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FILED: NEW YORK COUNTY CLERK 10/20/2015 05:03 PM INDEX NO. 652274/2012
NYSCEF DOC. NO. 411 RECEIVED NYSCEF: 10/20/2015
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
)
)
ONE WILLIAM STREET CAPITAL ) Index No. 652274/2012
MANAGEMENT, L.P., ) Motion Seq. No. 012
) IAS Part 3
Petitioner/Plaintiff, ) Justice Bransten
)
THE DEPOSITORY TRUST COMPANY AND )
CEDE & CO., ) PETITIONER/PLAINTIFF’S
) RESPONSES TO
Nominal Petitioners/ RESPONDENTS/DEFENDANTS’
)
Plaintiffs, RULE 19A STATEMENT OF
)
v. UNDISPUTED FACTS IN SUPPORT
)
) OF THEIR SECOND MOTION FOR
EDUCATION LOAN TRUST IV, et al., SUMMARY JUDGMENT
)
Respondents/Defendants. )
)
Petitioner/Plaintiff One William Street Capital Management, L.P. (“OWS”), by and
through its counsel, submits the following Rule 19A statement in opposition to
Respondents/Defendants U.S. Education Loan Trust IV, LLC, U.S. Education Servicing LLC,
and Dr. Henry Howard’s (collectively, “Respondents”) second motion for summary judgment.
PETITIONER’S RESPONSES TO RESPONDENTS’ RULE 19A STATEMENT
Respondents’ Statement No. 1:
The Series 2007-1B-1 notes at issue (the “Notes”) were issued in October 2007
pursuant to the Indenture of Trust and Fourth Supplemental Indenture of Trust between the
Issuer and respondent Bank of New York Mellon. Ex. 3, 4.1
Petitioner’s Response to Statement No. 1:
Undisputed.
1
References to “Ex.” shall be to the exhibits accompanying affirmation of Eric N. Whitney
submitted with respondents’ second motion for summary judgment, unless otherwise noted.
Respondents’ Statement No. 2:
On January 11, 2011, Petitioner One William Street Capital Management L.P. (“OWS”)
agreed to purchase $10 million of the Notes from its broker, Merrill Lynch, Pierce, Fenner &
Smith Inc. (collectively, with affiliated entity Banc of America Securities LLC, “Merrill”). Ex. 6
¶¶ 2-3; Ex. 7.
Petitioner’s Response to Statement No. 2:
Disputed as stated. On January 11, 2011, OWS purchased $10 million of the Notes from
Merrill Lynch. Ex. 6, Sorrentino Aff. ¶ 2; Ex. 7.
Respondents’ Statement No. 3:
On January 14, 2011, simultaneous with the settlement of its purchase, OWS engaged in
a repurchase transaction with Merrill whereby OWS sold the Notes to Merrill subject to an
agreement to buy them back in the future (the “Repo”). Ex. 8.
Petitioner’s Response to Statement No. 3:
Disputed. Merrill Lynch financed OWS’s purchase pursuant to a reverse repurchase
agreement (the “Master Repurchase Agreement”). Pursuant to the Master Repurchase
Agreement, Merrill Lynch (as Buyer under the Master Repurchase Agreement) covenanted to
pay to OWS (as Seller under the Master Repurchase Agreement) all principal and interest on the
Notes, to the extent not otherwise received by OWS, on the day Merrill Lynch received such
principal and/or interest payments, to the full extent OWS would have been entitled to receive
such principal and interest had OWS not entered into the reverse repurchase transaction with
Merrill Lynch. Ex. 6, Sorrentino Aff. ¶ 3; Ex. 9; see also Affidavit of Tanya Kalivas (“Kalivas
Aff.”) Ex. F, Affidavit of Mary Elizabeth Miller (“Miller Aff.”) ¶ 2 (“Merrill Lynch’s records
reflect that [OWS] has a property interest in $10 million principal amount of notes . . . issued by
U.S. Education Loan Trust IV, including the right to all principal and interest paid on the
Notes.”)).
