Avenue CLO Fund, Ltd. et al v. Bank of America, N.A., et al

Filing 79

CERTIFIED REMAND ORDER. MDL No. 2106. Signed by MDL (FLSD) on 1/14/14. (Attachments: # 1 Transmittal from FLSD, # 2 1 09-md-02106 Designation of Record, # 3 1 09-md-02106 Dkt. Sheet - flsd, # 4 09-MD-2106 DE 1, 2, 4-30, # 5 0 9-MD-2106 DE 32-36, # 6 09-MD-2106 DE 37 part 1 of 3, # 7 09-MD-2106 DE 37 part 2 of 3, # 8 09-MD-2106 DE 37 part 3 of 3, # 9 09-MD-2106 DE 38, 39, 41-47, 49, 50, # 10 09-MD-2106 DE 51, # 11 09-MD-2106 DE 52-59, 61-65, 68, 70, 72-76, # (1 2) 09-MD-2106 DE 78-84, 86-91, # 13 09-MD-2106 DE 93, 95-103, 106-108, # 14 09-MD-2106 DE 110-115, # 15 09-MD-2106 DE 116-125, 127-129, 132-134, # 16 09-MD-2106 DE 136-140, 142-158, # 17 09-MD-2106 DE 160-162, 164-167, 170-175, 177-190, # ( 18) 09-MD-2106 DE 191-199, 201-215, # 19 09-MD-2106 DE 217-229, 232-247, # 20 09-MD-2106 DE 248, # 21 09-MD-2106 DE 249 part 1 of 2, # 22 09-MD-2106 DE 249 part 2 of 2, # 23 09-MD-2106 DE 251-253, 262-266, 284-287, 300, 301, 310, 319, 326-3 31, # 24 09-MD-2106 DE 335, 336, 338-344, 346-349, # 25 09-MD-2106 DE 350, # 26 09-MD-2106 DE 351-358, # 27 09-MD-2106 DE 360-366, 368-374, # 28 09-MD-2106 DE 375 part 1 of 3, # 29 09-MD-2106 DE 375 part 2 of 3, # 30 09-MD-2106 DE 375 p art 3 of 3, # 31 09-MD-2106 DE 376 part 1, # 32 09-MD-2106 DE 376 part 2, # 33 09-MD-2106 DE 376 part 3, # 34 09-MD-2106 DE 376 part 4, # 35 09-MD-2106 DE 376 part 5, # 36 09-MD-2106 DE 376 part 6, # 37 09-MD-2106 DE 376 part 7, # 38 09-MD-2106 DE 376 part 8, # 39 09-MD-2106 DE 376 part 9, # 40 09-MD-2106 DE 377 part 1, # 41 09-MD-2106 DE 377 part 2, # 42 09-MD-2106 DE 378, # 43 09-MD-2106 DE 379, # 44 09-MD-2106 DE 380, # 45 09-MD-2106 DE 381 part 1, # 46 09-MD-2 106 DE 381 part 2, # 47 09-MD-2106 DE 382 part 1, # 48 09-MD-2106 DE 382 part 2, # 49 09-MD-2106 DE 382 part 3, # 50 09-MD-2106 DE 382 part 4, # 51 09-MD-2106 DE 383 part 1, # 52 09-MD-2106 DE 383 part 2, # 53 09-MD-2106 DE 383 part 3, # 54 09-MD-2106 DE 383 part 4, # 55 09-MD-2106 DE 383 part 5, # 56 09-MD-2106 DE 383 part 6, # 57 09-MD-2106 DE 383 part 7, # 58 09-MD-2106 DE 383 part 8, # 59 09-MD-2106 DE 383 part 9, # 60 09-MD-2106 DE 383 part 10, # 61 09-MD-2106 DE 383 part 11, # 62 09-MD-2106 DE 384 part 1, # 63 09-MD-2106 DE 384 part 2, # 64 09-MD-2106 DE 384 part 3, # 65 09-MD-2106 DE 384 part 4, # 66 09-MD-2106 DE 384 part 5, # 67 09-MD-2106 DE 384 part 6, # 68 09-MD-2106 DE 384 part 7, # ( 69) 09-MD-2106 DE 384 part 8, # 70 09-MD-2106 DE 384 part 9, # 71 09-MD-2106 DE 384 part 10, # 72 09-MD-2106 DE 384 part 11, # 73 09-MD-2106 DE 385 part 1, # 74 09-MD-2106 DE 385 part 2, # 75 09-MD-2106 DE 386 part 1, # 76 09-MD-2106 DE 386 part 2, # 77 09-MD-2106 DE 386 part 3, # 78 09-MD-2106 DE 386 part 4, # 79 09-MD-2106 DE 386 part 5, # 80 09-MD-2106 DE 386 part 6, # 81 09-MD-2106 DE 386 part 7, # 82 09-MD-2106 DE 387 part 1, # 83 09-MD-2106 DE 387 part 2, # 84 09-MD-2106 DE 388, # 85 09-MD-2106 DE 389 part 1, # 86 09-MD-2106 DE 389 part 2, # 87 09-MD-2106 DE 389 part 3, # 88 09-MD-2106 DE 389 part 4, # 89 09-MD-2106 DE 390, 392-394, # 90 1 10-cv-20236 Dkt. Sheet - flsd, # 91 10cv20236 DE #1-27, 29-31, 45, 53, 60-65, 67-70, 73, # 92 1 09-cv-23835 Dkt. Sheet - flsd, # 93 09cv23835 DE 112, 115-126, # 94 09cv23835 DE 130, 134, 135 and 145)(Copies have been distributed pursuant to the NEF - MMM)

