1 1 STATE OF NEW JERSEY 2 CASINO CONTROL COMMISSION 3 - - - - - - - - - - - - - - - - - - - 4 Amended Joint Petition of Resorts International Hotel, Inc., Column Financial Inc., 5 TriMont Real Estate Advisors, Inc., Wells Fargo Bank, NA, and RAC Atlantic City Holdings, LLC, for 6 declaratory rulings regarding the acquisition of real property on which a licensed casino hotel is operated 7 and for other relief (PRN 2040904); 8 Amended and Supplemented Petition of the Steering Committee of Secured Lenders for approval of 9 an Amended and Restated Purchase Agreement and for other relief (PRN 2950901) 10 - - - - - - - - - - - - - - - - - - - 11 12 Thursday, November 19, 2009 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 4:39 p.m. to 5:25 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 MICHAEL C. EPPS, VICE CHAIR WILLIAM T. SOMMELING, COMMISSIONER 4 SHARON ANNE HARRINGTON, COMMISSIONER 5 PRESENT FOR THE CASINO CONTROL COMMISSION: 6 DARYL W. NANCE, ADMINISTRATIVE ANALYST DANIEL J. HENEGHAN, PUBLIC INFORMATION OFFICER 7 OFFICE OF THE GENERAL COUNSEL: 8 DIANNA W. FAUNTLEROY, GENERAL COUNSEL/EXECUTIVE SECRETARY 9 LEONARD J. DiGIACOMO, ASSISTANT GENERAL COUNSEL 10 DIVISION OF GAMING ENFORCEMENT: DEPUTY ATTORNEYS GENERAL 11 JOHN E. ADAMS, JR., DEPUTY ATTORNEY GENERAL MARY JO FLAHERTY, DEPUTY ATTORNEY GENERAL 12 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 ITEM NO. 1 LEONARD J. DiGIACOMO, ASSISTANT GENERAL COUNSEL 3 MARY JO FLAHERTY, DEPUTY ATTORNEY GENERAL STERNS & WEINROTH, PC 4 PAUL M. O'GARA, ESQ. FOR: JOINT PETITIONERS 5 ITEM NO. 2 LEONARD J. DiGIACOMO, ASSISTANT 6 GENERAL COUNSEL JOHN E. ADAMS, JR., DEPUTY ATTORNEY 7 GENERAL DUANE MORRIS, LLP 8 CHRISTOPHER SORIANO, ESQ. ERIC FRANK, ESQ. 9 FOR: THE STEERING COMMITTEE OF SECURED LENDERS 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 4 1 AGENDA SPECIAL PUBLIC MEETING NO. 09-11-19 2 NOVEMBER 19, 2009, 4:39 P.m. ITEM PAGE VOTE 3 1 Amended Joint Petition of Resorts 7 45/46 International Hotel, Inc., Column 4 Financial Inc., TriMont Real Estate Advisors, Inc., Wells Fargo Bank, NA, and RAC Atlantic 5 City Holdings, LLC, for declaratory ruling regarding the acquisition of real property 6 on which a licensed casino hotel is operated and for other relief 7 2 Amended and Supplemented Petition of the 47 52 Steering Commission of Secured Lenders for 8 approval of an amended and restated purchase agreement and for other relief 9 Peter Hoelzle, sworn 11 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 5 1 E X H I B I T S : 2 NO. DESCRIPTION EVD 3 4 C-1 Draft Resolution X C-2 Draft Resolution X 5 6 D-3 DGE Letter Report, 10-8-09, PRN 2040904 X D-4 DGE Letter Report, 10-19-09 X 7 Re: TriMont Real Estate Advisor, Inc. D-5 DGE Letter Report, 11-13-09 X 8 Re: RAC Atlantic City Holdings, LLC 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 (Exhibits retained by Commission.) 25 6 1 (Special Public Meeting 09-11-19 was 2 commenced at 4:39 p.m.) 3 MR. NANCE: Good morning. I'd like to 4 read an opening statement. 5 This is to advise the general public 6 that in compliance with Chapter 231 of the 7 Public Laws of 1975 entitled the "Open Public 8 Meetings Act," the New Jersey Casino Control 9 Commission on November 17th, 2009, filed with 10 the Secretary of State at the State House, 11 Trenton, New Jersey, a notice of this hearing. 12 On November 17th, 2009, copies were mailed to 13 subscribers. 14 Members of the press will be permitted 15 to take photographs, and we would ask that this 16 be done in a manner which is not disruptive to 17 the Commission and which does not interfere 18 with the public's right to observe the hearing. 19 The use of cellular telephones in the 20 public meeting room while the Commission is in 21 session is prohibited. 22 Would everyone please stand for the 23 Pledge of Allegiance. 24 (The flag salute was recited.) 25 CHAIR KASSEKERT: Good afternoon. 7 ITEM NO. 1 1 MR. NANCE: Good afternoon. 2 Item No. 1 is the Amended Joint Petition 3 of Resorts International Hotel, Inc., Column 4 Financial Inc., TriMont Real Estate Advisors, 5 Inc., Wells Fargo Bank, NA, and RAC Atlantic 6 City Holdings, LLC, for declaratory ruling 7 regarding the acquisition of real property on 8 which a licensed casino hotel is operated and 9 for other relief. 10 Mr. DiGiacomo? 11 MR. DiGIACOMO: Chair, Commissioners, 12 would counsel please enter their appearances 13 for the record? 14 MR. O'GARA: Paul O'Gara for the lender 15 group, Petitioners. 16 MR. SORIANO: Good afternoon, Madame 17 Chair, Christopher Soriano of Duane Morris on 18 behalf of the Resorts International Hotel. 19 MS. FLAHERTY: Yes, Chair, and 20 Commissioners. Mary Jo Flaherty, DAG, on 21 behalf of the Division of Gaming Enforcement. 22 CHAIR KASSEKERT: Thank you. 23 At the end of August, the Commission 24 commenced a hearing on the Joint Petition by 25 Resorts and the Secured Lenders and the agents 8 ITEM NO. 1 1 of those lenders seeking several rulings 2 regarding the ownership of the casino hotel and 3 the underlying land as well as a Commission 4 approval for the management agreement for the 5 property. In the interim, the petition has 6 been amended, and the Division has reported on 7 the application for casino licensure by RAC 8 Atlantic City Holdings, LLC, or RAC for short 9 and on the application of TriMont for licensure 10 as a nongaming CSI. 11 We return today to reconvene the matter 12 and take additional testimony and enter such 13 rulings as may be appropriate. Before hearing 14 from the witnesses, there also are a number 15 exhibits premarked and identified on the list 16 that Mr. Nance has identified and shared with 17 the parties. 18 Mr. Nance? 19 MR. NANCE: The Commission has two 20 exhibits marked for identification only, which 21 are draft resolutions C-1 and C-2. 22 The Division of Gaming Enforcement has 23 three exhibits. They are adding D-1 -- I mean, 24 excuse me. D-3, D-4 and D-5. 25 D-3 is a DGE report dated October 8, 9 ITEM NO. 1 1 2009, regarding Petition No. 2040904. 2 D-4 is a DGE letter report dated October 3 19, 2009, regarding TriMont Real Estate 4 Advisors, Inc., CSI license. 5 And D-5 is a DGE letter report dated 6 November 13th, 2009, regarding RAC Atlantic 7 City Holdings, LLC. 8 CHAIR KASSEKERT: Thank you. 9 If counsel are satisfied that the list 10 prepared by the Commission staff accurately 11 identifies the premarked exhibits, are you 12 prepared to move them in on behalf of your 13 respective clients? 14 MS. FLAHERTY: Yes, Chair. I would move 15 D-3 through D-5 into evidence. 