1 PETER C. ANDERSON United States Trustee 2 TERRI HAWKINS-ANDERSEN Assistant U.S. Trustee 3 TIMOTHY J.

FARRIS Senior Trial Attorney - SBN 102678 4 ELIZABETH A. LOSSING Trial Attorney - SBN 144100 5 OFFICE OF THE UNITED STATES TRUSTEE 3685 Main Street, Suite 300 6 Riverside, CA 92501 Telephone: (951) 276-6990 7 Facsimile: (951) 276-6973 8 9 10 11 12 In re: 13 14 15 16 17 18 19 20 21 COMES NOW THE UNITED STATES TRUSTEE FOR THE CENTRAL DISTRICT OF UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA RIVERSIDE DIVISION ) ) NATIONAL R.V. HOLDINGS, INC., ) a Delaware corporation; and ) NATIONAL R.V., INC., a ) California corporation, ) ) ) ) ) ) Debtor(s). ) ) ) ) ______________________________) Case No. 6:07-17941-PC Chapter 11 UNITED STATES TRUSTEES OPPOSITION TO MOTION OF AD HOC COMMITTEE FOR RECONSIDERATION OF ORDER DENYING APPOINTMENT OF OFFICIAL COMMITTEE OF EQUITY HOLDERS DATE: April 21, 2008 TIME: 9:30 A.M. COURTROOM: "303" 3420 Twelfth Street Riverside, CA 92501

22 CALIFORNIA and opposes the Motion For Reconsideration Of Order 23 Denying Appointment Of Official Committee Of Equity Holders,

24 (hereinafter Reconsideration Motion)in the Chapter 11 cases of 25 National R.V. Holdings, Inc. (hereinafter referred to as Holdings) 26 and National R.V., Inc. (hereinafter referred to as R. V.), at this 27 time. This Opposition is based on the within Memorandum of Points

28 and Authorities, certain matters of record in the above-captioned

1 cases, the United States Trustees Opposition To The Motion Of Ad 2 Hoc Committee Of Equity Holders for Appointment Of Official

3 Committee Of Equity Holders, the Declaration of United States 4 Trustee Peter C. Anderson In Support Of United States Trustees 5 Opposition To Motion Of Ad Hoc Committee For Appointment Of Official 6 Committee Of Equity Holders, the Declaration Of Trial Attorney for

7 the United States Trustee Timothy J. Farris In Support Of United 8 States Trustees Opposition To Motion Of Ad Hoc Committee For 9 Appointment Of Official Committee Of Equity Holders, and such other 10 and further evidence as the Court may consider at the time of the 11 hearing on this matter. 12 13 DATED: April 10, 2008 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Respectfully submitted, PETER C. ANDERSON United States Trustee TERRI HAWKINS-ANDERSEN Assistant U.S. Trustee By: Timothy J. Farris TIMOTHY J. FARRIS Trial Attorney

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 II. I.

MEMORANDUM OF POINTS AND AUTHORITIES

INTRODUCTION

Having failed to persuade the United States Trustee of the present need for the appointment of an Official Equity Holders Committee in the Holdings case, and having failed to persuade the United States of Bankruptcy an Court of the present need for in the the

appointment

Official

Equity

Holders

Committee

Holdings case, and having failed a third time to persuade the United States Trustee there was a present need, based upon certain additional facts, to appoint such a committee, the Ad Hoc Committee of Equity Holders has brought the present Reconsideration Motion pursuant to F.R.C.P. 59.

THE AUTHORITY CITED IN SUPPORT OF ALTERING OR AMENDING THE ORDER IS EITHER NOT ON POINT OR DOES NOT SUPPORT THE AD HOC COMMITTEES MOTION.

The Ad Hoc Committee Of Equity Holders cites three main cases, on pages 3-4 of its Reconsideration Motion, in support of its contention that the Order denying its motion to require the United States Trustee to appoint an Official Equity Holders Committee was in error. The first case cited discusses a motion brought under

F.R.C.P. 60(B), not F.R.C.P. 59 and therefore is not on point to the matter before the Bankruptcy Court. The second and third cases

demonstrate some very selective editing of the ruling and holdings which could easily be taken out of context if the entire case was

1 not reviewed.