Case 1:09-md-02106-ASG Document 388 Entered on FLSD Docket 12/06/2013 Page 1 of 4

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Miami Division
CASE NO.: 09-2106-MD-GOLD/GOODMAN
IN RE:
FONTAINEBLEAU LAS VEGAS
CONTRACT LITIGATION
MDL NO. 2106
This document relates to all actions.
______________________________________/
NOTICE OF FILING ON THE PUBLIC RECORD
SUPPLEMENTAL SUMMARY JUDGMENT
DOCUMENTS PREVIOUSLY FILED UNDER SEAL
Defendant Bank of America N.A. (“BANA”) hereby gives notice that it is filing on the
public record certain documents, previously filed under seal related to BANA’s Motion for
Summary Judgment and BANA’s Opposition to Plaintiffs’ Motion for Partial Summary
Judgment in the above-titled case.
On October 4, 2013, this Court issued an Order Upon Mandate [D.E. #368] requiring the
parties to specify, by district court docket entry number, which documents previously filed under
seal could be unsealed. 1 However, because the parties could not view the sealed entries on the
electronic CM/ECF docket in this case—and therefore, could not determine which district court
docket entry numbers corresponded to each sealed document—the Court later issued a Sua
Sponte Order Regarding Mandate and Documents Filed Under Seal [D.E. #370] requiring the

1

The parties previously filed with the Eleventh Circuit a letter dated December 14, 2012,
identifying documents and testimony that should remain sealed. Since that time, the parties have
determined that certain evidence included on that list no longer needs to remain sealed and, upon
further review of the record, the parties have identified other evidence that should remain sealed
which was inadvertently omitted from the letter.

Case 1:09-md-02106-ASG Document 388 Entered on FLSD Docket 12/06/2013 Page 2 of 4

parties to make a recommendation by November 1, 2013 regarding how they proposed to comply
with this Court’s October 4, 2013 Order Upon Mandate.
On November 1, 2013, the parties filed a Joint Notice Regarding Proposal for Partially
Unsealing Summary Judgment Filings [D.E. #373]. The parties proposed submitting to the
Court redacted copies of all memoranda of law and statements of material facts, in addition to
one copy of each exhibit and a single compilation of each witness’s deposition transcript
excerpts cited in all memoranda of law. On November 5, 2013, this Court entered an Order
Approving Joint Proposal [D.E. #374], approving the parties’ joint proposal and ordering the
parties to file via CM/ECF redacted copies of the summary judgment memoranda of law,
statements of facts, and exhibits, on or before December 6, 2013.
BANA previously filed under seal the supplemental documents listed below on
November 16, 2011. In compliance with this Court’s Order Approving Joint Proposal, BANA
now files the following documents on the public record:2
BANA’S SUPPLEMENTAL SUMMARY JUDGMENT DOCUMENTS
No.
Document
Date Filed Under Seal
Filing Status
BANA’s Response to Plaintiffs’ Notice of Submission of Recently Produced Documents
1
BANA’s Response to Plaintiffs’ Notice November 16, 2011
Publicly filed with
of Submission of Recently Produced
redactions (attached)
Documents in Support of Plaintiffs’
Motion for Partial Summary Judgment
and in Opposition to BANA’s Motion
for Summary Judgment

2

Additional documents previously filed under seal related to BANA’s Motion for Summary
Judgment and Plaintiffs’ Motion for Partial Summary Judgment, including exhibits to the Cantor
Declarations, deposition exhibits, and other memoranda of law and statements of facts, will be
filed under separate cover.
2

Case 1:09-md-02106-ASG Document 388 Entered on FLSD Docket 12/06/2013 Page 3 of 4