16 CHAIR KASSEKERT: Thank you. 17 MR. O'GARA: No objection. 18 CHAIR KASSEKERT: Thank you. 19 MR. O'GARA: And with respect to the 20 drafts that were submitted, Mr. DiGiacomo and 21 Miss Flaherty and I had discussions with 22 respect to, I believe, which is C-1. And there 23 were a couple of minor things which we 24 understand. We've agreed, and we have no 25 objection as to their form of either of the two 10 ITEM NO. 1 1 draft resolutions with that small caveat, 2 Chair. 3 CHAIR KASSEKERT: Thank you. 4 Are there any sealing requests? 5 MS. FLAHERTY: No requests by the 6 Division. 7 MR. O'GARA: None beyond the initial one 8 from when we first convened, but no further 9 sealing requests at all. 10 CHAIR KASSEKERT: Thank you. 11 With that, I will receive all the 12 premarked exhibits into evidence. 13 Are there any other procedural matters 14 that need to be brought to our attention at 15 this time? 16 MR. O'GARA: No, ma'am. 17 MS. FLAHERTY: No, Chair. 18 CHAIR KASSEKERT: Okay. Thank you. 19 We're now set for opening statements, 20 which the parties may waive and elect instead 21 to proceed directly to testimony. 22 Counsel, what's your preference? 23 MS. FLAHERTY: I would waive my opening, 24 Chair. 25 MR. O'GARA: Yeah. We're prepared to go 11 Hoelzle - direct - O'Gara 1 directly to testimony. 2 CHAIR KASSEKERT: All right. 3 Mr. O'Gara, you can call your first 4 witness. 5 MR. O'GARA: Mr. Hoelzle. 6 CHAIR KASSEKERT: Mr. Nance will swear 7 you in. 8 9 PETER HOELZLE, was duly sworn to testify 10 in this matter. 11 12 MR. NANCE: Please state your name for 13 the record. 14 THE WITNESS: Peter Hoelzle. 15 MR. NANCE: Please spell your last name 16 for the record. 17 THE WITNESS: H-o-e-l-z-l-e. 18 MR. NANCE: Thank you. 19 CHAIR KASSEKERT: You may proceed. 20 21 DIRECT EXAMINATION BY MR. O'GARA: 22 Q. Mr. Hoelzle, by whom are you employed? 23 A. TriMont Real Estate Advisors, Atlanta, 24 Georgia. 25 Q. And is TriMont the special servicer for 12 Hoelzle - direct - O'Gara 1 a Wells Fargo trust under a pooling and servicing 2 agreement -- 3 A. Yes. 4 Q. -- with respect to Resorts credit 5 facility? 6 A. Yes, we are, Paul. 7 Q. Do you also have a position with an 8 entity known as Resorts Atlantic City, LLC? The Chair 9 referred to and we've referred to internally as RAC? 10 A. Yes, I do. I'm the president of that 11 entity. 12 Q. And who owns that entity? 13 A. The trust, the Wells Fargo trust. 14 Q. And was it formed specifically to 15 facilitate a consensual transaction by which a deed in 16 lieu of foreclosure would be granted to it in 17 satisfaction of an outstanding obligation? 18 A. Exactly. It's a New Jersey company. 19 Q. Now, are you familiar with the amended 20 petition that's pending before the Commission and the 21 approvals that it seeks? 22 A. Yes, I am. I'm familiar with the 23 petition, the resolution, and the regulations to which 24 its subject and the basis on which it's been formed 25 and the deed in lieu of transaction it contemplates. 13 Hoelzle - direct - O'Gara 1 Q. And are you also familiar that RAC is an 2 applicant for a New Jersey casino license? 3 A. I am. 4 Q. And were you also an applicant 5 individually to be plenarily qualified as a qualifier 6 of that entity? 7 A. Yes. I have been and I -- 8 Q. And do you have a colleague who also 9 applied to be plenarily qualified in conjunction with 10 today's proceedings? 11 A. Yes, I do. Mitchell Hunter. 12 Q. And is Mitchell Hunter here? 13 A. Yes. Mitchell Hunter is here. 14 Q. Now, you sought plenary qualification 15 and the entity sought casino licensure. Are you aware 16 of whether or not the Division of Gaming Enforcement 17 has reported to this Commission on those applications? 18 A. Yes. I'm aware they have. I think it 19 was November 9th that they reported on those 20 applications to the Commission. 21 Q. Now, do you understand that if RAC is 22 issued a casino license and the Commission approves 23 the consensual transaction that's outlined in the 24 petition, that it's subject to substantial regulatory 25 requirements and specific conditions to be imposed by 14 Hoelzle - direct - O'Gara 1 this Commission? 2 A. Yes, we are. 3 Q. And with respect to those conditions, 4 you understand that it requires compliance on the part 5 of TriMont and RAC? 6 A. Absolutely. 7 Q. Do you have any familiarity with the New 8 Jersey regulatory system, Mr. Hoelzle? 9 A. Yes, I do. In connection with this 10 application and with the petition that's been drawn 11 and in review of the resolution and the events leading 12 up to creating that resolution. 13 Q. And have you had interaction on a 14 regular basis over the last several months with the 15 general counsel the assistant general counsel and the 16 financial division of the Commission? 17 A. Yes, I have. 18 Q. Know them enough to call them on the 19 phone, and they recognize your voice? 20 A. I think they would, yes. 21 Q. And, likewise, the Division of Gaming 22 Enforcement, have you had substantial interaction? 23 A. Yes, I have. 24 Q. Do you anticipate there would be any 25 difficulty by you individually as the President of RAC 15 Hoelzle - direct - O'Gara 1 or RAC in complying with the requirements that are 2 imposed by this Commission in conjunction with your 3 casino license or the approval of this consensual 4 transaction? 5 A. No, I don't. 6 Q. If this petition is approved by the 7 Commission and also a casino license issued by RAC -- 8 to RAC -- what will happen next? Other than taking 9 the resolution home, are you contemplating doing 10 something? 11 A. It would be great to take the resolution 12 home, but the contemplated deed in lieu transaction 13 within the resolution is intended to close within ten 14 days, seven business days of the resolution being 15 granted. 16 Q. And with respect to that, what has to be 17 done? Is it just execution of documents, exchange of 18 documents, and actual closing. 19 A. Yes. 20 Q. Is that correct? 21 A. Yes. 22 Q. Now, are there any benefits that you see 23 that flow from the closing of consensual transaction 24 both from the point of view of the lenders and the 25 point of view of the facility? 16 Hoelzle - direct - O'Gara 1 A. Yes. The property will, hopefully, 2 become more financial stable, and the employment base 3 that Resorts and casino creates will be substantially 4 maintained. 5 Q. And at the last hearing there was an 6 exhibit that was admitted into evidence, J-9, which 7 has been referred to as the Commission advance letter. 8 You are familiar with that document? 