In sum, the cases do not support the contention that

2 the Order should be changed and, indeed, stand for the proposition 3 that the Order should be upheld. 4 The first case cited by the Ad Hoc Committee of Equity Holders

5 is American Ironworks & Erectors, Inc. V. North Am. Constr. Corp.,

th Cir.2001). 6 248 F.3d 892, 898-9 (9

That case involved unpaid

7 subcontractors on federal public works [who] brought suit under 8 Miller Act against [a] general contractor and its surety. 9 892. Id. at

The particular issue raised on the cited pages dealt with

10 whether or not the District Court should reconsider its ruling that 11 the contractor and its surety were required to pay the attorneys 12 fees of their withdrawing attorneys. On the pages cited by the Ad

th 13 Hoc Committee, the 9 Circuit states, As the district court noted,

14 a motion for reconsideration is treated as a motion to alter or 15 amend judgment under Federal Rule Of Civil Procedure Rule 59(e) if 16 it is filed within ten days of entry of judgment. Id at 898-9.

17 However, the outline heading for that section makes clear that the 18 motion being dealt with in that instance was a Rule 60(B) Motion. 19 As the citation of authority by the Ad Hoc Committee is exclusively 20 to F.R.C.P. 59, reliance on this decision appears to be misplaced. 21 Simply put, it is not on point to the Ad Hoc Committees issue.
th Circuit denied the motion for reconsideration 22 Further, the 9

23 therein. 24 The second case cited by the Ad Hoc Committee is McDowell v. This was a criminal In denying the

th 25 Calderon, 197 F.3d 1253, 1255 (9 Cir.1999).

26 case involving access to trial counsels files.

th 27 reconsideration motion therein, the 9 Circuit stated: A motion for

28 reconsideration under 59(e) should not be granted, absent highly

1 unusual circumstances, unless the district court is presented with 2 newly discovered evidence, committed clear error, or if there is an 3 intervening change in the controlling law.(Underlining added). 4 Ibid. Two points are very important here. First, the Ad Hoc

5 Committee failed to include the key language that a motion for 6 reconsideration under F.R.B.P. 59 should not be granted unless 7 highly unusual circumstances are found. Second, the 9th Circuit Therefore, it cannot

8 denied the F.R.C.P. 59 motion in that case.

9 support the Ad Hoc Committees contention that the Order should be 10 altered or amended. 11 The third case cited by the Ad Hoc Committee is 389 Orange St. Again, the

th Cir.1999). 12 Partners v. Arnold, 179 F.3d 656,665 (9

13 petition for rehearing was denied and the complete citation from the 14 holding is Under Rule 59(e), a motion for reconsideration should 15 not be granted, absent highly unusual circumstances, unless the 16 district court is presented with newly discovered evidence,

17 committed clear error, or if there is an intervening change in the 18 controlling law. 19 On page 3, Ibid. lines 16-18 of the Ad Hoc Committees

20 Reconsideration Motion, there is a parenthetical sentence, to wit, 21 Courts may grant a motion to alter or amend a judgment to take 22 account of an intervening change in controlling law, to take account 23 of newly discovered evidence, to correct clear legal error, and to 24 prevent manifest injustice (emphasis added). 25 to be cited in support of this proposition. No case law appears By adding emphasis to

26 the words, and to prevent manifest injustice, it appears that this 27 is the main contention of the Ad Hoc Committees argument. That

28 language comes from footnote 1 in the McDowell v. Calderon case.

1 Therein, it is stated as [t]hird, the motion will be granted if 2 necessary to prevent manifest injustice.... 3 fn.1. McDowell at 1255,

The F.R.C.P. 59 motion therein involved access to trial

4 counsels files for the penalty phase of a murder case and it is 5 only in the criminal context that this added issue arises, at least 6 in the cases cited by the Ad Hoc Committee. 7 The conclusion is inescapable. Rule 59 motions should only be There are no There has been

8 granted where highly unusual circumstances exist. 9 highly unusual circumstances in the Holdings case. 10 no change in the intervening law. 11 evidence.

There is no newly discovered Finally, no

There certainly was no clear legal error.

12 change in the Order is necessary to prevent manifest injustice, even 13 if that standard is applicable herein. 14 Reconsideration Motion should be denied. 15 16 17 18 19 20 The Ad Hoc Committee appears to base its request for alteration III. THERE IS NO NEWLY DISCOVERED EVIDENCE CITED IN THE RECONSIDERATION MOTION AND AN ALTERATION TO THE ORDER IS The Ad Hoc Committees

NOT NECESSARY TO PREVENT MANIFEST INJUSTICE.