Respondents’ Statement No. 4:
The Repo is governed by a “Master Repurchase Agreement” dated March 18,
2009 (“MRA”) between OWS and Banc of America Securities LLC. Ex. 9; Ex. 6 ¶ 3.
Petitioner’s Response to Statement No. 4:
Disputed. The “Repo” as defined by respondents is incorrect. Agreed that OWS’s repo
financing transaction with Merrill Lynch is governed by a Master Repurchase Agreement.
2
Respondents’ Statement No. 5:
The MRA states that “the parties intend that all Transactions hereunder be sales and
purchases and not loans.” Ex. 9, ¶ 6.
Petitioner’s Response to Statement No. 5:
Disputed as stated. The MRA states: “Although the parties intend that all Transactions
hereunder be sales and purchases and not loans, in the event that any such Transactions are
deemed to be loans, Seller shall be deemed to have pledged to Buyer as security for the
performance by Seller of its obligations under each such Transaction. . . .” Ex. 9, ¶ 6.
Respondents’ Statement No. 6:
The MRA defines OWS as the “Seller” and Merrill as the “Buyer.” Ex. 9, ¶ 1.
Petitioner’s Response to Statement No. 6:
Disputed. The MRA does not define the Seller or the Buyer. It states: “From time to
time the parties hereto may enter into transactions in which one party (“Seller”) agrees to transfer
to the other (“Buyer”) securities or other assets (“Securities”) against the transfer of funds by
Buyer, with simultaneous agreement by Buyer to transfer to Seller such Securities at a date
certain or on demand, against the transfer of funds by Seller. Ex. 9, ¶ 1.
Respondents’ Statement No. 7:
The MRA provides that, on the purchase date for any transaction, “the Purchased
Securities” shall be transferred to Buyer or its agent against the transfer of the Purchase Price to
an account of Seller,” and “[a]ll of Seller’s interest in the Purchased Securities shall pass to
Buyer on the Purchase date.” Ex. 9, ¶¶ 3(a), 8.
Petitioner’s Response to Statement No. 7:
Disputed, to the extent that respondents leave out essential language of the contract to
spin a tale inconsistent with the omitted language. Petitioner incorporates by reference its
response to Statement No. 3. OWS is the proper plaintiff in this case. Ex. 6, Sorrentino Aff.
¶ 4; see also Kalivas Aff. Ex. F, Miller Aff. ¶ 2 (“Merrill Lynch’s records reflect that [OWS] has
a property interest in $10 million principal amount of notes . . . issued by U.S. Education Loan
Trust IV, including the right to all principal and interest paid on the Notes.”)). The proceeding
text of Paragraph 6 to the MRA states: “in the event any such Transactions are deemed to be
loans, Seller shall be deemed to have pledged to Buyer as security for the performance by Seller
of its obligations under each such Transaction . . . . ” Ex. 9, ¶ 6.
3
Respondents’ Statement No. 8:
Under the MRA, the parties agreed that Merrill would transfer to OWS “an amount equal
to all Income paid or distributed [to Merrill] on or in respect of the Securities that is not
otherwise received by [OWS], to the full extent to which it would be so entitled if the Securities
had not been sold to [Merrill].” Ex. 9, ¶ 5.
Petitioner’s Response to Statement No. 8:
Undisputed.
Respondents’ Statement No. 9:
The Repo was continuously extended, or “rolled,” from January 2011 through August
2015. Ex. 10; Ex. 11; Ex. 12.
Petitioner’s Response to Statement No. 9:
Disputed. Petitioner incorporates by reference its response to Statement Nos. 3 and 4.
OWS always repurchased the Notes, and had a property interest in the Notes, including the right
to all principal and interest paid on the Notes. Ex. C, Sorrentino Aff. ¶ 4.