9 A. I am. Yes. 10 Q. And, in fact, that commitment remains 11 outstanding by KeyCorp? 12 A. That's correct. Yes. 13 Q. To the degree of funding that is so 14 indicated; correct? 15 A. That is. 16 Q. And the amount of that funding? 17 A. $8 million. 18 Q. Now, as the President of RAC, could you 19 just briefly tell the Commission, what are your 20 ultimate plans with respect to the real estate that 21 you'll acquire if this consensual transaction is 22 approved? 23 A. The plan is to stabilize the property, 24 make sure it's operating well, and begin to market the 25 property for sale to a casino owner operator that will 17 Hoelzle - cross - Flaherty 1 take it to the future. As lender and as the special 2 servicer for the lender group, we have no intention of 3 operating the hotel or the casino long-term under this 4 arrangement. 5 Q. And is it your goal to immediately begin 6 the efforts to stabilize the market? 7 A. Yes. Immediately. Stability will be 8 immediate. The effort to stabilize and the marketing 9 will probably begin within a six-to-nine months time 10 frame after that. 11 MR. O'GARA: I have no further 12 questions, Chair. 13 CHAIR KASSEKERT: Thank you. 14 Any questions, Counsel? 15 MR. SORIANO: No questions, Madame 16 Chair. 17 CHAIR KASSEKERT: Miss Flaherty, any 18 questions? 19 MS. FLAHERTY: Just one. 20 21 CROSS-EXAMINATION BY MS. FLAHERTY: 22 Q. Is it your intention and belief that the 23 transactions can be closed and finalized within the 24 seven business days? 25 A. It is, Mary Jo. Yes. The documents to 18 Hoelzle - cross - Flaherty 1 consummate this transaction have been in escrow for 2 several months. So they obviously need to be updated 3 and reexecuted, but I see no roadblock to that 4 happening. 5 MS. FLAHERTY: That's all. Thank you, 6 Chair. 7 CHAIR KASSEKERT: Thank you. 8 Let me ask if any Commissioners have any 9 questions? 10 COMMISSIONER SOMMELING: No questions, 11 Madame Chair. 12 CHAIR KASSEKERT: Commissioner Epps? 13 COMMISSIONER EPPS: I don't. 14 CHAIR KASSEKERT: Okay. Seeing no other 15 questions, you may step down. 16 THE WITNESS: Thank you. 17 CHAIR KASSEKERT: Your next witness, Mr. 18 O'Gara? 19 MR. O'GARA: Yes. We have no further 20 witnesses, Chair. 21 CHAIR KASSEKERT: Okay. Thank you. 22 Let me ask if the parties want to make 23 closing statements? 24 MS. FLAHERTY: Yes, Chair, and 25 Commissioners. I would like to make a closing 19 ITEM NO. 1 1 statement. This is a matter of importance that 2 we've spent a great deal of time and effort on 3 for a period of time, and we would like to put 4 our position on the record. 5 The Division weighed significant and 6 compelling policy interest presented by this 7 case. It also recognizes the Commission's view 8 of the casino licensing structure in light of 9 the ownership and management arrangement. 10 After a great deal of consideration, the 11 Division recommended an alternative to the 12 relief that was requested in the amended 13 petition. This is a matter of first 14 impression. The language and purpose of the 15 Act did not fit the situation. And the 16 structure before the Commission is also not 17 typical. It does not easily fit into the Act's 18 provisions. 19 Even though the Act's provisions are 20 thorough, not every scenario could be 21 envisioned and anticipated. In fact, over the 22 years, new provisions have been added to the 23 Act based upon the need that has been seen by 24 the legislature and by the regulatory agencies. 25 Numerous revisions to the Act have also been 20 ITEM NO. 1 1 incorporated. 2 The entry of private equity firms and 3 CMBS financing into the casino industry and 4 along with the economy's decline and depressed 5 conditions contributed to the issues which are 6 now before the Commission. There's been no 7 bankruptcy or judicial foreclosure. And this 8 case, although this is the first of its kind, 9 it may not be your last. The Commission 10 recommends that the Commission fashion a remedy 11 to the situation which is certainly unique 12 until legislate can be enacted. The 13 legislation was specifically addressed for 14 closure action in deeds granted in lieu of 15 foreclosure. 16 The Division makes that recommendation 17 for the following reasons: The provisions of 18 the Act have worked well, and they should 19 remain undisturbed for all other licensing 20 matters. Second, this case should not be used 21 as a possible precedent in future matters to 22 nullify essential aspects of the Act. 23 The Division therefore, respectfully 24 requests that the Commission invoke its powers, 25 its reserve powers under Section 75 of the Act 21 ITEM NO. 1 1 to address this emerging issue until new 2 legislation can be enacted. Such steps have 3 been taken in the past, especially I can note 4 with regard to ICA matters before the 5 provisions were put into the Act. 6 The regulatory process to be 7 implemented, although directed by the Act's 8 policies and guided by its relevant provisions 9 and prior regulatory actions, would be 10 specifically tailored to a deed-in-lieu of 11 foreclosure matter. We can be guided by the 12 intent underlying relevant sections of the Act. 13 In light of these considerations, we believe 14 that a cautious, limited approach is warranted. 15 It would best serve the interests of the 16 regulatory process. In the Division's view, a 17 prerequisite to this matter and in drafting any 18 new statutory provision would be that negative 19 information pertaining to any entity, including 20 a bank or licensed lending institution or an 21 indication of questionable activity or conduct 22 on its part, would void the availability of the 23 waiver. 24 The Division requests that the 25 Commission adopt the course of action set forth 22 ITEM NO. 1 1 in its October 8th report, which is D-3 in 2 evidence, and we stand by the recommendations 3 and conditions set forth in our three reports 4 in evidence which have been incorporated into 5 the draft resolutions. 6 The Division relies in its position set 7 forth in those reports as to other matters 8 which are also set forth in the resolutions 9 regarding management agreement and other 10 arrangements. 11 The Division also does not object to the 12 request to withdraw the casino license service 13 industry license application in light of the 14 fact that it has now applied for a casino 15 license which we have a reported upon. The 16 Division will devote its best efforts to 17 expeditiously investigating the remaining 18 filings that have been submitted and are to be 19 submitted, but that matter is not fully within 20 our control because it is dependent upon the 21 cooperation and the timely filing of the 22 disclosure forms. 