21 of the Order on two criteria: newly discovered evidence and a need 22 to prevent manifest injustice. Reconsideration Motion, pages 3-4.

23 Neither of these criteria is present in the Reconsideration Motion 24 or sufficient to support an alteration to the Order. 25 /// 26 /// 27 /// 28 ///

1 2 3 4 5 6 7 The

A.

THERE

IS

NO

NEWLY

DISCOVERED

EVIDENCE

IN

THE

RECONSIDERATION MOTION, ONLY A REHASHING OF PRIOR ARGUMENTS AND A REQUEST TO UTILIZE A DIFFERENT METHOD TO ANALYZE THE EVIDENCE THAT WAS PRESENT AT THE TIME OF THE PREVIOUS HEARING CONCERNING SOLVENCY.

Ad in

Hoc the

Committee

fails

to

cite

any

newly it

discovered asks the

8 evidence

Reconsideration

Motion,

rather

9 Bankruptcy Court to reconsider and amend the Courts previous 10 finding regarding solvency. 11 21. Reconsideration Motion, page 4, line

The U.S. Trustee did obtain testimony from the Debtors

12 insiders and consultant at the continued First Meeting of Creditors 13 held on April 8, 2008, subsequent to the filing of the

14 Reconsideration Motion, however, nothing in the continued Meeting of 15 Creditors renders the Courts finding regarding solvency clearly 16 erroneous. 17 John Corn, the Debtors President, Henry Pray, the Debtors and Bruce Conklin, of Kibel, Green, the Debtors

18 Controller,

19 consultant were present at the continued First Meeting of Creditors 20 and testified, under oath. They testified to issues regarding

21 restricted cash, Holdings February 2008 Monthly Operating Report 22 lists an ending balance for the New Funding bank account with a 23 balance of $1,624,183.97, which Mr. Conklin indicated could not be 24 correct, the ownership and surrender value of life insurance

25 policies and the WARN ACT class action lawsuit.

They also testified

26 that they were unable to determine the administrative expenses for 27 the Holdings estate at this time and that they have not segregated 28 the monies of each estate. Due to the change in personnel and some

1 apparent accounting issues, the asset, liability and equity position 2 of the Holdings estate is still unclear. The First Meeting of Holdings insiders

3 Creditors has been continued to April 28, 2008.

4 have promised to try to resolve some of these problems by that time. 5 Based upon the testimony at the April 8, 2008 continued

6 meeting, it appears that the determination as to whether or not 7 Holdings may be solvent at this time remains unknown. However, it

8 must be pointed out that the matter before the Bankruptcy Court is 9 a reconsideration motion brought under F.R.C.P. 59, not an entirely 10 new motion for the appointment of an equity holders committee. 11 Reconsideration Motion only recites facts known prior to The the

12 continued First Meeting of Creditors and the matters developed at 13 the continued First Meeting of Creditors is simply not relevant to 14 the Reconsideration Motion. 15 16 17 18 19 20 21 22 In Leap Wireless, the Bankruptcy Court criticized the debtor B. THE AD HOC COMMITTEES CITATION OF THE CASE OF IN RE LEAP WIRELESS INTL, INC., 295 B.R. 135, 137-39 (Bankr.S.D.Cal.2003), FOR THE PROPOSITION THAT THE COURT MUST MAKE AN INDEPENDENT FINDING REGARDING THE ISSUE OF SOLVENCY OF THE DEBTOR IS IN ERROR.

23 and its counsels failure to properly file Schedules, including the 24 valuation of the wireless licenses transferred to Cricket. The

25 Bankruptcy Court then pointed out that [m]ovants argue that the 26 Court cant determine whether Leap is hopelessly insolvent without 27 the single most critical piece of information - the value of the 28 28 Leap wireless licenses known to have been transferred to

1 Cricket.

Ibid at 139.

The Court continued, [w]hile the debtors

2 degree of insolvency is a factor to be considered at confirmation, 3 the test ... is, whether the debtor appears to be hopelessly 4 insolvent. 5 Ibid.

The Bankruptcy Court then considered the expert opinion that

6 equity was out of the money, the declining bond price, and the 7 costly investigation researching the value of the transferred

8 wireless licenses pre-petition.