Respondents’ Statement No. 10:
All amounts of income that OWS received since January 14, 2011 with respect to the
Notes have been received by OWS solely pursuant to Merrill’s agreement under the MRA to pay
to OWS “an amount equal” to the principal and interest payments on Notes received by Merrill
on the day Merrill received such principal and/or interest payments. Ex. 6 ¶ 3; Ex. 9 ¶¶ 5, 8.
Petitioner’s Response to Statement No. 10:
Disputed. OWS has received virtually no income with respect to the notes from Merrill
Lynch since January 14, 2011; in addition, disputed to the extent that respondents assert this
statement establishes that Merrill Lynch, and not OWS, owned the notes. To the extent that
respondents make such an assertion as an undisputed fact, petitioner incorporates by reference its
response to Statement No. 3. OWS is the proper plaintiff in this case. Ex. 6, Sorrentino Aff. ¶
4; Ex. 14, Locher Aff. ¶ 6. In addition, such an assertion would be a legal argument, not a fact,
and would therefore be improper under Rule 19A. On August 21, 2015, OWS repurchased the
Notes from Merrill Lynch and terminated the repurchase transaction. Ex. 14, Locher Aff. ¶ 6.
Respondents’ Statement No. 11:
4
Respondent Dr. Henry B. Howard is President of respondent U.S. Education Loan Trust
IV, LLC and U.S. Education Loan Servicing, LLC. Affidavit of Dr. Henry B. Howard dated
September 18, 2015 (“Howard Aff.”) ¶ 1.
Petitioner’s Response to Statement No. 11:
Undisputed.
Respondents’ Statement No. 12:
The first time that Dr. Howard communicated with OWS regarding the Notes was
January 13, 2014. Howard Aff. ¶ 4.
Petitioner’s Response to Statement No. 12:
Disputed, to the extent that discovery has not been completed. Dr. Howard has not been
cross-examined on his attorney-drafted affidavit, and Respondents have not produced documents
concerning communications with OWS.
Respondents’ Statement No. 13 :
On or about July 24, 2015, the Court issued a decision and order holding that the Repo
transaction constituted a sale of the Notes from OWS to Merrill. Ex. 13.
Petitioner’s Response to Statement No. 13:
Undisputed.
Respondents’ Statement No. 14:
On or about August 21, 2015, OWS terminated the Repo. Ex. 14 ¶ 6.
Petitioner’s Response to Statement No. 14:
Disputed to the extent that respondents assert this statement establishes any entity other
than OWS owns the notes. On August 21, 2015, OWS repurchased the Notes from Merrill
Lynch and terminated the repurchase transaction. The Notes are no longer “on repo.” OWS
owns them. Ex. 14 ¶ 6.
Respondents’ Statement No. 15:
The Notes are now owned by two investment funds OWS ABS Master Fund II LP and
William Street Capital Master Fund Ltd. Ex. 12, Ex. 14-A.
Petitioner’s Response to Statement No. 15:
5
Disputed. This statement is legal argument, not a fact, and is therefore improper under
Rule 19A. In addition, disputed to the extent that respondents assert this statement establishes
that OWS is not a proper party to this lawsuit. To the extent that respondents make such an
assertion as an undisputed fact, OWS is manager of funds and accounts that own legal title to the
Notes, OWS ABS Master Fund II LP and One William Street Capital Master Fund Ltd. Exs. 15,
16. Paragraph 2 of the Investment Management Agreement (“MA”) expressly grants OWS the
right to “do any and all acts and things on behalf of the Funds. . .including, without limitation. .
.the institution and settlement or compromise of suits.” Exs. 15, 16 ¶ 2.
Respondents’ Statement No. 16:
Pursuant to an Investment Management Agreement dated April 4, 2008, OWS acts as an
investment manager for [One William Street Capital Master Fund Ltd.] and “exercise[s] all
rights of the Funds,” including “the institution and settlement or compromise of suits and
administrative proceedings.” Ex. 15 ¶ ¶ 1, 2(p).