BANA’S SUPPLEMENTAL SUMMARY JUDGMENT DOCUMENTS
No.
Document
Date Filed Under Seal
Filing Status
BANA’s Revised Redlined Statements of Undisputed Material Facts
2
BANA’s Revised Redlined Response
November 16, 2011
Publicly filed with
to Plaintiffs’ Revised Redlined
redactions (attached)
Statement of Undisputed Material Facts
and Statement of Additional
Undisputed Material Facts in
Opposition to Plaintiffs’ Motion for
Partial Summary Judgment
3
BANA’s Revised Redlined Reply to
November 16, 2011
Publicly filed with
Plaintiffs’ Revised Redlined Response
redactions (attached)
to Defendant’s Statement of
Undisputed Material Facts and
Statement of Additional Material Facts
in Opposition to Defendant’s Motion
for Summary Judgment
Date: Miami, Florida
December 6, 2013
By: /s/ Jamie Zysk Isani
Jamie Zysk Isani
Jamie Zysk Isani (Florida Bar No. 728861)
HUNTON & WILLIAMS LLP
1111 Brickell Avenue, Suite 2500
Miami, Florida 33131
Telephone: [phone]
Facsimile: [phone]
E-mail: [e-mail]
-andBradley J. Butwin (pro hac vice)
Jonathan Rosenberg (pro hac vice)
Daniel L. Cantor (pro hac vice)
William J. Sushon (pro hac vice)
O’MELVENY & MYERS LLP
7 Times Square
New York, New York 10036
Telephone: [phone]
Facsimile: [phone]
E-mail: [e-mail]
[e-mail]
[e-mail]
[e-mail]
Attorneys for Defendant Bank of America, N.A.
3

Case 1:09-md-02106-ASG Document 388 Entered on FLSD Docket 12/06/2013 Page 4 of 4

CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing was served by transmission
of Notice of Electronic Filing generated by CM/ECF on December 6, 2013 on all counsel or
parties of record on the Service List below:
J. Michael Hennigan, Esq.
Kirk Dillman, Esq.
Robert Mockler, Esq.
MCKOOL SMITH, P.C.
865 South Figueroa Street, Suite 2900
Los Angeles, California 90017
Telephone: [phone]
Facsimile: [phone]
E-mail:
[e-mail]
[e-mail]
[e-mail]

David A. Rothstein, Esq.
Lorenz Michel Pruss, Esq.
DIMOND KAPLAN & ROTHSTEIN, P.A.
2665 South Bayshore Drive
Penthouse 2-B
Miami, Florida 33133
Telephone: [phone]
Facsimile: [phone]
E-mail:
[e-mail]
[e-mail]

Attorneys for Plaintiffs Avenue CLO Fund, Ltd. et al.
By:

4

/s/ Jamie Zysk Isani
Jamie Zysk Isani, Esq.

Case 1:09-md-02106-ASG Document 388-1 Entered on FLSD Docket 12/06/2013 Page 1 of 5

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Miami Division
CASE NO.: 09-2106-MD-GOLD/GOODMAN

INRE:
FONTAINEBLEAU LAS VEGAS
CONTRACT LITIGATION
MDL NO. 2106
This document relates to all actions.

·--------------------------~/
DEFENDANT BANK OF AMERICA, N.A.'S RESPONSE
TO PLAINTIFFS' NOTICE OF SUBMISSION OF RECENTLY
PRODUCED DOCUMENTS IN SUPPORT OF PLAINTIFFS'
MOTION FOR PARTIAL SUMMARY JUDGMENT Ai~D IN
OPPOSITION TO BANK OF AMERICA, N.A.'S MOTION FOR
SUMMARY JUDGMENT
The five recently-produced e-mails submitted by Plaintiffs are not relevant to the issues
raised by the pending motions for summary judgment. 1 They are both factually and legally
inelevant because BANA's Commercial Real Estate Banking group ("CREBI)) was uninvolved
in BANA's decision-making as Disbursement Agent or Bank Agent and there is no evidence that
the information in these e-mails was ever communicated to the personnel handling BANA's
Disbursement and Bank Agent functions.

Despite extensive deposition and

In addition, BANA has filed separate responses addressing the new assertions set forth in: (i)
Revised Redlined Statement of Undisputed Material Facts in Suppmt of Plaintiffs' Motion
for Partial Summary Judgment, and (ii) Term Lender Plaintiffs' Revised Redlined Response
to Defendant Bank of America, N.A. 's Statement of Undisputed Material Facts and
Statement of Additional Material Facts in Opposition to BofA's Motion for Summary
Judgment.

Case 1:09-md-02106-ASG Document 388-1 Entered on FLSD Docket 12/06/2013 Page 2 of 5

document discovery regarding BANA's process for approving Fontainebleau's Advance
Requests, there is no evidence that CREB members pru.1icipated in BANA's decision-making as
Agent. The evidence reflects that BANA)s Dallas-based Corporate Debt Products Group
("CDP") was responsible for approving Fontainebleau's Advance Requests, disbursing funds to
the Borrowers, and deciding what information was disseminated to the Lenders, and that
BANA's Agency Management group and Credit Services and Administration Department
reviewed Fontainebleau's monthly draw packages to ensure that all required documentation was
included. (See, e.g., BANA's Resp. to Pls.' SOUMF 1[ 9.)

