfer of claim. 

(b) The ADR Notice will (i) advise the Designated Claimant that his or her 

Designated Claim has been submitted to the ADR Procedures; (ii) request that the Designated 

Claimant verify or, as needed, correct, clarify, or supplement, certain information regarding the 

Designated Claim (including the addresses for notices under the ADR Procedures); and (iii) 

include an offer by the Debtors to settle the Designated Claim (a “Settlement Offer”). The 

ADR Notice also will require the Designated Claimant to sign and return the ADR Notice along 

with the Claimant’s Response (as defined in Section II.A.2 below) to the Debtors so that it is 

received by the Debtors no later than twenty-one (21) days2 after the mailing of the ADR Notice 

(the “Settlement Response Deadline”).

1

The form of the ADR Notice is attached hereto as Annex 1 and incorporated herein by reference. The Debtors 

anticipate that the ADR Notice will be substantially in the form of Annex 1; however, the Debtors reserve the right 

to modify the ADR Notice, as necessary or appropriate, consistent with the terms of the ADR Procedures.

2

Bankruptcy Rule 9006(a) shall apply to all periods calculated in the ADR Procedures. 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 6 

(c) If the Designated Claimant fails to sign and return the ADR Notice or to 

include a Claimant’s Response (as defined below) with the returned ADR Notice by the 

Settlement Response Deadline, (i) the Offer Exchange Procedures will be deemed terminated 

with respect to the Designated Claim and (ii) the Designated Claim will be submitted to 

nonbinding mediation. 

2. The Claimant’s Response

The only permitted responses to a Settlement Offer (the “Claimant’s Response”)

are (i) acceptance of the Settlement Offer, or (ii) rejection of the Settlement Offer coupled with a 

counteroffer (as further defined below, a “Counteroffer”). If the ADR Notice is returned 

without a response or with a response that is not a permitted response, the Designated Claim 

shall be treated as set forth in Section II.A.1(c) above.

3. The Counteroffer

The Counteroffer shall (i) provide all facts that substantiate the Designated Claim 

and that are sufficient for the Debtors to evaluate the validity and amount of the Designated 

Claim; (ii) provide all documents that the Designated Claimant contends support the Designated 

Claim; (iii) state the dollar amount of the Designated Claim (the “Proposed Claim Amount”),

which may not (A) improve the priority set forth in the Designated Claimant’s most recent 

timely filed proof of claim or amended proof of claim, or (B) exceed the lesser of the Claim 

Amount Cap (as defined in the ADR Order), if applicable, or the amount set forth in the 

Designated Claimant’s most recent timely filed proof of claim or amended proof of claim (but 

may liquidate any unliquidated amounts expressly referenced in a proof of claim), with an 

explanation of the calculation and basis for the Proposed Claim Amount; and (iv) provide the 

name and address of counsel representing the Designated Claimant with respect to the 

Designated Claim, unless the Designated Claimant is a natural person, in which case the 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 7 

Designated Claimant shall either provide the name of such counsel or state that he or she is 

appearing without counsel.

The Counteroffer is presumed to offer the allowance of the Designated Claim as a 

general unsecured claim in the Proposed Claim Amount against the Debtor identified in the 

applicable proof of claim. If the Debtors accept the Counteroffer, the Designated Claimant shall 

not seek recovery from the Debtors of any consideration other than the consideration ultimately 

distributed to holders of other allowed general unsecured claims against the relevant Debtor. A 

Counteroffer may not be for an unknown, unliquidated, or indefinite amount or priority, or the 

Designated Claim shall be treated as set forth in Section II.A.1(c) above. 

4. Consent to Subsequent Binding Arbitration

As described in Sections II.B and II.C below, in the absence of a settlement at the 

conclusion of the Offer Exchange Procedures, Designated Claims shall proceed to nonbinding 

mediation and, if such mediation is unsuccessful, upon consent of the parties (including deemed 

consent based on prior contractual agreements), to binding arbitration. A Designated Claimant is 

required to notify the Debtors whether it consents to, and thereby seeks to participate in, binding 

arbitration in the event that its Designated Claim ultimately is not resolved through the Offer 

Exchange Procedures and the nonbinding mediation. A Designated Claimant shall make an 

election to either consent or not consent to binding arbitration by checking the appropriate box in 

the ADR Notice (an “Opt-In/Opt-Out Election”). Any Designated Claimant that does not 

consent to binding arbitration in its response to the ADR Notice may later consent in writing to 

binding arbitration, subject to the agreement of the Debtors. Consent to binding arbitration, once 

given, cannot subsequently be withdrawn without consent of the Debtors. 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 8 

5. The Debtors’ Response to a Counteroffer

The Debtors must respond to any Counteroffer within fifteen (15) days after their 

receipt of the Counteroffer (the “Response Deadline”), by returning a written response (as 

further defined below, each a “Response Statement”). The Response Statement shall indicate 

that the Debtors (a) accept the Counteroffer; or (b) reject the Counteroffer, with or without 

making a revised Settlement Offer (a “Revised Settlement Offer”).

(a) Failure to Respond 

If the Debtors fail to respond to the Counteroffer by the Response Deadline,

(i) the Counteroffer will be deemed rejected by the Debtors; (ii) the Offer Exchange Procedures 

will be deemed terminated with respect to the Designated Claim; and (iii) the Designated Claim 

will be submitted to nonbinding mediation. 

(b) Revised Settlement Offer 

If the Debtors make a Revised Settlement Offer by the Response Deadline, the 

Designated Claimant may accept the Revised Settlement Offer by providing the Debtors with a 

written statement of acceptance no later than ten (10) days after the date of service of the 

Revised Settlement Offer (the “Revised Settlement Offer Response Deadline”). If the 

Designated Claimant does not accept the Revised Settlement Offer by the Revised Settlement 

Offer Response Deadline, the Revised Settlement Offer will be deemed rejected and the 

Designated Claim automatically will be submitted to nonbinding mediation. 

(c) Request for Additional Information 

The Debtors may request supplemental or clarification of information supplied in 

the Designated Claimant’s most recently filed proof of claim to assist in a good faith evaluation 

of any particular Designated Claim. If the Debtors request additional information or 

documentation by the Response Deadline, the Designated Claimant shall serve additional 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 9 

information or documentation sufficient to permit the Debtors to evaluate the basis for the 

Designated Claim (with the exception, in the Designated Claimant’s sole discretion, of privileged 

information or information prepared expressly in contemplation of litigation) so that it is 

received by the Debtors within fifteen (15) days after such request. If the Designated Claimant 

timely responds, the Debtors shall have fifteen (15) days to provide an amended Response 

Statement, which may include a Revised Settlement Offer as a counter to the Counteroffer. If 

the Debtors do not provide an amended Response Statement within this period, or if the 

Designated Claimant fails to provide the requested information or documentation within the time 

allotted, the Designated Claim will be submitted to nonbinding mediation. 

6. Offer Exchange Termination Date

Upon mutual written consent, the Debtors and a Designated Claimant may 

exchange additional Revised Settlement Offers and Counteroffers for up to twenty (20) days 

after the later of (a) the Revised Settlement Offer Response Deadline or (b) the expiration of the 

applicable timeframes provided for in Section II.A.5(c) above with respect to requesting, 

receiving, and responding to additional information or documentation. Otherwise, the Offer 

Exchange Procedures shall conclude and terminate on the earliest of the following (the “Offer 

Exchange Termination Date”): (i) the date upon which the Designated Claim automatically 

advances to nonbinding mediation under the provisions set forth above; (ii) the date that any 

settlement offer for a Designated Claim is accepted under the procedures set forth above; (iii) the 

date upon which a Response Statement was served by the Debtors, if the Debtors notified the 

Designated Claimant in their Response Statement of the Debtors’ intention to proceed directly to 

nonbinding mediation; or (iv) such earlier date as is agreed upon by the Debtors and the 

Designated Claimant. 
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7. Ability to Settle Claims

Nothing herein shall limit the ability of a Designated Claimant and the Debtors to 

settle a Designated Claim by mutual consent at any time. All such settlements shall be subject to 

the terms of Section II.D.2 below. 

B. Nonbinding Mediation (“Mediation”)

1. Mediation Notice

If the Debtors and the Designated Claimant do not settle the Designated Claim 

through the Offer Exchange Procedures, the Debtors shall serve a notice of nonbinding 

mediation, with a copy of the Designated Claimant’s applicable proof(s) of claim attached, on 

the Designated Claimant no later than thirty (30) days after the Offer Exchange Termination 

Date, or as soon thereafter as is reasonably practicable.3 The Mediation Notice will provide the 

Mediation Location (as such term is defined in Section II.B.2 below). 

2. Location and Appointment of the Mediator

All Mediations shall be conducted in either (i) New York, New York; (ii) Detroit, 

Michigan; (iii) Dallas, Texas; or (iv) San Francisco, California (collectively, the “Mediation

Locations”), unless the parties agree to a different location. Within ten (10) days after receiving 

the Mediation Notice, the Designated Claimant shall choose one of the individuals identified in a 

list of mediators annexed to the Mediation Notice and corresponding to the applicable Mediation 

Location to conduct the mediation (the “Mediator”).

To the maximum extent practicable, the scheduling and location of Mediation 

sessions shall give due consideration to the convenience of the parties and the proximity of the 

3

The form of the Mediation Notice is attached hereto as Annex 2 and incorporated herein by reference. The 

Debtors anticipate that the Mediation Notice will be substantially in the form of Annex 2; however, the Debtors 

reserve the right to modify the Mediation Notice, as necessary or appropriate, consistent with the terms of the ADR 

Procedures. 
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Designated Claimant. Notwithstanding the foregoing, within ten (10) business days after service 

of the Mediation Notice, the Designated Claimant may file a motion with the Bankruptcy Court, 

on notice to the Debtors and any previously appointed mediator, for an order directing that the 

Mediation be conducted in a different location (a “Hardship Motion”) if the Designated 

Claimant can demonstrate that traveling to any of the Mediation Locations presents a 

“substantial hardship;” provided, however, that there shall be a rebuttable presumption that, 

absent other extraordinary facts, there is no “substantial hardship” imposed on a Designated 

Claimant if the primary representative for a Designated Claimant resides in a location that is less 

than 750 miles from the Mediation Location or is less than a three-hour plane trip from the 

Mediation Location (based on typical commercial schedules for the fastest route, excluding any 

layovers). While a Hardship Motion is pending, all deadlines under these ADR Procedures shall 

be suspended. If a Hardship Motion is granted, any alternative location shall be determined by 

the Bankruptcy Court, taking into account the convenience of the parties and any agreements 

reached by the parties. If the location of the Mediation is changed, (i) any Mediator appointed in 

the original location may be replaced by a Mediator in the new location (selected by mutual 

agreement of the parties or order of the Court), and (ii) the Bankruptcy Court may require that 

that the Debtors and the Designated Claimant share the costs of the Mediation. 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 12 

3. Mediation Rules

The Mediation of Designated Claims shall be governed by the Mediator’s regular 

procedures, except where expressly modified in the ADR Procedures. In the event of any 

conflict, the ADR Procedures shall control. Any party to a Mediation that fails to participate in 

good faith, on the terms described herein, may be subject to sanctions under Section II.F below. 

(a) Impartiality and Qualifications of Mediators 

A person appointed as a Mediator must (i) be an impartial, neutral person; (ii) 

have no financial or personal interest in the proceedings or, except when otherwise agreed by the 

parties, in any related matter; and (iii) upon appointment, disclose any circumstances likely to 

create a reasonable inference of bias. In the event a Mediator discloses circumstances likely to 

create a reasonable inference of bias, such Mediator may be replaced at the written request of 

either the Debtors or the Designated Claimant prior to the mediation. 

(b) Fees and Costs for Mediation 

For each Mediation conducted under these ADR Procedures, the Mediator 

selected to preside will be entitled to charge the mediation fees disclosed to, and agreed to by, 

the Debtors and the Designated Claimant. Unless the parties have expressly agreed otherwise in 

writing (either prepetition or postpetition) as part of an agreement to submit Designated Claims 

to Mediation, the Mediator’s fees and the costs of any Mediation shall be shared equally by the 

Debtors and the Designated Claimant subject to the Sharing Cap (as such term is described in the 

ADR Order. For purposes of clarity, these costs shall not include travel expenses of the parties. 

(c) Pre-Mediation Briefing 

Unless the parties agree otherwise, on or before thirty (30) days prior to the 

scheduled Mediation, the Designated Claimant shall serve on the Mediator and the Debtors by 

electronic transmission or facsimile, at a minimum, and no later than by 6:00 p.m. (Eastern 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 13 

Time), a nonconfidential, pre-Mediation statement (the “Opening Statement”) not to exceed 

fifteen (15) pages, excluding any attachments, setting forth all of the Designated Claimant’s 

claims and identifying each and every cause of action or theory the Designated Claimant asserts, 

including a short and plain statement of the facts and law upon which the Designated Claimant 

relies for recovery and maintains entitle it to relief. The Designated Claimant shall include, as 

exhibits or annexes to the Opening Statement, all documents (or summaries of voluminous 

documents), affidavits, and other evidentiary materials on which the Designated Claimant relies 

(with the exception, in the Designated Claimant’s sole discretion, of privileged information or 

information prepared expressly in contemplation of litigation). Unless the parties agree 

otherwise, on or before fifteen (15) days after service of the Opening Statement, the Debtors 

shall serve on the Mediator and the Designated Claimant, by electronic transmission or facsimile, 

at a minimum, and no later than by 6:00 p.m. (Eastern Time), a nonconfidential response 

statement (the “Mediation Response Statement”) not to exceed fifteen (15) pages, excluding 

attachments. The Designated Claimant shall receive copies of all exhibits to the Mediation 

Response Statement (with the exception, in the Debtors’ sole discretion, of privileged 

information or information prepared expressly in contemplation of litigation). The Debtors shall 

provide copies of the Opening Statement and Mediation Response Statement to counsel to the 

statutory committee of unsecured creditors (the “Creditors’ Committee”) upon request, on a 

confidential basis. At the Mediator’s discretion and direction, the parties may submit additional, 

confidential letters or statements to the Mediator, which shall receive “Mediator’s-eyes-only” 

treatment. 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 14 

(d) The Mediation Session 

Unless otherwise agreed by the parties or as provided herein, the Mediation 

session must occur no later than sixty (60) days after the date on which the Mediator is 

appointed. Unless otherwise agreed by the parties, the Mediation session is open only to the 

parties and their respective counsel, and insurers (if any).