Petitioner’s Response to Statement No. 16:
Disputed, to the extent that respondents leave out essential language of the contract.
OWS is manager of OWS ABS Master Fund II LP and One William Street Capital Master Fund
Ltd. (“the Funds”). Exs. 15, 16. Paragraph 2 of the MA expressly grants OWS the right to “do
any and all acts and things on behalf of the Funds. . .including, without limitation. . .the
institution and settlement or compromise of suits.” Exs. 15, 16 ¶ 2.
Respondents’ Statement No. 17:
The [MA] provides that, “for all purposes,” OWS is “an independent contractor” and “not
an agent or employee” of [One William Street Capital Master Fund Ltd.]. See Ex. 15.
Petitioner’s Response to Statement No. 17:
Disputed, to the extent that respondents draw any legal conclusion inconsistent with the
contract language.
Respondents’ Statement No. 18:
[One William Street Capital Master Fund Ltd.] has not transferred to OWS any
ownership interest in any claim derived from [One William Street Capital Master Fund Ltd.]’s
ownership of the Notes. See Ex. 15.
Petitioner’s Response to Statement No. 18:
Disputed. This is legal argument, not a fact, and is therefore improper under Rule 19A.
In addition, disputed to the extent that respondents assert this statement establishes that OWS
does not have authority to institute a lawsuit on behalf of the Funds. To the extent that
6
respondents make such an assertion as an undisputed fact, petitioner incorporates by reference its
response to Statement No. 15. OWS is the proper plaintiff in this case.
Respondents’ Statement No. 19:
Pursuant to an Investment Management Agreement dated December 31, 2013, OWS acts
as an investment manager for [OWS ABS Master Fund II LP] and “exercise[s] all rights of the
Funds,” including “the institution and settlement or compromise of suits and administrative
proceedings.” Ex. 16 ¶¶ 1, 2(0).
Petitioner’s Response to Statement No. 19:
Disputed, to the extent that respondents leave out essential language of the contract.
OWS is manager of OWS ABS Master Fund II LP and One William Street Capital Master Fund
Ltd. (“the Funds”). Exs. 15, 16. Paragraph 2 of the Investment Management Agreement (“MA”)
expressly grants OWS the right to “do any and all acts and things on behalf of the Funds. .
.including, without limitation. . .the institution and settlement or compromise of suits.” Exs. 15 ¶
2(p), 16 ¶ 2(0).
Respondents’ Statement No. 20:
The [MA] provides that, “for all purposes,” OWS is “an independent contractor” and “not
an agent or employee” of [OWS ABS Master Fund II LP]. See Ex. 16 ¶ 4.
Petitioner’s Response to Statement No. 20:
Disputed, to the extent that respondents draw any legal conclusion inconsistent with the
contract language. This is legal argument, not a fact, and is therefore improper under Rule 19A.
In addition, disputed to the extent that respondents assert this statement establishes that OWS
does not have authority to institute a lawsuit on behalf of the Funds. To the extent that
respondents make such an assertion as an undisputed fact, petitioner incorporates by reference its
response to Statement No. 15. OWS is the proper plaintiff in this case.
Respondents’ Statement No. 21:
[OWS ABS Master Fund II LP] has not transferred to OWS any ownership interest in any
claim derived from [OWS ABS Master Fund II LP]’s ownership of the Notes. See Ex. 16.
Petitioner’s Response to Statement No. 21:
Disputed. This is legal argument, not a fact, and is therefore improper under Rule 19A.
In addition, disputed to the extent that respondents assert this statement establishes that OWS
does not have authority to institute a lawsuit on behalf of the Funds. To the extent that
respondents make such an assertion as an undisputed fact, petitioner incorporates by reference its
response to Statement No. 15. OWS is the proper plaintiff in this case.