The Loan Documents specifically pennitted BANA to pursue other banking relationships
despite its agent roles, and recognized that BANA (as an entity) might acquire information
regarding the Borrowers that would not be shared with the agent. Disbursement Agreement
Section 9.2.5 provides that ''the Disbursement Agent and its Affiliates may accept deposits from,
lend to and generally engage in any kind of banking, trust, financial advisory or other business
with the Project Entities or any of their Affiliates as if it were not performing the duties specified
herein) and may accept fees ru.1d other consideration from the Project Entities or ru.ty of their
Affiliates for services in connection with this Agreement and otherwise without having to
account for the same to the Lenders.')2 Section 9.2.5 further specifies that any knowledge
obtained by BANA in a non-agent capacity would not be imputed to BANA as Disbursement

2

Credit Agreement Section 9.2likewise spedfies that BANA will have the same rights as any
other Lender. and that it was free to conduct business with Fontainebleau and its affiliates:
"Such Person and its Affiliates may accept deposits from, lend money to, act as the financial
advisor or in any other advisory capacity for and the generally engage in any kind of business
with any Borrower or any Subsidiary or Affiliate thereof as if such Person were not the
Administrative Agent hereunder and without any duty to account therefore to the Lenders."

2

Case 1:09-md-02106-ASG Document 388-1 Entered on FLSD Docket 12/06/2013 Page 3 of 5

Agent: "[n]otwithstanding anything to the contrary in this Agreement. the Disbursement Agent
shall not be deemed to have knowledge of any fact known to it in any capacity other than the
capacity of Disbursement Agent, or by reason of the fact that the Disbursement Agent is also a
Funding Agent or Lender." The reasons for these protections are clear. In an organization of
BANA's size and complexity, it is unfair and impractical to charge those performing the specific
function of Disbursement Agent on the Fontainebleau Las Vegas Project \vith knowledge
obtained (but not shared) by each of BANA' s tens of thousands of employees in the course of

their many and varied responsibilities. Without this limitation, BANA would arguably be
required to canvass repeatedly each of its numerous employees to determine if they had relevant
infonnation concerning any transaction on which BANA acted as agent. That onerous duty is
inconsistent with the Disbursement Agent's limited ministetial role and the Disbursement
Agreement's provisions relieving the agent of any duty to investigate.
Thus, Plaintiffs' relevance assertion fails as to each of the five e-mails attached to their
Notice

•

Plaintiffs' Exhibit 1515

3

Case 1:09-md-02106-ASG Document 388-1 Entered on FLSD Docket 12/06/2013 Page 4 of 5

-

Dated: November 16, 201 1

Respectfully submitted,

0'
VENY & MYERS LLP
Bra
J. Butwin (pro hac vice)
Jonathan Rosenberg (pro hac vice)
Daniel L. Cantor (pro hac vice)
William J. Sushon (pro hac vice)
7 Times Square
New York, New York 10036
Telephone: [phone]
Facsimile: (2 12) 326-2061
E-mails: [e-mail];
[e-mail]; [e-mail];
[e-mail]
-and-

HUNTON & WILLIAMS LLP
Jamie Zysk Isani (Fla. BarNo. 728861)
Matthew Mannering (Fla. Bar No. 39300)
1111 Brickell Avenue, Suite 2500
Miami, Florida 33131

Telephone: [phone]
Facsimile: [phone]
E-mail: [e-mail];
[e-mail]
Attorneys for Bank ofAmerica, NA.

4

Case 1:09-md-02106-ASG Document 388-1 Entered on FLSD Docket 12/06/2013 Page 5 of 5

CERTIFICATE OF SERVICE
I hereby certify that on November 16, 2011 , a true and correct copy of the foregoing was
served by electronic means pursuant to an agreement between the parties on all counsel or parties
ofrecord listed below.
Kirk Dillman, Esq.
Robett Mockler, Esq.

MCKOOL SMITH HENNIGAN
865 South Figueroa Street, Suite 2900
Los Angeles, California 9001 7
Telephone: [phone]
Fascimile: (213) 694-1.234
E-mail: [e-mail]
[e-mail]

Attorneys for Plaintifft Avenue CLO Fund, Ltd. eta/.

5

Case 1:09-md-02106-ASG Document 388-2 Entered on FLSD Docket 12/06/2013 Page 1 of 36

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Miami Division
CASE NO.: 09-2106-MD-GOLD/GOODMAN
INRE:
FONTAINEBLEAU LAS VEGAS
CONTRACT LITIGATION
MDLN0.2106

This document relates to all actions.