(e) Treatment of Mediation Settlement 

If the Mediation results in a settlement of the Designated Claim, such settlement 

shall be subject to the terms of Section II.D below. If the Mediation of a Designated Claim does 

not result in a settlement of the Designated Claim, the Designated Claim shall be subject to 

Section II.C or II.E below. 

(f) Modification of the Mediation Procedures 

The Mediation procedures described herein may be modified upon the mutual 

written consent of the Debtors and the Designated Claimant. 

C. Arbitration

1. Binding Arbitration

If the Designated Claimant and the Debtors have consented to binding arbitration 

under Section II.A.4 above, the Designated Claim will be arbitrated under the terms of this 

Section II.C if such claim is not resolved in the Offer Exchange Procedures or Mediation. If the 

Designated Claimant has expressly indicated that it does not consent to binding arbitration in its 

response to the ADR Notice and has not subsequently opted in to binding arbitration pursuant to 

Section II.A.4 above, the Designated Claim shall be resolved in the Bankruptcy Court by the 

Debtors’ commencement of proceedings pursuant to the Bankruptcy Code, including without 

limitation, estimating or objecting to the Designated Claims. Any party to an arbitration that 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 15 

fails to participate in the arbitration in good faith, on the terms described herein, may be subject 

to sanctions under Section II.F below. 

2. Arbitration Notice

To initiate the arbitration process for a Designated Claim, the Debtors shall serve 

a notice of arbitration (the “Arbitration Notice”), with a copy of the Designated Claimant’s 

applicable proof(s) of claim attached, on the Designated Claimant, the Creditors’ Committee, 

and the American Arbitration Association (the “AAA”).4

3. Arbitration Rules and Procedures

For Designated Claims that are not designated by the Debtors as Complex 

Designated Claims (as defined below), the arbitration of all Designated Claims shall be 

conducted by a single arbitrator selected pursuant to the Commercial Arbitration Rules of the 

AAA. The arbitrator shall be governed by the commercial arbitration rules of the AAA then in 

effect (the “Arbitration Rules”), except where the Arbitration Rules are expressly modified in 

the ADR Procedures.5

The Debtors may, at their discretion, designate certain Designated Claims as 

complex designated claims (the “Complex Designated Claims”). The arbitration of all 

Complex Designated Claims shall be conducted by a panel of three arbitrators selected pursuant 

to the Commercial Arbitration Rules of the AAA. The AAA Procedures for Large, Complex 

Commercial Disputes, in addition to the Commercial Rules of Arbitration, shall be used for 

arbitration of all Complex Designated Claims; provided, however, unless otherwise agreed by the 

4

 The form of the Arbitration Notice is attached hereto as Annex 3 and incorporated herein by reference. The 

Debtors anticipate that the Arbitration Notice will be substantially in the form of Annex 3; however, the Debtors 

reserve the right to modify the Arbitration Notice, as necessary or appropriate, consistent with the terms of the ADR 

Procedures.

5

In the event of any conflict between the Arbitration Rules and the ADR Procedures, the ADR Procedures shall 

control.
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 16 

parties, (i) the AAA shall appoint a panel of three (3) arbitrators, as provided in this Section and 

Section II.C.3(g) and (ii) the arbitration hearing on a Complex Designated Claim must be held no 

later than ninety (90) days after the date of appointment of the arbitrator(s), as provided in 

Section II.C.3(k). Finally, the AAA Supplementary Rules for Class Arbitrations shall also be 

used for all Class Claims, including those related to class certification and the Class 

Determination Award (as defined in Rule 5 of the AAA Supplementary Rules for Class 

Arbitrations), except that the arbitrator(s) shall not make a Clause Construction Award (as 

defined in Rule 3 of the AAA Supplementary Rules for Class Arbitrations), or determine that a 

Class Claim is not arbitrable for failure for each class member to have entered into an arbitration 

agreement, the Court having specifically found that the ADR Procedures are applicable to Class 

Claims notwithstanding the absence of a written agreement to arbitrate.6

(a) Governing Law 

The ADR Procedures, as they relate to arbitration proceedings, are governed by 

the Federal Arbitration Act, 9 U.S.C. §§ 1, et seq. (the “Federal Arbitration Act”), and the 

enforceability of an arbitration award is governed by Section 9 of the Federal Arbitration Act, 

except as modified herein.

(b) Fees and Costs for Binding Arbitration; Sharing 

Unless the parties expressly have agreed otherwise in writing (either prepetition 

or postpetition) as part of an agreement to submit claims to binding arbitration, the fees and costs 

charged by the AAA and the arbitrator(s) shall be shared equally by the Debtors and the 

Designated Claimant; provided, however, that the arbitrator(s), in the arbitrator(s)’ sole 

discretion, may assess fees and costs against any party that the arbitrator(s) finds to be abusing or 

6

In the event of any conflict between the AAA Supplementary Rules for Class Arbitrations and the ADR 

Procedures, the ADR Procedures shall control.
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 17 

unduly delaying the arbitration process. The AAA shall submit invoices to the Designated 

Claimants and the Debtors according to the AAA’s ordinary invoicing practices then in effect 

and subject to the AAA’s ordinary payment terms then in effect. For purposes of clarity, these 

costs shall not include travel expenses of the parties. 

(c) Impartiality and Qualifications of Arbitrators 

In designating the arbitrator in accordance with the procedures described below, 

the AAA shall review the Arbitration Notice and the applicable Designated Claim. Any person 

appointed as an arbitrator must: (i) be an impartial, neutral person; (ii) be experienced (either 

from past arbitrations or former employment) in the law that is the subject of the Designated 

Claim; (iii) have no financial or personal interest in the proceedings or, except when otherwise 

agreed by the parties, in any related matter; and (iv) upon appointment, disclose any 

circumstances likely to create a reasonable inference of bias. In the event that an arbitrator 

discloses circumstances likely to create a reasonable inference of bias, such arbitrator may be 

replaced by the AAA at the written request of the Debtors or the Designated Claimant within ten 

(10) days after such disclosure. 

(d) Time and Location of Arbitration Hearings 

All arbitration hearings shall be conducted in either (i) New York, New York; (ii) 

Detroit, Michigan; (iii) Dallas, Texas; or (iv) San Francisco, California (collectively, the 

“Arbitration Locations”). To the maximum extent practicable, the scheduling and location of 

arbitration hearings shall give due consideration to the proximity of the Designated Claimant and 

to the convenience of the parties to the Arbitration Location. Within ten (10) days of 

appointment, the arbitrator(s) shall conduct a preliminary hearing pursuant to AAA Commercial 

Arbitration Rule 20. Notwithstanding anything set forth herein or in the ADR Order to the 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 18 

contrary, the Creditors’ Committee, through its counsel, shall be permitted to participate in the 

arbitration hearings to the same extent the Creditors’ Committee would be permitted to 

participate in claims litigation in the Bankruptcy Court pursuant to sections 502, 1103, 1109(b), 

or any other applicable section of the Bankruptcy Code. 

(e) Appeals of Arbitration Awards 

All arbitration awards shall be final and binding. Other than the identities of the 

applicable Debtors and Designated Claimants, the claims register number(s) assigned to the 

applicable arbitrated Designated Claims and the priority and dollar amounts of the Designated 

Claims as awarded in the arbitration awards, and except as otherwise required by law or agreed 

upon by the parties, all arbitration awards shall be treated as confidential. No party shall have 

the right to appeal an arbitration award except pursuant to the appeal provisions of the Federal 

Arbitration Act, in which case any appeal must be to the United States District Court for the 

Southern District of New York. Any appeal shall be governed by the Federal Arbitration Act.

The parties shall have ten (10) days from the date the arbitration award is served to appeal such 

award. Failure to timely appeal shall result in the loss of any appeal rights. Once any appeal has 

concluded or appellate rights are waived, the Debtors shall update the claims docket in their 

chapter 11 cases accordingly and may file any notice of the liquidated amount of the Designated 

Claim that they deem necessary or appropriate for such purpose. 

(f) Modification of the Arbitration Procedures 

The arbitration procedures described herein may be modified only upon the 

mutual consent of the Debtors and the Designated Claimant. In addition, the Debtors shall 

consult with the Creditors’ Committee prior to any modification to the arbitration procedures. 

(g) Appointment of the Arbitrator 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 19 

Within 5 five days of receiving the applicable Arbitration Notice, the AAA shall 

commence the following procedures for the appointment of arbitrator(s) (the “Appointment of 

Arbitrator(s) Procedures”) by concurrently sending by electronic transmission or facsimile, to 

the Debtors and the applicable Designated Claimant, an identical list of the names of at least 

eight (8) arbitrator candidates who meet the qualifications necessary for the matter.7 The 

Debtors and the applicable Designated Claimant shall have seven (7) business days from the date 

this list is served to (i) strike two (2) names from the proposed list, (ii) list the remaining names 

in order of preference, and (iii) return the list to the AAA. In the event that the Designated 

Claim is not a Complex Designated Claim, the AAA shall appoint a single arbitrator from the 

name(s) not stricken, giving consideration first to the preferences of the parties and second to 

scheduling and the availability of the arbitrator. In the event that the Designated Claim is a 

Complex Designated Claim, the AAA shall appoint a panel of three (3) arbitrators from the 

name(s) not stricken, giving consideration first to the preferences of the parties and second to the 

scheduling and the availability of the arbitrators. The AAA shall appoint the arbitrator(s) in 

accordance with the Appointment of Arbitrator(s) Procedures within ten (10) business days of its 

receipt of the applicable Arbitration Notice. 

(h) Pre-Hearing Matters 

Unless otherwise agreed to by the parties, any pre-hearing issues, matters or 

disputes (other than with respect to merits issues) shall be presented to the arbitrator(s) 

telephonically (or by such other method agreed to by the arbitrator(s) and the parties) for 

expeditious, final, and binding resolution. Upon a party’s request, the arbitrator(s) may order 

7

If, for any reason, there are more than two parties to an arbitration, AAA shall identify a number of potential 

arbitrators equal to the number of parties, plus one, and the remaining selection proceedings shall otherwise govern. 

Affiliated entities are considered a single party for this purpose. The Creditors’ Committee shall have no role in the 

arbitrator selection process. 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 20 

that a substantive motion, such as a motion for summary judgment, be heard in person rather 

than telephonically. Any pre-hearing issue, matter, or dispute (other than with respect to merits 

issues) must be presented to the arbitrator(s) not later than fifteen (15) days prior to the 

arbitration hearing so as to permit the arbitrator(s) to review and rule upon the requests by 

telephonic or electronic communication at least five days prior to the arbitration hearing. 

(i) Discovery

Unless the Designated Claim is a Complex Designated Claim, there shall be no 

interrogatories. Any requests for production of documents, electronically-stored information and 

things (“Document Requests”) shall be made in writing and shall be limited to no more than 

twenty (20) requests, including discrete subparts. Items requested in the Document Requests 

must be produced within thirty (30) days after service of the Document Requests. All documents 

from discovery shall be confidential and shall not be (i) disclosed to any person or party not 

participating in the arbitration proceeding or (ii) used for any purpose other than in connection 

with the arbitration proceeding, except as provided herein. Notwithstanding the foregoing, upon 

request of the Creditors’ Committee, the Debtors shall provide to the Creditors’ Committee, on a 

confidential basis, copies of all discovery materials produced pursuant to this Section II.C.3(i) 

for any particular Designated Claim. 

(j) Pre-Arbitration Statement 

Unless otherwise agreed by the parties, on or before ten (10) days prior to the 

scheduled arbitration hearing, each party shall submit to the arbitrator(s) and serve on the other 

party or parties and the Creditors’ Committee by overnight mail a pre-arbitration statement not to 

exceed fifteen (15) pages, excluding any attachments. On or before ten (10) days prior to the 

scheduled arbitration hearing, the Creditors’ Committee may submit a short statement, not to 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 21 

exceed five (5) pages, to the arbitrator(s) and serve such statement on the parties to the 

arbitration.