23 On another point, the financial 24 stability of Resorts underlies this entire 25 case. Resorts and RAC and casino licensees 23 ITEM NO. 1 1 have obligation to the Casino Revenue Fund, the 2 Casino Control Fund, the CRDA, the state, 3 county, federal taxing authorities, patrons, 4 vendors of goods and services, and their 5 employees. And, in particular, the Division 6 notes the borrowers' representations in the 7 settlement agreement, which is J-1 in evidence, 8 as to the ERISA compliance that they have 9 funded all their obligations under any such 10 plan. It is the Division's position that the 11 Resorts operation will need to continue to meet 12 all its obligations, including those owed to 13 employees. 14 Resorts' ability to satisfy important 15 policy interests of the Act, as well as the 16 financial stability requirements, weigh heavily 17 in the Division's recommended course of action 18 in this matter at this time. 19 In closing, the Division's position in 20 this matter is specifically and solely limited 21 to the deed-in-lieu of foreclosure 22 circumstances presented. The recommended 23 parameters and in addressing this matter in a 24 casino licensure context, those requirements 25 have been incorporated into the draft 24 ITEM NO. 1 1 resolution. They place limitations and 2 conditions upon the waiver of the bank 3 entities, that they not exercise significant 4 control and that their interests be held 5 subject to an exit strategy. 6 With those comments, the Division 7 respectfully requests that the Commission adopt 8 the resolution. 9 Thank you very much. 10 CHAIR KASSEKERT: Thank you. 11 Let me ask if any of the Commissioners 12 have any questions? 13 COMMISSIONER SOMMELING: I have no 14 questions, Madame Chair. 15 CHAIR KASSEKERT: Let me just say, I 16 agree with you, this has been an ungainly 17 process, to put it mildly. And working through 18 a process where we did not have the correct -- 19 quite the apparatus to address it. Obviously, 20 we've never anticipated under the Act the 21 entrance of private equity companies into -- 22 into this whole process and CMBSs as well. So 23 we look forward to working through those issues 24 so that we can continue to address them in the 25 future. And thank you for your comments. 25 ITEM NO. 1 1 MS. FLAHERTY: Thank you, Chair. 2 CHAIR KASSEKERT: Mr. O'Gara? 3 MR. O'GARA: Yeah. I think, as Miss 4 Flaherty alluded to and as you have, Chair, 5 this started a long, long time ago and a place 6 far, far away. 7 (Laughter.) 8 MR. O'GARA: But we ask that you adopt 9 the draft resolution. And we understand the 10 obligations. I think, that the Commission has 11 had an enough interaction because this has been 12 so complex and so unique to know that the 13 lenders, as lenders, as you come to know them, 14 which is Column Financial and Credit Suisse, 15 fully understands this. TriMont does. The 16 trust does. And we urge you to adopt the 17 resolution. And behalf all of them, and I 18 think I can speak for Mr. Ribis as well. We'd 19 like to thank you your General Counsel, Miss 20 Fauntleroy, and Mr. DiGiacomo, and the others 21 as well as Miss Flaherty, who have spent -- it 22 seems like a long time. And I said long -- you 23 know, galaxy far, far away. It has been a 24 great deal of time. And much of it, as Mr. 25 Hoelzle -- Peter referred to it, did he know 26 ITEM NO. 1 1 these people? It's because these people from 2 Atlanta have been in Atlantic City, and we sat 3 in a room. And I can say that we disagreed, 4 but we were never disagreeable which is -- 5 speaks well of Miss Fauntleroy. 6 (Laughter.) 7 MR. O'GARA: I don't know about me, 8 but -- 9 (Laughter.) 10 MR. O'GARA: And we certainly understand 11 the one-off nature of what's occurring. That 12 it's been a big part of it. And your 13 willingness to fashion this remedy, we think, 14 not only enures to the benefit of the group 15 that will now own this building but overall to 16 the ability of finding solutions to very 17 difficult problems in this city. And we urge 18 you to do so and to, hopefully, grant the 19 casino license to RAC so that we can proceed to 20 get to that place where we all want to go. 21 CHAIR KASSEKERT: Thank you. 22 MR. O'GARA: Thank you. 23 CHAIR KASSEKERT: Any questions, 24 comments for Mr. O'Gara? 25 (No response.) 27 ITEM NO. 1 1 CHAIR KASSEKERT: Thank you. 2 I, as well, appreciate your comments 3 with respect to our staffs, Mary Jo, Len, 4 Dianna, who put in an inordinate amount of 5 time. And I know it was not the easiest thing 6 when new companies did come in and don't 7 understand the intricacies of Casino Control 8 Act, and I know that was a learning process for 9 all of you gentlemen as well. And you didn't 10 put yourself in this situation. This situation 11 occurred and a bad economy. And, hopefully, as 12 we move forward, you know, we will have the 13 best interests of Atlantic City, the best 14 interests of the property, and the best 15 interests of the employees there at heart. 16 Let me ask if anyone needs to recess? I 17 don't think so at this point? I think we've 18 probably exhausted the discussion. Okay. 19 Let me just put some comments on the 20 record then. Some brief discussion of the 21 background leading to this matter is obviously 22 in order. 23 Casino licensee Resorts owns the casino 24 hotel and most of the land beneath it. Since 25 2001 affiliates of Colony Capital, a private 28 ITEM NO. 1 1 equity specialist headed by Thomas Barrack, 2 have held an indirect 95 percent interest in 3 Resorts with Nicholas Ribis holding the 4 remaining five percent. 5 In 2007, Resorts and its affiliates 6 refinanced their then-existing debt with a $360 7 million loan from Column Financial, a 8 subsidiary of international banking giant 9 Credit Suisse. Column Financial was granted a 10 mortgage on the real estate comprising the 11 casino hotel and on unrelated adjacent parcels 12 that are available for future development, 13 including the site of the former Steeplechase 14 Pier. 15 In arranging for that type of loan, 16 Resorts was required to lease the building and 17 the land to another affiliate known as PropCo, 18 for short, and then PropCo leased those assets 19 back to Resorts. In situations involving 20 leases, the legislature on the face of 21 Subsections 82C(5) and (6) of the Casino 22 Control Act have specifically conferred on the 23 Commission the discretion to choose between a 24 casino or CSI licensure. Thus, under that 25 specific authority, the Commission allowed 29 ITEM NO. 1 1 PropCo to obtain just a nongaming CSI license 2 and not a casino licensure, in part because 3 Resorts and PropCo were under the common 4 ownership with essentially the same individuals 5 being subjected to regulatory scrutiny. 