1 1 STATE OF NEW JERSEY 2 CASINO CONTROL COMMISSION 3 SPECIAL PUBLIC MEETING 4 - - - - - - - - - - - - - - - - - - - 5 6 THE PETITION OF TRUSTEE AND CONSERVATOR FOR ADAMAR 7 OF NEW JERSEY, INC., SEEKING APPROVAL TO HIRE 8 CO-INVESTMENT ADVISORS (PRN 1680802) 9 10 - - - - - - - - - - - - - - - - - - - 11 12 Monday, June 30, 2008 13 Atlantic City Commission Offices 14 Joseph P. Lordi Public Meeting Room - First Floor 15 Tennessee Avenue and Boardwalk 16 Atlantic City, New Jersey 08401 17 12:08 p.m. to 12:38 p.m. 18 19 Certified Court Reporter: Darlene Sillitoe 20 - - - - - - - - - - - - - - - - - - - - - - - - - - - 21 ATLANTIC CITY COURT REPORTING, LLC 22 CERTIFIED COURT REPORTERS AND VIDEOGRAPHERS 23 1125 ATLANTIC AVENUE, SUITE 416 24 ATLANTIC CITY, NEW JERSEY 08401 25 (609) 345-8448 www.accourtreporting.com 2 1 2 CASINO CONTROL COMMISSION: LINDA M. KASSEKERT, CHAIR 3 WILLIAM T. SOMMELING, VICE CHAIR MICHAEL A. FEDORKO, COMMISSIONER 4 MICHAEL C. EPPS, COMMISSIONER RALPH G. FRULIO, COMMISSIONER 5 6 PRESENT FOR THE CASINO CONTROL COMMISSION: DARYL W. NANCE, ADMINISTRATIVE ANALYST 7 DANIEL J. HENEGHAN, PUBLIC INFORMATION OFFICER 8 OFFICE OF THE GENERAL COUNSEL: DIANNA W. FAUNTLEROY, GENERAL COUNSEL/EXECUTIVE 9 SECRETARY LEONARD J. DIGIACOMO, ASSISTANT GENERAL COUNSEL 10 STEVEN M. INGIS, ASSISTANT GENERAL COUNSEL 11 DIVISION OF GAMING ENFORCEMENT: DEPUTY ATTORNEYS GENERAL 12 MARYJO FLAHERTY, DEPUTY ATTORNEY 13 14 15 16 17 18 19 20 21 22 23 24 25 3 1 A P P E A R A N C E S : 2 PASHMAN STEIN BY: MICHAEL STEIN, ESQ. 3 FOR: THE CONSERVATOR AND TRUSTEE 4 TAMA HUGHES, ESQ. 5 FOR: ADAMAR OF NEW JERSEY, INC. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 4 1 E X H I B I T S : 2 NO. DESCRIPTION EVD 3 4 P-1 Draft of proposed engagement letter, X 6-23-08, between Justice Gary Stein and 5 Moelis & Company, with attachments 6 P-2 Draft of proposed agreement among X Moelis & Company, Justice Gary Stein, 7 and JP Morgan Securities, Inc. 8 D-1 Report by Mary Jo Flaherty, DAG, 6-25-08 X 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (Exhibits retained by Commission.) 5 1 MR. NANCE: Good morning. I'd like to 2 read an opening statement. 3 This is to advise the general public 4 that in compliance with Chapter 231 of the 5 public laws of 1975 entitled the "Open Public 6 Meetings Act," the New Jersey Casino Control 7 Commission on June 23, 2008, filed with the 8 Secretary of State at the State House in 9 Trenton, New Jersey, a notice of this hearing. 10 On June 23rd, 2008, copies were mailed to 11 subscribers. 12 Members of the press will be permitted 13 to take photographs, and we ask that this be 14 done in a manner which is not disruptive or 15 distracting to the Commission. 16 The use of cellular telephones in the 17 public meeting room while the Commission is in 18 session is prohibited. 19 Would everyone please stand for the 20 Pledge of Allegiance. 21 (The flag salute was recited.) 22 CHAIR KASSEKERT: Good afternoon. 23 MR. NANCE: Good afternoon. 24 The matter before the Commission is the 25 petition of Trustee and Conservator for Adamar 6 1 of New Jersey, Inc., seeking approval to hire 2 co-investment advisors. 3 MR. DiGIACOMO: Chair, Commissioners, 4 good afternoon. I believe Mr. Michael Stein on 5 behalf of the Trustee and Conservator. Miss 6 Mary Jo Flaherty for the Division of Gaming 7 Enforcement. 8 I think each party has documents they 9 would like to move into evidence at this time. 10 MR. STEIN: Thank you, Chair Kassekert, 11 members of the Commission. Michael Stein here 12 on behalf of the Trustee. 