(k) Arbitration Hearing 

Unless otherwise agreed by the parties and the arbitrator(s) or as provided herein, 

the arbitration hearing on a Designated Claim must be held no later than ninety (90) days after 

the date of appointment of the arbitrator(s). The arbitration hearing is open only to the parties 

and their respective counsel, insurers (if any), and witnesses. In addition, notwithstanding 

anything else set forth herein or in the ADR Order to the contrary, the Creditors’ Committee, 

through its counsel, shall be permitted to attend and participate in the arbitration hearing to the 

same extent the Creditors’ Committee would be permitted to participate in claims litigation in the 

Bankruptcy Court, pursuant to sections 502, 1103, 1109(b), and any other applicable section of 

the Bankruptcy Code. Nonparty witnesses shall be sequestered. No posthearing briefs may be 

submitted, unless the arbitrator(s) requests briefs, in which case such briefing shall be subject to 

the issues, timing, and page limitations the arbitrator(s) imposes. There shall be no reply briefs. 

(l) Awards

The arbitrator(s) shall issue a written, reasoned opinion and award (the 

“Arbitration Award”) within fourteen (14) days after the arbitration hearing. The arbitrator(s) 

shall not be compensated for more than eight hours of deliberations on and preparation of the 

Arbitration Award for a Designated Claim. Any Arbitration Award shall be an allowed general 

unsecured nonpriority claim against the Debtor identified in the Arbitration Award (or if no 

Debtor is identified in the Arbitration Award, the claim shall be deemed to be against the Debtor 

identified in the Designated Claimant’s applicable proof of claim included with the service of the 

Arbitration Notice, unless otherwise ordered by the Bankruptcy Court). The Arbitration Award 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 22 

may not award a priority claim or otherwise determine the priority of the claim under the 

Bankruptcy Code; provided, however, that, within thirty (30) days after the issuance of an 

Arbitration Award, the Designated Claimant may seek relief from the Bankruptcy Court to 

determine that some or all of the Arbitration Award is subject to treatment as a priority claim if 

the Designated Claimant’s applicable proof of claim filed as of the date of filing of the ADR 

Order asserted an entitlement to such priority. Further, no portion of a claim resulting from any 

Arbitration Award shall be allowed to the extent that it consists of (a) punitive damages; (b) 

interest, attorneys’ fees, or other fees and costs, unless permissible under section 506(b) of the 

Bankruptcy Code; (c) an award under any penalty rate or penalty provision of the type specified 

in section 365(b)(2)(D) of the Bankruptcy Code; (d) amounts associated with obligations that are 

subject to disallowance under section 502(b) of the Bankruptcy Code; (e) specific performance, 

other compulsory injunctive relief, restrictive, restraining, or prohibitive injunctive relief or any 

other form of equitable remedy; or (f) any relief not among the foregoing but otherwise 

impermissible under applicable bankruptcy or nonbankruptcy law. The Debtors and the 

Creditors’ Committee shall have the right within thirty (30) days after the issuance of an 

Arbitration Awards to file a motion seeking relief from the Bankruptcy Court to enforce the 

preceding sentence and obtain the disallowance of any portion of a claim included in an 

Arbitration Award in violation of clauses (a) through (f) herein. In all cases, the awarded claim 

shall be subject to treatment in the Debtors’ chapter 11 cases as set forth in any order(s) 

confirming a chapter 11 plan or plans, or in such other applicable order of the Bankruptcy Court.

The entry of an Arbitration Award shall not grant the Designated Claimant any enforcement or 

collection rights. 

D. Settlements of Designated Claims

1. Settlements Permitted at Any Stage of the ADR Procedures
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 23 

Designated Claims may be settled by the Debtors and a Designated Claimant 

through the Offer Exchange Procedures, Mediation, or by agreement at any point during these 

ADR Procedures. Nothing herein shall prevent the parties from settling any claim at any time. 

2. Settlement Authority and Approvals

Nothing herein shall limit, expand, or otherwise modify the Debtors’ authority to 

settle claims pursuant to orders of the Bankruptcy Court then in effect, including without 

limitation the Order Pursuant to 11 U.S.C. § 105(a) and Fed. R. Bankr. P. 3007 and 9019(b) 

authorizing the Debtors to (i) File Omnibus Claims Objections and (ii) Establish Procedures for 

Settling Certain Claims, entered on October 6, 2006 [Docket No. 4180] (the “Claims

Procedures and Settlement Order”) and any future order(s) confirming a chapter 11 plan or 

plans in these cases (collectively, the “Settlement Authority Orders”). Any settlements of 

claims pursuant to, or in connection with, the ADR Procedures shall be approved consistent with 

the terms, conditions, and limitations set forth in the applicable Settlement Authority Orders. 

The Debtors shall be requested to seek Bankruptcy Court approval of such settlements only to 

the extent that (a) such approval is required by the terms of the Settlement Authority Orders or 

(b) the settlement falls outside of the authority granted in the Settlement Authority Orders and 

otherwise requires Bankruptcy Court approval. 

E. Failure to Resolve a Designated Claim Through ADR Procedures

1. Litigation Generally

Claims not resolved through the ADR Procedures shall proceed to litigation for 

resolution. Notwithstanding anything herein, the Debtors may terminate the ADR Procedures at 

any time prior to serving the Arbitration Notice and proceed to litigation of the Designated Claim 

as set forth herein. 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 24 

2. Litigation in the Bankruptcy Court

If the Designated Claim is not resolved by the ADR Procedures (an “Unresolved

Designated Claim”), litigation of such Unresolved Designated Claim shall proceed in the 

Bankruptcy Court by the commencement by the Debtors of proceedings consistent with the 

terms, conditions, and limitations set forth in the Claims Procedures Order or other applicable 

procedures or orders, as soon as reasonably practicable upon completion of the ADR Procedures 

for the Unresolved Designated Claim, to the extent that (a) the Bankruptcy Court has subject 

matter jurisdiction over the Unresolved Designated Claim and (b) the Unresolved Designated 

Claim is not subject to the abstention provisions of 28 U.S.C. § 1334(c). Disputes over the 

subject matter jurisdiction of the Bankruptcy Court or the application of abstention shall be 

determined by the Bankruptcy Court. 

3. Litigation in Other Courts

If the Unresolved Designated Claim cannot be adjudicated in the Bankruptcy 

Court as a result of abstention or because of lack of or limitations upon subject matter 

jurisdiction (as determined by the Bankruptcy Court), then, subject to the terms and conditions 

set forth in Section II.E.4 below, litigation of such Unresolved Designated Claim shall proceed 

(a) if the Unresolved Designated Claim was pending in a nonbankruptcy forum on the date the 

Debtors commenced their respective voluntary chapter 11 cases (the “Commencement Date”),

then (i) in such nonbankruptcy forum, subject to the Debtors’ right to seek removal or transfer of 

venue or (ii) in such other forum as determined by the Bankruptcy Court on request of the 

Debtors;8 or (b) if the Unresolved Designated Claim was not pending in any forum on the 

8

The Debtors may elect to file a motion pursuant to 28 U.S.C.§ 157(b)(5) to remove to the United States District 

Court for the Southern District of New York any Unresolved Designated Claim (along with any other unliquidated 

and litigation claims asserted against the Debtors) where the underlying claim is a personal injury claim or wrongful 

death claim.
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 25 

Commencement Date, then in the United States District Court for the Southern District of New 

York or such other nonbankruptcy forum that, as applicable, (i) has personal jurisdiction over the 

parties, (ii) has subject matter jurisdiction over the Unresolved Designated Claim, (iii) has in rem 

jurisdiction over the property involved in the Unresolved Designated Claim (if applicable) and 

(iv) is a proper venue. If necessary, any disputes regarding the applicability of this Section II.E.3 

shall be determined by the Bankruptcy Court. 

4. Modification of the Automatic Stay

If litigation of an Unresolved Designated Claim in a forum other than the 

Bankruptcy Court is required as set forth in Section II.E.3 above, the ADR Order provides that 

the automatic stay imposed by section 362 of the Bankruptcy Code, or any subsequent Plan 

Injunction (collectively, the “Stay”), shall be modified solely to the extent necessary to permit 

the liquidation of the amount of such Unresolved Designated Claim in the appropriate forum; 

provided, however, that any such liquidated claim (a) shall be subject to treatment under the 

applicable chapter 11 plan or plans confirmed in these cases; and (b) shall be treated as a general 

unsecured nonpriority claim against the Debtor identified in the judgment, unless otherwise 

determined and ordered by the Bankruptcy Court. No later than forty-five (45) days after the 

Bankruptcy Court determines that the terms of Section II.E.3 above applies to an Unresolved 

Designated Claim or at such other time as agreed to by the parties, the Debtors shall either (a) 

file a notice of such modification of the Stay (a “Notice of Stay Modification”) with the 

Bankruptcy Court and serve a copy of such notice on the Designated Claimant and the Creditors’ 

Committee or (b) file a motion seeking an order governing the terms upon which the Stay will be 

modified (a “Stay Motion”) and serve such Stay Motion on the Designated Claimant and the 

Creditors’ Committee. The Stay shall be modified solely to the extent set forth above (a) as of 

the date that is forty-five (45) days after the filing of a Notice of Stay Modification, unless the 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 26 

Bankruptcy Court orders otherwise or the parties otherwise agree; or (b) as ordered by the Court 

in connection with a Stay Motion. If the Debtors fail to file a Notice of Stay Modification or a 

Stay Motion for any reason with respect to an Unresolved Designated Claim, the Stay shall 

remain in effect with respect to such Unresolved Designated Claim and the Designated Claimant 

may seek a determination of the Bankruptcy Court regarding whether and on what terms the Stay 

must be modified to permit litigation in a nonbankruptcy forum as set forth in Section II.E.3 

above.

F. Failure to Comply with the ADR Procedures

If a Designated Claimant or the Debtors fail to comply with the ADR Procedures, 

negotiate in good faith, or cooperate as may be necessary to effectuate the ADR Procedures, the 

Bankruptcy Court may, after notice and a hearing, find such conduct to be in violation of the 

ADR Order or, with respect to a Designated Claimant, an abandonment of or failure to prosecute 

the Designated Claim, or both. Upon such findings, the Bankruptcy Court may, among other 

things, disallow and expunge the Designated Claim, in whole or part, or grant such other or 

further remedy deemed just and appropriate under the circumstances, including, without 

limitation, awarding attorneys’ fees, other fees, and costs to the other party. 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 

ANNEX 1

UNITED STATES BANKRUPTCY COURT 

SOUTHERN DISTRICT OF NEW YORK 

---------------------------------------------------------------x

:

In re : Chapter 11 Case No. 

:

MOTORS LIQUIDATION COMPANY, et al., : 09-50026 (REG) 

 f/k/a General Motors Corp., et al. : 

:

Debtors. : (Jointly Administered) 

:

---------------------------------------------------------------x

ALTERNATIVE DISPUTE RESOLUTION NOTICE

Service Date: 

Claimant(s): 

Claimant(s)’ Address: 

Designated Claim Number(s): 

Amount(s) Stated in Proof(s) of Claim: 

Deadline to Respond: 

By this notice (the “ADR Notice”), Motors Liquidation Company (f/k/a General 

Motors Corporation) and its affiliated debtors, as debtors in possession (collectively, the 

“Debtors”) designate the above-identified claim(s) (the “Designated Claim(s)”) in the Debtors’ 

chapter 11 cases and submit the Designated Claim(s) to alternative dispute resolution, pursuant 

to the procedures (the “ADR Procedures”) established by the Order Pursuant to 11 U.S.C. 

§ 105(a) and General Order M-390 Authorizing Implementation of Alternative Dispute 

Resolution Procedures, Including Mandatory Mediation (the “ADR Order”), entered by the 

United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy

Court”) on February 23, 2010. A complete copy of the ADR Procedures is enclosed for your 

reference.

The Debtors have reviewed your Designated Claim(s) and, pursuant to the ADR 

Procedures, offer the amounts set forth below for allowance of your Designated Claim(s) as [a] 

prepetition general unsecured nonpriority claim(s) in full satisfaction of the Designated Claim(s) 

(the “Settlement Offer”).

You are required to return this ADR Notice with a Claimant’s Response (as 

defined below) to the Settlement Offer by no later than the Deadline to Respond indicated above.
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 2 

In addition, to the extent your most recent proofs) of claim [does]/[do] not: (a) 

state the correct amount of your Designated Claim(s); (b) expressly identify each and every 

cause of action and legal theory on which you base your Designated Claim(s); (c) include 

current, correct, and complete contact information of your counsel or other representative; or (d) 

provide all documents on which you rely in support of your Designated Claim(s), you hereby are 

requested to provide all such information and documentation with your Claimant’s Response. 

If you do not return this ADR Notice with the requested information and a 

Claimant’s Response to the Settlement Offer to [Debtor’s Representative] so that it is received 

by the Deadline to Respond, your Designated Claims will be subject to mandatory mediation as 

set forth in Section II.B of the ADR Procedures. 

IN ADDITION, YOU ARE REQUIRED TO INDICATE EXPRESSLY 

WHETHER YOU CONSENT TO BINDING ARBITRATION IF YOUR DESIGNATED 

CLAIM(S) CANNOT BE SETTLED. PLEASE MARK THE BOX BELOW INDICATING 

WHETHER YOU (i) CONSENT TO BINDING ARBITRATION OR (ii) DO NOT

CONSENT TO (AND SEEK TO OPT OUT OF) BINDING ARBITRATION. PLEASE 

NOTE THAT YOUR CONSENT TO BINDING ARBITRATION CANNOT 

SUBSEQUENTLY BE WITHDRAWN. IN ADDITION, ANY ATTEMPT TO OPT OUT OF

BINDING ARBITRATION IN THE RESPONSE TO THIS ADR NOTICE SHALL BE 

INEFFECTIVE IF YOU PREVIOUSLY HAVE CONSENTED IN WRITING (EITHER 

PREPETITION OR POSTPETITION) TO BINDING ARBITRATION AS A MEANS TO 

RESOLVE YOUR CLAIM(S). 

