12-09802-reg Doc 181 Filed 09/24/12 Entered 09/26/12 15:41...

GENERAL MOTORS CORPORATION

1 UNITED STATES BANKRUPTCY COURT

2 SOUTHERN DISTRICT OF NEW YORK

3 Case No. 09-50026(REG)

4 Adv. Case No. 12-09802(REG)

5 - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

6 In the Matter of:

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8 GENERAL MOTORS CORPORATION,

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10 Debtor.

11 - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

12 MOTORS LIQUIDATION COMPANY GUC TRUST,

13 Plaintiff,

14 v.

15 APPALOOSA INVESTMENT LIMITED,

16 Defendant.

17 - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

18 U.S. Bankruptcy Court

19 One Boling Green

20 New York, New York

21

22 September 20, 2012

23 2:08 PM

24

25

VERITEXT REPORTING COMPANY212-267-6868 www.veritext.com 516-608-2400

12-09802-reg Doc 181 Filed 09/24/12 Entered 09/26/12 15:41:56 Main Document Pg 1 of 140


1 B E F O R E :

2 HON ROBERT E. GERBER

3 U.S. BANKRUPTCY JUDGE

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1 Hearing re: Trial

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25 Transcribed by: Nicole Yawn and Josh Garling and Penny Skaw




1 A P P E A R A N C E S :

2 KING & SPALDING LLP

3 Attorneys for General Motors LLC

4 1185 Avenue of the Americas

5 New York, NY 10036-4003

6

7 BY: SCOTT DAVIDSON, ESQ.

8 ARTHUR J. STEINBERG, ESQ.

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10 DICKSTEIN SHAPIRO LLP

11 Attorneys for GUC Trust

12 1633 Broadway

13 New York, NY 10019-6708

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15 BY: ERIC FISHER, ESQ.

16 KATIE L. COOPERMAN, ESQ.

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18 DICKSTEIN SHAPIRO LLP

19 Attorney for GUC Trust

20 1825 Bye Street NW

21 Washington, DC 20006-5403

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23 BY: MARY KIM, ESQ.

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1 CURTIS, MALLET-PREVOST, COLT & MOSLE LLP

2 Attorney for the Paulson Noteholders

3 101 Park Avenue

4 New York, NY 10178-0061

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6 BY: THERESA A. FOUDY, ESQ.

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8 GREENBERG TRAURIG, LLP

9 Attorneys for Elliott, Fortress, and Morgan Stanley

10 Met Life Building

11 200 Park Avenue

12 New York, NY 10166

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14 BY: BRUCE ZIRINSKY, ESQ.

15 JOHN H. BAE, ESQ.

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17 GREENBERG TRAURIG, LLP

18 Attorneys for Elliott, Fortress, and Morgan Stanley

19 77 West Wacker Drive, Suite 2500

20 Chicago, IL 60601

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22 BY: BEVIN M. BRENNAN, ESQ.

23 KEVIN D. FINGER, ESQ.

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25




1 AKIN GUMP STRAUSS HAUER & FELD LLP

2 Attorneys for the Nova Scotia Trustee

3 One Bryant Park

4 New York, NY 10036

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6 BY: SEAN E. O'DONNELL, ESQ.

7 DEAN L. CHAPMAN, ESQ.

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1 P R O C E E D I N G S

2 THE COURT: Have a seat, please.

3 For those of you don't know, I'm sorry for the

4 delay. We were out here on the bench continuously from

5 about 9:00 this morning to 9:30 this morning until close to

6 1:30.

7 All right. Are we ready to go?

8 MR. FISHER: Yes, Your Honor.

9 THE COURT: Go ahead.

10 MR. FISHER: The GUC Trust calls Mr. Bao Truong as

11 its next witness, Your Honor.

12 THE COURT: All right.

13 Mr. Truong here?

14 Come on up, please. Remain standing to be sworn.

15 (Witness Sworn)

16 THE COURT: All right. Have a seat, please,

17 Mr. Truong.

18 Go ahead, Mr. Fisher.

19 DIRECT EXAMINATION

20 BY MR. FISHER:

21 Q Good afternoon, Mr. Truong.

22 A Good afternoon.

23 Q Mr. Truong, you're currently a managing director at

24 Centerbridge; is that right?

25 A That's correct.




1 Q And, before joining Centerbridge, you worked at

2 Fortress?

3 A That's correct.

4 Q And you were there from September 2004 until February

5 2010, correct?

6 A Correct.

7 Q And, at Fortress, you worked in the credit business?

8 A Yes.

9 Q And the credit business is run by a gentleman by the

10 name of Pete Briger; is that right?


12 Q And, during the period of time that you were at

13 Fortress, you were the primary analyst covering the

14 securities of General Motors for Fortress, correct?

15 A Yes.

16 Q And you were involved in Fortress' decision to purchase

17 the securities of certain General Motors' issuers, correct?

18 A Yes.

19 Q And when did Fortress first purchase notes issued by

20 General Motors Nova Scotia Finance Company?

21 A 2006.

22 Q And, sitting here today, are you aware that you've

23 submitted written direct testimony in this case, that you

24 submitted a declaration in advance of today's testimony?

25 A Yes.




1 Q And do you know what date is identified as the first

2 purchase of securities in that declaration?

3 A I don't have it in front of me, so I don't recall the

4 first date.

5 MR. FISHER: Your Honor, may I approach?

6 THE COURT: Yes.

7 Okay. Thank you.

8 BY MR. FISHER:

9 Q Mr. Truong, do you have in front of you the declaration

10 that you submitted in this case?

11 A Yes.

12 Q Would you look, please, at paragraph 12? The first

13 clause says, quote, "When Fortress first made its investment

14 in the notes in 2005." Do you see that?

15 A Yes.

16 Q Is that statement incorrect?

17 A I'd want to confirm with the firm's trading records.

18 We -- we first analyzed the notes in 2005 in General Motors.

19 GM was downgraded into high yield in April of 2005. We

20 analyzed the notes, and I analyzed the notes, during that

21 time period. The first -- when we first purchased the notes

22 -- you know, I'd have to check the trading records, but it's

23 either 2005 or 2006.


25 THE COURT: Yes.




1 UNIDENTIFIED SPEAKER: Okay.

2 BY MR. FISHER:

3 Q Mr. Truong, Plaintiff's Exhibit 53 is the fourth

4 amended verified statement of Greenberg Traurig LLP,

5 pursuant to bankruptcy rule 2019, correct?

6 A Yes.

7 Q Would you turn, please, to Exhibit A of this document?

8 And turn to, within Exhibit A, the page that has the number

9 3 on the bottom. Do you see that?

10 A Yes.

11 Q The heading on that page says Fortress Credit

12 Opportunities Advisers, LLC. That entity is a Fortress

13 investment manager, right?

14 A It's an entity owned by Fortress.

15 Q Okay. And the securities listed on that page are

16 securities bought and sold by that Fortress entity, correct?


18 Q And there aren't any purchases in 2005, correct?


20 Q And, while we're on this page, there's a column that

21 says QTY. I assume that's quantity.

22 A I believe so.

23 Q Okay. And what's listed in that column, that's the

24 face amount of these notes that were purchased and sold by

25 this Fortress entity, correct?




1 A That's correct.

2 Q And the column that says price, is that the price that

3 Fortress actually paid for these notes?

4 A Well, the page lists buys and sells, so the price would

5 be the price at which that -- the price of the transaction.

6 Q Okay. So it's either the price at which they bought or

7 the price at which they sold, depending on the entry?

8 A That's correct.

9 Q Okay. And so, if one wanted to determine what Fortress

10 paid for the notes indicated, for example, if you take the

11 last entry on the page, 11/18/2008, would you simply

12 multiply 20 and-a-half percent by 7.5 million pounds to

13 arrive at the price that Fortress paid for that particular

14 security?

15 A If you're asking for the dollar amount, the actual

16 dollar amount that is paid for those securities, you'd

17 include an accrued interest. So you're paying for the

18 principle amount, that 20 and-a-half, 20.5 times the

19 principle amount plus the accrued interest on the bonds is

20 the amount that you'd actually pay for that bond.

21 Q Okay. If you turn the page, does that page indicate

22 Nova Scotia Finance Company notes with a maturity of 2023

23 that were bought -- bought and sold by Fortress Credit

24 Opportunities Advisers, LLC?

25 A Yes, it appears to be.




1 Q Okay. Any purchases in 2005?

2 A No.

3 Q Turn to the next page, please. Drawbridge Special

4 Opportunities Advisers, LLC -- is that also a Fortress

5 entity?

6 A Yes.

7 Q Any 2005 purchases?

8 A No.

9 Q The next page, Drawbridge Special Opportunities

10 Advisers, LLC -- those are -- what's listed on this page are

11 the 2023 notes issued by GM Nova Scotia Finance Company that

12 were bought and sold by this particular Fortress entity,

13 correct?

14 (No audible response)

15 Any -- any 2005 transactions in those notes?

16 A No.

17 Q And turn the page to the heading that says Warden (ph)

18 Master Fund, LP. Is that also a Fortress entity?

19 A I believe so.

20 Q And the trades on this page happened after you left

21 Fortress, right?

22 A The dates of the trades are after my exit date from

23 Fortress.

24 Q And no transactions in 2005?

25 A It doesn't appear to be.




1 Q And page 8 of this exhibit, Warden Master Fund II, LP.

2 Is that also a Fortress entity?

3 A I believe so.

4 Q Okay. Does seeing these pages refresh your

5 recollection as to whether the initial purchase of notes was

6 in 2005 or 2006?

7 A It appears that they were in 2006 and that the

8 reference of 2005 was a typo.

9 Q And, if you -- if you still have your declaration in

10 front of you, would you turn, please, to paragraph 16? And

11 paragraph 16 says, quote, "Fortress was aware of this

12 information when it first purchased notes in 2005," closed

13 quote. Is that similarly incorrect?

14 A Yes, I -- it's -- the 2005 is a typo. It should be

15 2006.

16 Q When Fortress first purchased notes in 2006, you were

17 involved in that decision, correct?

18 A Yes.

19 Q But you weren't the only one involved, right?


21 Q There were others at Fortress who were involved in the

22 decision to purchase the Nova Scotia notes, correct?

23 A Yes.

24 Q Drew Peters?

25 A I'm sorry?




1 Q I -- I'm sorry. I -- I -- I may have misspoken. Drew

2 McKnight. Do you recognize that name?

3 A I do.

4 Q And was he involved in the decision to purchase the

5 notes?

6 A Most likely.

7 Q And what was his position at the time?

8 A He's the firm's trader.

9 Q And Mr. Briger was involved in the decision?

10 A Yes.

11 Q And your colleague, Leslie Cowen, she was involved?

12 A Yes.

13 Q And Dean Dakolias was involved, right?

14 A I believe so.

15 Q Now, looking at the purchases and sales that we skimmed

16 through quickly in the exhibit to the 2019 that you were

17 shown as Plaintiff's Exhibit 53, if one wanted to understand

18 Fortress' investment strategy with regard to GM securities,

19 it wouldn't be enough to just look at the purchases and

20 sales in the notes, right?

21 A I'm sorry. Say that again.

22 Q Sure. If -- if one wanted to understand Fortress'

23 investment strategy with regard to its investments in -- in

24 GM securities, it wouldn't be enough to just study the

25 purchases and sales that are listed in the 2019, correct?




1 A I think that's correct, that one can't conclude an

2 investment strategy by looking at the trading records.

3 Q Right. And also, these weren't the only investments

4 that were relevant to realizing a return on the General

5 Motors investment made by Fortress, correct?

6 A That's correct.

7 Q There were also credit default swaps, correct?

8 A That's correct.

9 Q And the credit default swaps were part of the Nova

10 Scotia Finance Company investment strategy that Fortress

11 executed on during the period of time that you were there,

12 right?

13 A Yes.

14 Q And Fortress began purchasing credit default swaps with

15 regard to General Motors in or about April 2008; is that

16 right?

17 A I'm sorry. Could you repeat the question, please?

18 Q Sure. Did Fortress begin purchasing credit default

19 swaps that referenced General Motors securities in April

20 2008?

21 A We purchased credit default swaps when we purchased the

22 bonds, so we purchased CDS when we purchased bonds in April

23 of 2008. We also purchased CDS in 2006.

24 Q So, in connection with each purchase of the bonds,

25 there was also a purchase of credit default swaps, right?




1 A That's correct.

2 Q And the strategy was --

3 A I'm sorry. Just to clarify, that was -- I -- I'm not

4 sure if every trade corresponded with a trade in CDS.

5 Q Okay. Speaking in general terms, the strategy was to

6 purchase credit default swaps that were consistent with the

7 principle amount of Nova Scotia bonds.

8 THE COURT: Having trouble hearing you,

9 Mr. Fisher.

10 MR. FISHER: I'm sorry, Your Honor.

11 BY MR. FISHER:

12 Q In -- in general, the strategy was to purchase credit

13 default swaps that were consistent with the principle amount

14 of the bonds, of the Nova Scotia bonds, that Fortress was

15 purchasing, correct?

16 A Yes, based on U.S. dollar.

17 Q Based on U.S. dollars?


19 Q And the bonds were denominated in pounds sterling?


21 Q And Fortress continued to hold these credit default

22 swaps through May 2009, correct?


24 Q And the old GM bankruptcy filing on June 1, 2009 was an

25 event that triggered payments due with respect to these




1 credit default swaps, correct?

2 A That's correct.

3 Q And, as of the end of May 2009, Fortress entities held

4 approximately $220 million U.S. in Nova Scotia bonds; is

5 that right?

6 A I don't recall the precise amount in May 2009.

7 MR. FISHER: May I approach?

8 THE COURT: Yes.

9 BY MR. FISHER:

10 Q Mr. Truong, looking at Plaintiff's Exhibit 189, do you

11 see that the first unredacted email is an email from you to

12 Mr. Dakolias?

13 A Yes.

14 Q So that's an internal Fortress email, correct?


16 Q And, if -- if you look at the second -- your email

17 begins, "We own the following." And then, would you just

18 look at the second asterisk and read that out loud, please?

19 A You're asking me to read the second asterisk?

20 Q Yes, please.

21 A 139 million sterling of Nova bonds, in parentheses,

22 (U.S. dollar, 220 million today); assuming unsecureds

23 recover 25 cents. Again, that's Hohan Loke's (ph)

24 assumption, market may not agree, and we recover two times

25 that, or 50 cents. That's 42 cents up from mark for




1 approximately 92 million, parentheses, (could be higher,

2 depending on how we settle GM Canada), close parentheses.

3 Q Does looking at this email refresh your recollection

4 that, as of May 2009, Fortress held approximately in value

5 $220 million of Nova Scotia notes?

6 A Based on this email, I -- I would say yes.

7 Q And Fortress' holdings and credit default swaps, let's

8 say for the period right up until June 1, 2009, when old GM

9 filed for bankruptcy, its credit default swap holdings were

10 not publicly disclosed anywhere, were they?

11 A As far as I know, they were not.


13 THE COURT: Yes.

14 BY MR. FISHER:

15 Q Mr. Truong, I -- I'm changing topics in my questions to

16 you, and I have some questions I'd like to ask you about

17 what's known as the lock-up agreement. I've handed you

18 Plaintiff's Exhibit 16. Would you, please, read out loud

19 the text of the email that appears on the front of this

20 exhibit?

21 A Okay. Again, all, please find attached the final lock-

22 up agreement executed by all parties this morning. Regards,

23 Peter.

24 Q And this email was received by you?

25 A Yes.




1 Q And this seems to you to be the final version of what's

2 known as the lock-up agreement?

3 A Yes, it does.

4 Q And Fortress was a party to the lock-up agreement,

5 correct?

6 A That's correct.

7 Q And you personally were involved in the negotiation of

8 the lock-up agreement, correct?

9 A Yes.

10 Q And, under the lock-up agreement, Fortress was paid a

11 consent fee, right?


13 Q And it was paid approximately 37 percent of the face

14 amount of the notes that it held in cash?


16 Q And, under the lock-up agreement, Fortress is also

17 entitled to certain claims in the GM bankruptcy case,

18 correct?

19 A I'm sorry. Can you repeat that question, please?

20 Q Sure. In addition to the consent fee that was paid to

21 the Fortress entities, Fortress is also entitled, under the

22 lock-up agreement, to assert certain claims in the old GM

23 bankruptcy case, correct?

24 A I don't believe the ability to assert those claims is a

25 result of the lock-up agreement. I believe the lock-up




1 agreement -- my understanding is that General Motors would

2 support the assertion of those claims, but, without the

3 lock-up agreement, we could still assert -- bondholders

4 could still assert those claims.

5 Q Okay. And, when you talk about those claims, you're

6 talking about a claim against old GM, pursuant to its

7 guarantee of the Nova Scotia notes? Is that one of the

8 claims you're talking about?

9 A Yes, that's one of the claims.

10 Q And the other claim is a claim asserted by the Nova

11 Scotia Finance trustee, pursuant to Nova Scotia law? Is

12 that your understanding?

13 A That's one of the other claims.

14 Q And, in addition to those two claims, there are certain

15 other benefits that Fortress believes it's entitled to get,

16 under the lock-up agreement, correct?

17 A I'm sorry. Could you repeat that question?

18 Q I'm going to -- let me ask you a different question.

19 The way you look at -- at the lock-up agreement, Fortress

20 received more than, or was entitled to receive more than,

21 the two claims you just described, right?

22 A Again, I -- I don't believe that -- I don't interpret

23 the lock-up agreement as providing entitlement to assert

24 those claims. I think those claims arise out of the -- the

25 rights of our indenture and our bond.