13 The Commission has, and I think already 14 marked as Exhibit P-1, is a draft dated June 15 23rd of the proposed engagement letter between 16 Justice Stein as the Trustee and Conservator 17 and Moelis & Company, and I'd like to move that 18 into evidence along with Exhibit P-2, which is 19 a June 25th, 2008, a draft of a proposed 20 agreement among Moelis & Company, Justice Stein 21 in his capacity as Trustee and Conservator, and 22 JP Morgan Securities, Inc. 23 MS. FLAHERTY: No objection -- 24 CHAIR KASSEKERT: Any objections? 25 MS. FLAHERTY: -- chair. 7 1 CHAIR KASSEKERT: Okay. That being 2 said, I'll move them into evidence. 3 When do you anticipate we'll have final 4 copies of the exhibit? 5 MR. STEIN: It's our hope to be able to 6 have final drafts this week. We're working 7 hard to realize that goal. 8 CHAIR KASSEKERT: Okay. 9 MS. FLAHERTY: Yes, Chair and 10 Commissioners. 11 I have my report which has been marked 12 as D-1. It's the report of the Division of 13 Gaming Enforcement in response to the pending 14 petition regarding the co-investment advisors 15 1680802, and I would ask that be moved into 16 evidence. 17 CHAIR KASSEKERT: Thank you. 18 Any objection? 19 MR. STEIN: No. 20 CHAIR KASSEKERT: Okay. Any -- let me 21 ask if the Commissioners have any questions? 22 VICE CHAIR SOMMELING: No questions, 23 Madame Chair. 24 CHAIR KASSEKERT: Commissioner Epps? 25 COMMISSIONER EPPS: Are you going -- 8 1 CHAIR KASSEKERT: What. I'm going to 2 ask -- I'll just ask -- 3 MR. DiGIACOMO: Oh, and Madame Chair, I 4 would like to mention for you and the 5 Commissioners' edification, I've shared with 6 the counsel and parties a draft of a proposal 7 of order. 8 CHAIR KASSEKERT: Thank you. 9 Arguments? 10 MR. STEIN: Thank you, Chair, members of 11 the Commission. 12 Essentially I want to rely on the 13 petition that we've submitted. I'd like to 14 introduce to the Commission Frank Sellman and 15 Dan Huber, both of Moelis & Company who, along 16 with me, are available to answer any questions 17 that the Commission might have. But the 18 petition, I think, is self-explanatory, lays 19 out our position. 20 And other than reserving a couple of 21 minutes to respond to whatever it is that Miss 22 Flannery [sic] has to say, I have no nothing 23 further to add at this time. 24 CHAIR KASSEKERT: Thank you. 25 Any questions before we hear from the 9 1 Division? 2 COMMISSIONER EPPS: I'll wait. 3 CHAIR KASSEKERT: You'll wait? Okay. 4 Miss Flaherty? 5 MS. FLAHERTY: Yes, Chair and 6 Commissioners. 7 The conservator rule is really under the 8 control of the Commission, and the Conservator 9 is accountable on the Commission. And 10 discretion is with the Commission with regard 11 to conservator matters. The Division's 12 position is somewhat more limited in these 13 instances and in accordance with the provisions 14 of the Act. And based on that, we leave to the 15 Commission's sound discretion whether to grant 16 the relief that is sought in the petition which 17 is to retain a co-investment advisor. 18 We would condition our position with 19 regards to the limitation on the compensation 20 which is set forth in the agreements as to the 21 percentage, and that the split would be 40 22 percent to JP Morgan and 60 percent the 23 co-investment advisor. 24 And we urge the Commission to consider 25 some matters that we have put forth in our 10 1 report. First we had recommended a hold 2 harmless clause that the agreements be governed 3 by New Jersey law, was another recommendation. 4 And, finally, that no changes be made to the 5 draft agreements without further Commission 6 approval. 7 And we've had the opportunity to review 8 the draft resolution prepared by Mr. DiGiacomo, 9 and we're in agreement with that and that 10 addresses our concerns in those regards. 11 We would also note that the definition 12 of "transaction" is somewhat different between 13 the two draft agreements. The one in the 14 Moelis agreement is more specific, and we think 15 that they should be in conformity. So we would 16 just note that for the record. 