7
Dated: New York, New York
October 20, 2015
ARNOLD & PORTER LLP
By: s/ /s/ Kent A. Yalowitz
Kent A. Yalowitz
Tanya E. Kalivas
Kathryn W. Hutchinson
399 Park Avenue
New York, New York 10022
Tel. (212) 715-1000
Fax (212) 715-1399
Attorneys for Petitioner/Plaintiff One
William Street Capital Management, L.P.
8
Preview
FILED: NEW YORK COUNTY CLERK 10/20/2015 05:03 PM INDEX NO. 652274/2012 NYSCEF DOC. NO. 411 RECEIVED NYSCEF: 10/20/2015 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ) ) ONE WILLIAM STREET CAPITAL ) Index No. 652274/2012 MANAGEMENT, L.P., ) Motion Seq. No. 012 ) IAS Part 3 Petitioner/Plaintiff, ) Justice Bransten ) THE DEPOSITORY TRUST COMPANY AND ) CEDE & CO., ) PETITIONER/PLAINTIFF’S ) RESPONSES TO Nominal Petitioners/ RESPONDENTS/DEFENDANTS’ ) Plaintiffs, RULE 19A STATEMENT OF ) v. UNDISPUTED FACTS IN SUPPORT ) ) OF THEIR SECOND MOTION FOR EDUCATION LOAN TRUST IV, et al., SUMMARY JUDGMENT ) Respondents/Defendants. ) ) Petitioner/Plaintiff One William Street Capital Management, L.P. (“OWS”), by and through its counsel, submits the following Rule 19A statement in opposition to Respondents/Defendants U.S. Education Loan Trust IV, LLC, U.S. Education Servicing LLC, and Dr. Henry Howard’s (collectively, “Respondents”) second motion for summary judgment. PETITIONER’S RESPONSES TO RESPONDENTS’ RULE 19A STATEMENT Respondents’ Statement No. 1: The Series 2007-1B-1 notes at issue (the “Notes”) were issued in October 2007 pursuant to the Indenture of Trust and Fourth Supplemental Indenture of Trust between the Issuer and respondent Bank of New York Mellon. Ex. 3, 4.1 Petitioner’s Response to Statement No. 1: Undisputed. 1 References to “Ex.” shall be to the exhibits accompanying affirmation of Eric N. Whitney submitted with respondents’ second motion for summary judgment, unless otherwise noted. Respondents’ Statement No. 2: On January 11, 2011, Petitioner One William Street Capital Management L.P. (“OWS”) agreed to purchase $10 million of the Notes from its broker, Merrill Lynch, Pierce, Fenner & Smith Inc. (collectively, with affiliated entity Banc of America Securities LLC, “Merrill”). Ex. 6 ¶¶ 2-3; Ex. 7. Petitioner’s Response to Statement No. 2: Disputed as stated. On January 11, 2011, OWS purchased $10 million of the Notes from Merrill Lynch. Ex. 6, Sorrentino Aff. ¶ 2; Ex. 7. Respondents’ Statement No. 3: On January 14, 2011, simultaneous with the settlement of its purchase, OWS engaged in a repurchase transaction with Merrill whereby OWS sold the Notes to Merrill subject to an agreement to buy them back in the future (the “Repo”). Ex. 8. Petitioner’s Response to Statement No. 3: Disputed. Merrill Lynch financed OWS’s purchase pursuant to a reverse repurchase agreement (the “Master Repurchase Agreement”). Pursuant to the Master Repurchase Agreement, Merrill Lynch (as Buyer under the Master Repurchase Agreement) covenanted to pay to OWS (as Seller under the Master Repurchase Agreement) all principal and interest on the Notes, to the extent not otherwise received by OWS, on the day Merrill Lynch received such principal and/or interest payments, to the full extent OWS would have been entitled to receive such principal and interest had OWS not entered into the reverse repurchase transaction with Merrill Lynch. Ex. 6, Sorrentino Aff. ¶ 3; Ex. 9; see also Affidavit of Tanya Kalivas (“Kalivas Aff.”) Ex. F, Affidavit of Mary Elizabeth Miller (“Miller Aff.”) ¶ 2 (“Merrill Lynch’s records reflect that [OWS] has a property interest in $10 million principal amount of notes . . . issued by U.S. Education Loan Trust IV, including the right to all principal and interest paid on the Notes.”)). Respondents’ Statement No. 4: The Repo is governed by a “Master Repurchase Agreement” dated March 18, 2009 (“MRA”) between OWS and Banc of America Securities LLC. Ex. 9; Ex. 6 ¶ 3. Petitioner’s Response to Statement No. 4: Disputed. The “Repo” as defined by respondents is incorrect. Agreed that OWS’s repo financing transaction with Merrill Lynch is governed by a Master Repurchase Agreement. 