1 Q Okay. Besides those two claims, there's also a

2 subordination provision in the lock-up agreement, right?

3 A That's correct.

4 Q And what's subordinated are swap claims that old GM had

5 against Nova Scotia Finance Company, in certain

6 circumstances, right?

7 A Yes.

8 Q And, when you looked at the lock-up agreement

9 internally, you put a value on that, right?

10 A I'm sorry. Could you repeat the question?

11 Q Sure. Internally, when you analyzed the lock-up

12 agreement, as a Fortress employee, you put some value on the

13 subordination of the swap claim, right?

14 A There was potential value from the subordination of the

15 swap claim.


17 THE COURT: Yes.

18 BY MR. FISHER:

19 Q Mr. Truong, if you look towards the bottom half of

20 Plaintiff's Exhibit 175, do you see there an email that you

21 sent to Mr. Briger, Ms. Dunohue (ph), Mr. Dakolias, and

22 Ms. Cowen?

23 A Yes.

24 Q That's an email that you sent on May 30, 2009, correct?

25 A Yes.




1 Q And would you read that email out loud, please? It

2 begins, "We are jumping."

3 A "We're jumping on a call in two minutes, but I think we

4 may end up with 35 cents cash, 2.25 times claim at GM Corp.,

5 open parentheses (don't think the company has realized it's

6 a 2.25 claim yet, though -- will need to make sure all docs

7 are detailed correctly,) end parentheses. Will update you

8 in a few."

9 Q And, without quibbling with you about whether the --

10 the two times claims comes from the lock-up agreement or

11 arises simply as a matter of law, the -- I'm interested in

12 the .25 x above the two times claims. That is additional

13 value that -- that, in your mind, in your analysis, relates

14 to value associated with old GM's subordination of its swap

15 claims, right?

16 A I -- I don't recall the calculation for the 2.25. My

17 recollection is that the 2.25 calculation is a -- call it a

18 maximum, is not the claim that would be asserted or allowed,

19 but, under certain circumstances, it could reach as high as

20 2.25, but I don't recall precisely the math.


22 THE COURT: Yes.

23 MR. FISHER: Thank you.

24 BY MR. FISHER:

25 Q Mr. Truong, who is Max Saffian?




1 A He's a colleague at Fortress.

2 Q If you turn, please, to the second page of this

3 exhibit. Towards the bottom of the page, there's an email

4 from you to Mr. Briger and others. Do you see that?

5 A Yes.

6 Q Would you read the first paragraph out loud, please?

7 A Sure. "We've received agreement on terms of a

8 settlement, open parentheses (it is subject to final

9 documentation, which we will do today and tomorrow in an

10 agreement on an escrow-type mechanism for the cash.)

11 Q Now, in this email, did -- this is an email that you

12 sent Saturday evening, May 30, 2009; is that right?

13 A It appears to be.

14 Q When you say, "We received agreement on terms of a

15 settlement," you're referring to a telephone conversation

16 that you participated in, correct?


18 Q And, following that telephone conversation, it was your

19 view that you and the others on the call had reached an

20 agreement as to the business terms of a settlement with

21 respect to the Nova Scotia notes, correct?


23 Q But you understood that the agreement was subject to

24 final documentation, right?

25 A Yes.




1 Q And you understood that, in order to effect the

2 settlement, it was necessary to draft and execute a lock-up

3 agreement, correct?

4 A Yes.

5 Q Okay. Looking down in that same email, the -- the

6 first asterisk you write -- well, just immediately above

7 that, it says, quote, "The basic economics of the settlement

8 are as follows, 35 cents cash on a basis of par plus accrued

9 interest." And then, there's a parenthetical, and it says,

10 "This will be paid in less than a month due to an

11 administrative process related to the bond indenture." Do

12 you see that?

13 A Yes.

14 Q That point refers to the consent fee that was

15 ultimately reflected in the lock-up agreement, right?


17 Q And, even before the lock-up agreement was drafted, you

18 had an understanding that the consent fee would be paid in

19 less than a month from the date that you were writing this

20 email, correct?

21 A Yes, that was my understanding.

22 Q And that was based on information that you learned in

23 the course of negotiating the lock-up agreement, correct?

24 A I believe so.

25 Q And then, the next point in this email talks about




1 subordination of the currency swap claims at GM Nova Scotia.

2 Do you see that?

3 A Yes.

4 Q Okay. Then, after that, you write, quote, "GM Corp.

5 will acknowledge our guarantee and windup claims at GM Corp.

6 Because of the subordination above, we, in effect, have 2.25

7 times unsecured claims against GM Corp. We will need to

8 assert this in the bankruptcy and will get the distribution

9 along with other unsecured creditors. There is some risk

10 that other creditors may object to our windup claim." You

11 wrote that, right?

12 A I typed that, yes.

13 Q Okay. And that's consistent with what you just told

14 me, which is that the .25 X above the 2 is based on

15 subordination of the swap claims, right?

16 A The -- yes, that's correct.

17 Q Okay. And, when you reported the terms of this what

18 you say was this business deal that was reached Saturday

19 night, May 30th, the people internally at Fortress to whom

20 you reported the terms of the deal were -- were very pleased

21 with the terms, correct?

22 A I believe so.

23 Q And, if you look above, you'll see Mr. McKnight's

24 response. He says, "Nice work," right?





1 Q And Mr. Saffian writes, quote, "Amazing. Really,

2 really amazing. Let's all plan to get beers Monday night.

3 I'd call it a home run." You see that?

4 A Yes, I do.

5 Q And, if you turn to the first page of Exhibit 605,

6 towards the bottom of the page, there's an email from you to

7 Mr. Saffian and Mr. McKnight. Do you see that?

8 A I do.

9 Q Okay. And that's your response to Mr. Saffian's

10 invitation to drinks, and would you, please, read what you

11 wrote?

12 A Okay. It says, "Dude, I'd love to, but GM is filing

13 Monday, and I suspect I'll be in the office listening to the

14 hearing all day, but trust me, I've been drinking all

15 throughout these conference calls over the past two days.

16 Only way to calm my nerves down."

17 Q And the conference calls you're referring to there are

18 the conference calls relating to negotiation of what would

19 become the lock-up agreement, right?

20 A Yes.

21 Q And you knew that GM was filing on Monday, June 1st,

22 because that was something that had been told to you in the

23 course of the negotiations, correct?


25 Q Now, eventually, on the morning of June 1st, 2009, the




1 lock-up agreement was executed, right?

2 A I'm sorry. Is that -- say that again.

3 Q Yes. On the morning of June 1, 2009, the lock-up

4 agreement was executed by all parties.

5 A Yes.

6 Q And, once it was executed, you reached out to contacts

7 at other investment funds to tell them about the lock-up


9 A I -- I don't recall.

10 Q Well, do you recall that, on June 1, you communicated

11 with Michael Chung at a fund known as Arrowgrass about the

12 substance of the lock-up agreement?

13 A I believe I did.


15 THE COURT: Yes.

16 BY MR. FISHER:

17 Q Okay, Mr. Truong, you -- you know Mr. Chung at

18 Arrowgrass?

19 A I do.

20 Q And Plaintiff's Exhibit 178 is -- is an exchange of

21 emails between the two of you.

22 A Yes.

23 Q And, if you look at the top of page 2978, the -- the

24 first full email from the top of the page, that's an email

25 from you to Mr. Chung on June 1, 2009, right?




1 A Yes.

2 Q Okay. And you write, quote, "We settled at 35 cents

3 times par plus accrued through 6/30/09. The 2023s have more

4 accrued interest, so that's why the number is higher. The

5 last time they received a coupon was last July." That's an

6 email you wrote to Mr. Chung?


8 Q Okay. And what you're explaining to him here is why

9 the consent fee paid on the 2023 notes, meaning the Nova

10 Scotia notes with a maturity date in 2023, is a few

11 percentage points higher than the consent fee paid on the

12 2015 notes, correct?

13 A Yes.

14 Q And, if you look up one email, you'll see that

15 Mr. Chung, by email, asks you a question. He says, quote,

16 "Nice, and, to be clear, the 35 cents is in addition to the

17 GM Corp. guarantee, correct," and words like GTY I'm just

18 paraphrasing, to -- to make this intelligible, but, if I

19 paraphrase in away that's inaccurate, please, let me know.

20 And then, he asks, "Why did they not want to try to cram

21 down the interco through CCAA"? Do you see that?

22 A Yes.

23 Q Okay. And, when Mr. Chung talks about cramming down

24 the interco, he's talking about cramming down the

25 intercompany obligation between GM Canada and GM Nova Scotia




1 Finance Company, right?

2 A I believe so.

3 Q And then, if you look at the first -- I'm sorry. If

4 you turn to 2977 -- so turn back one -- one page, and would

5 you, please, read your response to Mr. Chung's question?

6 It's the email that begins, "Yes."

7 A "Yes, per the settlement and the AK, GM Corp. is

8 acknowledging our separate guarantees and ULC claims. As to

9 why they didn't try to cram us down, who knows. Maybe

10 they're afraid of us. Just kidding."

11 Q Okay. And then, looking up one email, Mr. Chung

12 writes, "You do scare me from time to time. Any magic to 35

13 as opposed to 40," And he's asking you about why the

14 consent fee was ultimately negotiated to be approximately 35

15 percent, right?

16 A It looks to be.

17 Q Okay. And, please, read your response to Mr. Chung's

18 email.

19 A "No."

20 Q It begins, "No."

21 A "No, just where we ended up on the cash. Don't tell me

22 you're not happy with 35. Your net recovery is higher than

23 the U.S. government's."

24 Q Okay. And then, looking up one email, Mr. Chung asks

25 you, "Is there any chance the ULC shareholder claim gets




1 pursued, or am I getting greedy again"? Do you see that?

2 A Yes.

3 Q And your response to him is that you fully expect that

4 the ULC claim will be pursued, right?

5 A Yes.

6 Q And then, he asks you again whether the ULC claim is

7 going to be pursued, in addition to the guarantee, right?

8 A Yes.

9 Q And you confirm that, in fact, the plan is to pursue

10 both claims, right?

11 A I'm sorry. I think the email states that both claims

12 are expressly acknowledged in the settlement.

13 Q And, in fact, both claims have been asserted in this

14 bankruptcy case, right?

15 A Yes.

16 Q Mr. Chung is not the only person with whom you

17 communicated about the terms of the lock-up agreement on

18 June 2, 1009, right?

19 A I don't believe so.

20 Q You also spoke to someone at Sandell Asset Management,

21 correct?

22 A Yes.

23 Q And that was Rebecca Pacholder; is that right?

24 A I believe so.

25 Q And would you look at Plaintiff's Exhibit 179, please?




1 And, looking at the second page, there's an email from

2 Ms. Pacholder to you. The subject line is GM Nova Scotia,

3 and she writes, "Wow you are a rock star. Nice work."

4 She's referring there to your work in negotiating the lock-

5 up agreement, right?

6 A I believe so.

7 Q And, if you look at your response to her, you tell her

8 that you yourself are very pleased with the negotiated

9 outcome, right?

10 A Yes.

11 Q And the implication of your email to her is that the GM

12 Nova Scotia bondholders did better than other GM creditors,

13 right?

14 A Yes.

15 Q And even did better than the first lien secured bank

16 debt did in Chrysler, right?

17 A Yes.

18 Q Mr. Truong, while you were at Fortress, there was a

19 woman named Anna Fratilla (ph), who worked in the operations

20 department there, right?

21 A Yes.

22 Q And, at certain points in time, Ms. Fratilla would

23 prepare spreadsheets that showed the Fortress funds return

24 on particularly investments; is that right?

25 A From time to time, she prepared those numbers.




1 Q And -- and you're aware that, as of June 3rd, 2009, one

2 of the Fortress funds had an annualized return on its

3 investment in the Nova Scotia notes on a mark-to-market

4 basis that was approximately 218.5 percent?

5 MS. BRENNAN: Objection, Your Honor.

6 THE COURT: Leave the room, Mr. Truong.

7 (Pause)

8 MS. BRENNAN: Your Honor, I'd like to lodge a

9 relevance objection at this point. I'm not certain what the

10 return on the investment showed.

11 As you'll recall, during one of the discovery

12 disputes in this case, the -- the -- the time the creditors'

13 committee, now GUC Trust, had asked and sought records

14 relating to sales of these securities, and, at the time, the

15 Court rules, I quote, "The various contentions that the

16 creditors' committee make made buy decisions, purchase

17 decisions plainly relevant, but, at least on this date of

18 the record, the amount of money that various Nova Scotia

19 noteholders might be making off this investment is not now

20 relevant, if it ever will be." I -- I don't think anything

21 has changed in the allegations, and, unless there's some

22 other purpose for this testimony, I -- I don't think it's

23 relevant today.

24 THE COURT: Mr. Fisher?

25 MR. FISHER: Your Honor, I think I've already laid




1 the foundation in -- in Mr. Truong's testimony that this

2 return on investment didn't relate solely to the Nova Scotia

3 notes, but also related to credit default swaps, and the

4 nature of the return and the extreme nature of the return

5 relates to the -- the way -- the way in which Mr. -- Mr. --

6 Fortress executed on a strategy that, as I'm going to show

7 later in -- I'm making a proffer now, but, as I'm going to

8 show later in the examination, that it was an outcome that

9 was made possible by steering events in a certain direction.

10 That direction being the bankruptcy of GM Nova Scotia

11 Finance, doing what he could to orchestrate and help

12 contribute to the bankruptcy of old GM, because that return

13 on investment related to all -- all of those -- all of those

14 factors, and the way in which he worked with this group of

15 noteholders was all designed to reach that -- that end, and

16 that's reflected ultimately in the return.

17 THE COURT: Well, the -- the motive to make a lot

18 of money at other creditors' expense is relevant, but I

19 think the nature of the objection is why is how much they

20 were making relevant. Help me on that, Mr. Fisher.

21 MR. FISHER: Well, because we contend that there

22 has not been complete disclosure about the nature of the

23 investments in GM securities, and that's part -- disclosure

24 by the noteholders, which is necessary to understand their

25 motives, which is part of the inequitable conduct.




1 So, to get to a -- an annualized mark-to-market

2 return of 218 percent, that's not just buying and selling

3 Nova Scotia notes. That's buying credit default swaps and

4 --

5 THE COURT: Well -- well, you -- you've already

6 made the point that they didn't disclose the credit default

7 swaps, and -- and she didn't object to that, but it -- it

8 seems to me the techniques and the motivation are relevant,

9 but I still need help from you on why exactly how rich they

10 got off this is also relevant.

11 MR. FISHER: Your Honor, I think the extent of the

12 returns goes to -- it goes to motivation. It's as simple as

13 that. I mean, if -- if the returns were modest, the

14 incentive to cut corners, not disclose information, and

15 engage in other inequitable conduct would have been less.

16 There was an opportunity here to make a truly outsized

17 return, and the conduct was directed towards that end.

18 I can tell the Court that, because in discovery,

19 we got very, very little information about the nature of the

20 returns, that I don't have much to ask on this particular

21 topic, because there isn't much information that we were

22 provided with.

23 THE COURT: Well, if you can lay more of a

24 foundation later on for why it might be relevant, I'll allow

25 you to raise it again, but, at this juncture, the objection




1 is sustained.

2 (Pause)


4 THE COURT: Yes.


6 BY MR. FISHER:

7 Q Mr. Truong, would you look, please, at Plaintiff's

8 Exhibit --

9 THE COURT: Before you proceed, Mr. Fisher, --

10 MR. FISHER: Yes.

11 THE COURT: -- give me a minute.

12 (Pause)

13 Go ahead.

14 BY MR. FISHER:

15 Q Mr. Truong, Plaintiff's Exhibit 640 -- if you look at

16 the bottom email, do you see that's an email that was sent

17 to you?

18 A Yes.

19 Q And the email says, quote, "Euroclear credited

20 48,189,490 Great Britain pounds for the GM Nova Scotia

21 assets this morning." Do you see that?

22 A Yes.

23 Q And that email was sent on June 26, 2009?

24 A Yes.

25 Q And that's the consent fee, that's the amount of the




1 consent fee that was paid to Fortress with respect to its

2 Nova Scotia holdings?


4 Q And the payment of that consent fee on June 26th, 2009,

5 that's consistent with what you told your colleagues at

6 Fortress in terms of the timing of payment. That's

7 consistent with what you told them at the end of May 2009,

8 right?

9 A Yes.

10 Q And Mr. McKnight's response -- you forwarded the email

11 to Mr. McKnight, and his response is, quote, "Cash money,"

12 right?



15 THE COURT: Yes.

16 BY MR. FISHER:

17 Q Mr. Truong, Plaintiff's Exhibit 29 is an 8-K that was

18 filed by General Motors Corp. on June 1, 2009, correct?

19 A Yes.

20 Q And you were provided an opportunity to have some input

21 into this 8-K, right?

22 A Yes.

23 Q And you commented on the 8-K when it was in draft form?

24 A Yes.

25 Q And, in particular, your comment related to how the




1 consent fee was described in the 8-K, right?

2 A Yes.

3 Q And your comment was accepted into what became the

4 final form of this 8-K, right?

5 A Yes.

6 Q Now, there was some discussion about the filing of this

7 8-K on the morning of June 1, 2009?

8 A I'm sorry. Was that a question?

9 Q Yes.

10 A Yes, there was.

11 Q And that happened at Weil's offices on the morning of

12 June 1, 2009?

13 A Yes.

14 Q And -- and you were there for those discussions, right?

15 A I was there for -- for certain discussions related to

16 the 8-K.