Details about the arbitration process, including the sharing of fees, are set forth in 

Section II.C of the ADR Procedures. 

YOU MUST RESPOND TO THE FOLLOWING SETTLEMENT OFFER: 

Settlement Offer: The Debtors offer you an allowed general unsecured, 

nonpriority claim in the amount of $_________ against [Name of Debtor] in full satisfaction of 

your Designated Claim(s), to be satisfied in accordance with any plan or plans of reorganization 

confirmed and implemented in the Debtors’ chapter 11 cases. 

The only permitted response (the “Claimant’s Response”) to the Settlement 

Offer are (a) acceptance of the Settlement Offer or (b) rejection of the Settlement Offer coupled 

with a counteroffer (a “Counteroffer”). Accordingly, please select your Claimant’s Response 

below:

Please indicate below if you accept or reject the Debtors’ Settlement Offer by marking 

the appropriate box. If you reject the Settlement Offer, please make your counteroffer 

where indicated. 

 I/we agree to and accept the terms of the Settlement Offer. 

or

I/we reject the Settlement Offer. However, I/we will accept, and propose as a 

Counteroffer, the following allowed claim in full satisfaction of the Designated Claim(s), 

to be satisfied in accordance with any plan or plans of reorganization confirmed and 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 3 

implemented in the Debtors’ chapter 11 cases: 

Debtor:

Amount: $ 

Priority: unsecured nonpriority claim (presumed) or other:* 

*Note - If you choose a different priority, you must attach an explanation and any 

relevant documentation. 

Section II.A.3 of the ADR procedures sets forth the restrictions on Counteroffers.

Your Counteroffer may not (a) improve the priority set forth in your most recent timely-filed 

proof of claim or amended proof of claim, or (b) exceed the lesser of the Claim Amount Cap (as 

defined in the ADR Order) or the amount set forth in your most recent timely-filed proof of 

claim(s) or amended proof of claim(s). You may not amend your proof of claim solely for the 

purpose of proposing a Counteroffer of a higher amount or a better priority. 

Please indicate below whether you consent to binding arbitration for your Designated 

Claim(s) by marking the appropriate box. 

 I/ WE CONSENT TO BINDING ARBITRATION. 

or

 I/WE DO NOT CONSENT TO BINDING ARBITRATION. 

[Signature of the Designated Claimant’s Authorized 

Representative]

By:

 Printed Name 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 

ANNEX 2

UNITED STATES BANKRUPTCY COURT 

SOUTHERN DISTRICT OF NEW YORK 

---------------------------------------------------------------x

:

In re : Chapter 11 Case No. 

:

MOTORS LIQUIDATION COMPANY, et al., : 09-50026 (REG) 

 f/k/a General Motors Corp., et al. : 

:

Debtors. : (Jointly Administered) 

:

---------------------------------------------------------------x

NOTICE OF NONBINDING MEDIATION

Service Date: 

Claimant(s): 

Claimant(s)’ Address: 

Designated Claim Number(s): 

Amount(s) Stated in Proof(s) of Claim: 

Mediation Location: 

By this Mediation Notice, Motors Liquidation Company (f/k/a General Motors 

Corporation) and its affiliated debtors, as debtors in possession (collectively, the “Debtors”)

submit the above-identified claim(s) (the “Designated Claim(s)”) in the Debtors’ chapter 11 

cases to mediation, pursuant to the procedures (the “ADR Procedures”) established by the Order 

Pursuant to 11 U.S.C. §105(a) and General Order M-390 Authorizing Implementation of 

Alternative Dispute Resolution Procedures, Including Mandatory Mediation, entered by the 

United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy

Court”) on February 23, 2010. The Debtors have been unable to resolve your Designated 

Claim(s) on a consensual basis with you through the Offer Exchange Procedures of the ADR 

Procedures, or the Offer Exchange Procedures otherwise were terminated as to your Designated 

Claim(s) as provided for in the ADR Procedures.

As provided for in the ADR Procedures, mediation shall be conducted in the 

Mediation Location set forth above, unless the parties agrees to a different location. As further 

provided in the ADR Procedures, you have ten (10) days to choose one of the individuals 

identified on the list of mediators enclosed with this Mediation Notice to conduct the mediation. 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 2 

A complete copy of the ADR Procedures is enclosed for your reference. Please 

refer to Section II.C of the ADR Procedures, concerning mediation. 

[Signature of the Debtors’ Authorized Person]
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 

ANNEX 3

UNITED STATES BANKRUPTCY COURT 

SOUTHERN DISTRICT OF NEW YORK 

---------------------------------------------------------------x

:

In re : Chapter 11 Case No. 

:

MOTORS LIQUIDATION COMPANY, et al., : 09-50026 (REG) 

 f/k/a General Motors Corp., et al. : 

:

Debtors. : (Jointly Administered) 

:

---------------------------------------------------------------x

NOTICE OF BINDING ARBITRATION

Service Date: 

Claimant(s): 

Claimant(s)’ Address: 

Designated Claim Number(s): 

Amount(s) Stated in Proof(s) of Claim: 

Arbitration Location: 

By this Arbitration Notice, Motors Liquidation Company (f/k/a General Motors 

Corporation) and its affiliated debtors, as debtors in possession (collectively, the “Debtors”)

submit the above-identified claim(s) (the “Designated Claim(s)”) in the Debtors’ chapter 11 

cases to binding arbitration, pursuant to the procedures (the “ADR Procedures”) established 

by the Order Pursuant to 11 U.S.C. § 105(a) and General Order M-390 Authorizing 

Implementation of Alternative Dispute Resolution Procedures, Including Mandatory Mediation, 

entered by the United States Bankruptcy Court for the Southern District of New York (the 

“Bankruptcy Court”) on February 23, 2010. The Debtors have been unable to resolve your 

Designated Claim(s) on a consensual basis with you through the Offer Exchange Procedures of 

the ADR Procedures and or through binding mediation. 

PLEASE NOTE THAT YOU HAVE CONSENTED (OR ARE DEEMED TO 

HAVE CONSENTED) TO BINDING ARBITRATION. THEREFORE, YOUR DESIGNATED 

CLAIM(S) WILL PROCEED TO BINDING ARBITRATION, PURSUANT TO THE ADR 

PROCEDURES.

As provided for in the ADR Procedures, an arbitrator will be appointed through 

the American Arbitration Association (“AAA”). The ADR Procedures require you and the 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 2 

Debtors to share the administrative fees and costs of arbitration charged by the AAA and the 

arbitrator.

A complete copy of the ADR Procedures is enclosed for your reference. Please 

refer to Section II.C of the ADR Procedures, concerning binding arbitration. 

[Signature of the Debtors’ Authorized Person] 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 

Exhibit B

Blackline of ADR Procedures
US_ACTIVE:\43300431\0243297971\06\72240.0639

UNITED STATES BANKRUPTCY COURT 

SOUTHERN DISTRICT OF NEW YORK 

---------------------------------------------------------------x

:

In re : Chapter 11 Case No. 

:

MOTORS LIQUIDATION COMPANY, et al., : 09-50026 (REG) 

 f/k/a General Motors Corp., et al. : 

:

Debtors. : (Jointly Administered) 

:

---------------------------------------------------------------x

ALTERNATIVE DISPUTE RESOLUTION PROCEDURES

The alternative dispute resolution procedures (the “ADR Procedures”) adopted 

in the chapter 11 cases of Motors Liquidation Company (f/k/a General Motors Corporation) 

(“MLC”) and its affiliated debtors, as debtors in possession (collectively, the “Debtors”), are set 

forth below: 

I. CLAIMS SUBJECT TO THE ADR 

PROCEDURES AND ADR INJUNCTION

A. Claims Subject to the ADR Procedures

1. The claims subject to the ADR Procedures (collectively, the “Designated

Claims”) include any and all claims (other than an Excluded Claim as defined below) designated 

by the Debtors under the notice procedures set forth below that assert or involve claims based on 

one or more of the following theories of recovery, whether or not litigation previously has been 

commenced by the claimant: (a) personal injury claims, (b) wrongful death claims, (c) tort 

claims, (d) product liability claims, (e) claims for damages arising from the rejection of an 

executory contract or unexpired lease with a Debtor under section 365 of the Bankruptcy Code,

(f) indemnity claims (excluding claims for damages arising from the rejection of executory 

contracts that relate primarily to environmental matters), (f) indemnity claims (excluding tax 
US_ACTIVE:\43300431\0243297971\06\72240.0639 2 

indemnity claims relating to leveraged fixed equipment lease transactions and excluding 

indemnity claims relating to asbestos liability), (g) lemon law claims, to the extent applicable 

under section 6.15 of the Master Sale and Purchase Agreement by and between the Debtors and 

NGMCO, Inc., dated as of June 1, 2009, and as amended (the “MPA”), (h) warranty claims, to 

the extent applicable under section 6.15 of the MPA, (i) environmental claims that constitute 

prepetition unsecured claims, (j) tax claims, and (kand (i) class action claims (“Class Claims”).

The Debtors may identify as a Designated Claim any proof of claim asserted in these cases, other 

than Excluded Claims as defined in Section I.B below, if the Debtors believe, in their business 

judgment and sole discretion, that the ADR Procedures would promote the resolution of such 

claim and serve the intended objectives of the ADR Procedures. 

2. The holders of the Designated Claims are referred to herein as the 

“Designated Claimants.”

B. Excluded Claims

The Debtors shall not identify as a Designated Claim any proof of claim within 

any of the following categories (collectively, the “Excluded Claims”): (a) claims for which the 

automatic stay under section 362 of title 11 of the United States Code (the “Bankruptcy Code”)

was modified by prior order of this Court (the “Bankruptcy Court”) to allow the litigation of 

the claim to proceed in another forum; (b) claims asserted in liquidated amounts of $500,000 or 

less; (c) asbestos-related claims (other than indemnity claims); and (d; (d) environmental claims 

that constitute prepetition unsecured claims (including claims for damages arising from the 

rejection of executory contracts that relate primarily to environmental matters); and (e) claims 

subject to a separate order of the Bankruptcy Court providing for arbitration or mediation. 

Notwithstanding the foregoing, any of the Excluded Claims, any disputed postpetition 

administrative expenses, and any claims or counterclaims asserted by the Debtors may be 
US_ACTIVE:\43300431\0243297971\06\72240.0639 3 

submitted to the ADR Procedures by agreement of the applicable Debtor and the applicable 

claimant or by further order of the Bankruptcy Court. 

C. The ADR Injunction

Upon service of the ADR Notice (as defined below) on a Designated Claimant 

under Section II.A.1 below, such Designated Claimant (and any other person or entity asserting 

an interest in the relevant Designated Claim) shall be enjoined from commencing or continuing 

any action or proceeding in any manner or any place, including in the Bankruptcy Court, seeking 

to establish, liquidate, collect on, or otherwise enforce the Designated Claim(s) identified in the 

ADR Notice other than (1) through these ADR Procedures, or (2) pursuant to a plan or plans 

confirmed in the applicable Debtors’ chapter 11 cases (collectively, the “ADR Injunction”).

Notwithstanding the forgoing, the Debtors shall not be precluded from seeking to estimate any 

Designated Claim not subject to an accepted Claim Amount Cap in connection with confirmation 

or consummation of a plan or plans confirmed in the applicable Debtors’ chapter 11 cases, or 

preclude the Designated Claimant from seeking estimation of its Designated Claim solely for 

voting purposes in connection with confirmation of a plan or plans confirmed in the applicable 

Debtors’ chapter 11 cases. The ADR Injunction shall expire with respect to a Designated Claim 

only when that Designated Claim has been resolved or after the ADR Procedures have been 

completed as to that Designated Claim. Except as expressly set forth herein or in a separate 

order of the Bankruptcy Court, the expiration of the ADR Injunction shall not extinguish, limit, 

or modify the automatic stay established by section 362 of the Bankruptcy Code or any similar 

injunction that may be imposed upon the confirmation or effectiveness of a plan or plans in the 

applicable Debtors’ chapter 11 cases (a “Plan Injunction”), and the automatic stay and the Plan 

Injunction shall remain in place to the extent then in effect. 
US_ACTIVE:\43300431\0243297971\06\72240.0639 4 

II. THE ADR PROCEDURES

A. Offer Exchange Procedures

The first stage of the ADR Procedures will be the following offer exchange 

procedures, requiring the parties to exchange settlement offers and thereby providing an 

opportunity to resolve the underlying Designated Claim on a consensual basis without any 

further proceedings by the parties (the “Offer Exchange Procedures”). Rule 408 of the Federal 

Rules of Evidence shall apply to the ADR Procedures. Except as permitted by Rule 408, no 

person may rely on, or introduce as evidence in connection with any arbitral, judicial, or other 

proceeding, any offer, counteroffer, or any other aspect of the ADR Procedures. 
US_ACTIVE:\43300431\0243297971\06\72240.0639 5 

1. Designation of Designated Claims and Settlement Offer by the Debtors

(a) At any time following the entry of an order approving the ADR 

Procedures (the “ADR Order”) and subject to the terms and conditions in Sections I.A and I.B 

above, the Debtors may designate a Designated Claim for resolution through the ADR 

Procedures by serving upon the Designated Claimant, at the address listed on the Designated 

Claimant’s most recently filed proof of claim or amended proof of claim, as well as to any 

counsel of record in these cases for the Designated Claimant, the following materials 

(collectively, the “ADR Materials”): (i) a notice that the Designated Claim has been submitted 

to the ADR Procedures (an “ADR Notice”),23

 (ii) a copy of the ADR Order, and (iii) a copy of 

these ADR Procedures. For transferred claims, the Debtors also will serve a copy of the ADR 

Materials on the transferee identified in the notice of transfer of claim. 