The Bankruptcy Court concluded,

9 [b]ased upon this, the Court finds that it appears that Leap is 10 hopelessly insolvent. Ibid. The Leap Wireless decision did not

11 require that an evidentiary hearing was necessary to determine the 12 issue of insolvency, and it did deny the motion to appoint an Equity 13 Holders Committee. Simply put, the Leap Wireless decision does not 14 stand for the proposition for which it is cited by the Ad Hoc 15 Committee. 16 Schedules Indeed, the Bankruptcy Court, in referring to the filed therein stated, [t]he asset side remains an

17 unknown as net book value clearly is not market value. 18 138.

Ibid at

Since there is no other citation of authority between page 5,

19 line 9 and page 8, line 8, the entire section of the Ad Hoc 20 Committees argument appears unsupported. 21 22 23 24 25 While the Ad Hoc Committee cited the Leap Wireless decision as C. THE SUBSTANTIAL LIKELIHOOD STANDARD IS THE PROPER STANDARD TO BE APPLIED IN CASES LIKE THIS ONE.

26 authority in its Reconsideration Motion, it apparently only seeks to 27 selectively cite that case, as the Bankruptcy Court therein utilized 28 the same substantial likelihood standard from Williams

1 Communications Group, Inc., 281 B.R. 216 (Bankr.S.D.N.Y.2002).

As

2 noted in the U.S. Trustees Opposition to the Motion to Appoint an 3 Official Equity Holders Committee, the Leap Wireless decision is 4 the best decision to rely upon in this case for several reasons, 5 including, (1) it is the only decision cited by any of the parties 6 that relates to the appointment of an equity holders committee
th 7 heard in the 9 Circuit, (2) it is the closest in size to the case

8 at bar, and (3) both cases involved active creditors committees 9 that were found to adequately represent the interests for which the 10 appointment of an equity holders committee was sought. 11 Wireless at 140. The Bankruptcy Court in Leap

Leap Wireless reached its

12 conclusion that the motion to appoint an equity holders committee 13 should be denied. This is precisely the ruling in the case at bar.

14 See Bankruptcy Courts Memorandum Opinion entered February 29, 2008, 15 page 8, lines 8-17, inclusive, page 10, lines 23-25, inclusive, and 16 page 14, lines 6-14, inclusive. 17 18 19 20 21 22 23 [T]he burden of demonstrating the need for adequate D. THE AD HOC COMMITTEE FAILED TO MEET ITS BURDEN OF PROVING ADEQUATE REPRESENTATION AND NOW SEEKS TO USE THE UNCERTAINTY OF THIS ISSUE TO SUPPORT

RECONSIDERATION.

24 representation ... is borne, in the first instance, by the party 25 seeking appointment. In re Johns-Manville Corp., 68 B.R. 155, 158 That party in the case is the Ad Hoc

26 (Dist. Ct. S.D.N.Y. 1986). 27 Committee.

To demonstrate a need for adequate representation, one

28 key factor is a showing that the class seeking the appointment is

1 in the money.

Without this showing, there is no need for such

2 representation. The Ad Hoc Committee failed provide any evidence to 3 demonstrate this factor to the Bankruptcy Courts satisfaction at 4 the prior hearing on this matter. Having failed to meet its burden

5 of proof at that hearing, the Ad Hoc Committee now suggests that the 6 very uncertainty that it could not overcome previously should demand 7 the appointment of an Official Equity Holders Committee on

8 reconsideration.

This is not newly discovered evidence nor was This is

9 the Bankruptcy Courts prior Order manifestly unjust.

10 nothing more than a request by the Ad Hoc Committee to relitigate 11 the same facts as were present at the prior hearing. 12 The Ad Hoc Committee posits two potentials for solvency: the

13 proceeds of the Kemlite litigation and the $45.1 million inter14 company account receivable. The Ad Hoc Committee fails to

15 demonstrate how the proceeds of the Kemlite litigation is an asset 16 of Holdings, rather than the plaintiff in that litigation, R.V. It

17 suggests that Holdings put up the money to prosecute the litigation, 18 but offers no theory upon which to base its claim of ownership of 19 the proceeds. 20 This is unpersuasive.

The Reconsideration Motion provides an analysis of the interThis issue was fully treated at the

21 company account receivable.