2 Respondents’ Statement No. 5: The MRA states that “the parties intend that all Transactions hereunder be sales and purchases and not loans.” Ex. 9, ¶ 6. Petitioner’s Response to Statement No. 5: Disputed as stated. The MRA states: “Although the parties intend that all Transactions hereunder be sales and purchases and not loans, in the event that any such Transactions are deemed to be loans, Seller shall be deemed to have pledged to Buyer as security for the performance by Seller of its obligations under each such Transaction. . . .” Ex. 9, ¶ 6. Respondents’ Statement No. 6: The MRA defines OWS as the “Seller” and Merrill as the “Buyer.” Ex. 9, ¶ 1. Petitioner’s Response to Statement No. 6: Disputed. The MRA does not define the Seller or the Buyer. It states: “From time to time the parties hereto may enter into transactions in which one party (“Seller”) agrees to transfer to the other (“Buyer”) securities or other assets (“Securities”) against the transfer of funds by Buyer, with simultaneous agreement by Buyer to transfer to Seller such Securities at a date certain or on demand, against the transfer of funds by Seller. Ex. 9, ¶ 1. Respondents’ Statement No. 7: The MRA provides that, on the purchase date for any transaction, “the Purchased Securities” shall be transferred to Buyer or its agent against the transfer of the Purchase Price to an account of Seller,” and “[a]ll of Seller’s interest in the Purchased Securities shall pass to Buyer on the Purchase date.” Ex. 9, ¶¶ 3(a), 8. Petitioner’s Response to Statement No. 7: Disputed, to the extent that respondents leave out essential language of the contract to spin a tale inconsistent with the omitted language. Petitioner incorporates by reference its response to Statement No. 3. OWS is the proper plaintiff in this case. Ex. 6, Sorrentino Aff. ¶ 4; see also Kalivas Aff. Ex. F, Miller Aff. ¶ 2 (“Merrill Lynch’s records reflect that [OWS] has a property interest in $10 million principal amount of notes . . . issued by U.S. Education Loan Trust IV, including the right to all principal and interest paid on the Notes.”)). The proceeding text of Paragraph 6 to the MRA states: “in the event any such Transactions are deemed to be loans, Seller shall be deemed to have pledged to Buyer as security for the performance by Seller of its obligations under each such Transaction . . . . ” Ex. 9, ¶ 6. 3 Respondents’ Statement No. 8: Under the MRA, the parties agreed that Merrill would transfer to OWS “an amount equal to all Income paid or distributed [to Merrill] on or in respect of the Securities that is not otherwise received by [OWS], to the full extent to which it would be so entitled if the Securities had not been sold to [Merrill].” Ex. 9, ¶ 5. Petitioner’s Response to Statement No. 8: Undisputed. Respondents’ Statement No. 9: The Repo was continuously extended, or “rolled,” from January 2011 through August 2015. Ex. 10; Ex. 11; Ex. 12. Petitioner’s Response to Statement No. 9: Disputed. Petitioner incorporates by reference its response to Statement Nos. 3 and 4. OWS always repurchased the Notes, and had a property interest in the Notes, including the right to all principal and interest paid on the Notes. Ex. C, Sorrentino Aff. ¶ 4. Respondents’ Statement No. 10: All amounts of income that OWS received since January 14, 2011 with respect to the Notes have been received by OWS solely pursuant to Merrill’s agreement under the MRA to pay to OWS “an amount equal” to the principal and interest payments on Notes received by Merrill on the day Merrill received such principal and/or interest