6 Pursuant to permission granted when we 7 approved the loan, Column Financial eventually 8 securitized a portion of it, in part to reduce 9 its risk of loss in the event of a default. 10 Thus, an affiliate of Credit Suisse deposited 11 the Resorts' mortgage and other securities with 12 Wells Fargo Bank as a trustee and collateral 13 agent under a pooling and servicing agreement. 14 Under that agreement, the Resorts loan 15 is divided approximately equally between a 16 Senior A participation and a Junior B 17 participation. Column Financial holds the B 18 participation, which although junior in right 19 of recovery, is entitled to exercise certain 20 authority as the directing holder. Wells Fargo 21 holds the Senior A participation half of the 22 loan as trustee for disparate certificate 23 holders. Yeah. Generally, in the financing 24 community, those certificates are referred to 25 as commercial mortgage backed securities, or 30 ITEM NO. 1 1 CMBS for short, with a loan typically referred 2 to as a CMBS loan. 3 In addition to the Resorts loan, Wells 4 Fargo also serves under the pooling and 5 servicing agreement as trustee for six other 6 loans unrelated to Resorts. Also as part of 7 the securitization process, a company referred 8 to as KeyCorp was appointed as master servicer 9 to handle, among other things, the processing 10 of payments under the loan, and through its 11 banking affiliate making protected advances to 12 or on behalf of Resorts in certain prescribed 13 circumstances. 14 Beginning last November, Resorts ceased 15 making the monthly interest payments and, thus, 16 the loan indisputably is in default. Not 17 surprisingly, Column Financial wants to 18 exercise the default remedies it bargained for 19 under the loan. As a step in that process, the 20 special servicing duties that initially fell to 21 KeyCorp are now vested in TriMont, which has 22 general expertise in such matters, albeit not 23 specific to casinos. 24 Earlier this year, the lenders' petition 25 for permission to proceed with their remedies, 31 ITEM NO. 1 1 Resorts filed a cross petition arguing that 2 before -- before exercising remedies, a 3 determination on the lenders' regulatory status 4 would be necessary. Although the Commission 5 afforded the lenders the opportunity to pursue 6 certain remedies, such as accelerating the loan 7 and initiating a foreclosure complaint, it 8 withheld other relief, especially pertaining to 9 control over Resorts' bank accounts until after 10 a full airing of the licensure and 11 qualification questions. 12 Additionally, the Commission, at the 13 Division's urging, required Resorts to maintain 14 a $15 million daily cash balance in order to 15 address concerns regarding the company's 16 financial stability. 17 Despite receiving Commission permission 18 to do so, the lenders have not yet filed a 19 foreclosure complaint, opting instead to reach 20 an amicable accommodation with Resorts. Around 21 mid-July, the parties had reached a settlement 22 and closed the transaction in escrow subject to 23 our approval, thus generating the pending joint 24 petition before us which has recently been 25 amended. 32 ITEM NO. 1 1 As now proposed, Resorts and its 2 affiliates will execute deeds-in-lieu of 3 foreclosure that surrender fee title to the 4 casino hotel and other mortgaged real estate to 5 RAC. Wells Fargo, solely in its capacity as 6 trustee under the pooling and servicing 7 agreement, will be RAC's sole member with 8 TriMont appointed as RAC's sole nonmember 9 manager. Since the CMBS loan is essentially 10 being extinguished, it will be replaced by RAC 11 as an asset under the pooling and servicing 12 agreement. 13 As for Resorts, Mr. Ribis will become 14 its sole indirect owner after Colony surrenders 15 its 95 percent indirect stake in the company. 16 As thus restructured, Resorts and RAC will be 17 bound by an agreement for Resorts to completely 18 manage the casino hotel with Joint Petitioners 19 proposing that Resorts continue as a casino and 20 CHAB licensee, and RAC as owner and party to 21 the management agreement also becoming a casino 22 licensee for an initial term of one year. 23 Although Subsection 85E specifically 24 identities those individuals and entities that 25 must qualify in connection with a noncorporate 33 ITEM NO. 1 1 applicant for casino licensure such as RAC, the 2 Commission nevertheless is also guided by 3 Subsection 85C, which on its face directly 4 applies only to corporate casino licensees. 5 Among other things, qualification is required 6 for those who directly or indirectly hold any 7 beneficial interest or ownership in the 8 securities of a corporate applicant under 9 Subsection 85C or in the applicant itself for 10 any other form of business organization under 11 Subsection 85E. 12 Qualification is also required for 13 anyone who, in the opinion of the Commission, 14 has the ability to control the applicant, 15 whether corporate or otherwise, or where the 16 ability exists to elect a majority of the 17 corporation's board of directors. 18 However, unique to Subsection 85C is an 19 exemption from qualification for, A, for a 20 "banking or other license lending institution 21 which makes a loan or holds a mortgage or other 22 lien acquired in the ordinary course of 23 business." 24 Under the transaction as proposed, the 25 loan and mortgage will be extinguished in 34 ITEM NO. 1 1 exchange for an indirect ownership interest in 2 the casino hotel. So I do not believe that the 3 bank exemption continues to pertain, per se. 4 Nevertheless, presumably animating the 5 exemption when it applies is a legislative 6 assessment that the regulatory rigors to which 7 banks are already subjected are an adequate 8 substitute for scrutiny under the Casino 9 Control Act. But, as will become clear 10 shortly, I will recommend that any disposition 11 of this matter in these unique circumstances be 12 accompanied by specified limitations on the 13 rights that might otherwise be available to the 14 banks under the pooling and servicing 15 agreement. 