(b) The ADR Notice will (i) advise the Designated Claimant that his or her 

Designated Claim has been submitted to the ADR Procedures; (ii) request that the Designated 

Claimant verify or, as needed, correct, clarify, or supplement, certain information regarding the 

Designated Claim (including the addresses for notices under the ADR Procedures); and (iii) 

include an offer by the Debtors to settle the Designated Claim (a “Settlement Offer”). The 

ADR Notice also will require the Designated Claimant to sign and return the ADR Notice along 

with the Claimant’s Response (as defined in Section II.A.2 below) to the Debtors so that it is 

received by the Debtors no later than twenty-one (21) days34

 after the mailing of the ADR Notice 

(the “Settlement Response Deadline”).

23

The form of the ADR Notice is attached hereto as Annex 1 and incorporated herein by reference. Although 

theThe Debtors anticipate that the ADR Notice will be substantially in the form of Annex 1,1; however, the Debtors 

reserve the right to modify the ADR Notice, as necessary or appropriate, consistent with the terms of the ADR 

Procedures.

34

Bankruptcy Rule 9006(a) shall apply to all periods calculated in the ADR Procedures. 
US_ACTIVE:\43300431\0243297971\06\72240.0639 6 

(c) If the Designated Claimant fails to sign and return the ADR Notice or to 

include a Claimant’s Response (as defined below) with the returned ADR Notice by the 

Settlement Response Deadline, (i) the Offer Exchange Procedures will be deemed terminated 

with respect to the Designated Claim and (ii) the Designated Claim will be submitted to 

nonbinding mediation. 

2. The Claimant’s Response

The only permitted responses to a Settlement Offer (the “Claimant’s Response”)

are (i) acceptance of the Settlement Offer, or (ii) rejection of the Settlement Offer coupled with a 

counteroffer (as further defined below, a “Counteroffer”). If the ADR Notice is returned 

without a response or with a response that is not a permitted response, the Designated Claim 

shall be treated as set forth in Section II.A.1(c) above.

3. The Counteroffer

The Counteroffer shall (i) provide all facts that substantiate the Designated Claim 

and that are sufficient for the Debtors to evaluate the validity and amount of the Designated 

Claim; (ii) provide all documents that the Designated Claimant contends support the Designated 

Claim; (iii) state the dollar amount of the Designated Claim (the “Proposed Claim Amount”),

which may not (A) improve the priority set forth in the Designated Claimant’s most recent 

timely filed proof of claim or amended proof of claim, or (B) exceed the lesser of the Claim 

Amount Cap (as defined in the ADR Order), if applicable, or the amount set forth in the 

Designated Claimant’s most recent timely filed proof of claim or amended proof of claim (but 

may liquidate any unliquidated amounts expressly referenced in a proof of claim), with an 

explanation of the calculation and basis for the Proposed Claim Amount; and (iv) provide the 

name and address of counsel representing the Designated Claimant with respect to the 

Designated Claim, unless the Designated Claimant is a natural person, in which case the 
US_ACTIVE:\43300431\0243297971\06\72240.0639 7 

Designated Claimant shall either provide the name of such counsel or state that he or she is 

appearing without counsel.

The Counteroffer is presumed to offer the allowance of the Designated Claim as a 

general unsecured claim in the Proposed Claim Amount against the Debtor identified in the 

applicable proof of claim. If the Debtors accept the Counteroffer, the Designated Claimant shall 

not seek recovery from the Debtors of any consideration other than the consideration ultimately 

distributed to holders of other allowed general unsecured claims against the relevant Debtor. A 

Counteroffer may not be for an unknown, unliquidated, or indefinite amount or priority, or the 

Designated Claim shall be treated as set forth in Section II.A.1(c) above. 

4. Consent to Subsequent Binding Arbitration

As described in Sections II.B and II.C below, in the absence of a settlement at the 

conclusion of the Offer Exchange Procedures, Designated Claims shall proceed to nonbinding 

mediation and, if such mediation is unsuccessful, upon consent of the parties (including deemed 

consent based on prior contractual agreements), to binding arbitration. A Designated Claimant is 

required to notify the Debtors whether it consents to, and thereby seeks to participate in, binding 

arbitration in the event that its Designated Claim ultimately is not resolved through the Offer 

Exchange Procedures and the nonbinding mediation. A Designated Claimant shall make an 

election to either consent or not consent to binding arbitration by checking the appropriate box in 

the ADR Notice (an “Opt-In/Opt-Out Election”). Any Designated Claimant that does not 

consent to binding arbitration in its response to the ADR Notice may later consent in writing to 

binding arbitration, subject to the agreement of the Debtors. Consent to binding arbitration, once 

given, cannot subsequently be withdrawn without consent of the Debtors. 
US_ACTIVE:\43300431\0243297971\06\72240.0639 8 

5. The Debtors’ Response to a Counteroffer

The Debtors must respond to any Counteroffer within fifteen (15) days after their 

receipt of the Counteroffer (the “Response Deadline”), by returning a written response (as 

further defined below, each a “Response Statement”). The Response Statement shall indicate 

that the Debtors (a) accept the Counteroffer; or (b) reject the Counteroffer, with or without 

making a revised Settlement Offer (a “Revised Settlement Offer”).

(a) Failure to Respond 

If the Debtors fail to respond to the Counteroffer by the Response Deadline,

(i) the Counteroffer will be deemed rejected by the Debtors; (ii) the Offer Exchange Procedures 

will be deemed terminated with respect to the Designated Claim; and (iii) the Designated Claim 

will be submitted to nonbinding mediation. 

(b) Revised Settlement Offer 

If the Debtors make a Revised Settlement Offer by the Response Deadline, the 

Designated Claimant may accept the Revised Settlement Offer by providing the Debtors with a 

written statement of acceptance no later than ten (10) days after the date of service of the 

Revised Settlement Offer (the “Revised Settlement Offer Response Deadline”). If the 

Designated Claimant does not accept the Revised Settlement Offer by the Revised Settlement 

Offer Response Deadline, the Revised Settlement Offer will be deemed rejected and the 

Designated Claim automatically will be submitted to nonbinding mediation. 

(c) Request for Additional Information 

The Debtors may request supplemental or clarification of information supplied in 

the Designated Claimant’s most recently filed proof of claim to assist in a good faith evaluation 

of any particular Designated Claim. If the Debtors request additional information or 

documentation by the Response Deadline, the Designated Claimant shall serve such additional 
US_ACTIVE:\43300431\0243297971\06\72240.0639 9 

information or documentation sufficient to permit the Debtors to evaluate the basis for the 

Designated Claim (with the exception, in the Designated Claimant’s sole discretion, of privileged 

information or information prepared expressly in contemplation of litigation) so that it is 

received by the Debtors within fifteen (15) days after such request. If the Designated Claimant 

timely responds, the Debtors shall have fifteen (15) days to provide an amended Response 

Statement, which may include a Revised Settlement Offer as a counter to the Counteroffer. If 

the Debtors do not provide an amended Response Statement within this period, or if the 

Designated Claimant fails to provide the requested information or documentation within the time 

allotted, the Designated Claim will be submitted to nonbinding mediation. 

6. Offer Exchange Termination Date

Upon mutual written consent, the Debtors and a Designated Claimant may 

exchange additional Revised Settlement Offers and Counteroffers for up to twenty (20) days 

after the later of (a) the Revised Settlement Offer Response Deadline or (b) the expiration of the 

applicable timeframes provided for in Section II.A.5(c) above with respect to requesting, 

receiving, and responding to additional information or documentation. Otherwise, the Offer 

Exchange Procedures shall conclude and terminate on the earliest of the following (the “Offer 

Exchange Termination Date”): (i) the date upon which the Designated Claim automatically 

advances to nonbinding mediation under the provisions set forth above; (ii) the date that any 

settlement offer for a Designated Claim is accepted under the procedures set forth above; (iii) the 

date upon which a Response Statement was served by the Debtors, if the Debtors notified the 

Designated Claimant in their Response Statement of the Debtors’ intention to proceed directly to 

nonbinding mediation; or (iv) such earlier date as is agreed upon by the Debtors and the 

Designated Claimant. 
US_ACTIVE:\43300431\0243297971\06\72240.0639 10 

7. Ability to Settle Claims

Nothing herein shall limit the ability of a Designated Claimant and the Debtors to 

settle a Designated Claim by mutual consent at any time. All such settlements shall be subject to 

the terms of Section II.D.2 below. 

B. Nonbinding Mediation (“Mediation”)

1. Mediation Notice

If the Debtors and the Designated Claimant do not settle the Designated Claim 

through the Offer Exchange Procedures, the Debtors shall serve a notice of nonbinding 

mediation, with a copy of the Designated Claimant’s applicable proof(s) of claim attached, on 

the Designated Claimant no later than thirty (30) days after the Offer Exchange Termination 

Date, or as soon thereafter as is reasonably practicable.45

 The Mediation Notice will provide the 

Mediation Location (as such term is defined in Section II.B.2 below). 

2. Location and Appointment of the Mediator

All Mediations shall be conducted in either (i) New York, New York; (ii) Detroit, 

Michigan; (iii) Dallas, Texas; or (iv) San Francisco, California (collectively, the “Mediation

Locations”), unless the parties agree to a different location. Within ten (10) days after receiving 

the Mediation Notice, the Designated Claimant shall choose one of the individuals identified in a 

list of mediators annexed to the Mediation Notice and corresponding to the applicable Mediation 

Location to conduct the mediation (the “Mediator”).

To the maximum extent practicable, the scheduling and location of Mediation 

sessions shall give due consideration to the convenience of the parties and the proximity of the 

45

The form of the Mediation Notice is attached hereto as Annex 2 and incorporated herein by reference. The 

Debtors anticipate that the Mediation Notice will be substantially in the form of Annex 2; however, the Debtors 

reserve the right to modify the Mediation Notice, as necessary or appropriate, consistent with the terms of the ADR 

Procedures. 
US_ACTIVE:\43300431\0243297971\06\72240.0639 11 

Designated Claimant. Notwithstanding the foregoing, within ten (10) business days after service 

of the Mediation Notice, the Designated Claimant may file a motion with the Bankruptcy Court, 

on notice to the Debtors and any previously appointed mediator, for an order directing that the 

Mediation be conducted in a different location (a “Hardship Motion”) if the Designated 

Claimant can demonstrate that traveling to any of the Mediation Locations presents a 

“substantial hardship;” provided, however, that there shall be a rebuttable presumption that, 

absent other extraordinary facts, there is no “substantial hardship” imposed on a Designated 

Claimant if the primary representative for a Designated Claimant resides in a location that is less 

than 750 miles from the Mediation Location or is less than a three-hour plane trip from the 

Mediation Location (based on typical commercial schedules for the fastest route, excluding any 

layovers). While a Hardship Motion is pending, all deadlines under these ADR Procedures shall 

be suspended. If a Hardship Motion is granted, any alternative location shall be determined by 

the Bankruptcy Court, taking into account the convenience of the parties and any agreements 

reached by the parties. If the location of the Mediation is changed, (i) any Mediator appointed in 

the original location may be replaced by a Mediator in the new location (selected by mutual 

agreement of the parties or order of the Court), and (ii) the Bankruptcy Court may require that 

that the Debtors and the Designated Claimant share the costs of the Mediation. 
US_ACTIVE:\43300431\0243297971\06\72240.0639 12 

3. Mediation Rules

The Mediation of Designated Claims shall be governed by the Mediator’s regular 

procedures, except where expressly modified in the ADR Procedures. In the event of any 

conflict, the ADR Procedures shall control. Any party to a Mediation that fails to participate in 

good faith, on the terms described herein, may be subject to sanctions under Section II.F below. 

(a) Impartiality and Qualifications of Mediators 

A person appointed as a Mediator must (i) be an impartial, neutral person; (ii) 

have no financial or personal interest in the proceedings or, except when otherwise agreed by the 

parties, in any related matter; and (iii) upon appointment, disclose any circumstances likely to 

create a reasonable inference of bias. In the event a Mediator discloses circumstances likely to 

create a reasonable inference of bias, such Mediator may be replaced at the written request of 

either the Debtors or the Designated Claimant prior to the mediation. 

(b) Fees and Costs for Mediation 

For each Mediation conducted under these ADR Procedures, the Mediator 

selected to preside will be entitled to charge the mediation fees disclosed to, and agreed to by, 

the Debtors and the Designated Claimant. Unless the parties have expressly agreed otherwise in 

writing (either prepetition or postpetition) as part of an agreement to submit Designated Claims 

to Mediation, the Mediator’s fees and the costs of any Mediation shall be shared equally by the 

Debtors and the Designated Claimant subject to the Sharing Cap (as such term is described in the 

ADR Order. For purposes of clarity, these costs shall not include travel expenses of the parties. 