17 And, finally, it's our position that any 18 deal which eventuates from these arrangements 19 would need to, obviously, meet the requirements 20 of the Casino Control Act in terms of licensing 21 standards, including financial stability, 22 integrity, and responsibility. And that would 23 be our position in regard to that. 24 If you have any questions, I'd be happy 25 to answer that. Thank you. 11 1 CHAIR KASSEKERT: Any questions, or do 2 you want to hear rebuttal? 3 COMMISSIONER EPPS: Well -- 4 MR. STEIN: The only -- by way of 5 rebuttal, the only thing that I'd add to my 6 presentation is I've had but a brief 7 opportunity to look today at the proposed form 8 of order. It was provided to me just before 9 the hearing. And I guess I'd ask the 10 Commission if there's an easy procedural way to 11 do it, to maybe if it was inclined to enter an 12 order similar in form to that, to maybe allow a 13 day for us to get comments from the 14 representatives of Moelis and JPMorgan Chase. 15 I -- I don't -- rather than have an order 16 entered and then face the possibility that an 17 easily remedied concern over the language of 18 the order exists, it might -- it might 19 facilitate matters or make it easier to first 20 get some feedback on the language. But I offer 21 that for your consideration. 22 MS. FLAHERTY: I would just ask for the 23 record that it be noted that if it's the 24 Commission's decision, it's the Commission's 25 order, we'll abide by whatever you rule. If 12 1 there's a further hearing to be held with 2 regard to comments or other matters that needs 3 to be brought, I don't know how we would 4 actually facilitate that in terms of having the 5 Division be able to respond and have 6 everybody's position known. So I would just 7 recommend that the Commission enter whichever 8 order you feel is appropriate. 9 Thank you. 10 CHAIR KASSEKERT: I guess my concern is 11 there was a concern I expressed by the 12 Conservator that we move quickly on this. We 13 have made every effort to do that. And, you 14 know, I mean, these are public proceedings, and 15 I think once an order is done, it's done. And 16 I would have a concern about revisiting things. 17 MR. STEIN: And -- and you're right, 18 Chair Kassekert. There was an interest to move 19 forward with all deliberate speed. And we so 20 appreciate that a special convening of this 21 body was made possible so that we could get to 22 work. And Moelis & Company has representatives 23 coming down to the casino tomorrow to begin its 24 due diligence. 25 I guess what I -- what I'm -- I 13 1 communicate the concern that I communicated 2 because what I don't want to see happen is that 3 an order is entered, and once reviewed by the 4 representatives of both bankers, both JPMorgan 5 Chase and Moelis, that they come back and say, 6 well, we actually -- we have some real problems 7 with this. We can't sign the engagement letter 8 or the side letter because of X, Y, and Z 9 which -- which might be something easily 10 remedied if it were flagged in advance. And 11 it's that potential for resistance from both of 12 our financial advisors that led me to raise as 13 a possibility a one-day grace period to review 14 the proposed form of order and ideally have it 15 entered, you know, with the consent and without 16 objections from any parties. 17 MS. FLAHERTY: I would just suggest, 18 Chair and Commissioners, I believe that the 19 Moelis organization is ready to proceed in 20 accordance with what you've stated, that the 21 regulatory agencies have moved forward quickly 22 to deal with the requests involved here. The 23 order is the order. If there's some meaningful 24 problem with regard to it, they can always ask 25 for relief with regard to the order, and we 14 1 will obviously, look at that, and if it's 2 reasonable, take a reasonable position. But I 3 don't think that there's any reason to not 4 proceed today. 