16 In any event, Resorts has exhibited 17 considerable difficulty in maintaining the cash 18 at the required $15 million level. Further 19 strain has been placed on those resources now 20 that the industry has entered its traditionally 21 slower part of the season. At present, the 22 lenders are in the best and, in all likelihood, 23 the only source of funding for the property at 24 a crucial time. 25 Plainly, this is not a case where the 35 ITEM NO. 1 1 lenders sought to become casino owners. If the 2 devastation from the economic and competitive 3 forces had not sent Resorts' cash balance 4 reeling, presumably the company would have 5 continued to make the required interest 6 payments and would have had the potential to 7 refinance the CMBS debt at maturity. 8 Assuredly, the lenders, would have welcomed 9 those eventualities as opposed to what actually 10 has transpired without actively seeking to own 11 a casino hotel. 12 While I'm not unsympathetic to their 13 plight, and understand that a decision 14 requiring casino licensure in these 15 circumstances may appear severe, I cannot 16 abandon what I see as a statutory mandate. 17 Given these unique circumstances, 18 however, it certainly seems reasonable for the 19 regulators to react with a measure of 20 flexibility that might not otherwise be readily 21 apparent. That is especially true here where 22 we are being asked to extend this extraordinary 23 relief for a finite period of a limited 24 duration solely as an exit mechanism that 25 affords the banks a means to extricate 36 ITEM NO. 1 1 themselves from the defaulted CMBS loan outside 2 of a bankruptcy context. 3 In responding to the Joint Petition as 4 amended, the Division cautions that a strict 5 reliance on the bank exemption may lead to 6 unintended consequences. While I, for one, 7 share much of those concerns, I note that the 8 Division has also observed that the uniqueness 9 of the current circumstances merits an approach 10 that, while measured, nonetheless builds in 11 flexibility to address the situation that 12 everyone seemingly acknowledges as emergent and 13 yet historic. 14 Accordingly, I am prepared to recommend 15 under these unique circumstances that the 16 Commission, with the Division's concurrence, 17 conditionally grant the request in the Amended 18 Joint Petition that seeks permission for all 19 the banks and licensed lending institutions 20 involved to forego the Act's qualification 21 requirements under Section 85 and Section 84B. 22 Of course, those banks will continue to be 23 obligated to cooperate with the regulators by, 24 among other things, providing the Commission 25 and the Division with pertinent documents and 37 ITEM NO. 1 1 information upon request. 2 Moreover, if my Commission colleagues 3 agree with me, I would foresee limiting the 4 exercise of certain rights of the directing 5 holders such as its ability to replace the 6 special servicer by requiring prior Commission 7 approval for any such exercise. 8 We are also asked to approve the terms 9 of the management agreement. Despite the 10 abbreviated length of the term of the 11 agreement, I am prepared to recommend that the 12 Commission approve it in these extraordinary 13 circumstances. 14 And as for joint and several liability, 15 the Joint Petitioners do not seek to be 16 relieved of that requirement and, hence, the 17 contract is to be also so read. 18 Subsection 82C(7) also provides that the 19 manager "own at least ten percent of all 20 outstanding equity securities of any casino 21 licensee." As joint Petitioners correctly 22 note, if this requirement is intended to ensure 23 that the manager has an equity owner with at 24 least a ten-percent stake the company, then it 25 is readily satisfied here because Mr. Ribis 38 ITEM NO. 1 1 will own a hundred percent of Resorts. 2 Insofar as Resorts, as manager, owning 3 at least ten percent of RAC, as owner, 4 presumably the point of the requirement is that 5 the manager have an economic stake in the owner 6 that would tend to cause the manager to work 7 for the highest return possible on the 8 investment. Seemingly, that is satisfied here 9 through the contract terms that provide for the 10 manager receiving an incentive fee. Thus, as 11 to this point, Joint Petitioners appear 12 entitled to the relief that they seek. 13 Somewhat lost in the midst of these 14 transactions is that Colony, which will 15 relinquish it's 95 percent indirect stake in 16 Resorts, will cease to have any affiliate that 17 is a holding company of Resorts. As such, all 18 Colony-related entities and individuals would 19 no longer need to qualify. The surrender of 20 the two classes of stock, one voting and one 21 nonvoting, of Colony RIH Holdings, Inc., will 22 leave that entity as Resorts' ultimate holding 23 company wholly owned by Mr. Ribis but requires 24 Commission preapproval in accordance with NJAC 25 19:43-2.8 to ensure, among other things, that 39 ITEM NO. 1 1 Colony Holdings will continue to be qualified 2 as a holding company of Resorts. 3 As for the future and Resorts' role in 4 it, even under the best of circumstances, the 5 lenders apparently do not intend to provide an 6 unlimited reservoir of capital even with 7 indirect control over the bank accounts through 8 RAC as a casino licensee. Although the lenders 9 are amenable to notifying the regulators 45 10 days in advance of any funds flow -- any funds 11 flow stoppage, constant vigilance will be 12 required to ensure that financial stability is 13 maintained. 14 While the banks may need not qualify, 15 two individuals, Peter Hoelzle and Mitchell 16 Hunter, are designated as officers of RAC and, 17 thus, must qualify before the Commission could 18 issue RAC a casino license. In that regard, 19 the Division has now reported on their 20 individual suitability as well as on RAC's 21 casino licensibility. 22 Likewise, TriMont, which under RAC's 23 operating agreement is the company's sole 24 nonmember manager, it is appropriate for 25 designation as a discretionary qualifier that 40 ITEM NO. 1 1 must essentially meet the same qualification 2 criteria as apply to the casino licensees. 3 And, coincidentally, two of TriMont's 4 individual qualifiers are Mr. Hoelzle and 5 Hunter who, as I just indicated, are also 6 officers of RAC. 7 As earlier mentioned, the Division has 8 completed its investigation and reported on the 9 plenary qualification of two of TriMont's 10 individual qualifiers. However, given that 11 TriMont is a discretionary qualifier for which 12 the Commission has wide latitude in designating 13 who its individual qualifiers are, there 14 seemingly exists sufficient authority for the 15 Commission to allow the contemplated 16 transaction to close so long as all those 17 individuals are at least amenable to some form 18 of temporary qualification with the expectation 19 that their and the company's plenary 20 suitability will be determined in short order. 