17 Q Okay. And, at a certain point in time, you were told

18 that this 8-K would be filed by 8:30 in the morning on

19 June 1, 2009, right?

20 A I believe so.

21 Q But that's not, in fact, what happened, right?


23 Q When was the 8-K, in fact, filed?

24 A Later that afternoon.





1 THE COURT: Yes.

2 BY MR. FISHER:

3 Q In June 2009, did you report to Ms. Cowen at Fortress?

4 A Leslie Cowen ran the corporate distress (ph) group, so,

5 yes.

6 Q And, towards the bottom of Plaintiff's Exhibit 174, do

7 you see where Ms. Cowen asks you, quote, "When will they

8 release the 8-K"?

9 A Yes.

10 Q And, if you look up one email, your response is 8:30

11 a.m., right?


13 Q And that's an email that you sent to Ms. Cowen at 7:55

14 a.m. on June 1, 2009?

15 A Yes.

16 Q And you also tell her, quote, "Canadian government just

17 approved the deal. I'm waiting for a copy of all executed

18 forms. Then, I'll head out," right? Do you see that?

19 A Yes.

20 Q When you talk about all executed forms in this email,

21 what are you talking about?

22 A I believe I'm referring to the lock-up agreement.

23 Q And when did you finally head out from Weil, Gotshal's

24 offices on the morning of June 1, 2009?

25 A I believe I left Weil's offices somewhere between 9:00




1 to 10:00 a.m.

2 Q And, from Weil's offices, did you go straight to

3 Fortress' offices?

4 A I did.

5 Q And, when you left Weil's offices sometime between 9:00

6 and 10:00 a.m., you did not leave with a fully executed copy

7 of the lock-up agreement, did you?

8 A Now, I -- I don't recall.

9 Q You don't have any executed copy of the lock-up

10 agreement that you took with you when you left Weil's

11 offices on June 1, 2009, do you?

12 A I'm -- I'm sorry. Are you asking if I currently have?

13 Q Sure, yes. Do you currently have a copy?

14 A I currently don't have a copy.

15 Q Okay. Did Fortress look for a copy?

16 A Did Fortress look for a copy leading up to today?

17 Q Yes.

18 A During -- during what time period are you --

19 Q Have you ever seen a copy of a lock-up agreement that

20 you took from Weil's offices on the morning of June 1, 2009?

21 A I don't recall.

22 Q The Plaintiff's Exhibit 29 -- that's the 8-K that we

23 were looking at just a moment ago. Would you, please, pick

24 that back up? Under the lock-up agreement, General Motors

25 Nova Scotia Finance Company consented to being petitioned




1 into bankruptcy in Canada, right?

2 A Yes.

3 Q And that fact doesn't appear in this 8-K, does it?

4 (Pause)

5 A It does not.

6 Q And as of June 1, 2009, you knew that the consent fee

7 would be paid approximately by the end of that month, by the

8 end of June, 2009, right?

9 A Yes.

10 Q And the timing of the payment of the consent fee is not

11 mentioned anywhere in this 8-K, correct?

12 A No, it's referred to as a forthcoming meeting.

13 Q And there's no information in the 8-K about when that

14 meeting would be held, right?

15 A No.

16 Q And the timing of that meeting was in the control of

17 the parties who signed the lock-up agreement, right?

18 A I don't believe that's the case.

19 Q Well, the timing of the meeting was dependent upon

20 giving notice about passage of an extraordinary resolution,

21 right?

22 A The details around a timing of an extraordinary

23 resolution are detailed in the documents for the bond. The

24 date of the meeting is in control of General Motors, but the

25 amount of notice and other details related to that




1 extraordinary resolution were actually public and in details

2 and in documents related to the bond itself.

3 Q And you knew when the consent fee would be paid, right?

4 A I didn't -- I don't know if I knew the date.

5 Q Well, in a June 3rd email you were able to accurately

6 predict that it would be paid on June 26th, right?

7 A As per the terms related to an extraordinary resolution

8 as it pertained to the bonds, so yes.

9 Q And in connection with your role, your participation in

10 negotiating the lock-up agreement, you learned that the

11 funds for the consent fee were funds that were transferred

12 by old GM, correct?


14 Q And that information is not in this 8-K that we're

15 looking at, is it?

16 A It doesn't appear to be.


18 THE COURT: Yes.

19 (Pause)

20 BY MR. FISHER:

21 Q Mr. Truong, does Plaintiff's Exhibit 191, is that a

22 Bloomberg chat between you and Mr. Chung of Arrowgrass

23 Capital?

24 A Yes.

25 Q Okay. And it's an exchange that you had on June 8,




1 2009?

2 A That's correct.

3 Q Okay. Would you turn to the second page of this

4 exhibit, please, and you will see there's a chat that has a

5 time stamp next to it towards the middle of the page,

6 15:31:13. It says, "Bao Truong, Fortress Investment,

7 says ..."

8 And you write, quote, "Nova recoveries can only go

9 up in my opinion." Do you see that?

10 A Yes.

11 Q And Mr. Chung says, "Why, that was my next question.

12 The extraordinary resolution, is that conditional on 363

13 success or is the only condition bondholders agreeing in

14 extraordinary resolution?"

15 And you tell Mr. Chung, "It's the latter," right?

16 A Yes.

17 Q And then if you continue to read down through this

18 chat, you tell Mr. Chung that payment of the consent fee is

19 scheduled for the day after the extraordinary resolution

20 meeting, right?

21 A Yes.

22 Q Okay. And looking at this email exchange, it's your

23 understanding that before you told him that, Mr. Chung

24 didn't know that, right?

25 A It appears that way, yes.




1 Q And Mr. Chung -- or Arrowgrass Capital was a Nova

2 Scotia noteholder, right?

3 A Yes.

4 Q And you knew that, right?

5 A Yes.

6 Q And Arrowgrass Capital, though, did not participate in

7 negotiation of the lock-up agreement, correct?

8 A That's correct.

9 Q Okay. I want to leave the lock-up agreement aside for

10 a few minutes and I want to focus on the six months or so

11 leading up to the negotiation of the lock-up agreement.

12 In December 2008 -- or anytime before 2009, there

13 were a number of different investment funds with whom you

14 spoke about the Nova Scotia notes, correct?

15 A Yes.

16 Q You spoke with people at Aurelius in this pre-2009

17 period?

18 A Is your question, did I speak with the folks at

19 Aurelius pre-January 1st, 2009?

20 Q About the Nova Scotia notes.

21 A Yes.

22 Q And one of the people you spoke to was Mark Brodsky at

23 Aurelius, correct?


25 Q And you spoke to Didric Cederholm at Elliott about the




1 Nova Scotia notes before 2009?

2 A That's correct.

3 Q And you spoke with Jim Bolin at Appaloosa, correct?

4 A I'm not sure if that's correct.

5 (Pause)


7 THE COURT: Yes.

8 (Pause)

9 BY MR. FISHER:

10 Q I've handed you, Mr. Truong, your deposition transcript

11 from this case. Do you recognize that that's the transcript

12 of your deposition?

13 A Yes.

14 Q Would you turn to page 38, please. At the very bottom

15 of that page, line 25 -- do you have the line?

16 A Yes.

17 Q Question, "You list for me a number of funds with which

18 you've communicated about the Nova Scotia bonds at various

19 points in time. Did you communicate with any of those funds

20 that you mentioned before 2009 about the Nova Scotia bonds?"

21 Answer, "Yes."

22 Question, "Which of the funds did you speak with

23 before 2009?"

24 Answer, "Pre-2009 -- and, again, I don't recall

25 all of the funds that I spoke with -- pre-2009 it would




1 include Aurelius, Elliott, Appaloosa and Arrowgrass."

2 Do you see that?

3 A Yes.

4 Q And does seeing those questions and answers refresh

5 your recollection that you spoke with Appaloosa about the

6 Nova Scotia notes before 2009?

7 A I'm sorry, when I -- when you asked your question did I

8 speak with -- I'm trying to recollect that period. I know I

9 communicated with Jim Bolin. I don't know if we spoke

10 either by phone or directly.

11 It may have been by either email or some type of

12 electronic communication.

13 Q Okay. But you do -- you do recall communicating with

14 Mr. Bolin of Appaloosa about --

15 A Yes.

16 Q -- the Nova Scotia notes?

17 And -- okay, now I just want to turn to January

18 2009. In January of 2009 you spoke to Mr. Gropper at

19 Aurelius about the Nova Scotia notes?

20 A Yes.

21 Q Okay. And you spoke to Mr. Gropper's colleague, Dennis

22 Prieto, about the Nova Scotia notes?

23 A Yes.

24 Q Okay. And at some point in the first quarter of 2009,

25 you and Mr. Gropper discussed filing a lawsuit against Nova




1 Scotia Finance Company in addition to certain other

2 defendants, correct?

3 A I'm sorry, could you repeat the question?

4 Q Yes. At some point in the first quarter of 2009, you

5 and Mr. Gropper discussed commencing a lawsuit against GM

6 Nova Scotia Finance Company, among others?

7 A Yes.

8 Q And, in fact, such a lawsuit was commenced, right?

9 A That's correct.

10 Q And that was in March of 2009?

11 A Yes.

12 Q And Appaloosa was also involved in commencing that

13 lawsuit, correct?

14 A Yes.

15 Q And in the course of talking about the Nova Scotia

16 notes and talking about the lawsuit, you came to learn what

17 Aurelius' position was in the Nova Scotia notes, right?

18 A Yes.

19 Q And you came to learn what Appaloosa's position was in

20 the Nova Scotia notes, correct?

21 A Yes.

22 Q And there was a fourth noteholder who was also involved

23 in your discussions about the Nova Scotia notes during this

24 first quarter of 2009, right?

25 A I'm sorry, when you say "involved in your discussions,"




1 what do you mean by that?

2 Q Well, during this period of time, the first quarter of

3 2009, were you also in touch with Didric Cederholm of

4 Elliott?

5 A I was in discussions with Didric Cederholm from Elliott

6 during that period of time.

7 Q Okay. And those discussions included discussions about

8 the Nova Scotia notes, correct?

9 A Those discussions did not pertain to the Nova Scotia

10 notes, generally.

11 THE COURT: I couldn't hear that answer.

12 THE WITNESS: The discussions with Didric

13 Cederholm from Elliott did not pertain to the Nova Scotia

14 notes, generally.

15 I've had -- during that period, we were both

16 serving on the steering committee of General Motors for the

17 bondholders, so, naturally, there -- Didric and I spoke

18 quite often about -- about General Motors.

19 We did not communicate -- we did not have

20 discussions really about the Nova Scotia bonds other than

21 one or two conversations where we -- he noted to me and I

22 noted to him that we were holders of those bonds.

23 But, when you said "participate in -- in your

24 discussions," we did not include Didric in those

25 discussions. In those discussions, I would refer to as




1 discussions between Appaloosa, Aurelius and Fortress, as it

2 pertains to the Nova Scotia notes.

3 THE COURT: Mr. Fisher, we've been going on for

4 almost an hour and a half. Why don't you look -- unless

5 you're on the homestretch, why don't you look for a place to

6 take a break in the next five or ten minutes.

7 MR. FISHER: Will do, Your Honor.

8 May I approach?

9 THE COURT: Yeah.

10 (Pause)

11 BY MR. FISHER:

12 Q Mr. Truong, Plaintiff's Exhibit 167, is that a message

13 that you sent to Rebecca Pacholder of Sandell Asset

14 Management?


16 Q Okay. And would you read the subject line, please.

17 A "By the way comma, obviously, please keep confi (sic)

18 the fourth holder of the GM."

19 Q Okay. That fourth holder of GM Nova Scotia bonds

20 that's referred to in the body of this email, is that

21 Elliott?

22 A I don't recall at the time of this email who I was

23 referring to as the fourth holder.

24 Q In the email you write, "The other three, including

25 ourselves, are public from the pleading and press."




1 When you refer to the "other three," you're

2 referring to Appaloosa, Aurelius and Fortress, correct?

3 A I believe so.

4 Q And your testimony is, sitting here today, you don't

5 remember one way or the other whether the fourth holder was

6 Elliott?

7 A I don't recall who I was referring to in that specific

8 email.

9 Q You did identify for Ms. Pacholder a fourth significant

10 holder of Nova Scotia notes, right?

11 A From this email it appears to be, but I don't recall

12 the details of that conversation.

13 Q And you likely told her that in a telephone call?


15 Q Whoever this fourth holder was, this fourth holder of

16 Nova Scotia notes, asked you, at least at this point in

17 time, May 2009, to keep its identity confidential, right?


19 Q In terms of Appaloosa's involvement in the lawsuit that

20 was filed in Nova Scotia, you communicated with Jim Bolin at

21 Appaloosa about his involvement in the lawsuit, right?


23 Q Yes. Did you communicate with Jim Bolin of Appaloosa

24 in the first part of 2009 about Appaloosa's involvement in

25 the lawsuit that was filed in March 2009?




1 A Yes.

2 Q And Mr. Gropper also communicated with Appaloosa,

3 correct?

4 A I believe so.

5 Q And you and Mr. Gropper both spoke with one other about

6 getting Appaloosa involved in the effort, right?

7 A Yes.

8 Q And before commencing the lawsuit, you retained

9 Canadian counsel?

10 A Yes.

11 Q The three of you retained Cox & Palmer; is that right?

12 A I'm sorry, say --

13 Q Yes. The three of you, Appaloosa, Aurelius and

14 Fortress, retained Cox & Palmer to commence the lawsuit; is

15 that right?

16 A No.

17 Q Was it Blakes?

18 A Yes.

19 Q Okay. And once that lawsuit --

20 A I'm sorry, just to -- if I could clarify my answer to

21 that question.

22 Aurelius and Fortress retained Blakes in the

23 beginning of January. The intent was not to file a lawsuit.

24 If Blakes -- I'm not sure if -- technically, Blakes was

25 retained by Appaloosa, but that was the sequence of events.




1 MR. FISHER: Your Honor, I'm almost at a stopping

2 point, just a few more questions on this topic.

3 THE COURT: All right.

4 BY MR. FISHER:

5 Q Once you filed this lawsuit in March of 2009, you let

6 contacts at other investment funds know about the lawsuit,

7 right?

8 A I -- I mentioned it to a -- one or two funds.

9 Q You shared the complaint that was filed with Citigroup?

10 A I did.

11 Q And with a fund known as Marathon?

12 A Yes.

13 Q And a fund known as CarVal?

14 A Yes.

15 Q And a -- and J.P. Morgan?

16 A Yes.

17 Q And Sandell Asset Management?

18 A Yes.

19 Q And then in April 2009 after the lawsuit was filed,

20 Fortress, Aurelius and Appaloosa talked about possibly

21 engaging Dechert to represent you as a group of Nova Scotia

22 bondholders, right?

23 A I don't recall the purpose of speaking with Dechert

24 during that time period.

25 Q But you do remember that a call was set up with Dechert




1 in or about April 2009?

2 A I do recall that an email was sent and we set up a call

3 -- or the intent was to set up a call. I don't believe that

4 call was -- the subject of that call pertained to the Nova

5 Scotia notes.

6 Q The folks who participated in that call, that was

7 Aurelius, right? Yes?

8 A Yes.

9 Q And Appaloosa participated?

10 A I recall the email to set up the call and the parties

11 that were listed on the email.

12 Q Okay. Who were they, what do you recall about that?

13 A That it was -- included Appaloosa, Aurelius, Elliott.

14 Q And Fortress?


16 Q And as of that point in time, April 2009, you knew that

17 the four of you were each substantial holders of GM Nova

18 Scotia notes, right?

19 A I knew that the four funds held Nova Scotia notes.

20 Q And you knew that collectively you held more than two-

21 thirds of the notes, right?

22 A I don't recall if I knew that at the time.

23 Q Okay. And you don't recall what the subject matter was

24 of the call that was set up with Dechert?

25 A I don't recall the subject matter, but I'm pretty sure




1 it didn't have -- include or involve the Nova Scotia notes,

2 because --

3 Q It concern -- it concerned General Motors, right,

4 you're sure about that?

5 A It certainly concerned General Motors. And the reason

6 I -- why I don't believe it involved the Nova Scotia bonds

7 is given the events that were occurring at that time with

8 Chrysler and the state of General Motors and a potential

9 restructuring, you know, there were other topics to discuss.

10 While I don't recall the specific topic of that

11 call, my recollection is that it involved those other

12 aspects of General Motors and that it did not pertain to

13 specifics about the Nova Scotia bonds.

14 Q And in terms of GM securities held by Fortress at that

15 point in time, Fortress had made a decision not to invest in

16 the regular GM corporate bonds, right?


18 Q Instead, it decided to invest in the Nova Scotia notes,

19 right?


21 Q Okay.

22 MR. FISHER: Your Honor, this might be a good time

23 to take a break.

24 THE COURT: Okay. Until a quarter to 4:00 on the

25 clock up there.




1 We're in recess.

2 (Recess at 3:33 p.m.)

3 DIRECT EXAMINATION (Resumed)

4 BY MR. FISHER:

5 Q Mr. Truong, before Fortress purchased the notes for the

6 first time in 2006, you did some due diligence about the

7 notes, right?

8 A That's correct.

9 Q And one of the things that you did was you spoke to

10 Mr. Brabander at GM Canada; is that right?


12 Q And Mr. Brabander at the time was the treasurer of GM

13 Canada, correct?

14 A I believe so.

15 Q And Mr. Brabander told you that there was an

16 intercompany loan between GM Canada and GM Nova Scotia

17 Finance Company, right?

18 A I believe he detailed two intercompany loans; one

19 between GM Canada and GM Nova Scotia Investments, and

20 another between GM Nova Scotia Finance and GM Nova Scotia

21 Investments.

22 Q And you took notes of that conversation?

23 A I did.

24 Q Now, the information that he shared with you in that

25 telephone call -- I'm sorry, I don't know whether I asked




1 you -- I'd like to confirm.