(c) Pre-Mediation Briefing 

Unless the parties agree otherwise, on or before thirty (30) days prior to the 

scheduled Mediation, the Designated Claimant shall serve on the Mediator and the Debtors by 

electronic transmission or facsimile, at a minimum, and no later than by 6:00 p.m. (Eastern 
US_ACTIVE:\43300431\0243297971\06\72240.0639 13 

Time), a nonconfidential, pre-Mediation statement (the “Opening Statement”) not to exceed 

fifteen (15) pages, excluding any attachments, setting forth all of the Designated Claimant’s 

claims and identifying each and every cause of action or theory the Designated Claimant asserts, 

including a short and plain statement of the facts and law upon which the Designated Claimant 

relies for recovery and maintains entitle it to relief. The Designated Claimant shall include, as 

exhibits or annexes to the Opening Statement, all documents (or summaries of voluminous 

documents), affidavits, and other evidentiary materials on which the Designated Claimant relies

(with the exception, in the Designated Claimant’s sole discretion, of privileged information or 

information prepared expressly in contemplation of litigation). Unless the parties agree 

otherwise, on or before fifteen (15) days after service of the Opening Statement, the Debtors 

shall serve on the Mediator and the Designated Claimant, by electronic transmission or facsimile, 

at a minimum, and no later than by 6:00 p.m. (Eastern Time), a nonconfidential response 

statement (the “Mediation Response Statement”) not to exceed fifteen (15) pages, excluding 

attachments. The Designated Claimant shall receive copies of all exhibits to the Mediation 

Response Statement (with the exception, in the Debtors’ sole discretion, of privileged 

information or information prepared expressly in contemplation of litigation). The Debtors shall 

provide copies of the Opening Statement and Mediation Response Statement to counsel to the 

statutory committee of unsecured creditors (the “Creditors’ Committee”) upon request, on a 

confidential basis. At the Mediator’s discretion and direction, the parties may submit additional, 

confidential letters or statements to the Mediator, which shall receive “Mediator’s-eyes-only” 

treatment. 
US_ACTIVE:\43300431\0243297971\06\72240.0639 14 

(d) The Mediation Session 

Unless otherwise agreed by the parties or as provided herein, the Mediation 

session must occur no later than sixty (60) days after the date on which the Mediator is 

appointed. Unless otherwise agreed by the parties, the Mediation session is open only to the 

parties and their respective counsel, and insurers (if any).

(e) Treatment of Mediation Settlement 

If the Mediation results in a settlement of the Designated Claim, such settlement 

shall be subject to the terms of Section II.D below. If the Mediation of a Designated Claim does 

not result in a settlement of the Designated Claim, the Designated Claim shall be subject to 

Section II.C or II.E below. 

(f) Modification of the Mediation Procedures 

The Mediation procedures described herein may be modified upon the mutual 

written consent of the Debtors and the Designated Claimant. 

C. Arbitration

1. Binding Arbitration

If the Designated Claimant and the Debtors have consented to binding arbitration 

under Section II.A.4 above, the Designated Claim will be arbitrated under the terms of this 

Section II.C if such claim is not resolved in the Offer Exchange Procedures or Mediation. If the 

Designated Claimant has expressly indicated that it does not consent to binding arbitration in its 

response to the ADR Notice and has not subsequently opted in to binding arbitration pursuant to 

Section II.A.4 above, the Designated Claim shall be resolved in the Bankruptcy Court by the 

Debtors’ commencement of proceedings pursuant to the Bankruptcy Code, including without 

limitation, estimating or objecting to the Designated Claims. Any party to an arbitration that 
US_ACTIVE:\43300431\0243297971\06\72240.0639 15 

fails to participate in the arbitration in good faith, on the terms described herein, may be subject 

to sanctions under Section II.F below. 

2. Arbitration Notice

To initiate the arbitration process for a Designated Claim, the Debtors shall serve 

a notice of arbitration (the “Arbitration Notice”), with a copy of the Designated Claimant’s 

applicable proof(s) of claim attached, on the Designated Claimant, the Creditors’ Committee, 

and the American Arbitration Association (the “AAA”).56

3. Arbitration Rules and Procedures

For Designated Claims that are not designated by the Debtors as Complex 

Designated Claims (as defined below), the arbitration of all Designated Claims shall be 

conducted by a single arbitrator selected pursuant to the Commercial Arbitration Rules of the 

AAA. The arbitrator shall be governed by the commercial arbitration rules of the AAA then in 

effect (the “Arbitration Rules”), except where the Arbitration Rules are expressly modified in 

the ADR Procedures.67

The Debtors may, at their discretion, designate certain Designated Claims as 

complex designated claims (the “Complex Designated Claims”). The arbitration of all 

Complex Designated Claims shall be conducted by a panel of three arbitrators selected pursuant 

to the Commercial Arbitration Rules of the AAA. The AAA Procedures for Large, Complex 

Commercial Disputes, in addition to the Commercial Rules of Arbitration, shall be used for 

arbitration of all Complex Designated Claims, in addition to the Commercial Rules of 

56

 The form of the Arbitration Notice is attached hereto as Annex 3 and incorporated herein by reference. The 

Debtors anticipate that the Arbitration Notice will be substantially in the form of Annex 3; however, the Debtors 

reserve the right to modify the Arbitration Notice, as necessary or appropriate, consistent with the terms of the ADR 

Procedures.

67

In the event of any conflict between the Arbitration Rules and the ADR Procedures, the ADR Procedures shall 

control.
US_ACTIVE:\43300431\0243297971\06\72240.0639 16 

Arbitration.

7

; provided, however, unless otherwise agreed by the parties, (i) the AAA shall 

appoint a panel of three (3) arbitrators, as provided in this Section and Section II.C.3(g) and (ii) 

the arbitration hearing on a Complex Designated Claim must be held no later than ninety (90) 

days after the date of appointment of the arbitrator(s), as provided in Section II.C.3(k). Finally, 

the AAA Supplementary Rules for Class Arbitrations shall also be used for all Class Claims, 

including those related to class certification and the Class Determination Award (as defined in 

Rule 5 of the AAA Supplementary Rules for Class Arbitrations), except that the arbitrator(s) 

shall not make a Clause Construction Award (as defined in Rule 3 of the AAA Supplementary 

Rules for Class Arbitrations), or determine that a Class Claim is not arbitrable for failure for each 

class member to have entered into an arbitration agreement, the Court having specifically found 

that the ADR Procedures are applicable to Class Claims notwithstanding the absence of a written 

agreement to arbitrate.8

(a) Governing Law 

The ADR Procedures, as they relate to arbitration proceedings, are governed by 

the Federal Arbitration Act, 9 U.S.C. §§ 1, et seq. (the “Federal Arbitration Act”), and the 

enforceability of an arbitration award is governed by Section 9 of the Federal Arbitration Act, 

except as modified herein.

(b) Fees and Costs for Binding Arbitration; Sharing 

Unless the parties expressly have agreed otherwise in writing (either prepetition 

or postpetition) as part of an agreement to submit claims to binding arbitration, the fees and costs 

7

In the event of any conflict between the AAA Procedures for Large, Complex Commercial Disputes and the ADR 

Procedures, the ADR Procedures shall control.

8

In the event of any conflict between the AAA Supplementary Rules for Class Arbitrations and the ADR 

Procedures, the ADR Procedures shall control.
US_ACTIVE:\43300431\0243297971\06\72240.0639 17 

charged by the AAA and the arbitrator(s) shall be shared equally by the Debtors and the 

Designated Claimant; provided, however, that the arbitrator(s), in the arbitrator(s)’ sole 

discretion, may assess fees and costs against any party that the arbitrator(s) finds to be abusing or 

unduly delaying the arbitration process. The AAA shall submit invoices to the Designated 

Claimants and the Debtors according to the AAA’s ordinary invoicing practices then in effect 

and subject to the AAA’s ordinary payment terms then in effect. For purposes of clarity, these 

costs shall not include travel expenses of the parties. 

(c) Impartiality and Qualifications of Arbitrators 

In designating the arbitrator in accordance with the procedures described below, 

the AAA shall review the Arbitration Notice and the applicable Designated Claim. Any person 

appointed as an arbitrator must: (i) be an impartial, neutral person; (ii) be experienced (either 

from past arbitrations or former employment) in the law that is the subject of the Designated 

Claim; (iii) have no financial or personal interest in the proceedings or, except when otherwise 

agreed by the parties, in any related matter; and (iv) upon appointment, disclose any 

circumstances likely to create a reasonable inference of bias. In the event that an arbitrator 

discloses circumstances likely to create a reasonable inference of bias, such arbitrator may be 

replaced by the AAA at the written request of the Debtors or the Designated Claimant within ten 

(10) days after such disclosure. 

(d) Time and Location of Arbitration Hearings 

All arbitration hearings shall be conducted in either (i) New York, New York; (ii) 

Detroit, Michigan; (iii) Dallas, Texas; or (iv) San Francisco, California (collectively, the 

“Arbitration Locations”). To the maximum extent practicable, the scheduling and location of 

arbitration hearings shall give due consideration to the proximity of the Designated Claimant and 
US_ACTIVE:\43300431\0243297971\06\72240.0639 18 

to the convenience of the parties to the Arbitration Location. Within ten (10) days of 

appointment, the arbitrator(s) shall conduct a preliminary hearing pursuant to AAA Commercial 

Arbitration Rule 20. Notwithstanding anything set forth herein or in the ADR Order to the 

contrary, the Creditors’ Committee, through its counsel, shall be permitted to participate in the 

arbitration hearings to the same extent the Creditors’ Committee would be permitted to 

participate in claims litigation in the Bankruptcy Court pursuant to sections 502, 1103, 1109(b), 

or any other applicable section of the Bankruptcy Code. 

(e) Appeals of Arbitration Awards 

All arbitration awards shall be final and binding. Other than the identities of the 

applicable Debtors and Designated Claimants, the claims register number(s) assigned to the 

applicable arbitrated Designated Claims and the priority and dollar amounts of the Designated 

Claims as awarded in the arbitration awards, and except as otherwise required by law or agreed 

upon by the parties, all arbitration awards shall be treated as confidential. No party shall have 

the right to appeal an arbitration award except pursuant to the appeal provisions of the Federal 

Arbitration Act, in which case any appeal must be to the United States District Court for the 

Southern District of New York. Any appeal shall be governed by the Federal Arbitration Act.

The parties shall have ten (10) days from the date the arbitration award is served to appeal such 

award. Failure to timely appeal shall result in the loss of any appeal rights. Once any appeal has 

concluded or appellate rights are waived, the Debtors shall update the claims docket in their 

chapter 11 cases accordingly and may file any notice of the liquidated amount of the Designated 

Claim that they deem necessary or appropriate for such purpose. 

(f) Modification of the Arbitration Procedures 
US_ACTIVE:\43300431\0243297971\06\72240.0639 19 

The arbitration procedures described herein may be modified only upon the 

mutual consent of the Debtors and the Designated Claimant. In addition, the Debtors shall 

consult with the Creditors’ Committee prior to any modification to the arbitration procedures. 

(g) Appointment of the Arbitrator 

Within 5 five days of receiving the applicable Arbitration Notice, the AAA shall 

commence the following procedures for the appointment of arbitrator(s) (the “Appointment of 

Arbitrator(s) Procedures”) by concurrently sending by electronic transmission or facsimile, to 

the Debtors and the applicable Designated Claimant, an identical list of the names of at least 

eight (8) arbitrator candidates who meet the qualifications necessary for the matter.9 The 

Debtors and the applicable Designated Claimant shall have seven (7) business days from the date 

this list is served to (i) strike two (2) names from the proposed list, (ii) list the remaining names 

in order of preference, and (iii) return the list to the AAA. In the event that the Designated 

Claim is not a Complex Designated Claim, the AAA shall appoint a single arbitrator from the 

name(s) not stricken, giving consideration first to the preferences of the parties and second to 

scheduling and the availability of the arbitrator. In the event that the Designated Claim is a 

Complex Designated Claim, the AAA shall appoint a panel of three (3) arbitrators from the 

name(s) not stricken, giving consideration first to the preferences of the parties and second to the 

scheduling and the availability of the arbitrators. The AAA shall appoint the arbitrator(s) in 

accordance with the Appointment of Arbitrator(s) Procedures within ten (10) business days of its 

receipt of the applicable Arbitration Notice. 

(h) Pre-Hearing Matters 

9

If, for any reason, there are more than two parties to an arbitration, AAA shall identify a number of potential 

arbitrators equal to the number of parties, plus one, and the remaining selection proceedings shall otherwise govern. 

Affiliated entities are considered a single party for this purpose. The Creditors’ Committee shall have no role in the 

arbitrator selection process. 
US_ACTIVE:\43300431\0243297971\06\72240.0639 20 

Unless otherwise agreed to by the parties, any pre-hearing issues, matters or 

disputes (other than with respect to merits issues) shall be presented to the arbitrator(s) 

telephonically (or by such other method agreed to by the arbitrator(s) and the parties) for 

expeditious, final, and binding resolution. Upon a party’s request, the arbitrator(s) may order 

that a substantive motion, such as a motion for summary judgment, be heard in person rather 

than telephonically. Any pre-hearing issue, matter, or dispute (other than with respect to merits 

issues) must be presented to the arbitrator(s) not later than fifteen (15) days prior to the 

arbitration hearing so as to permit the arbitrator(s) to review and rule upon the requests by 

telephonic or electronic communication at least five days prior to the arbitration hearing. 