--------------------------~'
DEFENDANT BANK OF AMERICA, N.A. 'S REVISED
RED LINED RESPONSE TO PLAINTIFFS' REVISED
REDLINED STATEMENT OF UNDISPUTED MATERIAL
FACTS AND STATEMENT OF ADDITIONAL UNDISPUTED
MATERIAL FACTS IN OPPOSITION TO PLAINTIFFS'
MOTION FOR PARTIAL SUMMARY JUDGMENT

O'MELVENY & MYERS LLP
Bradley J. Butwin (pro hac vice)
Jonathan Rosenberg (pro hac vice)
Daniel L. Cantor (pro hac vice)
William J. Sushon (pro hac vice)
Times Square Tower
7 Times Square
New York, New York 10036
Telephone: [phone]
-andHUNTON & WILLIAMS LLP
Jamie Zysk Isani (Fla. Bar No. 728861)
Matthew Mallilering (Fla. Bar No. 39300)
1111 Brickell Avenue, Suite 2500
Miami, Florida 33131
Telephone: [phone]
Attorneys for Bank ofAmerica, N.A.
CONTAINS INFORMATION THAT IS "CONFIDENTIAL" AND "HIGHLY
CONFIDENTIAL" UNDER PROTECTIVE ORDER
FILED UNDER SEAL

Case 1:09-md-02106-ASG Document 388-2 Entered on FLSD Docket 12/06/2013 Page 2 of 36

BANA'S REVISED REDI ,JNED RESPONSEl TO PLAINTIFFS' REVISED
REDLTNED STATEMENT OF UNDISPUTED MATERIAL FACTS2
I.

RESPONSES TO PLAINTIFFS' DEFINITIONS
Response to Definitions 1 through 6, 8 and 9: Undisputed.
Response to Definition 7: Disputed. Whether or not the Plaintiffs' predecessors-in-

interest were "Term Lenders" is an issue on which the Plaintiffs bear the burden of proof.
II.

RESPONSES TO PLAINTIFFS' PURPORTEDLY UNDISPUTED FACTS
Response to Paragraph 1: Disputed. The cited evidence does not support the

statement. The cited evidence reflects that Bane of America Securities, Barclays Bank PLC,
Deutsche Bank Tmst Company Americas, and Merrill Lynch, Pierce, Fenner & Smith Inc. were
engaged as Joint Lead An·angers and Joint Book Managers to underwtite and arrange a $1.85
billion credit facility to be used for, among other things, the Project's development and
constmction. (See Dec!. of DanielL. Cantor in Support ofBANA's Opp. to Pis.' Mot. for Partial
Summ. J. and Request for Judicial Notice (the "Cantor Opp. Dec!.") Ex. 41 [Dep. Ex. 4 (March
2007 Offering Memorandum) at BANA_ FB00291963].)
Response to Paragraph 2: Disputed. The statement's description of the Project's

financing is inaccurate. In addition to the $675 million Second Mortgage Note offering, the
$1.85 billion in financing under the June 6, 2007 Credit Agreement, the $315 million Retail
Facility Agreement, and the $85 million retail mezzanine loan, the Project was also financed
with an equity contribution fi·om a group of Fontainebleau Resmts subsidiaries. (See Cantor
Opp. Dec!. Ex. 42 [Dep. Ex. 5 (March 2007 Offeting Memorandum) at 29].) BANA also
disputes that the $1.85 billion in financing was "bank" financing, as many lenders, including
Plaintiffs' predecessors-in-interest, were not banks. (See id. Ex. 14 (Fu Dep. at 18:3-14).)
Response to Paragraph 3: Disputed. BANA disputes that the $1.85 billion in financing

was "bank" fmancing, as many lenders, including Plaintiffs' predecessors-in-interest, were not
banks. (Cantor Opp. Dec!. Ex. 14 (Fu Dep. at 18:3-14).) Undisputed that the $1.85 billion under

Defendant submits this Revised Redlined Response to respond to Tetm Lender Plaintiffs'
Revised Redlined Statement of Undisputed Material Faets in Suppmt of Plaintiffs' Motion
for Pmtial Summmy Judgment filed with this Court under seal on November 14..2Jll..L
2

Defined te1ms are listed in Exhibit A hereto.
FILED UNDER SEAL

Case 1:09-md-02106-ASG Document 388-2 Entered on FLSD Docket 12/06/2013 Page 3 of 36

the June 6, 2007 Credit Agreement included (a) a $700 million Initial Tetm Loan Facility; (b) a
$350 million Delay Draw Term Loan Facility; and (c) an $800 million Revolving Loan Facility.
Response to Paragraph 4: Undisputed.
Response to Paragraph 5: Disputed. The cited evidence does not support Plaintiffs'
statement. The cited evidence refers to "mandatory prepayments" under the Credit Agreement.