2 That call that you just described happened in

3 2005, right?

4 A That's correct.

5 Q And the information that he provided to you in that

6 telephone call about the intercompany obligations you just

7 described, there was no public filing describing those

8 intercompany obligations until sometime in 2009, correct?

9 A I don't recall seeing those notes detailed in a filing,

10 yes.

11 Q Okay. And, in fact, the first time that you're aware

12 of any such intercompany obligations being described in a

13 public filing is when the S-4 was filed in connection with

14 GM -- GM's bond exchange offer in April 2009, correct?



17 THE COURT: Yes.

18 (Pause)

19 BY MR. FISHER:

20 Q Mr. Truong, Exhibit 168, the attachment to the email

21 that appears on the first page, are those your handwritten

22 notes of your 2005 conversation with Mr. Brabander?

23 A Yes.

24 Q And then if you could turn to Plaintiff's Exhibit 653,

25 please. The bottom email there, is that an email that you




1 sent to Christine Daley at Oak Hill Advisors?

2 A Yes.

3 Q Okay. And in connection with the litigation that you

4 commenced -- that Fortress commenced, along with Aurelius

5 and Appaloosa in Nova Scotia, at any point in time did you

6 file an affidavit in support of that litigation?


8 Q Yes. In connection with the Nova Scotia litigation,

9 did you file an affidavit?

10 A I believe we -- I filed an affidavit in connection to a

11 motion for a receivership.

12 Q And was -- was that a motion in which Aurelius,

13 Appaloosa and Fortress proposed having Peter Wedlake, of

14 Green Hunt Wedlake, appointed as a receiver?

15 A Yes.

16 Q And you submitted an affidavit in support of that

17 motion?

18 A I did.

19 Q And if you look at Plaintiff's Exhibit 653, would you

20 please read, beginning from BTW, by the way, would you

21 please read your email to Ms. Daley.

22 A Sure.

23 "Just for kicks and since you asked, I've also

24 attached my affidavit for -- from our GM Nova Scotia

25 complaint. We made our points in Dan Gropper's affidavit,




1 but he couldn't testify to knowledge of the intercompany

2 note prior to disclosure by GM in the April 2009 exchange

3 docs, so we filed this affidavit detailing conversations I

4 had with General Motors. It is my first filed affidavit, so

5 kind of fun."

6 Q So you filed the affidavit in support of the receiver

7 motion because you were the one with personal knowledge

8 about the information that Mr. Brabander had conveyed to you

9 back in 2005, right?


11 Q The reason that you were the one to file the

12 affidavit -- the reason that you filed an affidavit in

13 support of the receiver motion in Nova Scotia was because

14 you had personal knowledge about your conversation with

15 Mr. Brabander?

16 A That is likely one reason that I filed an affidavit.

17 Q And does seeing this email refresh your recollection

18 that, at least to your knowledge, the first place that the

19 information conveyed to you by Mr. Brabander was publicly

20 disclosed was in the April 2009 exchange documents?

21 A Yes.

22 Q Now, before those exchange documents were publicly

23 filed, you did speak to certain funds about the information

24 you had learned from Mr. Brabander, right?





1 Q Between 2005 when you had a conversation with

2 Mr. Brabander, and let's say March 2009, which is before the

3 bond exchange documents were filed by General Motors, you

4 spoke to Arrowgrass about the intercompany obligations that

5 you had learned about from Mr. Brabander, right?

6 A I recall speaking with Arrowgrass. I don't recall if

7 those conversations included conversations -- you know,

8 details around the intercompany note.

9 Q You spoke to Aurelius about the intercompany note,

10 again, before April 2009?


12 Q And you spoke to Elliott about the intercompany note

13 before April 2009?

14 A I -- I -- I'm not sure.

15 Q Okay. If you still have your deposition transcript --

16 A Yeah.

17 Q -- in front of you, would you turn to page 67, please.

18 A Okay.

19 Q Beginning on line 16:

20 Question, "The 2005 conversation you testified

21 about earlier in which the subject of the intercompany note

22 came up from 2005 until the Nova Scotia lawsuit was

23 commenced in March of 2009, did you speak with anyone

24 outside of Fortress about that intercompany note?"

25 Answer, "About the intercompany note?"




1 Question, "Yes."

2 Answer, "From 2005 to 2009?"

3 Question, "Right."

4 Answer, "March of 2009."

5 And then Mr. Finger cautioned you about

6 attorney/client privilege.

7 Answer, "Yes."

8 Question, "Did you speak with Arrowgrass about the

9 intercompany note?"

10 Answer, "Again, I don't recall a specific

11 conversation, but it is likely that I did."

12 Question, "And what about Aurelius?"

13 Answer, "Yes."

14 Question, "And Appaloosa?"

15 "Until March -- I'm sorry, the dates were March?"

16 Question, "From when you found out about the

17 intercompany note in that 2005 conversation until March."

18 Answer, "Until March?"

19 Question, "Until March of 2009."

20 Answer, "I don't recall."

21 Question, "Elliott?"

22 Answer, "Elliott, yes."

23 Did I ask you those questions, did you provide

24 those answers?

25 A Yes.




1 Q And when you said at your deposition that you spoke to

2 Elliott about the intercompany note, that would have been a

3 conversation with Mr. Cederholm, right?

4 A That would be a conversation with Cederholm, yes.

5 Q Okay. During the first half of 2009, with regard to

6 the Nova Scotia notes, you've already explained that one of

7 the things you were involved with was the litigation in Nova

8 Scotia, right?


10 Q During the first half of 2009, you were involved in the

11 litigation that we've been talking about in Nova Scotia,

12 right?

13 A Yes.

14 Q And during that same period of time, you were also a

15 member of a steering committee of ad hoc bondholders of

16 General Motors, right?

17 A Yes.

18 Q You joined that steering committee in approximately

19 December of 2008?


21 Q And you stayed on that steering committee until when?

22 A I don't recall that there was an exact end date, but

23 activity trailed off post the bankruptcy. I don't recall

24 that there being much activity post the filing of

25 bankruptcy.




1 Q Okay. So you stayed on the committee at least right up

2 until the bankruptcy; is that right?

3 A Again, I don't recall a date where I left the

4 committee, but the activity of the committee more or less

5 ceased upon the filing.

6 Q Okay. And the objective of this -- now, the steering

7 committee was a steering committee of an ad hoc committee,

8 right?

9 A I'm sorry, say --

10 Q It was a steering committee of a larger committee of

11 bondholders; is that right?

12 A The -- it was a steering committee that included a

13 number of funds that were holders of General Motors

14 securities. That fund was represented by Paul Weiss and

15 Houlihan Lokey. They were in touch with other bondholders.

16 I'm not sure I would characterize it as you have,

17 which is the steering committee is a committee of a larger

18 committee.

19 Q Okay. And Mr. Cederholm, of Elliott, also sat on that

20 committee?


22 Q And the two of you knew that you each held a

23 substantial position in GM Nova Scotia notes, right?

24 A We knew that we -- our funds held the Nova Scotia

25 notes.




1 Q And -- and you knew that Elliott held Nova Scotia notes

2 as well, right?

3 A I knew at the time that Elliott held Nova Scotia notes.

4 Q And as of when you joined the steering committee in

5 December 2008, you expected that General Motors Nova Scotia

6 Finance Company would end up in bankruptcy, right?


8 Q Uh-huh. As early as December of 2008 when you joined

9 the committee, you expected that General Motors Nova Scotia

10 Finance Company would end up in bankruptcy?

11 A I -- that's not -- that's incorrect. It's obviously a

12 possibility at that time in December 2008, but I wouldn't

13 describe it as my expectation.

14 Q Mr. Truong, you're familiar with the term "winding up"?

15 A Yes.

16 Q And you're aware that in order for Nova Scotia Finance

17 Company to assert an unlimited liability company claim

18 against old GM, its sole shareholder, there has to be a

19 winding up event?

20 A Yes.

21 Q And you're aware that a bankruptcy filing is -- or it's

22 your position that a bankruptcy filing is such a winding up

23 event, right?

24 A Yes.

25 (Pause)





2 THE COURT: Yes.

3 (Pause)

4 BY MR. FISHER:

5 Q Is that an email that you wrote for Michael Chung, of

6 Arrowgrass Capital, on December 10, 2008?

7 A Yes.

8 Q Okay. And would you read the email, please.

9 A "I checked a bit more, and, indeed, GM Nova Scotia is

10 an unlimited liability company, so there is, or will be, a

11 shareholder liability claim. Thanks."

12 Q And you also recall having conversations with Mr. Chung

13 of Arrowgrass about the possible winding up of GM Nova

14 Scotia Finance Company, right?


16 Q Well, in this email when you say "there is or will be a

17 shareholder liability claim"; do you see that?

18 A Yes.

19 Q Okay. You understand -- you understood when you wrote

20 this email that in order for there to be a shareholder

21 liability claim, a winding up event is a precondition,

22 right?

23 A Yes.

24 Q And that's a subject that you discussed with Mr. Chung,

25 of Arrowgrass, in or about December 2008, right?




1 A It appears to be, yes.

2 Q And in addition to this email, you also had phone

3 conversations with him about that topic, right?

4 A I've had a -- no, I haven't -- likely during that

5 period, had a number of conversations. I don't know if this

6 specific topic you referred to was a topic of discussion on

7 a phone call.

8 Q Okay. Would you turn, please, in your deposition to

9 page 62 -- I'm sorry, page 61, at the very bottom, line 25.

10 Question, "At the time you sent this email,

11 December 2008, did you have an understanding that it would

12 take a General Motors Nova Scotia bankruptcy proceeding to

13 give rise to a shareholder liability claim against General

14 Motors, Corp.?"

15 Answer, "I don't think -- I don't recall. I don't

16 recall."

17 Question, "Is that a topic that you discussed with

18 Mr. Chung?"

19 And then there's an objection.

20 Answer, "When you say 'topic,' what do you mean?"

21 Question, "I should be clearer, the topic of a

22 shareholder liability claim with regard to GM Nova Scotia

23 Finance. I mean you see there's an email about that. I'm

24 just asking whether that is something you also discussed

25 with him."




1 Answer, "Well, the email -- the email is part --

2 is a discussion."

3 Question, "Apart from the email, do you remember

4 any other discussions?"

5 Answer, "I believe I had -- I believe I had phone

6 conversations."

7 Question, "Do you remember anything at all about

8 those conversations?"

9 Answer, "I believe those conversations involved

10 the shareholder liability claim."

11 Question, "I'm just asking whether you remember

12 what was said about that topic."

13 Answer, "I believe part of the discussion -- I

14 don't recall the discussions, whether there was more than

15 one, and I don't recall the discussions in their entirety.

16 I do recall that we had a discussion about -- about when a

17 shareholder liability claim would be due."

18 Question, "And what did you say to Mr. Chung about

19 when such a claim would be due?"

20 Answer, "Upon a winding up of the company."

21 And did I ask you those questions, did you provide

22 those answers at your deposition?

23 A Yes.

24 Q If we move forward a month from December 2008 to

25 January 2009. January 2009 you were still on the steering




1 committee, right?

2 A That's correct.

3 Q But by January 2009, you were actually rooting for an

4 old GM bankruptcy filing, right?

5 A I'm sorry, say that again?

6 Q Yes. By January 2009, were you rooting for an old GM

7 bankruptcy filing?

8 A I don't believe that's correct.

9 Q Well, in January 2009 did you consider a bankruptcy

10 scenario to be a better forum for Fortress to assert the

11 multiple claims that it had with respect to its Nova Scotia

12 notes?

13 A A better forum compare -- as compared to what?

14 Q As compared to an out-of-court restructuring.

15 A The -- I'm sorry, could you repeat that question?

16 Q Yes. I'll make it a multiple choice question.

17 Which of the following was better for Fortress'

18 return -- returns on investment based on your point of view

19 in January 2009; A, an out-of-court restructuring, or, B, an

20 old GM bankruptcy filing?

21 A The -- it depends on -- let me -- I need to -- I need

22 help parsing your question, which is why I'm having a hard

23 time answering it.

24 The best outcome, as a bondholder, is if a company

25 continues to repay us or continue to -- to pay our




1 obligation as it becomes due, our interest as it becomes

2 due, and our principal when it is due.

3 During this period, there -- there was a

4 contemplation of a restructuring of some of the debt

5 obligations of the company. If for an out-of-court exchange

6 was successful, that would be -- that would be beneficial to

7 holders of General Motors securities, including ourselves,

8 who held bonds.

9 Is one -- so, to your question, is out-of-court

10 preferable to a bankruptcy? I guess it's hard to -- the way

11 you phrased that question -- a successful out-of-court

12 exchange is preferable to a bankruptcy, to the extent that

13 the out-of-court exchange provides a fair and adequate

14 consideration.

15 In the event of a failed exchange, the -- a

16 bankruptcy is a natural option.

17 Q And in January 2009 you thought that Fortress would do

18 a lot better if GM filed for bankruptcy, right?

19 A That statement is incorrect.


21 THE COURT: Yeah.

22 (Pause)

23 BY MR. FISHER:

24 Q Mr. Truong, Plaintiff's Exhibit 163, the bottom half of

25 this page, is that an email from you to Ms. Cowen and




1 Mr. McKnight at Fortress?

2 A Yes.

3 Q And would you read the last sentence in your email,

4 please.

5 A Sure.

6 "Anyway, just another reason why I think an out-

7 of-court restructuring that impairs GM Nova Scotia bonds is

8 impossible, and a bankruptcy filing only gives us a better

9 forum to assert our multiple claims."

10 Q Okay. And that's something that you told Ms. Cowen and

11 Ms. McKnight -- and Mr. McKnight in January 2009, right?


13 Q And Ms. Cowen's response is, quote, "That's an

14 excellent point," right?


16 (Pause)

17 Q And in January 2009, it was your view that Chapter 11

18 was the only way that General Motors could succeed as a

19 private enterprise, right?

20 A I'm sorry, if you could repeat the question.

21 Q Yes. In January 2009, did you express, as your view,

22 the position that the only way General Motors could succeed

23 as a private enterprise was through Chapter 11?

24 A My view at that time -- you know, bond exchanges are

25 hard -- it is hard to have a successful bond exchange with




1 so many different creditors and so many types of securities.

2 The -- there was an attempt to structure a

3 successful out-of-court exchange, and there are a lot of

4 things to consider in structuring and how to structure that

5 to make it successful.

6 It was my view at the time, notwithstanding our

7 intent, to structure a successful out-of-court exchange and

8 that exchange would be beneficial to our economic interest.

9 But that -- that structuring a successful out-of-court

10 exchange at that time would be difficult and that bankruptcy

11 was a likely option -- was a likely possibility.

12 Q And just to be clear about your view, I understand

13 you're telling me that you thought at the time, January

14 2009, that bankruptcy was a likely outcome, but it was also

15 your view that bankruptcy would give Fortress a better forum

16 to assert the multiple claims associated with its Nova

17 Scotia bonds, right?

18 A You know, perhaps the use of the word "better" here --

19 I suppose when one thinks of better, it is better relative

20 to something, and I may -- perhaps the use of the word

21 "better" here is misused.

22 But to be -- to respond -- to be responsive to

23 your question, it wasn't, at that time, my preference for a

24 bankruptcy of General Motors.

25 Q You expressed the view internally at Fortress that a




1 bankruptcy would be better with regard to asserting the

2 multiple claims with regard to the Nova Scotia notes, right?

3 Did you express that view?

4 A I expressed that in this email, yes.

5 Q Did you ever retract that view?

6 A The -- what I meant by better --

7 Q That's not what I'm asking.

8 A Okay.

9 THE COURT: The pending question is, "Did you

10 retract that view?"

11 THE WITNESS: I did not retract that statement.

12 BY MR. FISHER:

13 Q And you also made a statement in January 2009 that a

14 bankruptcy was the only way that General Motors could

15 succeed as a private company, right?

16 A Yes, I made that statement.


18 THE COURT: Yes.

19 (Pause)

20 BY MR. FISHER:

21 Q Mr. Truong, you know Matthew Breckenridge, with the

22 Marathon fund?

23 A I do.

24 Q And you told Mr. Breckenridge about a conversation that

25 you had had with someone from a fund called "Loomis" in your




1

2 1 January 22, 2009, email which is included in Plaintiff's

3 2 Exhibit 166?

4 3 A Yes.

5 4 Q And in recounting that conversation to Mr. Breckenridge

6 5 you write, quote, "She also said she has spoken with a few

7 6 long onlies who also agree that Chapter 11 is the preferred

8 7 path." Do you see that?

9 8 A Yes.

10 9 Q And then you write, quote:

11 10

12 "We discussed getting other members of the steering

13 11 committee on board with this direction because I think it

14 12 will impact the message for our lobbyists, as well as the

15 13 work for Andy and HLHZ over the next few weeks."

16 14

Do you see that?

17

15 A Yes.

18

16 Q And, in fact, you did have a discussion with someone

19

17 from Loomis in which you discussed getting other members of

20

18 the steering committee, that you were a member of, on board

21

19 with a message that Chapter 11 was the preferred path for

22

20 old GM, right?

23

21 A Yes.

24 22 Q And that was in January 2009, correct?

23 A Yes.

25 24 Q And when you spoke to Ms. -- when you spoke to --

25 what's Diana's last name?

Page 71




1 A I don't recall.

2 Q Okay. Was she on the steering committee with you?

3 A Yes.

4 Q And the fund she represented was called "Loomis"; is

5 that right?