5 CHAIR KASSEKERT: I agree. Okay. I 6 agree. 7 Let me ask if there are any questions? 8 VICE CHAIR SOMMELING: No questions, 9 Madame Chair. 10 CHAIR KASSEKERT: Commissioner Epps? 11 COMMISSIONER EPPS: My first question is 12 why is it that we have draft agreements this 13 morning? 14 MR. STEIN: You mean why are they not in 15 final? 16 COMMISSIONER EPPS: Yes. 17 MR. STEIN: The negotiations haven't 18 been completed. And I think collaboratively in 19 an effort to enable the co-advisors to get to 20 work as expeditiously as possible, this hearing 21 was scheduled mindful of the distinct 22 possibility that it might take place before 23 agreements were finalized. And I think, 24 conceptually, what we would propose is that the 25 approval be subject to the Commission's 15 1 approval of the final agreements and perhaps 2 with delegation of authority to the Chair to 3 oversee the approval of those final agreements. 4 COMMISSIONER EPPS: You suggested that 5 Moelis was coming down tomorrow to start 6 working. They're going to work without an 7 engagement? 8 MR. STEIN: They are prepared -- subject 9 to the Commission granting our petition today, 10 they are prepared to get to work tomorrow while 11 the engagement letter is still under 12 negotiation. That's right. At our urging and 13 request. 14 COMMISSIONER EPPS: Okay. I have a 15 separate question. 16 My understanding was that the Justice 17 was particularly interested in having Mr. 18 Moelis, because of whatever particular 19 expertise he brings to the process, participate 20 in this process. Is he going to be the party 21 executing whatever functions that Moelis is 22 bringing to this process? Him personally? 23 MR. STEIN: Absolutely. We've been 24 assured by him, and Justice Stein has had very 25 direct and candid discussions with him about 16 1 his active participation, and we have 2 assurances from him that he will be directly 3 and actively involved. 4 Now, that's not to say that he's going 5 to be here tomorrow engaging in some due 6 diligence work, but he is going to be the point 7 person. He is going to be available, you know, 8 when and as needed, and he is going to be 9 directing and spearheading the effort, and we 10 have that commitment from him. 11 CHAIR KASSEKERT: Commissioner Fedorko? 12 COMMISSIONER FEDORKO: I'm just a little 13 concerned, Mr. Stein, on the -- we're 14 basically -- I don't know if this is the 15 correct legal term, but we're working without a 16 contract, with Moelis; right? It's all being 17 worked up? 18 MR. STEIN: The -- you have the draft 19 agreement, and I -- I guess, then, to that 20 extent, to the extent they've agreed at our 21 behest to begin work tomorrow once the 22 Commission approves the petition or grants the 23 petition, you know, that's at their risk and 24 peril. In other words, I mean, it's -- 25 everybody is -- has agreed to work with all due 17 1 deliberate speed and in good faith, and 2 everybody wants to have a final agreement 3 negotiated and executed, hopefully this week. 4 I think that Moelis & Company feels 5 comfortable with the bona fides and the good 6 faith that everybody's working with to get to 7 work even without all the i's dotted and the 8 t's crossed at this point. I think that the 9 relationship has developed to the point where 10 they're ready to go to work. To their credit. 