(i) Discovery

Unless the Designated Claim is a Complex Designated Claim, there shall be no 

interrogatories. Any requests for production of documents, electronically-stored information and 

things (“Document Requests”) shall be made in writing and shall be limited to no more than 

twenty (20) requests, including discrete subparts. Items requested in the Document Requests 

must be produced within thirty (30) days after service of the Document Requests. All documents 

from discovery shall be confidential and shall not be (i) disclosed to any person or party not 

participating in the arbitration proceeding or (ii) used for any purpose other than in connection 

with the arbitration proceeding, except as provided herein. Notwithstanding the foregoing, upon 

request of the Creditors’ Committee, the Debtors shall provide to the Creditors’ Committee, on a 

confidential basis, copies of all discovery materials produced pursuant to this Section II.C.3(i) 

for any particular Designated Claim. 

(j) Pre-Arbitration Statement 
US_ACTIVE:\43300431\0243297971\06\72240.0639 21 

Unless otherwise agreed by the parties, on or before ten (10) days prior to the 

scheduled arbitration hearing, each party shall submit to the arbitrator(s) and serve on the other 

party or parties and the Creditors’ Committee by overnight mail a pre-arbitration statement not to 

exceed fifteen (15) pages, excluding any attachments. On or before ten (10) days prior to the 

scheduled arbitration hearing, the Creditors’ Committee may submit a short statement, not to 

exceed five (5) pages, to the arbitrator(s) and serve such statement on the parties to the 

arbitration.

(k) Arbitration Hearing 

Unless otherwise agreed by the parties and the arbitrator(s) or as provided herein, 

the arbitration hearing on a Designated Claim must be held no later than ninety (90) days after 

the date of appointment of the arbitrator(s). The arbitration hearing is open only to the parties 

and their respective counsel, insurers (if any), and witnesses. In addition, notwithstanding 

anything else set forth herein or in the ADR Order to the contrary, the Creditors’ Committee, 

through its counsel, shall be permitted to attend and participate in the arbitration hearing to the 

same extent the Creditors’ Committee would be permitted to participate in claims litigation in the 

Bankruptcy Court, pursuant to sections 502, 1103, 1109(b), and any other applicable section of 

the Bankruptcy Code. Nonparty witnesses shall be sequestered. No posthearing briefs may be 

submitted, unless the arbitrator(s) requests briefs, in which case such briefing shall be subject to 

the issues, timing, and page limitations the arbitrator(s) imposes. There shall be no reply briefs. 

(l) Awards

The arbitrator(s) shall issue a written, reasoned opinion and award (the 

“Arbitration Award”) within fourteen (14) days after the arbitration hearing. The arbitrator(s) 

shall not be compensated for more than eight hours of deliberations on and preparation of the 
US_ACTIVE:\43300431\0243297971\06\72240.0639 22 

Arbitration Award for a Designated Claim. Any Arbitration Award shall be an allowed general 

unsecured nonpriority claim against the Debtor identified in the Arbitration Award (or if no 

Debtor is identified in the Arbitration Award, the claim shall be deemed to be against the Debtor 

identified in the Designated Claimant’s applicable proof of claim included with the service of the 

Arbitration Notice, unless otherwise ordered by the Bankruptcy Court). The Arbitration Award 

may not award a priority claim or otherwise determine the priority of the claim under the 

Bankruptcy Code; provided, however, that, within thirty (30) days after the issuance of an 

Arbitration Award, the Designated Claimant may seek relief from the Bankruptcy Court to 

determine that some or all of the Arbitration Award is subject to treatment as a priority claim if 

the Designated Claimant’s applicable proof of claim filed as of the date of filing of the ADR 

Order asserted an entitlement to such priority. Further, no portion of a claim resulting from any 

Arbitration Award shall be allowed to the extent that it consists of (a) punitive damages; (b) 

interest, attorneys’ fees, or other fees and costs, unless permissible under section 506(b) of the 

Bankruptcy Code; (c) an award under any penalty rate or penalty provision of the type specified 

in section 365(b)(2)(D) of the Bankruptcy Code; (d) amounts associated with obligations that are 

subject to disallowance under section 502(b) of the Bankruptcy Code; (e) specific performance, 

other compulsory injunctive relief, restrictive, restraining, or prohibitive injunctive relief or any 

other form of equitable remedy; or (f) any relief not among the foregoing but otherwise 

impermissible under applicable bankruptcy or nonbankruptcy law. The Debtors and the 

Creditors’ Committee shall have the right within thirty (30) days after the issuance of an 

Arbitration Awards to file a motion seeking relief from the Bankruptcy Court to enforce the 

preceding sentence and obtain the disallowance of any portion of a claim included in an 

Arbitration Award in violation of clauses (a) through (f) herein. In all cases, the awarded claim 
US_ACTIVE:\43300431\0243297971\06\72240.0639 23 

shall be subject to treatment in the Debtors’ chapter 11 cases as set forth in any order(s) 

confirming a chapter 11 plan or plans, or in such other applicable order of the Bankruptcy Court.

The entry of an Arbitration Award shall not grant the Designated Claimant any enforcement or 

collection rights. 

D. Settlements of Designated Claims

1. Settlements Permitted at Any Stage of the ADR Procedures

Designated Claims may be settled by the Debtors and a Designated Claimant 

through the Offer Exchange Procedures, Mediation, or by agreement at any point during these 

ADR Procedures. Nothing herein shall prevent the parties from settling any claim at any time. 

2. Settlement Authority and Approvals

Nothing herein shall limit, expand, or otherwise modify the Debtors’ authority to 

settle claims pursuant to orders of the Bankruptcy Court then in effect, including without 

limitation the Order Pursuant to 11 U.S.C. § 105(a) and Fed. R. Bankr. P. 3007 and 9019(b) 

authorizing the Debtors to (i) File Omnibus Claims Objections and (ii) Establish Procedures for 

Settling Certain Claims, entered on October 6, 2006 [Docket No. 4180] (the “Claims

Procedures and Settlement Order”) and any future order(s) confirming a chapter 11 plan or 

plans in these cases (collectively, the “Settlement Authority Orders”). Any settlements of 

claims pursuant to, or in connection with, the ADR Procedures shall be approved consistent with 

the terms, conditions, and limitations set forth in the applicable Settlement Authority Orders. 

The Debtors shall be requested to seek Bankruptcy Court approval of such settlements only to 

the extent that (a) such approval is required by the terms of the Settlement Authority Orders or 

(b) the settlement falls outside of the authority granted in the Settlement Authority Orders and 

otherwise requires Bankruptcy Court approval. 
US_ACTIVE:\43300431\0243297971\06\72240.0639 24 

E. Failure to Resolve a Designated Claim Through ADR Procedures

1. Litigation Generally

Claims not resolved through the ADR Procedures shall proceed to litigation for 

resolution. Notwithstanding anything herein, the Debtors may terminate the ADR Procedures at 

any time prior to serving the Arbitration Notice and proceed to litigation of the Designated Claim 

as set forth herein. 

2. Litigation in the Bankruptcy Court

If the Designated Claim is not resolved by the ADR Procedures (an “Unresolved

Designated Claim”), litigation of such Unresolved Designated Claim shall proceed in the 

Bankruptcy Court by the commencement by the Debtors of proceedings consistent with the 

terms, conditions, and limitations set forth in the Claims Procedures Order or other applicable 

procedures or orders, as soon as reasonably practicable upon completion of the ADR Procedures 

for the Unresolved Designated Claim, to the extent that (a) the Bankruptcy Court has subject 

matter jurisdiction over the Unresolved Designated Claim and (b) the Unresolved Designated 

Claim is not subject to the abstention provisions of 28 U.S.C. § 1334(c). Disputes over the 

subject matter jurisdiction of the Bankruptcy Court or the application of abstention shall be 

determined by the Bankruptcy Court. 

3. Litigation in Other Courts

If the Unresolved Designated Claim cannot be adjudicated in the Bankruptcy 

Court as a result of abstention or because of lack of or limitations upon subject matter 

jurisdiction (as determined by the Bankruptcy Court), then, subject to the terms and conditions 

set forth in Section II.E.4 below, litigation of such Unresolved Designated Claim shall proceed 

(a) if the Unresolved Designated Claim was pending in a nonbankruptcy forum on the date the 

Debtors commenced their respective voluntary chapter 11 cases (the “Commencement Date”),
US_ACTIVE:\43300431\0243297971\06\72240.0639 25 

then (i) in such nonbankruptcy forum, subject to the Debtors’ right to seek removal or transfer of 

venue or (ii) in such other forum as determined by the Bankruptcy Court on request of the 

Debtors;10 or (b) if the Unresolved Designated Claim was not pending in any forum on the 

Commencement Date, then in the United States District Court for the Southern District of New 

York or such other nonbankruptcy forum that, as applicable, (i) has personal jurisdiction over the 

parties, (ii) has subject matter jurisdiction over the Unresolved Designated Claim, (iii) has in rem 

jurisdiction over the property involved in the Unresolved Designated Claim (if applicable) and 

(iv) is a proper venue. If necessary, any disputes regarding the applicability of this Section II.E.3 

shall be determined by the Bankruptcy Court. 

4. Modification of the Automatic Stay

If litigation of an Unresolved Designated Claim in a forum other than the 

Bankruptcy Court is required as set forth in Section II.E.3 above, the ADR Order provides that 

the automatic stay imposed by section 362 of the Bankruptcy Code, or any subsequent Plan 

Injunction (collectively, the “Stay”), shall be modified solely to the extent necessary to permit 

the liquidation of the amount of such Unresolved Designated Claim in the appropriate forum; 

provided, however, that any such liquidated claim (a) shall be subject to treatment under the 

applicable chapter 11 plan or plans confirmed in these cases; and (b) shall be treated as a general 

unsecured nonpriority claim against the Debtor identified in the judgment, unless otherwise 

determined and ordered by the Bankruptcy Court. No later than forty-five (45) days after the 

Bankruptcy Court determines that the terms of Section II.E.3 above applies to an Unresolved 

Designated Claim or at such other time as agreed to by the parties, the Debtors shall either (a) 

10 The Debtors may elect to file a motion pursuant to 28 U.S.C.§ 157(b)(5) to remove to the United States District 

Court for the Southern District of New York any Unresolved Designated Claim (along with any other unliquidated 

and litigation claims asserted against the Debtors) where the underlying claim is a personal injury claim or wrongful 

death claim.
US_ACTIVE:\43300431\0243297971\06\72240.0639 26 

file a notice of such modification of the Stay (a “Notice of Stay Modification”) with the 

Bankruptcy Court and serve a copy of such notice on the Designated Claimant and the Creditors’ 

Committee or (b) file a motion seeking an order governing the terms upon which the Stay will be 

modified (a “Stay Motion”) and serve such Stay Motion on the Designated Claimant and the 

Creditors’ Committee. The Stay shall be modified solely to the extent set forth above (a) as of 

the date that is forty-five (45) days after the filing of a Notice of Stay Modification, unless the 

Bankruptcy Court orders otherwise or the parties otherwise agree; or (b) as ordered by the Court 

in connection with a Stay Motion. If the Debtors fail to file a Notice of Stay Modification or a 

Stay Motion for any reason with respect to an Unresolved Designated Claim, the Stay shall 

remain in effect with respect to such Unresolved Designated Claim and the Designated Claimant 

may seek a determination of the Bankruptcy Court regarding whether and on what terms the Stay 

must be modified to permit litigation in a nonbankruptcy forum as set forth in Section II.E.3 

above.

F. Failure to Comply with the ADR Procedures

If a Designated Claimant or the Debtors fail to comply with the ADR Procedures, 

negotiate in good faith, or cooperate as may be necessary to effectuate the ADR Procedures, the 

Bankruptcy Court may, after notice and a hearing, find such conduct to be in violation of the 

ADR Order or, with respect to a Designated Claimant, an abandonment of or failure to prosecute 

the Designated Claim, or both. Upon such findings, the Bankruptcy Court may, among other 

things, disallow and expunge the Designated Claim, in whole or part, or grant such other or 

further remedy deemed just and appropriate under the circumstances, including, without 

limitation, awarding attorneys’ fees, other fees, and costs to the other party. 
US_ACTIVE:\43300431\0243297971\06\72240.0639 

ANNEX 1

UNITED STATES BANKRUPTCY COURT 

SOUTHERN DISTRICT OF NEW YORK 

---------------------------------------------------------------x

:

In re : Chapter 11 Case No. 

:

MOTORS LIQUIDATION COMPANY, et al., : 09-50026 (REG) 

 f/k/a General Motors Corp., et al. : 

:

Debtors. : (Jointly Administered) 

:

---------------------------------------------------------------x

ALTERNATIVE DISPUTE RESOLUTION NOTICE

Service Date: 

Claimant(s): 

Claimant(s)’ Address: 

Designated Claim Number(s): 

Amount(s) Stated in Proof(s) of Claim: 

Deadline to Respond: 

By this notice (the “ADR Notice”), Motors Liquidation Company (f/k/a General 

Motors CoporationCorporation) and its affiliated debtors, as debtors in possession (collectively, 

the “Debtors”) designate the above-identified claim(s) (the “Designated Claim(s)”) in the 

Debtors’ chapter 11 cases and submit the Designated Claim(s) to alternative dispute resolution, 

pursuant to the procedures (the “ADR Procedures”) established by the Order Pursuant to 11 

U.S.C. § 105(a) and General Order M-390 Authorizing Implementation of Alternative Dispute 

Resolution Procedures, Including Mandatory Mediation (the “ADR Order”), entered by the 

United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy

Court”) on February __,23, 2010. A complete copy of the ADR Procedures is enclosed for your 

reference.