6 A Yes.

7 Q And you also discussed with her going through a list of

8 the steering committee members so that you could divide it

9 up and try to build a consensus around the view that a

10 Chapter 11 filing was the preferred path for General Motors,

11 right?

12 A Yes.

13 Q And then, if you look up you'll see that you forwarded

14 on the email exchange that you had with Mr. Breckenridge to

15 Ms. Cowen and Mr. McKnight at Fortress; do you see that?

16 A Yes.

17 Q And you told them, quote, "In my view, Chapter 11 is

18 the only way GM succeeds as a private enterprise," close

19 quote; do you see that sentence?

20 A Yes.

21 (Pause)


23 THE COURT: Yes.

24 (Pause)

25 BY MR. FISHER:




1 Q Mr. Truong, on Plaintiff's Exhibit 588, that's an email

2 that Mr. McKnight sent you to and Mr. Safian (ph), on

3 January 15th, 2009, correct?

4 A That's correct.

5 Q And is -- what Mr. McKnight did here is he took a

6 headline that said, "GM says preliminary talks underway on

7 debt exchange," and he added in the language, "Triple DIP

8 likely to drive process"; is that right?

9 A I believe so.

10 Q And when Mr. McKnight sent this to you, you understood

11 that when he wrote, "Triple DIP likely to drive process," he

12 was referring to the Nova Scotia notes, right?

13 A I believe so.

14 (Pause)

15 Q Now, Mr. Truong, ultimately, the way the Nova Scotia

16 notes recoveries were resolved was through the lock-up

17 agreement, right?


19 Q Sure. Ultimately, the question of how the Nova Scotia

20 notes would be treated from your point of view was resolved

21 by the lock-up agreement, correct?

22 A I'm not sure if it was resolved, but it was detailed

23 how those claims could be treated.

24 Q Okay. And turn your attention now to sort of late May

25 2009. If Fortress didn't end up reaching an agreement with




1 GM and the related GM parties about the Nova Scotia bonds,

2 it was Fortress' plan to object to the proposed 363 sale of

3 old GM's assets to new GM, right?


5 Q Sure. In the event that you hadn't reached an

6 agreement on the lock-up agreement, it was your plan to

7 mount an opposition to the proposed 363 sale of old GM's

8 assets to new GM?

9 A I'm not sure I would use the word "plan." It was a

10 possibility.

11 Q And it was a possibility that you discussed with a

12 public relations firm called "Sard," right?


14 Q And it was a possibility that Fortress discussed with

15 Appaloosa, right?


17 Q And a possibility that was discussed with Aurelius,

18 right?

19 A I believe so.

20 Q In fact, if the lock-up agreement had not been reached,

21 Appaloosa, Aurelius, and Fortress had talked about engaging

22 the same PR firm to assist them in opposing the proposed 363

23 sale process, right?

24 A I believe so.

25 Q Now, the bond exchange offer was proposed towards the




1 end of April 2009?

2 A I believe so.

3 Q And as a member of the steering committee you

4 considered the bond exchange offer?

5 A Yes.

6 Q And you immediately concluded that the Nova Scotia

7 notes would never accept the exchange offer, correct?

8 A That's not correct.


10 THE COURT: Yes.

11 (Pause)

12 BY MR. FISHER:

13 Q Mr. Truong, is this a Bloomberg chat between you and

14 Mr. Chung of Arrowgrass Capital?

15 A Yes.

16 Q And this was an exchange on April 27, 2009?

17 A Yes.

18 Q Okay. And if you look towards the middle of the page,

19 Mr. Chung writes to you, "Not a chance this exchange

20 happens, right"; do you see that?

21 A Yes.

22 Q And your response is, "Not for the Novas, but need to

23 go through the docs and the viability plan."

24 And then Mr. Chung writes, "Not for Novas, as in

25 they're not being offered the same or exchange not happening




1 for the Novas, i.e. Novas never accept this?"

2 And you write, "The latter, we wouldn't accept

3 it."

4 And then Mr. Chung writes, "As suspected. Shall

5 we get together later in the week or over weekend," and it

6 continues.

7 The messages that I read that you authored, those

8 are things you said to Mr. Chung in this email exchange,

9 right -- in this Bloomberg exchange, right?


11 Q And what you told Mr. Chung in this Bloomberg exchange,

12 which is that the Novas would never accept the exchange

13 offer, that's not a view that you communicated to the

14 steering committee, is it?

15 A I'm sorry, can you repeat the question?

16 Q Yes. What we just saw, where you expressed the view

17 the Novas would never accept the exchange offer, you did not

18 communicate that view to the steering committee, right?

19 A There are two -- I think there are two parts to your

20 question. The first part references that the Novas would

21 not accept. When I wrote -- I wrote this email -- when I

22 speak of Novas I'm speaking on behalf of Fortress; I'm not

23 speaking on behalf of the other Nova Scotia bondholders. I

24 don't know what they would do. Perhaps this email is --

25 this conversation refers to Fortress' view and Fortress'




1 holdings of Nova Scotia bonds.

2 The second part of your question, did I relate

3 that to my view that we, as a holder of Nova Scotia

4 bondholders, would not accept the exchange offer? The --

5 there was a lot of conversations during that period. I

6 don't recall each of those conversations, but it is likely

7 that as a participant of the steering committee, one member

8 of many, that I expressed a view that this exchange was

9 insufficient for GM bondholders, including the Nova

10 Scotia -- including our -- our holdings as a Nova Scotia

11 holder.

12 Q Okay. Would you turn in your deposition, please, to

13 page 201, line 13.

14 Question -- And, you know, if it's helpful,

15 obviously, look at the whole exhibit, but in particular, you

16 tell Mr. Chung, approximately six lines up from the bottom,

17 that the -- that, quote, "The Novas wouldn't accept it,"

18 referring to the exchange offer.

19 "Why is it that the -- why was it your view that

20 the Nova Scotia bondholders would not accept the exchange

21 offer?"

22 Answer, "Because the exchange offer didn't give

23 us adequate consideration for our bonds."

24 Question, "And during the period of time that you

25 were on the steering committee, did you express that view on




1 behalf of Nova Scotia bondholders?"

2 Answer, "Did I express what view?"

3 Question, "The view that the exchange offer was

4 not an offer that the Nova Scotia bondholders would accept."

5 And then there's an instruction about privilege.

6 Answer, "Can you repeat the question, please?"

7 Question, "Sure. Did you -- did you tell anyone

8 on the steering committee that the exchange offer was not an

9 offer that, in your view, Nova Scotia bondholders should

10 accept?"

11 Another objection -- or an instruction based on

12 privilege.

13 Answer, "Sorry, I just want to understand the

14 question one more time."

15 Question, "Sure. Did you tell anyone on the

16 steering committee that it was your view that the Nova

17 Scotia bondholders should not accept the exchange offer?"

18 Answer, "I don't believe I did."

19 Question, "Were the other members of the steering

20 committee aware that Fortress was a Nova Scotia bondholder?"

21 Answer, "Yes."

22 Question, "And how do you know they were, how do

23 you know they were aware of that?"

24 Answer, "I told them -- I told certain holders."

25 Did I ask you those questions, did you provide




1 those answers?

2 A Yes.

3 Q And in the event of an old GM bankruptcy filing, in

4 addition to whatever claims you have, or Fortress has with

5 respect to the Nova Scotia notes, Fortress also stood to be

6 paid with respect to the credit default swaps that we talked

7 about earlier in your testimony, correct?


9 Q In the event of an old GM bankruptcy, Fortress would

10 have been paid on the credit default swaps that it held as

11 of the General Motors bankruptcy filing?

12 A Yes.

13 Q Okay. A few questions now about the weekend during

14 which the lock-up agreement was negotiated. On May 28th,

15 you attended a meeting at Weil Gotshal?

16 A Yes.

17 Q And during the course of that meeting, as best you can

18 recall, the General Motors parties offered the Nova Scotia

19 bondholders 28 cents on the dollar, all in, right?


21 Q And then you've already told us that at some point late

22 in the afternoon or perhaps the evening on Saturday, you

23 thought that the parties reached a basic understanding as to

24 the business terms of what would become the lock-up

25 agreement, right?




1 A That's correct.

2 Q And in that phone call, where it's your view that an

3 agreement was reached on the key business terms, Mr. Gropper

4 did most of the talking, right?

5 A Yes.

6 Q And then following that call on Saturday, on Sunday

7 afternoon, May 31, 2009, you showed up in person at Weil's

8 offices, right?

9 A Yes.

10 Q And you stayed at Weil's offices all through the night

11 and into the following morning, correct?


13 Q And the purpose of being there was to finalize a lock-

14 up agreement, right?


16 Q And the lock-up agreement was a document that was

17 heavily negotiated, correct?

18 A Correct.

19 Q And on Sunday you had Mr. Dakolias, of Fortress, sign a

20 signature page to the lock-up agreement, right?

21 A Yes.

22 Q And as of Sunday when Mr. Dakolias signed his name on

23 that signature page, there wasn't yet a final lock-up






1 Q And the point was to turn that signature over once

2 there was a final lock-up agreement, correct?

3 A Yes.

4 Q And it's your recollection that you turned over

5 Mr. Dakolias' signature page at approximately 7:00 a.m. on

6 the morning of June 1, 2009, right?

7 A That's correct.

8 Q But you don't remember who you gave it to, correct?

9 A I don't recall.

10 Q And in your recollection, Mr. Gropper was the last of

11 the noteholders to turn over his signature page, correct?

12 A Yes.

13 (Pause)

14 Q Now, do you still have Plaintiff's Exhibit 16 in front

15 of you? That's the lock-up agreement that's attached to the

16 email from Weil Gotshal.

17 A Yes.

18 Q This is the final version, right?


20 Q And the way you got from a draft to a final was by

21 having lots of discussions over the course of May 31st and

22 into the morning about various drafts?

23 A Yes.

24 Q And then a Weil lawyer would go off and work on the

25 document, based on the discussions that the parties had had,




1 correct?

2 A That's correct.

3 Q And then a Weil lawyer would come back and provide a

4 new version of the document for everyone to review, correct?

5 A That's correct.

6 Q And you reviewed every draft of the lock-up agreement

7 that was provided over the course of May 31st and into the

8 morning of June 1st, 2009, correct?

9 A Yes.

10 Q And in general, when reviewing a document, it was your

11 practice to pay attention to version numbers that appear on

12 the bottom of documents, correct?

13 A Not entirely.

14 (Pause)


16 THE COURT: Yes.

17 (Pause)

18 BY MR. FISHER:

19 Q Mr. Truong, looking first at Plaintiff's Exhibit 173.

20 At 6:50 a.m. on June 1, you wrote the email that appears on

21 the bottom -- the second email on Plaintiff's Exhibit 173,

22 correct?

23 A Yes.

24 Q And you write to Ms. Cowen and others, quote, "Still

25 here, believe or not. Greg has reviewed the final draft.




1 Folks are filling out sig pages now."

2 Who's the Greg referred to there?

3 A Greg Leahy, he is internal counsel.

4 Q Mr. Leahy was not present Weil Gotshal's offices,

5 correct?

6 A That's correct.

7 Q And sitting here today, you now understand that the

8 version of the document that Mr. Leahy reviewed, in fact,

9 was not the final version of the document; is that right?

10 A I'm sorry, could you repeat your question?

11 Q Yes. The version of the document that Mr. Leahy

12 reviewed was not, in fact, the final version of the

13 document, right?

14 A Yeah, I'm not sure if I know the answer to your

15 question.

16 Q Did you say you're not sure if you have the ability to

17 answer the question?

18 A I'm not sure I know the answer to your question.

19 (Pause)

20 Q Okay. Do you still have your direct testimony, the

21 declaration that you submitted?

22 A Yes.

23 Q In paragraph 63 on page 13, the third sentence you

24 write:

25

"In the 6:50 a.m. email that began this chain of




1 emails, Fortress' in-house counsel, Greg Leahy, had, quote,

2 'Reviewed the final draft, and that people were filling out

3 signature pages at around 6:50 a.m.'"

4

Do you see that?

5 A Yes.

6 Q And sitting here today, you don't know whether, in

7 fact, Mr. Leahy had reviewed the final draft of the lock-up


9 A If you're -- I'm sorry, I wasn't clear about what your

10 question was.

11 If your question is did Greg Leahy review a final

12 draft of a document, Greg Leahy was participating in the

13 negotiations and was available by phone -- he was working

14 from home. He reviewed all the documents, and, as internal

15 counsel, he reviewed -- I've acquired his signoff on the

16 document before providing signatures -- before agreeing to

17 the document in its final form.

18 I wasn't clear about your question earlier, but if

19 your question is did he review a final draft of the

20 document, then, yes, he did.

21 Q Okay. I think you inserted the word "a" in your

22 answer -- a final draft.

23 A Uh-huh.

24 Q And my question -- let me -- I'll ask a different

25 question.




1 As of 6:50 a.m. when you sent that email, the

2 lock-up agreement wasn't finished, right, and by finished --

3 I don't want to argue with you about whether the

4 negotiations were still going on -- I'm just talking about

5 the document. The document had not yet reached its final

6 form, correct?

7 A The -- we negotiated through the night starting at

8 3:00 p.m. Sunday; it was a very long evening. During that

9 period, I held Fortress' signature pages. I did not hand

10 over those signature pages until we were, in my view,

11 finished on the document. And my view -- well -- that it --

12 that it -- that it was completed, and the document that we

13 were handing our signature pages to represented everything

14 that we needed to -- it needed for it to represent in the

15 business agreement.

16 And so I held that signature until 7:00 a.m. after

17 I received confirmation from Greg. Likely that I received

18 confirmation -- Greg -- that he approved the final document,

19 I provided our signature pages. Only until then did I

20 provide our signatures.

21 Q And it's your understanding that Greg reviewed whatever

22 version of the document existed up to 7:00 a.m. when you --

23 A Yes.

24 Q -- turned in your signature page, right?

25 A Yes.




1 Q But you're aware that the lock-up agreement document

2 was revised after 7:00 a.m., correct?

3 A I believe that there were minor edits to the document

4 post my handing of the signature pages, so, yes, to your

5 question.

6 Q And if you look at Plaintiff's Exhibit 687, and in

7 particular, I want to direct your attention to the last two

8 pages of this exhibit.

9 Now, you -- you -- you stayed at Weil's offices

10 until at least 9:00 a.m. on the morning of June 1, 2009,

11 right?

12 A Yes.

13 Q And looking at these last two pages, those two pages

14 indicate changes that were made to the document, to the

15 lock-up agreement document, after 7:00 a.m., correct?

16 MS. BRENNAN: Objection.

17 THE COURT: Leave the room, please, Mr. Truong.

18 Maybe I'm getting tired -- I didn't understand the

19 basis for the objection.

20 MS. BRENNAN: The basis for the objection is

21 simply that this -- there's been no indication that this

22 witness knows anything about this document. It's not a

23 document produced by Fortress. He's essentially asking him

24 to read and opine on a document he's never seen before and

25 there's no foundation for this testimony.




1 THE COURT: Mr. Fisher, do you want to respond?

2 MR. FISHER: Yes. Mr. Truong testified that he

3 stayed at Weil's offices until 9:00 a.m. and he testified

4 that he didn't think there were changes after 7:00 a.m., or

5 rather he testified that there were changes, but he

6 described them as minor.

7 So, I'm simply asking him to look at this document

8 and to look at the substance of what's included on those

9 last two pages to determine whether he remembers whether in

10 fact those were changes that were made after 7:00 a.m.

11 He was there.

12 THE COURT: You can ask him if he sees that any

13 language there refreshes his recollection as to whether

14 there was anything, but you can't ask him to read a whole

15 document and to compare it to something else. That's not

16 fair for any human being.

17 I don't remember exactly how the question was

18 phrased. I'm going to sustain the last one and -- sustain

19 the objection to the last one and then ask -- invite you, if

20 you wish, Mr. Fisher, to ask a new question that doesn't

21 require him to read a whole document and to analyze it.

22 You can show him any particular language and ask

23 him if he has a memory of that being in or out. And if he

24 does or he doesn't, that -- whatever that is -- will be his

25 testimony.




1

2 1 All right. Bring him back in, please.

3 2 Wait. Before we do, how much more do you got?

4 3 MR. FISHER: I'm almost at the end, Your Honor.

5 4 THE COURT: All right.

6 5 And how much is the redirect going to be?

7 6 MS. BRENNAN: Hopefully about 30 to 45 minutes,

8 7 maybe less.

9 8 THE COURT: All right. Bring him back.

10 9 DIRECT EXAMINATION (Resumed)

11 10 BY MR. FISHER:

12 11 Q Mr. Truong, you can set aside Plaintiff's Exhibit 687.

13 12

14 After 7:00 a.m. when you turned over Mr. Dakolias'

15 13 signature page, do you remember Mr. Woodworth returning to a

16 14 conference room at Weil with a new draft of the lock-up

17 15 agreement?

18 16 A I'm sorry, could you repeat the question?

19 17 Q After 7:00 a.m. did Mr. Woodworth return to a

20 18 conference room at Weil with a new version of the lock-up

21 19 agreement?

22 20 A I don't recall.

23 21 Q As of 8:04 a.m. on the morning of June 1, 2009, the

24 22 lock-up agreement was still being worked through, correct?

23 A I'm sorry, can you repeat your question?

25 24 Q As of 8:04 a.m. on the morning of June 1, 2009, the

25 lock-up agreement was still being worked through, correct?

Page 88




1 A I'm not sure what you mean by "still being worked

2 through."