11 COMMISSIONER FEDORKO: Miss Flaherty, 12 are you all right with that? 13 MS. FLAHERTY: Well, my concern would be 14 with regard to the licensing status and the 15 situation is Moelis & Company has filed its -- 16 I've been advised by the Commission staff that 17 they've filed their vendor registration form. 18 So with that involved, I feel comfortable from 19 an integrity law enforcement standpoint with 20 the issue. I would just note that apparently 21 JP Morgan has not as yet filed their vendor 22 form. 23 MR. STEIN: I should address that. I 24 was advised of that before the hearing, and I 25 had made a note to publicly apologize on their 18 1 behalf and represent to the Commission today 2 that among my first calls when I leave here 3 today will be to their representatives and make 4 sure that they comply with that request. I 5 don't know why JPMorgan Chase had not done 6 that. Moelis has. But, again, my apologies on 7 their behalf. 8 COMMISSIONER EPPS: I have another 9 question. 10 CHAIR KASSEKERT: Commissioner Epps? 11 COMMISSIONER EPPS: If the agreements 12 are still in draft, and you said they're being 13 negotiated, are there terms of the original 14 agreements still in negotiation? Because I 15 know there was language that the Commission 16 suggested or wanted to have included. Is the 17 Commission's language that which is being 18 negotiated, or is there other language in the 19 original documents still in negotiations? 20 MR. STEIN: I'm not sure how to 21 distinguish between the two. But, surely, the 22 entire agreement is still subject to 23 negotiation. 24 COMMISSIONER EPPS: I guess my point is, 25 is it the Commission's suggestion of additional 19 1 language that has delayed the process, or was 2 the process delayed in and of itself and the 3 Commission's other request simply further 4 clouded the issue. 5 MR. STEIN: Yeah. I don't know that any 6 request made by the Commission, in fairness to 7 the process, has appreciably delayed the 8 process. I think that pressure is being put on 9 all the lawyers to move as quickly as they can 10 to get this done, and that's what they're 11 trying to do. And I think there's a lot of 12 confidence and optimism that they're going to 13 come to full terms again, you know, shortly. 14 But I don't believe that you can separate out 15 and make a causal connection to why the final 16 agreement isn't in place today. 17 COMMISSIONER EPPS: Okay. Because my 18 concern is if this negotiation hits a snag, for 19 whatever reason, and there can't be agreement, 20 where are we? 21 MR. STEIN: Yeah. That's a fair 22 concern. I'm here to represent to the 23 Commission that we feel -- we feel like we're 24 far enough long where we feel comfortable that 25 we're going to make a deal. I mean, that the 20 1 essential material terms have been worked out, 2 and it's now just a matter of the lawyers 3 doting their i's and crossing their t's. 4 And I can speak of the lawyers in third 5 person because, thankfully, I'm not one of them 6 who's engaged in the actual drafting of these 7 agreements. But we would not be standing here 8 before you were we not confident that a final 9 agreement will be executed in short order. 10 COMMISSIONER EPPS: And just let me 11 understand, I guess maybe for counsel -- staff 12 counsel -- if the agreements are completed 13 sometime later, they're subject to delegation 14 to -- for final approval? 15 MR. DiGIACOMO: That's the proposal 16 before you for consideration. Yes. 17 COMMISSIONER EPPS: My other question 18 is, what happens if they're not satisfactory at 19 the point of delegation? Then where are we? 20 MR. STEIN: If -- 21 COMMISSIONER EPPS: I mean, there's so 22 many what-ifs here, it makes me -- 23 MR. STEIN: Commissioner, if I can 24 address that. What I expect is, you know -- 25 that's a possibility. And that, in fact, is an 21 1 important check on the process that the Chair 2 on behalf of the Commission have the authority 3 to look at the final agreement and say, well, 4 wait a second. Where did this come from? Or 5 I'm not sure that we're comfortable with this. 6 And that -- and that will require some 7 renegotiation if that happens. 