(See, e.g., Credit Agmt. at § 2.11 (a).) Moreover, this statement is not material or relevant to the
resolution of Plaintiffs' motion for partial summary judgment.
Response to Paragraph 6: Disputed. The statement is inaccurate because Plaintiffs
have defined Fontainebleau as "Fontainebleau Resorts, LLC and all affiliates and subsidiaries,
including the Borrowers." The Disbursement Agreement governed the disbursement of Credit
Agreement, Second Lien Facility and Retail Facility funds to Fontainebleau Las Vegas Holdings,
LLC, Fontainebleau Las Vegas Capital Corp., Fontainebleau Las Vegas Retail, LLC,
Fontainebleau Las Vegas, LLC and Fontainebleau Las Vegas II, LLC. (See Disbursement
Agmt., Art. 2.)
Response to Paragraphs 7 and 8: Undisputed.
Response to Paragraph 9: Disputed. The cited evidence does not support the
statement. Although BANA's Corporate Debt Products Group ("CDP") was responsible for
approving the Advance Requests, disbursing funds to the Borrowers, and deciding what
information was disseminated to the Lenders (Cantor Opp. Dec!. Exs. 21 (Bolio Dep. at 83:3-7);
16 (Brown Dep. at 49:7-50: 19); 26 (Susman Dep. at 49:22-50: 15; 52:2-7)), the cited evidence
does not reflect that CDP was responsible for "all" ofBANA's actions as Disbursement or Bank
Agent or that CDP made "all" decisions relating to the disbursement of the loans. Among other
things, BANA's Agency Management group and Credit Services and Administration Depattment
also had responsibilities relating to BANA's agent roles. For example, Credit Services reviewed
the Bo!Towers' monthly draw packages to ensure that all required documents were included. (Id.
Exs. 21 (Bolio Dep. at 30:1-32:20); 16 (Brown Dep. at 39:8-12).)
Response to Paragraph 10: Disputed. The cited evidence does not support the
statement. Mr. Susman did not have "primary responsibility" over BANA's "various agency
roles." The cited evidence reflects only that Mr. Susman was involved as a CDP member in
connection with BANA's roles as Administrative Agent and Disbursement Agent for the
Fontainebleau Las Vegas fmancing. BANA was involved in multiple transactions as an agent
while Mr. Susman was employed by BANA, but there is no evidence that he had "primary
2
FILED UNDER SEAL

Case 1:09-md-02106-ASG Document 388-2 Entered on FLSD Docket 12/06/2013 Page 4 of 36

responsibility" over all of those "agency roles." BANA does not dispute that Mr. Susman was a
CDP Senior Vice President and ceased to be employed by BANA in February 2009 .
Response to Paragraph 11: Undisputed.
Response to Paragraph 12: Disputed. The evidence does not support this statement.
The Term Lenders- i.e., Plaintiffs in this action-did not fund all of the Initial Term Loan
Facility. The cited evidence reflects that $700 million was funded at closing, but it does not
establish that Plaintiffs funded that amount. Nor have Plaintiffs cited any evidence reflecting
that they funded the entire $700 million Initial Tenn Loan Facility at closing. Dep. Ex. 644 is a
bank statement reflecting funding of the Bank Proceeds Account, but does not identifY the
entities that funded. And Plaintiffs' Exhibit 1501-a Disbursement Agreement exhibit-does
not identify the entities that funded on closing.
Response to Paragraphs 13 through 25: Undisputed.
Response to Paragraph 26: Undisputed that the Second Mortgage Proceeds Account
was exhausted after $17,643.02 was requested and funded in response to the September 2008
Advance Request. (See Cantor Opp. Decl. Exs. 45 [Dep. Ex. 237]; 63 [Dep. Ex. 890].)
Response to Paragraphs 27 through 29: Undisputed.
Response to Paragraph 30: Disputed. The cited evidence does not support this
statement. Lehman was not responsible for the "entire" $189.6 million portion of the Retail
Loan to be advanced after closing. Approximately $125.4 million ofthe $315 million Retail
Facility was advanced at closing, leaving $189.6 million to be advanced after closing. (Cantor
Opp. Decl. Ex. 88 [Dep. Ex. 831].) Post-closing, $100 million ofthe Retail Facility was
syndicated by Lehman to other lenders. The Retail Facility was subdivided into eight notes-AI
through A8. (See id. Ex. 49 [Dep. Ex. 9, Ex. A].)

(See id. Ex. 74 [Dep. Ex. 23].) BANA does not

dispute that Lehman was responsible for $215 million of the $315 million Retail Loan after
taking into account the syndication. Moreover, Plaintiffs' citation to Exhibit 1504 is improper as
its contents are inadmissible hearsay. Exhibit I 504 is a September 2009 filing by non-party
Fontainebleau Las Vegas Retail, LLC in the Lehman bankruptcy. The document is not in
evidence and cannot be introduced to prove the truth of any matter asserted in the filing. 3

3

See Autonation, Inc. v. 0 'Brien, 347 F. Supp. 2d 1299, 1310 (S.D. Fla. 2004) ("A court may
take judicial notice of a document tiled in another court not for the truth of the matters
3
FILED UNDER SEAL

Case 1:09-md-02106-ASG Document 388-2 Entered on FLSD Docket 12/06/2013 Page 5 of 36

Response to Paragraph 31: Disputed. "Administrative Agent" is not a defined term
under the Retail Facility Agreement. Section 9.7.2(d) of the Retail Facility Agreement states that
Lehman was the "administrative agent" for the Retail Lenders. (See Retail Agmt. § 9.7.2(d).)