The Debtors have reviewed your Designated Claim(s) and, pursuant to the ADR 

Procedures, offer the amounts set forth below for allowance of your Designated Claim(s) as [a] 

prepetition general unsecured nonpriority claim(s) in full satisfaction of the Designated Claim(s) 

(the “Settlement Offer”).

You are required to return this ADR Notice with a Claimant’s Response (as 

defined below) to the Settlement Offer by no later than the Deadline to Respond indicated above.
US_ACTIVE:\43300431\0243297971\06\72240.0639 2 

In addition, to the extent your most recent proofs) of claim [does]/[do] not: (a) 

state the correct amount of your Designated Claim(s); (b) expressly identify each and every 

cause of action and legal theory on which you base your Designated Claim(s); (c) include 

current, correct, and complete contact information of your counsel or other representative; or (d) 

provide all documents on which you rely in support of your Designated Claim(s), you hereby are 

requested to provide all such information and documentation with your Claimant’s Response. 

If you do not return this ADR Notice with the requested information and a 

Claimant’s Response to the Settlement Offer to [Debtor’s Representative] so that it is received 

by the Deadline to Respond, your Designated Claims will be subject to mandatory mediation as 

set forth in Section II.B of the ADR Procedures. 

IN ADDITION, YOU ARE REQUIRED TO INDICATE EXPRESSLY 

WHETHER YOU CONSENT TO BINDING ARBITRATION IF YOUR DESIGNATED 

CLAIM(S) CANNOT BE SETTLED. PLEASE MARK THE BOX BELOW INDICATING 

WHETHER YOU (i) CONSENT TO BINDING ARBITRATION OR (ii) DO NOT

CONSENT TO (AND SEEK TO OPT OUT OF) BINDING ARBITRATION. PLEASE 

NOTE THAT YOUR CONSENT TO BINDING ARBITRATION CANNOT 

SUBSEQUENTLY BE WITHDRAWN. IN ADDITION, ANY ATTEMPT TO OPT OUT OF

BINDING ARBITRATION IN THE RESPONSE TO THIS ADR NOTICE SHALL BE 

INEFFECTIVE IF YOU PREVIOUSLY HAVE CONSENTED IN WRITING (EITHER 

PREPETITION OR POSTPETITION) TO BINDING ARBITRATION AS A MEANS TO 

RESOLVE YOUR CLAIM(S). 

Details about the arbitration process, including the sharing of fees, are set forth in 

Section II.C of the ADR Procedures. 

YOU MUST RESPOND TO THE FOLLOWING SETTLEMENT OFFER: 

Settlement Offer: The Debtors offer you an allowed general unsecured, 

nonpriority claim in the amount of $_________ against [Name of Debtor] in full satisfaction of 

your Designated Claim(s), to be satisfied in accordance with any plan or plans of reorganization 

confirmed and implemented in the Debtors’ chapter 11 cases. 

The only permitted response (the “Claimant’s Response”) to the Settlement 

Offer are (a) acceptance of the Settlement Offer or (b) rejection of the Settlement Offer coupled 

with a counteroffer (a “Counteroffer”). Accordingly, please select your Claimant’s Response 

below:

Please indicate below if you accept or reject the Debtors’ Settlement Offer by marking 

the appropriate box. If you reject the Settlement Offer, please make your counteroffer 

where indicated. 

 I/we agree to and accept the terms of the Settlement Offer. 

or

I/we reject the Settlement Offer. However, I/we will accept, and propose as a 

Counteroffer, the following allowed claim in full satisfaction of the Designated Claim(s), 

to be satisfied in accordance with any plan or plans of reorganization confirmed and 
US_ACTIVE:\43300431\0243297971\06\72240.0639 3 

implemented in the Debtors’ chapter 11 cases: 

Debtor:

Amount: $ 

Priority: unsecured nonpriority claim (presumed) or other:* 

*Note - If you choose a different priority, you must attach an explanation and any 

relevant documentation. 

Section II.A.3 of the ADR procedures sets forth the restrictions on Counteroffers.

Your Counteroffer may not (a) improve the priority set forth in your most recent timely-filed 

proof of claim or amended proof of claim, or (b) exceed the lesser of the Claim Amount Cap (as 

defined in the ADR Order) or the amount set forth in your most recent timely-filed proof of 

claim(s) or amended proof of claim(s). You may not amend your proof of claim solely for the 

purpose of proposing a Counteroffer of a higher amount or a better priority. 

Please indicate below whether you consent to binding arbitration for your Designated 

Claim(s) by marking the appropriate box. 

 I/ WE CONSENT TO BINDING ARBITRATION. 

or

 I/WE DO NOT CONSENT TO BINDING ARBITRATION. 

[Signature of the Designated Claimant’s Authorized 

Representative]

By:

 Printed Name 
US_ACTIVE:\43300431\0243297971\06\72240.0639 

ANNEX 2

UNITED STATES BANKRUPTCY COURT 

SOUTHERN DISTRICT OF NEW YORK 

---------------------------------------------------------------x

:

In re : Chapter 11 Case No. 

:

MOTORS LIQUIDATION COMPANY, et al., : 09-50026 (REG) 

 f/k/a General Motors Corp., et al. : 

:

Debtors. : (Jointly Administered) 

:

---------------------------------------------------------------x

NOTICE OF NONBINDING MEDIATION

Service Date: 

Claimant(s): 

Claimant(s)’ Address: 

Designated Claim Number(s): 

Amount(s) Stated in Proof(s) of Claim: 

Mediation Location: 

By this Mediation Notice, Motors Liquidation Company (f/k/a General Motors 

CoporationCorporation) and its affiliated debtors, as debtors in possession (collectively, the 

“Debtors”) submit the above-identified claim(s) (the “Designated Claim(s)”) in the Debtors’ 

chapter 11 cases to mediation, pursuant to the procedures (the “ADR Procedures”) established 

by the Order Pursuant to 11 U.S.C. §105(a) and General Order M-390 Authorizing 

Implementation of Alternative Dispute Resolution Procedures, Including Mandatory Mediation, 

entered by the United States Bankruptcy Court for the Southern District of New York (the 

“Bankruptcy Court”) on February __,23, 2010. The Debtors have been unable to resolve your 

Designated Claim(s) on a consensual basis with you through the Offer Exchange Procedures of 

the ADR Procedures, or the Offer Exchange Procedures otherwise were terminated as to your 

Designated Claim(s) as provided for in the ADR Procedures.

As provided for in the ADR Procedures, mediation shall be conducted in the 

Mediation Location set forth above, unless the parties agrees to a different location. As further 

provided in the ADR Procedures, you have ten (10) days to choose one of the individuals 

identified on the list of mediators enclosed with this Mediation Notice to conduct the mediation. 
US_ACTIVE:\43300431\0243297971\06\72240.0639 2 

A complete copy of the ADR Procedures is enclosed for your reference. Please 

refer to Section II.C of the ADR Procedures, concerning mediation. 

[Signature of the Debtors’ Authorized Person]
US_ACTIVE:\43300431\0243297971\06\72240.0639 

ANNEX 3

UNITED STATES BANKRUPTCY COURT 

SOUTHERN DISTRICT OF NEW YORK 

---------------------------------------------------------------x

:

In re : Chapter 11 Case No. 

:

MOTORS LIQUIDATION COMPANY, et al., : 09-50026 (REG) 

 f/k/a General Motors Corp., et al. : 

:

Debtors. : (Jointly Administered) 

:

---------------------------------------------------------------x

NOTICE OF BINDING ARBITRATION

Service Date: 

Claimant(s): 

Claimant(s)’ Address: 

Designated Claim Number(s): 

Amount(s) Stated in Proof(s) of Claim: 

Arbitration Location: 

By this Arbitration Notice, Motors Liquidation Company (f/k/a General Motors 

CoporationCorporation) and its affiliated debtors, as debtors in possession (collectively, the 

“Debtors”) submit the above-identified claim(s) (the “Designated Claim(s)”) in the Debtors’ 

chapter 11 cases to binding arbitration, pursuant to the procedures (the “ADR Procedures”)

established by the Order Pursuant to 11 U.S.C. § 105(a) and General Order M-390 Authorizing 

Implementation of Alternative Dispute Resolution Procedures, Including Mandatory Mediation, 

entered by the United States Bankruptcy Court for the Southern District of New York (the 

“Bankruptcy Court”) on February __,23, 2010. The Debtors have been unable to resolve your 

Designated Claim(s) on a consensual basis with you through the Offer Exchange Procedures of 

the ADR Procedures and or through binding mediation. 

PLEASE NOTE THAT YOU HAVE CONSENTED (OR ARE DEEMED TO 

HAVE CONSENTED) TO BINDING ARBITRATION. THEREFORE, YOUR DESIGNATED 

CLAIM(S) WILL PROCEED TO BINDING ARBITRATION, PURSUANT TO THE ADR 

PROCEDURES.

As provided for in the ADR Procedures, an arbitrator will be appointed through 

the American Arbitration Association (“AAA”). The ADR Procedures require you and the 
US_ACTIVE:\43300431\0243297971\06\72240.0639 2 

Debtors to share the administrative fees and costs of arbitration charged by the AAA and the 

arbitrator.

A complete copy of the ADR Procedures is enclosed for your reference. Please 

refer to Section II.C of the ADR Procedures, concerning binding arbitration. 

[Signature of the Debtors’ Authorized Person] 
US ACTIVE:\43297971\06\72240.0639

Exhibit D

Form of Capping Claim Letter

US_ACTIVE:\43300431\02\72240.0639C:\DOCUMENTS AND SETTINGS\DUMMER\DESKTOP\USREVISEDUS ACTIVE MLC- MOTION TO ESTABLISH 

ADR PROCEDURES 43244146 7.DOC 2 

cc: Pablo Falabella, Esq. 

Weil, Gotshal & Manges LLP 

767 Fifth Avenue 

New York, NY 10153 

pablo.falabella@weil.com

C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 

Exhibit C

Schedule of Mediators
DOCUMENT2

Schedule of Mediators

Dallas, Texas

Name Experience

Burdin, Mary Personal injury, products liability 

Damuth, Brenda J. Personal injury, products liability 

Grissom, Jerry Class actions, personal injury, products liability 

Hale, Earl F. Complex business disputes 

Lopez, Hon. Carlos G. Personal injury, products liability 

Martin, Hon. Harlan Complex business disputes, personal injury, products liability 

Nolland, Christopher Complex business disputes, class actions 

Parker, Walter E. “Rip” Personal injury, products liability, complex disputes 

Pryor, Will Personal injury, products liability, complex business disputes 

Rubenstein, Kenneth J. Personal injury, products liability; complex disputes 

Young, James Class actions, complex business disputes, insurance disputes, 

personal injury 

New York, New York

Name Experience

Carling, Francis Products liability, personal injury 

Cyganowski, Melanie Complex business disputes 

Ellerin, Hon. Betty Complex business disputes, products liability, personal injury, 

class actions 

Farber, Eugene I. Products liability 

Feerick, Kevin Complex business disputes, products liability 

Gafni, Abraham J. Complex business disputes, products liability, personal injury 

Holtzman, Eric H. Products liability 

Hyman, Ms. Chris Stern Insurance disputes 

Leber, Bernice K. Complex business disputes 

Levin, Jack P. Class actions, breach of warranty claims, products liability 

McAllister, Michael T. Personal injury, products liability 

McLaughlin, Hon. Joseph 

T.

Complex business disputes, class actions 

Ricchiuti, Joseph F. Complex business disputes, products liability, personal injury, 

class actions 

Silbermann, Hon. 

Jacqueline W. 

Complex business disputes, products liability, personal injury, 

class actions 

Woodin, Peter H. Complex business disputes, products liability, personal injury, 

class actions 
DOCUMENT2 2 

Detroit, Michigan

Name Experience

Connor, Laurence D. Complex business disputes 

Harrison, Michael G. Personal injury 

Kaufman, Richard C. Personal injury 

Muth, Jon R. Complex business disputes, class actions 

Pappas, Edward H. Complex business disputes, products liability 

von Ende, Carl H. Complex business disputes 

San Fancisco, California

Name Experience

Cahill, Hon. William J. Complex business disputes, products liability, personal injury, 

class actions 

Cowett, Hon. Patricia Ann 

Yim 

Personal injury 

Donnet, Toni-Diane Consumer litigation, personal injury 

Glavis, Greta Personal injury, complex business disputes 

Infante, Hon. Edward A. Complex business disputes 

Komar, Hon. Jack Products liability class actions, mass torts 

Lynch, Hon. Eugene F. Complex business disputes 

McPharlin, Linda Hendrix Complex business disputes 

Schau, Jan Frankel Personal injury, products liability 

Smith, Hon. Fern M. Complex business disputes, products liability, personal injury, 

class actions 

Spieczny, Nancy J. Personal injury 

Tucker, William J. Personal injury, complex business disputes 

Wied, Colin W. Complex business disputes, personal injury, products liability 

Wulff, Randall W. Complex business disputes, products liability, class actions 
C:\NRPORTBL\US_ACTIVE\FALABELL\43316013_1.DOC 

Exhibit D

Form of Capping Claim Letter

141

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142

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Canon in Light of the Bankruptcies of Lehman, Chrysler, and General Motors,” UC Davis 

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on Other Financial Institutions,” Applied Financial Economics 22.5 (2012): 375–385.

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Brooklyn Journal of Corporate, Financial, and Commercial Law 6.1 (2011): 1–46.

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