8 But -- but I guess -- I think what I 9 would say is this: Moelis & Company wants very 10 much to have this retention, and we would like 11 to retain them. And we think it's a credit to 12 them and emblematic of the belief that 13 everybody has that we're going to be able to 14 make a final deal that they're flying people in 15 tonight to go to work all because Justice Stein 16 has said that we want to move forward as 17 expeditiously as possible. 18 COMMISSIONER EPPS: I mean, I guess that 19 begs the question then. What delays the deal? 20 I mean, why can't it -- why can't we execute an 21 agreement? And if everybody wants to get to 22 work, why aren't we finalizing the document? 23 That doesn't seem to make sense to me. 24 MR. STEIN: I -- 25 COMMISSIONER EPPS: My other problem is, 22 1 we've given a 120-day extension to get this 2 process done, and we're well into that -- I 3 mean, you've moved into that time period 4 already. And if there's further negotiation, 5 as you've indicated could be an outcome, how -- 6 then we're ended up -- we're in a situation 7 where it turns out that the process didn't have 8 enough time for it to work itself out 9 completely, and then we're looking at more time 10 on the process. 11 MR. STEIN: Let me address that 12 directly. 13 Absolutely uppermost in the mind of 14 Justice Stein and weighing so heavily on his 15 shoulders is the desire to move this forward as 16 expeditiously as possible. That is why he 17 began searching for and negotiating once he 18 found with Moelis almost immediately upon 19 learning that Ken Shay of Bear Stearns was not 20 going to stay with Bear Stearns. That is why 21 he urged Moelis & Company to be ready to get to 22 work the day that our petition was granted, If 23 it were to be granted. That is why we 24 requested and are so appreciative that you 25 inconvenienced yourselves to hold a special 23 1 hearing date today. So he is so mindful of 2 that and is moving absolutely as expeditiously 3 as he possibly can to move this forward. And 4 that is why Moelis, to their credit, has agreed 5 to start working even before there's a fully 6 signed document. 7 CHAIR KASSEKERT: Commissioner 8 Sommeling? 9 VICE CHAIR SOMMELING: Mr. Stein, you 10 keep mentioning in short order you'll have the 11 agreement completed. You're positive and 12 you're sure. But can you give us some 13 reasonable period of time what that means? 14 "Short order"? 15 MR. STEIN: Yeah. Let me -- 16 VICE CHAIR SOMMELING: We've been going 17 on short order for what? Two a week, two 18 weeks? Commissioners Epps -- 19 MR. STEIN: Commissioner, let me -- 20 VICE CHAIR SOMMELING: -- brought up -- 21 Commissioner Epps has brought the fact up we're 22 well into the 120-day period. So it's kind of 23 nebulous to say short order without kind of 24 pinpoint some definite time when this document 25 would be completed. 24 1 MR. STEIN: Yeah. I -- what I -- 2 VICE CHAIR SOMMELING: And delivered. 3 MR. STEIN: Yeah. I'm not here to say 4 definitely positively anything. What I am here 5 to say is that I wouldn't be here if all 6 parties weren't working in good faith and were 7 very confident that we're going to have a final 8 deal in short order. I wish I could say we'll 9 have it for you tomorrow or the next day. 10 We're working with the -- with the hope and 11 desire to have a final deal this week. 12 But, you know, to answer the question 13 why isn't there a final deal in place? There 14 is a few wrinkles that need to be ironed out, 15 and the lawyers are working at ironing them 16 out. And I don't believe those wrinkles 17 pertain to the big issues, to the material 18 issues that need to be negotiated like the fee. 19 But I can only assure you that it's -- 20 you know, it's a top priority to the Trustee 21 and Conservator to get the agreement executed 22 as quickly as he possibly can, and he's been 23 working day and night to make that happen. 