21 With the Division now having reported on 22 TriMont's application for a nongaming CSI 23 license, I believe that if any such licensure 24 is granted, the Commission may look to that as 25 the requisite interim step which I just 41 ITEM NO. 1 1 mentioned. 2 I am satisfied that all concerned 3 appreciate that the casino licensure is a 4 unique privilege and not a right. In these 5 trying and extenuating circumstances, the 6 proposed casino licensure for which RAC tends 7 to foster continuity and stability in Resorts' 8 casino operations, while providing the 9 regulators with the means to carefully monitor 10 and be especially watchful of the company's 11 finances. Further, to deal with these exigent 12 and extraordinary circumstances, I believe the 13 following features are critical components of 14 any relief that the Commission might grant: 15 One, that Resorts and RAC must at all 16 times have $15 million available to operate the 17 property; 18 Two, to the extent Resorts cannot 19 achieve that amount through its own operation, 20 it may look to KeyCorp and Key Bank to supply 21 the needed flexibility, and they will provide 22 45 days notice if under the pooling and 23 servicing agreement they determine to 24 discontinue such funding; 25 Three, Resorts' former Colony owners 42 ITEM NO. 1 1 will relinquish their interests in the property 2 and no longer be designated as Resorts 3 qualifiers. 4 Four, RAC must obtain casino licensure 5 on which the Division recently has reported 6 favorably; 7 Five, Resorts will continue as a 8 licensee through the management agreement, but 9 its current five-year license term that expires 10 in 2013 will be shortened to coincide with the 11 one-year expiration of RAC's casino license; 12 and, in any event, a replacement manager would 13 require Commission preapproval under the Act; 14 Six, by mid-December, TriMont will file 15 for qualification under Section 85 of the Act 16 and, thus, be subject to establishing, other 17 than residency, all casino key employee 18 criteria such as good character and financial 19 stability; 20 Seven, although -- yeah -- seven, 21 although TriMont is not expected to complete 22 its comprehensive BED application until after 23 the deal closes, it will be permitted to 24 continue as a special servicer and begin 25 servicing as RAC's sole nonmember manager upon 43 ITEM NO. 1 1 receiving licensure as a nongaming CSI on which 2 the Division has recently also reported 3 favorably; 4 Eight, an independent person meeting key 5 employee standards will be appointed to advise 6 TriMont as to its compliance with these 7 matters; 8 Nine, while Column Financial, Credit 9 Suisse, and Wells Fargo will not have to 10 qualify, the controlling holder, which is 11 currently Column Financial, cannot exercise 12 certain of its rights under the pooling and 13 servicing agreement without Commission approval 14 which means, among other things, that the 15 Commission approval is needed before the 16 controlling holder can designate a replacement 17 for TriMont; 18 And, ten, efforts must be made to sell 19 the property during RAC's initial one-year 20 license term with, A, the Commission and the 21 Division receiving periodic progress reports; 22 and, B, assuming that the license is renewed, a 23 36-month deadline in which to dispose of the 24 asset. 25 I believe those salient features and 44 ITEM NO. 1 1 others have been captured in the first of the 2 two draft resolutions which were marked for 3 identification only as Exhibit C-1 that 4 addresses the declaratory relief requested in 5 the Amended Joint Petition. The companion 6 draft resolution, while incorporating those 7 features, and marked for identification only as 8 Exhibit C-2, directly deals with RAC's casino 9 licensure, TriMont's CSI licensure, and 10 modifications to Resorts' existing casino 11 license that are appropriate in light of these 12 circumstances. 13 Although both matters are obviously 14 related, I recommend that the Commission 15 proceed by separate vote on each distinct 16 resolution. 17 With that, I move that the Commission 18 adopt Exhibits C-1, the draft resolution, on 19 the Amended Joint Petition, and consistent with 20 my earlier remarks, grant the relief outlined 21 therein subject to the conditions included in 22 the resolution. 23 And I theresofore move. 24 Is there a second? 25 VICE CHAIR EPPS: Second. 45 ITEM NO. 1 1 COMMISSIONER SOMMELING: Second. 2 CHAIR KASSEKERT: Motion has made and 3 seconded. This a role call vote. 4 MR. NANCE: Commissioner Harrington? 5 COMMISSIONER HARRINGTON: Yes. 6 MR. NANCE: Commissioner Sommeling? 7 COMMISSIONER SOMMELING: Yes. 8 MR. NANCE: Vice Chair Epps? 9 VICE CHAIR EPPS: Yes. 10 MR. NANCE: Chair Kassekert? 11 CHAIR KASSEKERT: Yes. 12 MR. NANCE: The record will reflect that 13 the motion is unanimous. 14 CHAIR KASSEKERT: Thank you. 15 I will now move that the Commission 16 adopt Exhibit C-2, the companion draft 17 licensure resolution, and: One, issue a 18 one-year casino license to RAC; two, issue a 19 one-year nongaming CSI license to TriMont; and, 20 three, modify the existing Resorts' casino 21 license resolution to conform to the 22 Commission's rulings in these matters in each 23 case subject to the conditions included in the 24 draft resolution, and I so move. 25 COMMISSIONER SOMMELING: Second. 46 ITEM NO. 1 1 VICE CHAIR EPPS: Second. 2 CHAIR KASSEKERT: The motion has been 3 made and seconded. This is a roll call vote. 4 MR. NANCE: Commissioner Harrington? 5 COMMISSIONER HARRINGTON: Yes. 6 MR. NANCE: Commissioner Sommeling? 7 COMMISSIONER SOMMELING: Yes. 8 MR. NANCE: Vice Chair Epps? 9 VICE CHAIR EPPS: Yes. 10 MR. NANCE: Chair Kassekert? 11 CHAIR KASSEKERT: Yes. 12 MR. NANCE: The record will reflect that 13 the motion is unanimous. 14 CHAIR KASSEKERT: Thank you. 15 MR. O'GARA: Thank you. 16 CHAIR KASSEKERT: And congratulations, I 17 think. 18 (Laughter.) 19 COMMISSIONER HARRINGTON: Good luck. 20 CHAIR KASSEKERT: And good luck. Right. 21 MR. O'GARA: Thank you very much. 22 23 (A pause was taken in the proceedings 24 from 5:18 to 5:20 p.m.) 25 47 ITEM NO. 2 1 MR. NANCE: Item No. 2, Amended and 2 Supplemented Petition of the Steering 3 Commission of Secured Lenders for approval of 4 an amended and restated purchase agreement and 5 for other relief. 