22 hearing on the Motion to Appoint an Equity Holders Committee. 23 Further, the Reconsideration Motion fails to address a key argument 24 made by the U.S. Trustee at that hearing, namely, if the inter25 company account receivable is allowed and not objected to, then both 26 the Official Creditors Committee and the Holdings Board of

27 Directors owe a fiduciary duty to Holdings.

Under this scenario,

28 the equity of Holdings is clearly adequately represented by both the

1 Board of Directors and the Official Creditors Committee.

If the Ad

2 Hoc Committee argues that the inter-company account receivable will 3 be objected to successfully, then Holdings will be insolvent, but 4 the Board of Directors will still owe a fiduciary duty to the equity 5 to adequately represent their interests. 6 The Ad Hoc Committee states in the Reconsideration Motion that

7 the Courts finding that the Holding Company is likely insolvent 8 was clear error.... The U.S. Trustee could not disagree more. The

9 evidence before the Bankruptcy Court was that the Debtors Chief 10 Financial Officer and Treasurer testified at the First Meeting of 11 Creditors, held on January 28, 2008, that the liabilities of the 12 Debtors was only $22 million, not including $7 million of

13 administrative expenses. Clearly, this figure could not include the 14 inter-company account receivable of $45 million. 15 million dollars. This totals $29

He further testified that he expected the asset

16 liquidation to bring in $22 million, not including the Kemlite 17 litigation and the Intellectual Property. The Kemlite litigation This yields

18 has now been liquidated for a maximum of $3.5 million.

19 $25.5 million in proceeds to pay $29 million in debt, not including 20 the Intellectual Property. Unless the Intellectual Property is

21 worth more than $3.5 million or the inter-company account receivable 22 is allowed, then there will be zero proceeds available to pay equity 23 in Holdings. 24 Testimony provided at the April 8, 2008 continued First

25 Meeting of Creditors from Holdings insiders suggest that it still 26 can not be determined at this time whether equity will be in the 27 money, until Holdings explains the $1.6 million of unrestricted cash 28 listed in the February 2008 Monthly Operating Report, the ownership

1 of the life insurance policies is determined, the net to be received 2 from the Wells Fargo restricted cash is determined, the Debtors 3 cash assets are properly segregated, and the administrative expenses 4 are properly allocated between the estates. Based thereon, it will

5 be very difficult to say with certainty that Holdings equity 6 holders are in the money. 7 8 the The Bankruptcy Courts decision was proper and not in error: Ad Hoc Committee had failed to present any evidence to

9 demonstrate that the Holdings estate is solvent.

Notwithstanding

10 the Ad Hoc Committees bold assertion that the Courts finding that 11 the Holding Company is likely insolvent was clear error, (emphasis 12 added), the Bankruptcy Courts finding is both correct and well13 supported. 14 15 16 17 18 19 20 The Ad Hoc Committee challenges the Bankruptcy Courts findings E. THE AD HOC COMMITTEE SEEKS TO RELITIGATE THE SAME ISSUES WITH RESPECT TO HOW WIDELY HELD AND ACTIVELY TRADED THE SHARES OF HOLDINGS ARE WITHOUT ANY NEWLY DISCOVERED EVIDENCE.

21 with respect to the shares of Holdings found on page 11, lines 1722 23, inclusive, of the Memorandum Opinion. The Bankruptcy Court

23 found that the Ad Hoc Committee had failed to provide any evidence 24 that Holdings stock was actively traded. 25 11, lines 18-19, inclusive. Memorandum Opinion, page

The Bankruptcy Court also found that it Memorandum

26 did not appear that Holdings stock was widely held. 27 Opinion, page 11, lines 19-20, inclusive.

Nevertheless, the Ad Hoc

28 Committee recites the same facts and concludes that the shares of

1 Holdings

are

indeed

both

widely

held

and

actively

traded. Simply Ad Hoc

2 Reconsideration Motion, page 14, lines 23-25, inclusive. 3 put, the Bankruptcy Courts analysis is correct. The

4 Committee has failed to introduce newly discovered evidence to 5 support the contention that Holdings stock is widely held and 6 actively traded. 7 8 9 10 11 12 13 Rather than reiterate the argument set forth in the United F. THE EQUITY HOLDERS OF HOLDINGS ARE ADEQUATELY

REPRESENTED BY THE OFFICIAL CREDITORS COMMITTEE, THE BOARD OF DIRECTORS, THE INSIDERS WHO OWN SHARES AND BY THE AD HOC COMMITTEE ITSELF.