4 THE COURT: Yes.

5 (Pause)

6 MR. FISHER: Your Honor, to save time I'll ask

7 whether counsel will simply stipulate that the proper time

8 on the top email is 8:04 a.m. eastern.

9 MS. BRENNAN: We're fine with that stipulation.

10 THE COURT: I'm sorry, I couldn't hear what you

11 said.

12 MS. BRENNAN: Sorry. We're fine with that

13 stipulation, that it should be 8:04 a.m.

14 THE COURT: Okay.

15 BY MR. FISHER:

16 Q Mr. Truong, the first email that appears in the string

17 on Plaintiff's Exhibit 177, that's an email to -- that you

18 sent to Ms. Cowen?

19 A Yes.

20 Q And the email that you sent is referring to the

21 document known as the lock-up agreement, right?

22 A Yes.

23 Q And you wrote, quote, "Still being worked through, but,

24 yes, final docs will be sent around."

25 That's what you wrote, correct?




1 A Correct.

2 Q And after sending this email, you stuck around at

3 Weil's offices so that you could get a copy of the final

4 version of the lock-up agreement, right?

5 A That's correct.

6 Q And you've told us that you just don't remember whether

7 you ended up taking a copy back to Fortress or not, right?

8 A That's correct. I don't recall.

9 Q And to your knowledge, no one's ever found a copy of

10 the lock-up agreement that you may or may not have brought

11 back from Weil's offices on the morning of June 1, 2009,

12 correct?


14 Q And, if you didn't leave until, at the earliest,

15 9 a.m., you were at Weil's offices when old GM filed its

16 bankruptcy petition, correct?


18 Q Following entry into the lock-up agreement, during that

19 first week in June 2009, Fortress purchased more notes, more

20 Nova Scotia notes, correct?


22 Q Fortress purchased notes on June 2nd, 2009?


24 Q And Fortress had discussions with Elliot and Appaloosa

25 about having them purchase notes alongside Fortress,




1 correct?

2 A I don't recall.


4 THE COURT: Yes.

5 (Pause)

6 BY MR. FISHER:

7 Q This is an email from Mr. McKnight that was written on

8 June 2nd, 2009, correct?

9 A That's correct.

10 Q And you're copied on the email?

11 A Yes, I was.

12 Q And Mr. McKnight asks Mr. Brigger (ph) and Mr. Dakolias

13 whether they are alright with Fortress buying more notes,

14 correct?

15 A I believe the email is addressed to Pete.

16 Q So Mr. McKnight was asking Mr. Brigger whether it was

17 alright if Fortress bought more notes at this point in time,

18 correct?


20 Q And Mr. McKnight writes, quote, "Either Appaloosa or

21 Elliott would be buying along with us." Do you see that?

22 A I do see that.

23 (Pause)


25 THE COURT: Yes.




1 (Pause)


3 BY MR. FISHER:

4 Q Mr. Truong, Plaintiff's Exhibit 630, that's an email

5 from you to Mr. Corcoran (ph), right?

6 A That's correct.

7 Q And what firm was Mr. Corcoran with?

8 A Kevin Corcoran works at -- worked at the time at

9 Fortress.

10 Q And you tell Mr. Corcoran, quote:

11 "We own 150 million pounds in total, 12 million

12 pounds of which were purchased on Monday of this week, and

13 the rest we owned before this week, just FYI so that you can

14 double check the totals."

15 Do you see that?

16 A I do see that.

17 Q And do you believe that to be correct?

18 A I think I may have -- I think the date may be incorrect

19 in that email.

20 Q When do you think the purchases were?

21 A Likely Tuesday.

22 Q So that would have been June 2nd, 2009?


24 Q And if you look at Plaintiff's Exhibit 631, which

25 should be in front of you, does that email list the Nova




1 Scotia bonds that were purchased by a number of different

2 Fortress entities during that first week of June 2009?


4 Q Okay. And as of early June 2009, Fortress' plan was

5 after collecting -- that after the collecting the consent

6 fee, it would sell down its Nova Scotia bonds position,

7 correct?


9 Q Yes. At this point in time, first week of June 2009,

10 Fortress understood that a consent fee was going to be paid

11 by the end of the month, right?


13 Q And Fortress' plan was to sell down its position on the

14 Nova Scotia bonds after collecting the consent fee, correct?

15 A I don't know if that was our plan. I don't recall.

16 (Pause)


18 THE COURT: Yes.

19 MR. FISHER: Thanks.

20 (Pause)

21 BY MR. FISHER:

22 Q Mr. Truong, within Plaintiff's Exhibit 181, would you

23 turn, please, to page 1939. That's a paragraph that you

24 wrote, correct?

25 A Yes.




1 Q Okay. And you write, quote:

2 "On 6/1/09 we, along with Aurelius and Appaloosa,

3 settled our litigation with the company, which provided for

4 a cash payment of 37 cents to 38 cents depending on the bond

5 and preservation of our two unsecured claims against GM

6 Corp.

7 We received the cash payment on 6/26/09 and will

8 need to assert the GM Corp. claims as part of the

9 liquidation of old GM. We are looking to sell down and

10 de-risk our position over time which includes shorting

11 general unsecured bonds of GM Corp."

12 You wrote all of that, right?

13 A Yes.

14 (Pause)


16 THE COURT: Yes.

17 UNIDENTIFIED SPEAKER: All right. Thank you.

18 (Pause)

19 BY MR. FISHER:

20 Q Mr. Truong, with reference to Plaintiff's Exhibit 635,

21 Isuki Sun (ph), was she at Fortress on June 10, 2009?

22 A Yes.

23 Q Okay. And the attachment to the email, is that a slide

24 that she prepared for your review?

25 A Yes.




1 Q And, if you look at the second page of the exhibit, did

2 you review the timeline?

3 A Did I review the timeline at that time? Did I review

4 the exhibit?

5 Q At the time, yes.

6 A Yes, I reviewed the exhibit at that time.

7 Q And generally speaking, the timeline lays out events

8 from April 2008 and then it culminates with a description of

9 the lock-up agreement, correct?


11 Q Okay. And the events on the timeline include, among

12 other things, Fortress joining the steering committee of GM

13 bondholders, right?

14 A Yes.

15 Q And Fortress filing a lawsuit asserting an oppression

16 claim against a number of GM entities, right?

17 A Yes.

18 Q And then old GM's bankruptcy, correct?


20 MR. FISHER: Your Honor, I have no further

21 questions, at this time, for Mr. Truong.

22 I have one document management issue which is,

23 although I realize that it's late, I've been able to cut

24 down on many of the documents that I showed Mr. Truong, but

25 they're documents I'd like to get into evidence, and so I




1 would like to provide a list of the documents to counsel and

2 have an assurance from them that there'll be no objection to

3 the admission of those documents into evidence.

4 There is no objection in the joint pretrial

5 submission, but this remains part of this stubborn

6 disagreement where there's a position that I need to show a

7 document to a witness in order to get it into evidence.

8 So we'd save a lot of time if I could just simply

9 give a list to my adversaries.

10 MS. BRENNAN: I believe that's a request we made

11 of the GUC Trust. We're in -- we asked for such a list

12 prior to today, I think, last Thursday. We're obviously

13 willing to entertain that request.

14 This last document, I think, exemplifies what one

15 of the issues is, for instance, and I don't want to overstep

16 my bounds -- in the interest of time, I don't think

17 Mr. Truong needs to be excused for this, but the bottom

18 right portion is something to which we would object for the

19 admission, based on your prior ruling.

20 So -- but we're

21 happy to entertain the list and have that discussion offline

22 with Mr. Fisher.

23 THE COURT: I don't want to slow down the trial by

24 going through this now. Deal with it offline.

25 If it turns out that we need to bring Mr. Truong




1 back to authenticate or otherwise lay a foundation for a

2 document I'll entertain such a request if you guys can't

3 reach agreement.

4 Let's get on to the redirect. You're done

5 otherwise, Mr. Fisher?

6 MR. FISHER: I am, Your Honor, and I'll provide a

7 list of those documents today to Greenberg, Traurig.

8 THE COURT: All right. We're in recess until 5:15

9 and then we'll go on to the redirect.

10 (Recess at 5:07 p.m.)

11 THE COURT: All right. Have seats. Let's

12 proceed.

13 CROSS-EXAMINATION

14 BY MS. BRENNAN:

15 Q Good afternoon, Mr. Truong.

16 A Good afternoon.

17 Q Do you recall that you were asked a series of questions

18 about credit default swaps that were owned by Fortress?

19 A Yes.

20 Q Okay. And who generally are the counterparties to the

21 credit default swaps?

22 A Financial institutions, banks.

23 Q Does -- is General Motors an obligor on any of the

24 credit default swaps?

25 A No.




1 Q And what triggered the credit default swaps for the

2 Nova Scotia bonds?

3 A I'm sorry. Can you repeat the question?

4 Q Sure. Was there an event that triggered the

5 obligations under the credit default swaps for the GM Nova

6 Scotia bonds that Fortress had purchased?

7 A There was an event of default that triggered the credit

8 default swaps that referenced General Motors Corp.

9 Q Okay. And what was that event?

10 A The bankruptcy of General Motors Corp.

11 Q And what date was that?

12 A June 1st, 2009.

13 Q Okay.

14 THE COURT: Pause. Were these credit default

15 swaps with respect to the indebtedness of General Motors

16 bonds that we're talking about or with respect to Nova

17 Scotia bonds that we're talking about?

18 THE WITNESS: That's why I was careful with my

19 answer. CDS of General Motors referenced GM Corp., not GM

20 Nova Scotia.

21 THE COURT: Yes, but were the credit default swaps

22 that you acquired with respect to indebtedness of General

23 Motors Nova Scotia or with respect to General Motors

24 Corporation?

25 THE WITNESS: There is no CDS that referenced --




1 there was no CDS that referenced General Motors Nova Scotia.

2 GM CDS referenced unsecured obligations, generally, General

3 Motors Corp. That included GM unsecured bonds, which were

4 direct obligations of GM Corp.

5 It also included the Nova Scotia bonds as

6 deliverable securities into the CDS. So CDS -- that the CDS

7 itself referenced direct -- referenced obligations of GM

8 Corp.

9 THE COURT: And you could deliver -- I still don't

10 follow --

11 THE WITNESS: Sure.

12 THE COURT: -- because you're talking about two

13 different obligations. You're talking about obligations of

14 General Motors Corp. -- you can have obligations of General

15 Motors Corp. as bonds, you can have obligations against

16 General Motors Corp. as guarantee claims --

17 THE WITNESS: That's correct.

18 THE COURT: -- and you could have obligations of

19 General Nova Scotia -- General Motors Nova Scotia, which is

20 a GM affiliate, but which is a different entity. And I'm

21 trying to understand what the credit default swaps

22 protected.

23 THE WITNESS: Sure. So credit default swaps

24 reference unsecured obligations of GM Corp. Those include

25 direct obligations and guaranteed obligations.




1 So in the case of GM Nova Scotia, the bonds issued

2 out of GM Nova Scotia, where GM Nova Scotia Finance is a

3 direct obligor of those bonds. GM -- General Motors Corp.

4 is the guarantor of those bonds which makes those bonds

5 deliverable into a CDS auction and deliverable against CDS.

6 Generally, CDS references the cheapest to deliver

7 security.

8 THE COURT: References the what?

9 THE WITNESS: The -- what's called -- what's known

10 as the cheapest to deliver. So the GM -- and that would, in

11 this case, be the price of GM Corp. bonds.

12 (Pause)

13 THE WITNESS: As an example, if there's a CDS

14 auction, and let's say, hypothetically, there's GM Corp.

15 bonds at the time were trading at 13 cents. The GM Nova

16 Scotia bonds were trading at a number higher, and certainly

17 post-June 1st, because of our settlement, they were trading

18 at a higher price, higher price than 13 cents.

19 The CDS auction, when it took place, references

20 the cheapest to deliver, and the cheapest to deliver is --

21 because both bonds are deliverable into the CDS auction, the

22 CDS auction clears at -- with the reference security that is

23 cheapest to deliver and the referenced security is GM Corp.

24 bonds, which are at 13 cents, which is why the GM CDS traded

25 to approximately 87, 88 cents.




1 But both bonds are deliverable into a CDS auction.

2 CDS, on its own, references, as an instrument, references

3 the unsecured obligations of GM Corp.

4 THE COURT: Are you telling me that the

5 beneficiaries of the GM -- of these credit default swaps,

6 which in this case is you and your company, or your company,

7 could get 87 cents on the credit default swap representing

8 the difference between par and the lowly 13 cents that

9 unsecured bonds of General Motors Corporation were trading

10 at?

11 THE WITNESS: That's correct. The CDS references

12 GM Corp. securities. So wherever those securities trade

13 through into the auction, the cheapest to deliver, that's

14 where the auction clears at.


16 BY MS. BRENNAN:

17 Q Okay. And when you reference the auction, who

18 participates in the auction?

19 A Market participants.

20 Q Okay. Does General Motors -- in this case, did General

21 Motors, or any of its subsidiaries, participate in the

22 auction?

23 A No.

24 Q Okay. If -- to participate in the auction, do you have

25 to -- does the participant have to be a creditor of old GM?




1 A No.

2 Q Okay. And do you know the approximate date on which

3 the auction in this case occurred?

4 A I believe in and around June 12th.

5 Q Okay. So at least as of June 12th, 2009, did Fortress

6 own any credit default swaps that referenced old GM?

7 A Did we reference -- did we own CDS at the time of the

8 CDS auction?

9 Q No, after the CDS auction, did Fortress --

10 A No.

11 Q -- own any credit --

12 A No.

13 Q -- default swaps referencing old General Motors?

14 A No.

15 Q Okay. And who is the payor on credit default swaps?

16 A The counterparty to the CDS.

17 Q Did the credit default swaps cost General Motors any

18 money?

19 A No.

20 Q And did the credit default swaps cost the creditors of

21 General Motors any money?

22 A No.

23 Q If I could ask you to turn to one of the exhibits that

24 Mr. Fisher handed to you earlier that's been marked as

25 PX-605.




1 (Pause)

2 Q If it helps, it's an email on the top that's dated

3 May 30th, 2009 from Max Safian.

4 A I got it.

5 Q Okay. And do you recall that Mr. Fisher referred you

6 to the email -- the last email on the first page that you

7 sent to Max Safian and Drew McKnight?

8 A Yes.

9 Q And he had you -- do you recall that he had you read

10 that portion of the email?

11 A Yes.

12 Q Do you recall participating in conference calls

13 regarding the GM Nova Scotia on May 30th?

14 A Yes.

15 Q Were you drunk during those calls?

16 A I was -- I certainly was not.

17 Q Okay. And if I could ask you to look at another

18 exhibit that Mr. Fisher showed to you which has been marked

19 as Plaintiff's Exhibit 16, which is the June 1st, 2009 email

20 from Peter Goddard at 10:37 a.m.

21 (Pause)

22 A Okay.

23 Q Okay. Mr. Truong, do you remember that Mr. Fisher

24 asked you a series of questions regarding the subordination

25 of the swap liability under the terms of the lock-up




1 agreement?

2 A Yes.

3 Q Okay. And do you have an understanding of when the

4 swap liability could be subordinated?

5 A I believe it is under the circumstance where there is a

6 disallowance of one of the claims. Those two claims being

7 the guarantee claim and the wind up claim, the deficiency

8 claim.

9 Q If I could you to look at Plaintiff's Exhibit 16, and

10 turn to page 9 which, at the bottom, is WGM and the last

11 numbers are 800.

12 (Pause)

13 Q Are you there?

14 A Yes.

15 Q Okay. And if I could ask you to look at Romanette five

16 in the second sentence of that paragraph, could you read

17 that sentence aloud that begins with, "If for any

18 reason ..."?

19 A "If for any reason any portion of the deficiency claim

20 is disallowed, the guarantor agrees that the swap liability

21 is subordinate to the prior indefeasible payment in full of

22 the notes."

23 Q Does that clause reflect your understanding of the

24 agreement that was reached with respect to the subordination

25 of the swap liability?




1 A Yes.

2 Q Does that sentence refresh your recollection that this

3 was what was agreed upon with respect to subordinating the

4 swap liability under the terms of the lock-up agreement?

5 A Yes.

6 Q Okay. If I could ask you to look at Exhibits PX-178

7 and 179.

8 (Pause)

9 Q Okay. And if we could start with-PX 178, do you recall

10 these emails between you and Mr. Chung of Arrowgrass?

11 A Yes.

12 Q Okay. And do you recall that Mr. Fisher asked you

13 certain questions with respect to some of the terms of the

14 lock-up agreement?

15 A Yes.

16 Q Okay. And do you have an understanding of whether or

17 not you had these discussion -- or these email exchanges

18 with Mr. Chung before or after the issuance of the 8-K?

19 A I believe it was after the issuance of the 8-K.

20 Q Okay. And if I could ask you to turn to the other

21 exhibit, PX-179, which is the email exchange that you had

22 with Ms. Pacholder. Do you have that exhibit?

23 Do you have an understanding of whether or not you

24 had these discussions with Ms. Pacholder before or after the

25 issuance of the 8-K?




1 A It was after the issuance.

2 Q Now, with respect to the 8-K, do you recall that

3 Mr. Fisher asked you certain questions about your review of

4 the 8-K before it was issued?


6 Q Sure. Do you recall that Mr. Fisher asked you whether

7 or not you had had the opportunity to review the Form 8-K

8 before it was filed?

9 A Yes.

10 Q Okay. And can you -- and do you recall that you

11 testified that you had certain input into the 8-K?

12 A Yes.

13 Q Okay. And could you describe what your input into the

14 8-K was?