24 VICE CHAIR SOMMELING: No more 25 questions. 25 1 CHAIR KASSEKERT: Any other questions? 2 MS. FLAHERTY: Chair, if I could just 3 make a suggestion. 4 CHAIR KASSEKERT: Sure. 5 MS. FLAHERTY: In addition to the matter 6 we've been talking about with regard to the 7 status of the proposed agreements, I would 8 recommend before work is done, since the full 9 agreement hadn't been entered, that at least 10 the confidentiality of the provisions be agreed 11 to by Moelis for the protection of the casino 12 on a interim basis. 13 MR. STEIN: I don't think that's a 14 problem at all. I mean -- I mean, there's no 15 question that to the extent they begin looking 16 tomorrow at confidential casino information, 17 they intend and expect to hold it in 18 confidence. That's not an issue. 19 CHAIR KASSEKERT: Makes sense. 20 Anybody have any questions about that? 21 VICE CHAIR SOMMELING: No. 22 COMMISSIONER FEDORKO: Is that going to 23 be added to the order? 24 CHAIR KASSEKERT: Yes. 25 MR. DiGIACOMO: Yes, Commissioner. 26 1 CHAIR KASSEKERT: Any other questions? 2 Does anybody need a recess? 3 (No response.) 4 CHAIR KASSEKERT: No? All right. 5 Accordingly, I'm going to move to grant 6 Justice Stein permission to retain Moelis & 7 Company and JP Morgan as his financial 8 co-advisors as set forth and in the conditions 9 of the draft order including: 10 One, submission by July 9th, 2008, of 11 the final drafts of all permanent agreements 12 for my review under delegated authority and the 13 assignment of the January Bear Stearns 14 agreement to JP Morgan Securities, Inc.; 15 And, two, submission by 5 p.m. on July 16 1, 2008, a vendor registration form for JP 17 Morgan Securities, Inc., and I so move. 18 Is there a second? 19 VICE SOMMELING: Second. 20 CHAIR KASSEKERT: Motion has been made 21 and seconded. All in favor? 22 (Ayes.) 23 CHAIR KASSEKERT: Opposed? 24 COMMISSIONER EPPS: No. 25 CHAIR KASSEKERT: Motion carries. 27 1 MR. STEIN: Chair Kassekert, I missed 2 that last date for the Morgan deadline. 3 CHAIR KASSEKERT: July 1st. Tomorrow. 4 MR. STEIN: And I have one point of 5 clarification. I don't believe, but I could be 6 wrong on this. I don't believe there is an 7 actual agreement assigning the Bear engagement 8 letter to JP Morgan. I think it's an operation 9 of law by virtue of the merger. So if there is 10 an agreement, we'll provide that agreement. If 11 not, we'll just provide a representation that 12 the assignment occurred by virtue of the merger 13 and just -- 14 CHAIR KASSEKERT: Counsel? 15 MR. DiGIACOMO: That would be adequate, 16 Chair. 17 CHAIR KASSEKERT: Prior to do the public 18 portion, I feel the need to say something on 19 the public record with respect to our last 20 order. 21 It came to my attention on Friday that 22 the $19 million in the concentration account 23 was achieved, and certain funds were 24 transferred out of that account as payment. 25 And I'm glad to see Tama Hughes here because I 28 1 want to make something very, very clear on the 2 record. In our last order, Mr. Stein, one of 3 the provisions, and I'm going to read from it 4 so you can hear it, was in furtherance of the 5 Commission and Division monitoring the cash 6 reserve requirement, Justice Stein shall 7 provide them with a schedule with establishing 8 the monthly amount projected to be withdrawn 9 from the account, meaning the concentration 10 account, to cover those items. These payments 11 contingent upon the requisite cash reserve 12 being maintained with authority to delegate to 13 the Chair, Linda M. Kassekert, to authorize, A, 14 payments that exceed such projected amounts 15 such as the Commission having first approved 16 the actual bills for any projected amounts and 17 in consultation with the Division as 18 appropriate payments for such items on an 19 emergent basis, the balance of the 20 concentration account being below the requisite 21 threshold, provided that any such emergent 22 requests shall be accompanied by a revised 23 payment schedule. 