Response to Paragraphs 32 and 33: Undisputed.
Response to Paragraph 34: Disputed. BANA does not dispute that Lehman did not
fund its $2,526,184 portion of the September 2008 Retail Advance. (Cantor Opp. Dec!. Ex. 52
[Dep. Ex. 14].) But the cited Susman deposition testimony does not support the statement. The
testimony reflects Mr. Susman's understanding at the time of his deposition that Lehman did not
fund its portion of the Retail Advance for September 2008, and not his knowledge in September
2008. (Id. Ex. 26 (Susman Dep. at 264:24-265:3).)

Response to Paragraph 35: Disputed. This statement mischaracterizes the events
because it does not specify which Fontainebleau-related entity funded Lehman's share of the
September 2008 Retail Advance with equity. FBR funded Lehman's $2,526,184 portion of the
September 2008 Retail Advance with equity. (See Cantor Opp. Dec!. Ex. 52 [Dep. Ex. 14].) In
addition, most of the cited evidence does not support the statement. Deposition Exhibits 78 and
80, and Plaintiffs' Exhibit 1502 should be disregarded because they contain inadmissible
hearsay. These exhibits are e-mails fmwarding a Merrill Lynch analyst's unsubstantiated rumor
that "FBLEAU equity sponsors have funded the amount required from Lehman on the retail
credit facility due this month ($4 million)." There is no foundation for the reports' contents.
Moreover, the report's contents are inadmissible hearsay because the analyst was never deposed
and Plaintiffs cite the report for the truth of its contents.4 Moreover, the umeliability of the
report's contents are evident, as it exaggerates the amount of Lehman's Retail Advance by more
than 50%. Nor does the cited Susman deposition testimony support the statement. It reflects
Mr. Susman's understanding at the time of his deposition that FBR wired to Trimont Lehman's
portion of the Retail Advance for September 2008 and not his understanding in September 2008.

(See id. Ex. 26 (Susman Dep. at 264:24-265:3).)

asserted in the other litigation, but to establish the fact of such litigation and related filings."
(citations omitted)).
4

See United States v. Baker, 432 F.3d 1189, 1211 (11th Cir. 2005) (news report inadmissible
as hearsay).
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Response to Paragraph 36: Disputed.

(See Cantor Opp. Decl. Exs. 73, 78, 83, 87 [Dep.
Exs. 22, 28, 35, 41].) Some of the cited evidence does not support this statement.

And the cited Susman testimony does not support Plaintiffs'
statement because he was no longer employed by BANA at the time of the February 2009 Retail
Advance. (Id. Ex. 26 (Susman Dep. at 15:22-16:22)

~BANA~P- to~' 9-IOJ

Response to Paragraph 37: Disputed. Plaintiffs' mischaracterize the evidence by
misidentifYing the parties to the Guaranty Agreement and amendments thereto. In December
2008, FBR, Tumberry Residential Limited Partner, L.P. ("TRLP"), and Jeffrey Soffer entered
into the Guaranty Agreement in favor ofULLICO. (Cantor Opp. Decl. Ex. 75 [Dep. Ex. 24].)

(See id. Exs. 79 [Dep. Ex. 30]; 80 [Dep. Ex. 36]; 86 [Dep. Ex. 42].)

Response to Paragraph 38: Disputed. The cited evidence does not support this
statement. The cited evidence reflects that, tmder the Guaranty Agreement, ULLICO would pay
Lehman's $3,391,631.83 portion of the December 2008 Retail Advance poltion, and Jeffrey
Soffer, FBR, and TRLP (together, the "Guarantors") guaranteed repayment within ninety days
subject to certain conditions. (See Cantor Opp. Decl. Ex. 75 [Dep. Ex. 24].)

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(ld. Ex. 80 [Dep. Ex. 36].)
And under the Third Amendment, ULLICO received a $1 million payment from Soffer-less
than Lehman's $3,313,170.49 March 2009 Retail Advance portion). (See id. Ex. 86 [Dep. Ex.

(!d. Exs. 69 [Dep. Ex. 46]; 4 (Kolben Dep. at

133:18-134: I 0).)
Response to Paragraph 39: Undisputed, but BANA disputes that the cited evidence
supports the statement. Deposition Exhibits 206, 609, 814, 831, 906 and 907 do not support the
statement because they do not reflect that ULLICO did not agree to pennanently pay or to
assume Lehman's obligations under the Retail Facility.
Response to Paragraphs 40-42: Undisputed.
Response to Paragraph 43: Disputed. The cited evidence does not support this
statement.