payments. Ex. 6 ¶ 3; Ex. 9 ¶¶ 5, 8. Petitioner’s Response to Statement No. 10: Disputed. OWS has received virtually no income with respect to the notes from Merrill Lynch since January 14, 2011; in addition, disputed to the extent that respondents assert this statement establishes that Merrill Lynch, and not OWS, owned the notes. To the extent that respondents make such an assertion as an undisputed fact, petitioner incorporates by reference its response to Statement No. 3. OWS is the proper plaintiff in this case. Ex. 6, Sorrentino Aff. ¶ 4; Ex. 14, Locher Aff. ¶ 6. In addition, such an assertion would be a legal argument, not a fact, and would therefore be improper under Rule 19A. On August 21, 2015, OWS repurchased the Notes from Merrill Lynch and terminated the repurchase transaction. Ex. 14, Locher Aff. ¶ 6. Respondents’ Statement No. 11: 4 Respondent Dr. Henry B. Howard is President of respondent U.S. Education Loan Trust IV, LLC and U.S. Education Loan Servicing, LLC. Affidavit of Dr. Henry B. Howard dated September 18, 2015 (“Howard Aff.”) ¶ 1. Petitioner’s Response to Statement No. 11: Undisputed. Respondents’ Statement No. 12: The first time that Dr. Howard communicated with OWS regarding the Notes was January 13, 2014. Howard Aff. ¶ 4. Petitioner’s Response to Statement No. 12: Disputed, to the extent that discovery has not been completed. Dr. Howard has not been cross-examined on his attorney-drafted affidavit, and Respondents have not produced documents concerning communications with OWS. Respondents’ Statement No. 13 : On or about July 24, 2015, the Court issued a decision and order holding that the Repo transaction constituted a sale of the Notes from OWS to Merrill. Ex. 13. Petitioner’s Response to Statement No. 13: Undisputed. Respondents’ Statement No. 14: On or about August 21, 2015, OWS terminated the Repo. Ex. 14 ¶ 6. Petitioner’s Response to Statement No. 14: Disputed to the extent that respondents assert this statement establishes any entity other than OWS owns the notes. On August 21, 2015, OWS repurchased the Notes from Merrill Lynch and terminated the repurchase transaction. The Notes are no longer “on repo.” OWS owns them. Ex. 14 ¶ 6. Respondents’ Statement No. 15: The Notes are now owned by two investment funds OWS ABS Master Fund II LP and William Street Capital Master Fund Ltd. Ex. 12, Ex. 14-A. Petitioner’s Response to Statement No. 15: 5 Disputed. This statement is legal argument, not a fact, and is therefore improper under Rule 19A. In addition, disputed to the extent that respondents assert this statement establishes that OWS is not a proper party to this lawsuit. To the extent that respondents make such an assertion as an undisputed fact, OWS is manager of funds and accounts that own legal title to the Notes, OWS ABS Master Fund II LP and One William Street Capital Master Fund Ltd. Exs. 15, 16. Paragraph 2 of the Investment Management Agreement (“MA”) expressly grants OWS the right to “do any and all acts and things on behalf of the Funds. . .including, without limitation. . .the institution and settlement or compromise of suits.” Exs. 15, 16 ¶ 2. Respondents’ Statement No. 16: Pursuant to an Investment Management Agreement dated April 4, 2008, OWS acts as an investment manager for [One William Street Capital Master Fund Ltd.] and “exercise[s] all rights of the Funds,” including “the institution and settlement or compromise of suits and administrative proceedings.” Ex. 15 ¶ ¶ 1, 2(p). Petitioner’s Response to Statement No. 16: Disputed, to the extent that respondents leave out essential language of the contract. OWS is manager of OWS ABS Master Fund II LP and One William Street Capital Master Fund Ltd. (“the Funds”). Exs. 15, 16. Paragraph 2 of the MA expressly grants OWS the right to “do any and all acts and things on behalf of the Funds. . .including, without limitation. . .the institution and settlement or compromise of suits.” Exs. 15, 16 ¶ 2. Respondents’ Statement No. 17: The [MA] provides that, “for all purposes,” OWS is “an independent contractor” and “not an agent or employee” of [One William Street Capital Master Fund Ltd.]