15 A The only change that I had to the 8-K was to separate

16 the consent fee between the two bonds, as opposed to

17 aggregating the consent fee.

18 Q Okay. If I could ask you to look at PX-29, which is

19 that June 1st 8-K.

20 (Pause)

21 A Okay.


23 whether or not the 8-K include a reference to a bankruptcy

24 filing by GM Nova Scotia?

25 A Yes.




1 Q Okay. If I could ask to you to look at -- the Bates

2 number on the bottom is AURGM14281.

3 A Okay.

4 Q Okay. And if you look at the third paragraph down, the

5 last phrase is a deficiency obligation. Do you see that?

6 A Yes.

7 Q Do you have an understanding what the deficiency

8 obligation is?

9 A Yes, it is the -- the deficiency claim is defined in

10 the lock-up agreement but it is a -- essentially a

11 shareholder -- the shareholder liability claim.

12 Q Can I ask you to look at the declaration that you filed

13 in this case?

14 (Pause)

15 Q And, specifically, could I ask you to look at

16 paragraph 18 on page 4? And in paragraph 18, it references

17 a telephone conversation with John Stapleton, do you see

18 where I'm reading?

19 A Yes.

20 Q Do you know if that conversation occurred on

21 January 29th, 2009?

22 A I think that -- it may have been a typo.

23 Q Okay. Do you know what date that conversation did take

24 place?

25 A I believe it was earlier in the month.




1 Q Okay. And can I ask you to look at what has been

2 marked at Plaintiff's Exhibit 191, which is the Bloomberg

3 chats between you and Mr. Chung on June 8th, 2009?

4 (Pause)

5 A Okay.

6 Q Okay. And if I could ask you to look at the second

7 page which is FORGM4004 and, in particular, the entry, about

8 six entries up, that has the time of 15:32:38, where

9 Mr. Chung asks when is the meeting scheduled for?

10 Do you recall being asked questions about this

11 portion of the Bloomberg chat?

12 A Yes.

13 Q Okay. Do you have an understanding of when the notice

14 of the meetings to pass the extraordinary resolution was

15 issued?


17 Q Sure. Do you know when the notice of the meeting to

18 pass the extraordinary resolution attached to the lock-up

19 agreement was made public?


21 MS. BRENNAN: Your Honor, may I approach?

22 THE COURT: Yes, you may.

23 (Pause)

24 BY MS. BRENNAN:

25 Q Mr. Truong, if I could ask you to look at the last two




1 pages of this document which is -- which has the Financial

2 Times logo at the top. Do you see that?

3 A Yes.

4 Q And if you turn to the last page of the document in the

5 bottom right hand corner, there's a notice of meetings for

6 GM.

7 A Okay.

8 Q Okay, And if you look at the top, and I think it's

9 pretty hard to read, there's a date for the Financial Times.

10 I don't know if you can make that out or not, on the top

11 left.

12 A June 3rd.

13 Q Yes. Does seeing this document refresh your

14 recollection that the notice of meetings for the passing of

15 the extraordinary resolution was issued on June 3rd, 2009?

16 A Well, I'm acknowledging what's in front of me, which is

17 that notice made in the -- available in the Financial Times

18 on June 3rd, 2009.

19 Q Okay. And if I could ask you to look earlier in the

20 exhibit, on the part that's a bit more legible, of the

21 notice of the meetings, and if you could turn to page -- if

22 you could turn to page 3, which is WGM16824.

23 Do you recall that Mr. Fisher asked you a series

24 of questions relating to when the payment of the consent fee

25 would be made relative to the passing of the extraordinary




1 resolution?

2 A Yes.

3 Q And he asked you certain questions about whether or not

4 it was known that the payment would be made the day

5 following the passing of the extraordinary resolution. Do

6 you recall that -- those questions?

7 A Yes.

8 Q Okay. If I could ask you to look at page 3, and in the

9 first resolution paragraph, the first paragraph that starts

10 in bold, "Resolves." And if I could ask you to look at that

11 paragraph and read it from the first sentence of that

12 paragraph out loud, please.

13 A I'm sorry, the first paragraph starting --

14 Q Oh, excuse me. The first sentence of the paragraph of

15 -- that starts, "resolved by special quorum ..."

16 A "Resolves by special quorum an extraordinary resolution

17 in accordance with Schedule 4 of the fiscal and paying

18 agency agreement to pay, subject to the approval of the

19 foregoing extraordinary resolution by the requisite

20 noteholders, an amount equal to 366 spot 46 per thousand of

21 principal amount of the 2015 notes outstanding and 380 spot

22 17 per thousand of principal amount of the 2023 notes

23 outstanding, immediately following the approval of the

24 foregoing extraordinary resolution by the requisite

25 noteholders."




1 Q Does reading that sentence refresh your recollection

2 that had been made public that the payment would be made

3 immediately following the approval of the extraordinary

4 resolution?

5 A Yes.

6 Q And, for the record, we were looking at Defendant's

7 Exhibit 193.

8 (Pause)

9 Q Could you please look at what's been marked as

10 Plaintiff's Exhibit 174, which is an email between you and

11 Leslie Cowen on June 1st at -- I believe, all the same

12 stipulation that 8:03 a.m. but it says 7:03 a.m. at the top?

13 (Pause)

14 A Okay.

15 Q Okay. And if I could ask you to look at the last email

16 where you write, in part, "Folks are filling out sig pages

17 now." Do you see that?

18 A Yes.

19 Q Do you have any doubt that the parties to the lock-up

20 agreement were filling out signature pages by 7:00 a.m. on

21 June 1st, 2009?

22 A No.

23 Q And do you recall having any discussions with anybody

24 on -- from General Motors regarding the possibility of GM

25 Canada having to file for bankruptcy?





2 Q Sure. Do you recall during those negotiations in late

3 May, May 30th through June 1st, 2009, do you recall having

4 any discussions with anybody on behalf of GM regarding the

5 potential for GM Canada to file for bankruptcy?

6 A Yes.

7 Q And what was your understanding from those

8 conversations?

9 A That General Motors Nova Scotia Finance Company would

10 enter bankruptcy subsequent, at some point, at a later date.

11 Q Okay. And was that something that the noteholders

12 threatened to do? Put GM Canada into bankruptcy?

13 A I wouldn't characterize it that way.

14 Q Okay. If you can look at the first email on

15 Plaintiff's Exhibit 174, and if you could read the sentence

16 that starts with, "Was just speaking ..." out loud for us,

17 please.

18 A "Was just speaking with the GM lawyer and they said

19 there was real risk, even through tonight, that Canadian

20 government would just file GM Canada, so I'm glad we got

21 this executed."

22 Q Was that your understanding of a potential bankruptcy

23 filing for GM Canada during the night of June 1st, 2009?

24 A Yes.

25 Q Or I should say the early morning hours of June 1st,




1 2009?

2 A Yes.

3 (Pause)

4 Q Can I ask you to look at what's been marked as

5 Plaintiff's Exhibit 177, which is an email from you to

6 Leslie Cowan also at -- it says 7:04 at the top but that we

7 stipulated as 8:04 a.m.?

8 (Pause)

9 A I'm just waiting on the monitor.

10 Q Okay. Okay. Do you recall looking at this email where

11 you reference, "Still being worked through," at the top?

12 A Yes.

13 Q Okay. Do you have an understanding of what you meant

14 at 8:04 a.m. by still being worked through?

15 A Well, I was waiting for a hard copy or photocopy of our

16 document, of the lock-up agreement, for some time, and it is

17 my belief that it's still being worked through likely

18 represents, or refers to, the getting that hard copy, or

19 getting a photocopy.

20 Q Were you still editing the lock-up agreement at 8:04

21 a.m. on June 1st, 2009?

22 MR. FISHER: Objection. Leading.

23 THE COURT: Sustained.

24 BY MS. BRENNA:

25 Q Mr. Truong, do you know -- do you have any




1 understanding of whether or not the lock-up agreement was

2 being edited by anybody after 7:57 a.m. on June 1st, 2009?

3 A I don't believe so.

4 Q Okay. Okay. If I could ask you to look at what's been

5 marked as Plaintiff's Exhibit 163.

6 (Pause)

7 A Okay.

8 Q Do you have it on monitor? Is that --

9 A Yeah.

10 Q -- easier? Okay.

11 And if I could ask you to look at the last

12 sentence there where Mr. Fisher asked you a number of

13 questions about your comment about an out-of-court

14 restructuring. Do you remember that testimony?

15 A Yes.

16 Q Okay. And in this sentence you say, at the end, "a

17 bankruptcy filing only gives us a better forum to assert our

18 multiple claims." Do you see that?

19 A Yes.

20 Q What did you mean by a better forum in that sentence?

21 A The General Motors Nova Scotia bonds had particular

22 characteristics to it.

23 Mr. Fisher was asking me whether I had a

24 preference for a bankruptcy filing, and I did not have a

25 preference for a bankruptcy filing.




1 But in an adequate restructuring, if there's an

2 exchange proposal, one would expect that it would take into

3 consideration the attributes of our bonds. And I don't know

4 -- I didn't know if that was going to happen.

5 So if one were to -- so if one were to look at an

6 out-of -- an exchange offering that did not include that --

7 or attributed any consideration or adequate consideration

8 for those differences, for the differences in those bonds, a

9 court process could allow those claims to be asserted.

10 (Pause)

11 Q Do you recall your testimony that you had certain

12 conversations in 2005 with a Ms. -- Mr. Bravender of General

13 Motors?

14 A Yes.

15 Q Okay. How did you reach out to Mr. Bravender in the

16 first instance?

17 A I called him.

18 Q And how were -- did you know Mr. Bravender before you

19 called him?

20 A No.

21 Q Okay. And how did you become aware of him or as

22 somebody that you might want to talk to?

23 A He's listed in the offering circular for the bonds.

24 Q And how did you identify yourself to Mr. Bravender?

25 A I told him I was a prospective bondholder.




1 Q And did you believe that Mr. Bravender was divulging

2 any non-public information to you?

3 A I did not.

4 (Pause)

5 Q Do you recall having any specific conversations with

6 Mr. Cederholm regarding --

7 THE COURT: Well, pause, please.

8 How would the remainder of the investing public

9 get the information he gave you on the phone? By calling

10 him up also or by some other means?

11 THE WITNESS: Well, there are a variety of ways

12 but one -- one path is the path that I undertook, which was

13 to call him.

14 THE COURT: Go on.

15 BY MS. BRENNAN:

16 Q Could you describe what the other ways would be?

17 A Well, investor relations. There are other people that

18 may have knowledge of that that one could contact.

19 Q Do you recall having any specific conversations with

20 Mr. Cederholm of Elliott regarding the intercompany note

21 before April of 2009?

22 A We've had a -- we -- during that period, we had a

23 number of conversations, including a conversation about the

24 notes. More specifically, that he held the notes.

25 Q Yeah. I'm sorry, with respect to the intercompany note




1 between GM Canada and GM Nova Scotia Finance, do you

2 remember any specific conversations with Mr. Cederholm

3 before April 2009?

4 A I'm sorry. I don't recall us having a detailed

5 conversation about the intercompany note.

6 Q If I could ask you to look at what's been marked as

7 Plaintiff's Exhibit 166, which is an email from you to

8 Leslie Cowan and Drew McKnight on January 22nd, 2009.

9 (Pause)

10 Q Do you have that on the monitor in front of you?

11 A Yes.


13 certain questions with respect to the top email where you

14 write, "In my view chapter 11 is the only way GM succeeds as

15 a private enterprise"?

16 A Yes, I wrote that.

17 Q Okay. And can you explain what you meant by that

18 sentence?

19 A Well, as I expressed earlier, getting an exchange -- a

20 successful exchange completed, was very difficult. There

21 are a lot of constituents and a lot of different creditors.

22 GM, at the time, had a lot of leverage. The debt

23 on its balance sheet, pension obligations, all sorts of

24 indebtedness and obligations. And lots of times bankruptcy

25 is a useful tool to deliver the balance sheet and allow




1 companies to succeed.

2 And so it was my view that without a successful

3 debt exchange or an out-of-court restructuring, and I felt

4 that one -- it was difficult to achieve that -- that for GM

5 to succeed as a company, and be successful as a company, and

6 it certainly has been post its exit from bankruptcy, that

7 bankruptcy would be a useful tool to allow it to succeed.

8 (Pause)

9 Q Did there come a point in time at which you learned

10 that Nova Scotia Finance had transferred money out in excess

11 of $570 million Canadian in May of 2008?


13 Q Sure. Did there come a time that you learned that Nova

14 Scotia Finance and an affiliate entity transferred to old GM

15 over $570 million Canadian?

16 A Yes.

17 Q And when did you find that out?

18 A Approximately January of 2009.

19 Q And do you know when those transfers occurred?

20 A May 2008.

21 Q Do you recall if you -- if Fortress received any notice

22 from its prime broker with respect to those transfers that

23 had been done in May of 2008?

24 MR. FISHER: Objection, Your Honor. This is

25 beyond the scope of the adverse direct examination.





2 MR. BRENNAN: Your Honor, he's asking certain

3 questions with respect to the Nova Scotia litigation which

4 these directly tie to.

5 THE COURT: Leave the room, Mr. Truong.

6 (Pause)

7 THE COURT: All right. Flesh out your position

8 more in terms of why you think it flows from what Mr. Fisher

9 asked and, Mr. Fisher, when it's your turn, you can tell me

10 why you think that, although you did mention the payment and

11 the oppression lawsuit, why you think this isn't fair game.

12 First, I'll hear in support of the question.

13 MR. BRENNAN: Sure. During the cross-examination,

14 there were a series of questions with respect to when

15 counsel was retained in order to pursue the litigation.

16 There were questions that implicitly suggested that counsel

17 was retained solely for the purpose of pursuing litigation

18 rather than trying to get information or receipt consensual

19 resolution.

20 It ties to the allegations and, I believe, at

21 least in the amended adversary proceeding complaint in this,

22 if not in the objection, that the noteholders knew or should

23 have known of these transfers in May 2008 and somehow waited

24 until January 2009 and, I believe, Mr. Fisher asked a series

25 of questions with respect to the timing of the retention of




1 counsel.

2 THE COURT: All right. Mr. Fisher?

3 MR. FISHER: Your Honor, it is the GUC Trust's

4 position that these noteholders knew, or should have known,

5 about the transfers that they challenged in the litigation

6 that they commenced in Nova Scotia.

7 But the fact is that I did not, with this witness,

8 get into the underlying substance of that lawsuit, and the

9 questions that Ms. Brennan is asking now go directly to the

10 details of the substance of allegations made in that lawsuit

11 and I avoided questioning this witness about any of those

12 topics.

13 THE COURT: I'm not going to cut it that fine,

14 Mr. Fisher, having brought up the subject a little. I'm

15 going to allow some reasonable questioning the other way.

16 And, if you want to follow up after that, I'll permit you if

17 anybody in the courtroom still has any energy.

18 Go ahead.

19 MS. BRENNAN: I promise it will be very short.

20 (Pause)

21 BY MS. BRENNAN:

22 Q I forget where the last question we left off was, so I

23 apologize if I'm repeating myself.

24 But, Mr. Truong, do you have an understanding of

25 whether or not you received any notices from your prime




1 broker with respect to the May 2008 transfers in or about

2 May of 2008?

3 A I don't believe we did.

4 Q Okay. Do you know if Fortress received any notice of

5 those transfers in 2008?

6 A I don't believe we did.

7 Q Did you ever have anybody look to see if Fortress had

8 received any such notices in 2008?

9 A Yes.

10 Q Okay. And what was the result of that search?

11 A They didn't find any notices.


13 THE COURT: Yes.

14 (Pause)

15 BY MS. BRENNAN:

16 Q Mr. Truong, I've handed you what's been marked as

17 Defendant's Exhibit 92. Can you describe what this email

18 is?

19 A Sure. I asked someone in our operations group,

20 Kevin Corcoran, your Kevin Corcoran, to follow up to see if

21 there were any notices related to the May 2008 distribution.

22 Q And does this document inform your understanding of

23 whether the prime broker had received any notices in 2008

24 regarding the May 2008 transfers?

25 A Yes, if -- it indicates that there was no notice in




1 their system for 2008 other than for the annual interest

2 payment in December.

3 Q Okay.

4 THE COURT: Before you go on, when you got the

5 first of the three emails shown on Defendant's Trial

6 Exhibit 92, did you have an understanding as to what was a

7 PB?

8 THE WITNESS: Yes.

9 THE COURT: What was it?

10 THE WITNESS: It's a prime broker.

11 THE COURT: What does that mean in context?

12 THE WITNESS: The -- you know, a financial

13 institution acts as a prime broker so it holds our bonds --

14 effectively holds our bonds for us and all information, all

15 notices, trusts, should come through the prime broker who

16 is, technically, the holder of our bonds, vis-à-vis, you

17 know, the fiscal paying agent, in this example, or bond

18 trustee.

19 THE COURT: All right. Continue.

20 BY MS. BRENNAN:

21 Q Okay. Mr. Truong, if I could ask you to look at what's

22 been marked and handed up to you as Plaintiff's Exhibit 588.

23 And that's -- do you have that email in front of you?

24 A Yes.





1 certain questions about the addition of the language triple

2 DIP likely to drive process?

3 A Yes.

4 Q After January 15th of 2009, do you believe that the GM

5 Nova Scotia bondholders drove the debt exchange process?

6 MR. FISHER: Objection. Leading.


8 BY MS. BRENNAN:

9 Q Mr. Truong, after -- from January 15th, 2009 through

10 April 27th, 2009, can you describe from a GM Nova Scotia

11 noteholders perspective -- from Fortress' perspective, its

12 involvement in what ultimately became the bond exchange

13 offered issued by GM on April 27th, 2009?