24 Now, understanding that in that part of 25 the order we're dealing with emergent issues, 29 1 but there was a requirement for the Justice to 2 provide us with a schedule to establish a 3 monthly amount projected to be withdrawn. That 4 was not done. The money was transferred. 5 I want to direct to you that I would 6 like that monthly amount projected. I would 7 like that from the Justice. And I'm going to 8 further order that since -- I'm going to 9 further ask, since Tama Hughes is here, that no 10 money -- and she should take this message back 11 to the casino -- no money be paid until we have 12 that monthly amount, that schedule to us. 13 MR. STEIN: I -- there -- the -- I don't 14 think was paid was anything other than a 15 portion of fees that were approved when we were 16 before you -- 17 CHAIR KASSEKERT: Yes. Right. The fees 18 that we approved. 19 MR. STEIN: -- two weeks ago in June. In 20 other words, in June. And it's still June, so 21 I believe that we intend to provide you with a 22 schedule for July, but we were here in June, an 23 order was entered, a threshold was set, and 24 fees were approved for that -- for that -- and 25 those were the only fees that were paid. So to 30 1 the extent -- what I'm hearing is that you 2 would have liked to have seen a schedule for 3 the month of June, I don't think that we 4 appreciated that. So we'll -- we'll make sure 5 that you get that for the month of July going 6 forward. 7 CHAIR KASSEKERT: Thank you. 8 MR. STEIN: Okay? 9 CHAIR KASSEKERT: Any other matters to-- 10 Yes? 11 MS. FLAHERTY: Just to clarify that. 12 CHAIR KASSEKERT: Yes. 13 MS. FLAHERTY: Before any other payments 14 were to be made, though, we'd want a schedule. 15 CHAIR KASSEKERT: Right. 16 MS. FLAHERTY: Not for July, but for 17 now. That is what I understood the Chair -- 18 MR. STEIN: Well, we're at July 1st. So 19 we're talking about a schedule for the month of 20 estimated fees or already approved fees for the 21 month of July and then monthly thereafter. 22 MS. FLAHERTY: Right. But no payments 23 to be made until the schedule is received. 24 CHAIR KASSEKERT: Until I see the 25 schedule. Correct. 31 1 Are there any other matters that need to 2 be brought to our attention today? 3 (No response.) 4 CHAIR KASSEKERT: Seeing none, I'll 5 declare this portion of the meeting closed. 6 It's time for the public portion. 7 MR NANCE: It is now time for the public 8 participation portion of the meeting. 9 CHAIR KASSEKERT: Is there anyone from 10 the public that wishes to be heard? 11 (No response.) 12 CHAIR KASSEKERT: Seeing no one, I'll 13 declare this portion of the meeting closed and 14 entertain a motion to adjourn. 15 VICE CHAIR SOMMELING: Motion to 16 adjourn. 17 COMMISSIONER FEDORKO: Second. 18 CHAIR KASSEKERT: The motion has been 19 made and seconded. All in favor? 20 (Ayes.) 21 CHAIR KASSEKERT: Opposed? 22 (No response.) 23 CHAIR KASSEKERT: Motion carries. 24 (The Special Meeting was adjourned at 25 12:38 p.m.) 32 1 2 C E R T I F I C A T E 3 4 5 I, DARLENE SILLITOE, a Certified Court 6 Reporter and Notary Public of the State of New 7 Jersey, certify that the foregoing is a true 8 and accurate transcript of the proceedings. 9 10 11 I further certify that I am neither 12 attorney, of counsel for, nor related to or 13 employed by any of the parties to the action; 14 further that I am not a relative or employee of 15 any attorney or counsel employed in this case; 16 nor am I financially interested in the action. 17 18 19 DARLENE SILLITOE CCR 20 License No XI01023 21 22 Dated: June 30, 2008 23 My Commission Expires on July 10, 2009 24 ID No 2062871 25