. See Ex. 15. Petitioner’s Response to Statement No. 17: Disputed, to the extent that respondents draw any legal conclusion inconsistent with the contract language. Respondents’ Statement No. 18: [One William Street Capital Master Fund Ltd.] has not transferred to OWS any ownership interest in any claim derived from [One William Street Capital Master Fund Ltd.]’s ownership of the Notes. See Ex. 15. Petitioner’s Response to Statement No. 18: Disputed. This is legal argument, not a fact, and is therefore improper under Rule 19A. In addition, disputed to the extent that respondents assert this statement establishes that OWS does not have authority to institute a lawsuit on behalf of the Funds. To the extent that 6 respondents make such an assertion as an undisputed fact, petitioner incorporates by reference its response to Statement No. 15. OWS is the proper plaintiff in this case. Respondents’ Statement No. 19: Pursuant to an Investment Management Agreement dated December 31, 2013, OWS acts as an investment manager for [OWS ABS Master Fund II LP] and “exercise[s] all rights of the Funds,” including “the institution and settlement or compromise of suits and administrative proceedings.” Ex. 16 ¶¶ 1, 2(0). Petitioner’s Response to Statement No. 19: Disputed, to the extent that respondents leave out essential language of the contract. OWS is manager of OWS ABS Master Fund II LP and One William Street Capital Master Fund Ltd. (“the Funds”). Exs. 15, 16. Paragraph 2 of the Investment Management Agreement (“MA”) expressly grants OWS the right to “do any and all acts and things on behalf of the Funds. . .including, without limitation. . .the institution and settlement or compromise of suits.” Exs. 15 ¶ 2(p), 16 ¶ 2(0). Respondents’ Statement No. 20: The [MA] provides that, “for all purposes,” OWS is “an independent contractor” and “not an agent or employee” of [OWS ABS Master Fund II LP]. See Ex. 16 ¶ 4. Petitioner’s Response to Statement No. 20: Disputed, to the extent that respondents draw any legal conclusion inconsistent with the contract language. This is legal argument, not a fact, and is therefore improper under Rule 19A. In addition, disputed to the extent that respondents assert this statement establishes that OWS does not have authority to institute a lawsuit on behalf of the Funds. To the extent that respondents make such an assertion as an undisputed fact, petitioner incorporates by reference its response to Statement No. 15. OWS is the proper plaintiff in this case. Respondents’ Statement No. 21: [OWS ABS Master Fund II LP] has not transferred to OWS any ownership interest in any claim derived from [OWS ABS Master Fund II LP]’s ownership of the Notes. See Ex. 16. Petitioner’s Response to Statement No. 21: Disputed. This is legal argument, not a fact, and is therefore improper under Rule 19A. In addition, disputed to the extent that respondents assert this statement establishes that OWS does not have authority to institute a lawsuit on behalf of the Funds. To the extent that respondents make such an assertion as an undisputed fact, petitioner incorporates by reference its response to Statement No. 15. OWS is the proper plaintiff in this case. 7 Dated: New York, New York October 20, 2015 ARNOLD & PORTER LLP By: s/ /s/ Kent A. Yalowitz Kent A. Yalowitz Tanya E. Kalivas Kathryn W. Hutchinson 399 Park Avenue New York, New York 10022 Tel. (212) 715-1000 Fax (212) 715-1399 Attorneys for Petitioner/Plaintiff One William Street Capital Management, L.P. 8