15 Q Sure. Are you aware that there was bond exchange offer

16 that was issued by General Motors on April 27th, 2009?

17 A Yes.

18 Q Okay. And between January 15th, 2009 and April 27th,

19 2009, can you please describe what Fortress' involvement in

20 drafting the terms of that bond exchange offer was?

21 A I don't believe we had any role in drafting the bond

22 exchange offer.

23 Q Did you make any efforts to reach out to General Motors

24 with respect to the bond exchange offer?

25 A With respect to --




1 Q After January 15th of 2009?

2 A We participated on a steering committee that attempted

3 to have a dialogue with the company around what an exchange

4 -- what an exchange offer could look like.

5 You know, I don't know how much input they

6 provided into what was actually the bond exchange.

7 Q Did you see any draft terms prior to April 27th, 2009?

8 A No.

9 (Pause)

10 Q Mr. Truong, could I ask you to look at what's been

11 marked as Plaintiff's Exhibit 190? And do you recall that

12 Mr. Fisher asked you a series of questions with respect to

13 these Bloomberg chats that you had with Mr. Chung with

14 respect to the offer and the bond exchange offer issued on

15 April 27th, 2009?

16 A Yes.

17 Q Can you describe for me what you did, on behalf of

18 Fortress, once the bond exchange offer was issued?

19 A Well, I analyzed the bond exchange offer.

20 Q And what did you do to analyze it?

21 A Well, I looked at what and analyzed what was being

22 offered in the consideration that bondholders were being

23 offered in consideration for their bonds.

24 Q Okay. And what was your ultimate conclusion based on

25 that analysis?




1 A That it was insufficient consideration for our bonds.

2 Q Now you've referenced your work on the steering

3 committee. And who was the legal counsel for the steering

4 committee?

5 A Paul Weiss.

6 Q And who was the financial advisor to the steering

7 committee?

8 A Houlihan Lokey.

9 Q Okay. Was Paul Weiss aware that Fortress was a Nova

10 Scotia bondholder?

11 A Yes.

12 Q Was Houlihan Lokey aware that Fortress was a Nova

13 Scotia bondholder?

14 A Yes.

15 Q Did the steering committee reach a position

16 collectively about a response to the bond exchange offer

17 issued on April 27th, 2009 by General Motors?


19 Q Okay. Do you recall -- is it your -- do you know if

20 the bond exchange offer was successful?

21 A It was not successful.

22 Q And do you have an understanding about why it wasn't

23 successful?

24 A It didn't garner enough votes.

25 Q And who were the people who --




1 COURT REPORTER: (Indiscernible - 03:25:22).

2 THE WITNESS: Garner enough votes.

3 BY MS. BRENNAN:

4 Q And who were allowed to vote on the bond exchange

5 offer?

6 A I'm sorry, rather, when I said vote, I meant tender --

7 Q Okay.

8 A -- after the bonds. So, everyone that owns -- owned

9 obligations and bonds of General Motors.

10 Q Was that only General Motors Nova Scotia bondholders?

11 A No.

12 Q All right. Do you know as of -- on what date the bond

13 exchange offer expired?

14 A I believe towards the end of May.

15 (Pause)

16 Q Do you know if the bond exchange offer was accepted by

17 a sufficient majority of non-Nova Scotia GM creditors?

18 A It was not.

19 (Pause)

20 Q Okay. How did you learn that the bond exchange offer

21 had not passed?



24 THE COURT: Yes.

25 (Pause)




1 BY MS. BRENNA:

2 Q Mr. Truong, I've handed you what's been marked as

3 Defendant's Exhibit 105. Can you describe what this email

4 -- well, do you recognize this email?

5 A I recognize it as you give it to me, yes.

6 Q And what is this?

7 A It's a news release by General Motors Corp.

8 Q And who sent it to you?

9 A An individual at Goldman Sachs.

10 Q And what is his role with respect to Fortress' holdings

11 in the Nova Scotia bonds?

12 A Well, he's our prime broker.

13 Q And did he regularly send you information relating to

14 your holdings?

15 A I'm sorry. When you say holdings, you're -- are you

16 referring specifically to Nova Scotia bonds?

17 Q Yeah. What -- yes. What is Goldman Sachs'

18 relationship with Fortress with respect to the GM Nova

19 Scotia bonds?

20 A They were our prime broker.

21 Q Okay. And what -- and -- describe the activities of

22 the prime -- you expect the prime broker to perform for

23 Fortress.

24 A Well, it would include sending notices.

25 Q Okay. And is this a notice you believe you received on




1 or about May 27th, 2009?

2 A Yes.

3 Q Okay. And did you do anything as a result of receiving

4 this notice?

5 A I don't recall.

6 Q If --

7 THE COURT: All right. Pause. I'm getting a

8 message that we need to break because we're having a problem

9 with the audio.

10 MS. BRENNAN: Okay. Well, this was my last

11 exhibit anyhow, so -- I know, Mr. Fisher may wonder --

12 THE COURT: Is it recording at all or is it

13 distorting, or what?

14 UNIDENTIFIED SPEAKER: Distorting (indiscernible -

15 03:29:23).

16 THE COURT: I'll let you question if you're

17 willing to go without a transcript; otherwise, we need to

18 pause.

19 MS. BRENNAN: I think that if the court reporter

20 who's taking it -- if we can stipulate to the use of that, I

21 think we can probably finish today.

22 THE COURT: Yeah, but are you going to have follow

23 up, Mr. Fisher?

24 MR. FISHER: I will, Your Honor, but as long as

25 there are written -- as long as there's no issue with the




1 written transcript being accurately recorded, for purposes

2 of moving this along, we'd be willing to rely on that

3 transcript as well.

4 THE COURT: Well, we have a supplemental reporter

5 here. Are you guys -- normally whatever you guys hire is

6 not the official transcript. If you're willing to stipulate

7 that whatever the, you know, old fashion court reporter

8 takes down is a satisfactory transcription, I'm willing to

9 continue with the understanding that the official recording

10 that our court system does isn't -- not operable.

11 MS. BRENNAN: I think we can stipulate to that.

12 MR. FISHER: Agreed, Your Honor.

13 THE COURT: Okay. All right. From this minute

14 on, 6:12, what goes on in the manual transcript will become

15 the official one.

16 Under these circumstances, can I let my court --

17 my electronic court reporting operator go home or --

18 MS. BRENNAN: I believe so.

19 THE COURT: You're going to stay?

20 Okay. All right. Please don't take this as an

21 invitation to keep on going forever, guys.

22 (Laughter)

23 MS. BRENNAN: Yeah, I think I'm on my last

24 question.

25 BY MS. BRENNAN:




1 Q Mr. Truong, is the type of information sent in

2 Defendant's Trial Exhibit 105 the type of information that

3 Goldman Sachs would send to you as a usual business

4 practice?

5 A Yes.

6 MS. BRENNAN: That's all I have.

7 THE COURT: All right. Mr. Fisher?

8 MR. FISHER: So, Your Honor, it's my understand I

9 can keep going until the court reporter runs out of paper;

10 is that right? I've just --

11 THE COURT: Or runs out of energy.

12 (Laughter)

13 THE COURT: The latter is likely to come quicker.

14 MR. FISHER: Very few questions. Just on that one

15 topic relating to an underlying issue in the GM -- in the

16 Nova Scotia litigation.

17 REDIRECT EXAMINATION

18 BY MR. FISHER:

19 Q Mr. Truong, you were shown an email from May 2009 in

20 which Fortress inquired of its prime broker as to whether

21 Fortress had received notices regarding a transfer of money

22 out of GM Nova Scotia Finance Company. Do you recall that

23 exhibit?

24 A Yes.

25 Q Okay. And May 2009, that's after Fortress and the




1 other plaintiffs had already commenced the litigation in

2 Nova Scotia, correct?

3 A That's correct.

4 Q And before commencing the lawsuit in Nova Scotia,

5 Fortress didn't make any such inquiry of its prime broker,

6 correct?

7 A I don't recall, but that's likely correct. Yes.

8 Q And before commencing its litigation in Nova Scotia,

9 Fortress didn't investigate what information was publicly

10 available in Canada about the transfer that was challenged

11 in the Nova Scotia litigation; did it?


13 Q Before commencing the litigation in Nova Scotia,

14 Fortress did not do any work to determine whether the

15 transfer of money challenged in that litigation had been

16 publicly disclosed in some form in Canada, right?

17 A That's incorrect. We -- there's a Nova Scotia

18 company's registry that we went to to examine that

19 disclosure.

20 Q And when you went to that registry, you learned that

21 the transfer, the $575 million Canadian transfer, that was

22 one of the issues raised in your litigation, you learned

23 that that transfer had been disclosed in a special

24 resolution filed with the Nova Scotia Office of Registrar of

25 Joint Stock Companies, right?




1 A Yes, that's correct.

2 MR. FISHER: Your Honor, I have no further

3 questions.

4 For the avoidance of doubt, the GUC Trust offers

5 into evidence all of the exhibits that it showed to

6 Mr. Truong today, to the extent they're all not already

7 admitted into evidence and, in addition, there's a list of

8 additional exhibits that I didn't show to Mr. Truong today

9 as to which the joint pre-trial submission indicates that

10 the noteholders have no objection, and so I'd like to just

11 very quickly read off those exhibit numbers and offer them

12 into evidence. It's --


14 MR. FISHER: -- Plaintiff's Exhibit 165 and then

15 these are all Plaintiff Exhibit numbers: Exhibit 6,

16 Exhibit 161, Exhibit 164, Exhibit 526, Exhibit 545,



19 Exhibit 182, Exhibit 183, Exhibit 184, and Exhibit 512.

20 THE COURT: All right. What's the noteholder

21 position vis-à-vis those? I assume those that were not

22 objected to in the pre-trial order are in. Are there any

23 objections to -- in the remainder?

24 MS. BRENNAN: I agree with that with respect to

25 things that were shown. That's the first I've heard of the




1 list so I'd need to take a look. As I said, on the other --

2 one exhibit, you know, for instance, we -- that IRO

3 calculation may not and I just honestly don't know. I just

4 ask that we have the evening to look at them and then we can

5 report back tomorrow.

6 THE COURT: All right. I assume you're okay with

7 that, Mr. Fisher?

8 MR. FISHER: I am, Your Honor, but just to make a

9 record on this issue, the exhibit that I did show to

10 Mr. Truong, as to which the noteholders now say they have an

11 objection to a portion of the exhibit, based on relevance,

12 is an exhibit that in the joint pre-trial order, they did

13 not state any objection.

14 And we were admonished by the noteholders in

15 advance of trial that if we didn't indicate an objection on

16 that joint pre-trial submission we would be deemed to have

17 waived that objection, and that's how we've been conducting

18 ourselves throughout this trial.

19 THE COURT: Well, okay, then I hadn't been aware

20 of that. So, how now do I have a relevance objection when

21 the time for dealing with that was supposed to be back at

22 the pre-trial order?

23 MR. FINGER: Mr. Fisher continually misrepresents

24 our pre-trial discussions on this point, Your Honor. And

25 we've been trying to work this out, and last week had a




1 phone conference where I explained to him my view.

2 Admittedly, Mr. Fisher has a different view, but

3 it's safe to say that there was no agreement on this point.

4 And our view is -- and I will express it to the Court, which

5 is there are no foundation or authentication objections to

6 these documents, but there are always -- is it -- and my

7 view is is there a relevance issue here. And with respect

8 to this particular piece of it, the Court has now ruled that

9 it is not relevant with respect to that small right-hand

10 corner of the document and, in that sense, we make that

11 relevance objection.

12 To further state --

13 THE COURT: Well, let's not talk in code words.

14 MR. FINGER: Yes.

15 THE COURT: You're talking about the profit --

16 MR. FINGER: Yes.

17 THE COURT: -- that was made?

18 MR. FINGER: Yes.

19 THE COURT: All right. My more specific ruling

20 trumps the prior proceedings. Otherwise, my ruling would

21 have no affect.

22 On the other hand, when people engage in pre-trial

23 preparation, I don't expect them -- let me rephrase that --

24 I expect them not to retreat from what they agreed to in

25 prior proceedings. Okay?




1 So, when I ruled vis-à-vis live testimony that the

2 motivation to make a big profit was admissible, the

3 motivation to get rich at the expense of other creditors is

4 admissible, but the exact amount of how rich you would get

5 by that is inadmissible, that ruling stands.

6 MR. FINGER: Thank you, Your Honor.

7 THE COURT: All right. Yes, Mr. O'Donnell?

8 MR. O'DONNELL: Your Honor. I apologize.

9 Sean O'Donnell with Akin, Gump on behalf of the Nova Scotia

10 trustee.

11 I just wanted to be clear on the record that this

12 agreement as to how the exhibits are being handled is not

13 limited to between the GUC Trust and the noteholders. And

14 the Court may recall actually this came up on the very first

15 day of trial with respect to Mr. Wedlake's testimony.

16 To be clear, the understanding, or lack of an

17 understanding, has to do with exhibits that go, say 3-, 400

18 exhibits that we did not object to on issues of foundation,

19 et cetera, but simply can't stipulate that they all come

20 into evidence now so that we can be sandbagged at the end of

21 trial, in closing argument, as to what the meaning of some

22 of those documents are without having the ability to rebut

23 those documents or the meaning that's being advanced by the

24 GUC Trust. That's the heart of the problem.

25 And I completely agree with Mr. Finger that there




1 has been a continued misrepresentation to this Court as to

2 what the agreement was, or lack thereof. It's something the

3 parties have tried to work through and that I'm hopeful we

4 can resolve without further burdening the Court, but I

5 wanted it to be brought to your attention. This is not

6 limited to the noteholders.

7 THE COURT: Well, the Court's already been

8 burdened, Mr. O'Donnell, and the reason by which the Court

9 has already been burdened is you guys elected to take

10 shortcuts in your pre-trial preparation and that inevitably

11 places burdens on a Judge because, on the one hand, you're

12 saying that you want to reserve the rights to look at these

13 things and, on the other hand, you failed to do it at an

14 earlier time requiring me to have to say that if we can't

15 resolve this, and you're objecting to something on

16 foundation or relevance, I will have to rule on it, most

17 likely adverse to those who are objecting to it, but I'll

18 give you a reservation of rights on that.

19 MR. O'DONNELL: Thank you, Your --

20 THE COURT: And, forgive me, if it requires any of

21 these witnesses to be called back to lay foundations because

22 there were eleventh hour objections to it, I'm telling you

23 now, I'm going to allow the two sides to do that.

24 MR. O'DONNELL: Yes, Your Honor. We understand

25 that and please, also, keep in mind, the process that we're




1 advocating today, it's no different than the process that

2 Mr. Fisher proposed to this Court when Mr. Bonomo stepped

3 down from the stand.

4 THE COURT: I understand that. At the same time,

5 the more things that are held back, the less we can feel

6 comfortable that we've accomplished things and can move on.

7 We may have a zillion do-overs and I may let the

8 two sides have the do-overs. Somehow I think you can tell

9 from my body language when things make me cranky and this

10 episode does.

11 MR. FINGER: Understood, Your Honor.

12 THE COURT: Okay. Are we done for the day at this

13 point?

14 MR. FINGER: Nothing further from us, Your Honor.

15 THE COURT: All right. Noteholders?

16 MR. FISHER: Nothing further, Your Honor.

17 THE COURT: All right. We're adjourned. 9:00

18 o'clock tomorrow, that's the time you wanted to continue,

19 right?

20 UNIDENTIFIED SPEAKER: Yes, Your Honor.

21 UNIDENTIFIED SPEAKER: Yes, Your Honor.

22 THE COURT: Okay. (Break in audio) -- anything

23 where he may be called back to testify, then he needn't come

24 back until there's further order from me; however, I don't

25 want you discussing your testimony until we know you're




1 absolutely done in every respect. You can talk to your --

2 to the noteholder lawyers or anybody else in this case about

3 what you want for dinner, or how the Mets are doing, or the

4 weather, or anything, but not this case.

5 Okay. We're adjourned until tomorrow morning.

6 UNIDENTIFIED SPEAKER: Thank you, Your Honor.

7 (Whereupon these proceedings were concluded at 6:24 PM)

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1 I N D E X

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3 T E S T I M O N Y

4 PLAINTIFF'S

5 WITNESS EXAM BY PAGE LINE

6 Bao Truong Mr. Fisher 7 19

7 Ms. Brennan 97 13

8 Mr. Fisher 130 17

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1 C E R T I F I C A T I O N

2

3 I, Nicole Yawn, certify that the foregoing transcript is a

4 true and accurate record of the proceedings.

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ALSO TRANSCRIBED BY:

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Veritext

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200 Old Country Road

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Suite 580

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Mineola, NY 11501

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Date: September 24, 2012

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NicoleYawn

Digitally signed by Nicole Yawn DN: cn=Nicole Yawn, o, ou, [email protected],c=USDate: 2012.09.24 15:51:58 -04'00'

WilliamGarling

Digitally signed by William Garling DN: cn=William Garling, o, ou, [email protected], c=US Date: 2012.09.24 15:52:30 -04'00'

Pamela A Skaw

Digitally signed by Pamela A SkawDN: cn=Pamela A Skaw, o, ou, [email protected],c=USDate: 2012.09.24 15:53:39 -04'00'


12-09802-reg Doc 181 Filed 09/24/12 Entered 09/26/12 15:41...

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Transcript of 12-09802-reg Doc 181 Filed 09/24/12 Entered 09/26/12 15:41...