14 States Trustees Opposition to Appoint an Equity Holders Committee, 15 the United States Trustee respectfully requests that the Bankruptcy 16 Court take judicial notice of Section III G on pages 11-12 of the 17 Opposition. Unlike the Ad Hoc Committees Reconsideration Motion at 18 pages 15-17, the United States Trustee previously provided the 19 Bankruptcy Court with four separate entities that provide adequate 20 representation for the equity holders in Holdings and the supporting 21 case law. 22 The Ad Hoc Committee cites the Bankruptcy Court to an

23 unpublished non-bankruptcy opinion, Credit Lyonnaise Bank Nederland 24 N.V. v. Pathe Communications, 1991 WL 277613, with respect to 25 heightened awareness of concerns expressed by Chancellor Allen. 26 How this case relates to the appointment of an equity holders 27 committee 28 determine. in a chapter 11 liquidation case is difficult to

In any case, it is an unpublished opinion and should not

1 receive great authoritative weight.

Equity has at least four

2 separate sources of adequate representation in the case at bar; an 3 official committee would be redundant and unnecessary. 4 5 6 7 8 9 of The Ad Hoc Committee of Equity Holders has not met the burden proof of the demonstrating Bankruptcy unusual that Courts the circumstances and facts include justify For all VII. CONCLUSIONS

10 supporting 11 sufficient

Memorandum that

Opinion would

highly

circumstances

12 reconsideration under Federal Rule Of Civil Procedure 59.

13 of the foregoing reasons and such other and further reasons as are 14 brought forward at the time of the hearing on the Ad Hoc Committees 15 Reconsideration Motion, the United States Trustee respectfully

16 requests that this Honorable Court deny the Reconsideration Motion, 17 or in the alternative, continue the hearing to a date after April 18 28, 2008 when the factual issues that arose at the continued First 19 Meeting of Creditors can be more completely determined. 20 21 DATED: April 10, 2008 22 23 24 25 26 27 28 Respectfully submitted, PETER C. ANDERSON United States Trustee TERRI HAWKINS-ANDERSEN Assistant U.S. Trustee /S/Timothy J. Farris TIMOTHY J. FARRIS Trial Atorney

1 STATE OF CALIFORNIA COUNTY OF RIVERSIDE 2 3 4

I am employed in the County of Riverside, State of California, in the Office of the United States Trustee under the supervision of a member of the bar of this Court at whose direction the service was made. I am over the age of 18 and not a party to the within action; and my business address is 3685 Main Street, Suite 300, Riverside, California 92501-2804.

5 On April 10, 2008, I served the foregoing document described as, UNITED STATES TRUSTEES OPPOSITION 6 7

TO MOTION OF AD HOC COMMITTEE FOR RECONSIDERATION OF ORDER DENYING APPOINTMENT OF OFFICIAL COMMITTEE OF EQUITY HOLDERS, on interested parties in this action by placing a true and correct copy thereof in a sealed envelope with first class postage thereon fully prepaid in the United States mail at Riverside, California, addressed as follows: NATIONAL R.V. INC. 3411 N. PERRIS BLVD. PERRIS, CA 92571

8 NATIONAL R.V. HOLDINGS, INC. 9

3411 N. PERRIS BLVD. PERRIS, CA 92571

10 LEE R. BOGDANOFF 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

JONATHAN S. SHENSON DAVID M. GUESS KLEE TUCHIN BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS 39TH FLOOR LOS ANGELES, CA 90067 ALI M.M. MOJDEHI CHRISTINE E. BAUR BAKER & MCKENZIE LLP 12544 HIGH BLUFF DR. 3RD FLOOR SAN DIEGO, CA 92130 HAMID R. RAFATJOO PACHULSKI STANG ZIEHL JONES 10100 SANTA MONICA BLVD 11TH FLOOR LOS ANGELES, CA 90067-4100 SANDRA W. LAVIGNA SENIOR BANKRUPTCY COUNSEL UNITED STATES SECURITIES AND EXCHANGE COMMISSION LOS ANGELES REGIONAL OFFICE 5670 WILSHIRE BLVD LOS ANGELES, CA 90036-3648 I declare under penalty of perjury that the foregoing is true and correct.

Dated: April 10, 2008 /S/ Pat Pezoldt____ Pat Pezoldt