6 Mr. DiGiacomo? 7 MR. DiGIACOMO: Chair, Commissioners, 8 good afternoon. 9 Would counsel please put their 10 appearances on the record? 11 MR. SORIANO: Good afternoon, once 12 again, Madame Chair and members of the 13 Commission. Christopher Soriano, Duane Morris, 14 on behalf of the lenders. With me from Duane 15 Morris is Eric Frank. 16 MR. FRANK: Good afternoon. 17 CHAIR KASSEKERT: Good afternoon. 18 MR. ADAMS: Jack Adams, DAG, on behalf 19 of the Division. 20 CHAIR KASSEKERT: Thank you. 21 We, obviously, took considerable 22 testimony last week on that. 23 Let me just ask if there is anything 24 else that needs to be brought to our attention? 25 MR. SORIANO: No, Madame Chair. 48 ITEM NO. 2 1 MR. ADAMS: I have had an opportunity to 2 review the draft resolution and don't have any 3 problems with it. 4 CHAIR KASSEKERT: Okay. 5 MR. DiGIACOMO: And I have shared it 6 with counsel, Chair. 7 CHAIR KASSEKERT: Thank you. 8 Let me just ask if the Commissioners 9 have any questions? 10 COMMISSIONER SOMMELING: I have no 11 questions, Madame Chair. 12 COMMISSIONER HARRINGTON: No. 13 CHAIR KASSEKERT: Okay. Great. 14 As I said, last week the Commission 15 heard testimony regarding the petition from the 16 Steering Commission of Secured Lenders seeking, 17 among other things, approval of the amended and 18 restated purchase agreement. As explained 19 through the testimony of Jordan Bleznick of 20 Icahn Associates, the major portion of changes 21 to the purchase agreement were made to allow 22 the sale of Adamar's assets to proceed as a G 23 Reorganization under the Internal Revenue Code. 24 The advantage of the G Reorganization is to 25 provide the Steering Committee with a historic 49 ITEM NO. 2 1 tax basis of $700 million based on the lenders' 2 analysis of the original building and 3 improvements costs minus deprecation rather 4 than the basis of the amount of their $200 5 million credit bid. The G Reorganization 6 would, therefore, afford the lenders a 7 significant tax advantages should the assets of 8 Adamar be sold by them at some future date. 9 We also heard testimony from Kyle 10 Pasewark, involving the more technical changes 11 to the purchase agreement. Specifically, the 12 APA was updated, for example, to remove 13 references to future bankruptcy proceedings 14 which now have occurred and to specify the name 15 of the buyer. Also, an important change was to 16 confirm that, if for any reason, the amended 17 restated purchase agreement was terminated, 18 this transaction would still proceed under the 19 prior APA with an automatic extension of the 20 closing date. 21 Since the lenders' proposed G 22 Reorganization and the technical amendments to 23 the agreement do not change the technical terms 24 of the APA previously approved by this 25 Commission, I am prepared to approve the 50 ITEM NO. 2 1 amended and restated APA. 2 The additional relief sought in the 3 petition includes requests to, one, confirm a 4 prior Commission ruling that Credit Suisse may 5 not qualifier under the Casino Control Act; 6 two, approve the plan of reorganization of the 7 Tropicana Entertainment, which has been 8 approved by the Delaware Bankruptcy Court; 9 three, permit the sale of the Adamar assets to 10 move forward consistent with the sale order 11 approved by the New Jersey Bankruptcy Court; 12 four, permit modifications to the previously 13 approved sale period time line consistent with 14 the terms of the amended and restated purchase 15 agreement; and, five, approval ancillary 16 agreements to the amended and restated purchase 17 agreement. I am similarly prepared to grant 18 these requests for relief. 19 The petition also includes the 20 additional requests for approval of a momentary 21 lapse in the conservatorship to allow for a 22 complete transfer of all of the conservator's 23 rights and titles to Adamar's assets. Although 24 the Commission offered the option for a 25 post-hearing submission to allow for full 51 ITEM NO. 2 1 consideration of this request, the secured 2 lenders did not submit any post-hearing 3 arguments on this issue. So while we 4 previously deferred decision on this issue at 5 that time the Commission approved the APA back 6 in April, I would nevertheless again recommend 7 postponing a ruling on that issue until we have 8 additional information to better determine what 9 specifically the lenders need regarding title. 10 At the hearing last week, counsel for 11 the secured lenders indicated the a concern 12 about title was raised in connection with 13 obtaining title insurance. Accordingly, I 14 would require counsel by November 30th, 2009, 15 to elaborate in writing on this issue, paying 16 particular attention to any asserted title 17 company concerns and addressing the points the 18 Division noted on the record regarding the 19 provisions of the bankruptcy court sale order. 20 With that, I would move to adopt the 21 draft resolution approving the amended and 22 restated purchase agreement and granting the 23 other relief requested as specified in my 24 earlier remarks, but, again, reserving decision 25 on the requests in the seventh count for a 52 ITEM NO. 2 1 momentary lapse in the conservatorship, and I 2 so move. 3 Is there a second? 4 COMMISSIONER SOMMELING: Second. 5 VICE CHAIR EPPS: Second. 6 CHAIR KASSEKERT: The motion has been 7 made and seconded. All in favor? 8 (Ayes.) 9 CHAIR KASSEKERT: Opposed? 10 (No response.) 11 CHAIR KASSEKERT: The motion carries. 12 Thank you. 13 MR. DiGIACOMO: Chair, Commissioners, 14 thank you. 15 MR. NANCE: It is now time for the 16 public participation portion of the meeting. 17 CHAIR KASSEKERT: Is there anyone from 18 the public that wishes to be heard? 19 (No response.) 20 CHAIR KASSEKERT: Seeing no one, I'll 21 declare this portion of the meeting closed and 22 entertain a motion to adjourn 23 VICE CHAIR EPPS: Motion to adjourn. 24 COMMISSIONER SOMMELING: Motion to 25 adjourn. 53 1 CHAIR KASSEKERT: Second? 2 VICE CHAIR EPPS: Second. 3 CHAIR KASSEKERT: The motion has been 4 made and seconded. All in favor? 5 (Ayes.) 6 CHAIR KASSEKERT: Opposed? 7 (No response.) 8 CHAIR KASSEKERT: The motion carries. 9 Thank you. 10 CHAIR KASSEKERT: Thank you. 11 MR. SORIANO: Thank you. 12 (The Special Public Meeting was 13 adjourned at 5:25 p.m.) 14 15 16 17 18 19 20 21 22 23 24 25 54 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: November 21, 2009 23 My Notary Commission Expires July 22, 2014 24 ID No 2062871 25