Non~

of the exhibits cited discuss. or even mentiqn. whether the Project could be

lm.ili without the Retail FacilttY_.ftnancin&-ttJim Freeman, in his cited testimony, testified that it
was a "concern" when asked "ifLehman didn't fund its obligation and no one stepped up to fund
it, that could very well shut down all fmancing for the project?" (Cantor Opp. Decl. Ex. 17
(Freeman Dep. at 56:24-57:3

Response to Paragraph 44: Undisputed.
Response to Paragraph 45: Disputed. The statement is not supported by the cited
evidence. BANA witnesses testified that the funding for the Project would continue if the Retail
Lenders continued to advance the Retail Shared Costs. Bret Yunker testified that "I understood
there could be complications with funding going forward by virtue of Lehman's bankruptcy .. . .
I don't know if it means that the project must be shut down if the retail funding doesn't occur. I
think that would mean that the entity couldn't obtain funds out of the resort facility if the retail
funding didn't occur." (Cantor Opp. Decl. Ex. 6 (Yunker Dep. at 36:13-37:6).) Jon Varnell
testified: "The issue is whether or not [Lehman] would continue to fund or whether that funding
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would have to be found somewhere else." (Id. Ex. 13 (Varnell Dep. at 162:3-5).) Likewise, Jeff
Susman testified that Lelllnan's bank:mptcy '\vould have an impact if the company was not able
to fmd alternate fmancing for the retail piece." (Id. Ex. 26 (Susman Dep. at 147:23-24).) And
the cited David Howard testimony was limited to the implications of the Retail Lenders not
funding. (See id. Ex. 12 (Howard Dep. at 39:13-40:

~_2::1QJ

Response to Paragraph 46: Disputed. The evidence cited does not establish that the
Project could not be built without the Retail Facility financing. The cited evidence shows that
..the way the documents were constructed, that if retail funds were not funded, then the [resort]
lenders were not required ... to fund." (!d. Exs. 12 (Howard Dep. at 39:24-40:3); 26 (Susman
Dep. at 146:10-18).) Bret Yunker testified: "I don't know if it means that the project must be
shut down if the retail funding doesn't occur. I think that would mean that the entity couldn't
obtain funds out of the res01t facility if the retail funding didn't occur. But I can'tjump to the
exact conclusion of the project shutting down at that point. ... The fmancing shuts down. That's
different from the project shutting down." (Id. Ex. 6 (Yunker Dep. at 37:2- 11).)
Response to Paragraphs 47-49: Undisputed.
Response to Paragraph 50: Disputed. The cited evidence does not support the
statement. BANA's Bret Yunker and Fontainebleau's Jim Freeman both testified tbat they did
not recall whether they had a conversation regarding the impact ofFBR's fi.mding on the
conditions precedent to disbursement, but left open the possibility that a discussion took place
between Freeman and BANA. (See Cantor Opp. DecI. Exs. 17 (Freeman Dep. at 74:12-24,
88:19-91:11); 6 (Yunker Dep. at 96: 11-98:14).)
Response to Paragraph 51: Disputed. On September 22, 2008, BANA asked
Fontainebleau to schedule a call with the Lenders to address their Lehman-related questions.
(Cantor Opp. Decl. Ex. 47 [Dep. Ex. 901 ].) Fontainebleau agreed to pat1icipate in the Lender
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call in October 2008, but later declined to hold the call. (ld. Ex. 55 [Dep. Ex. 205].)
Fontainebleau Later discussed the implications of the Lehman banlallptcy with Lenders on
numerous occasions, including during an October 29,2008 call, a November 18,2008 meeting,
an early-December 2008 call, and a March 2009 presentation. (See id. Exs. 68 [Dep. Ex. 158
(Fu's notes of October 29, 2008 Fontainebleau call with Lenders)]; 98 [Dep. Ex. 377 (Mule's
summary of October 29,2008 call)]; 99 [Dep. Ex. 379 (e-mail confirming Caspian's attendance
at Fontainebleau meeting)]; 70 [Dep. Ex. 381 (Mule's notes of November 2008 meeting with
Fontainebleau)]; 71 [Dep. Ex. 160 (Churchill e-mail summarizing December 2008 Fontainebleau
call)].) In addition, numerous Lenders held meetings or calls with Fontainebleau during the fall
of2008, during which the implications ofLehman's bankruptcy for the Pr~j ect were discussed.
(!d. Exs.

- ); 40 [Dep. Ex. 382 (Mule's notes of Caspian's call with Freeman)]; 100 (Btigade email thanking Fontainebleau for arranging call).)
Response to Paragraph 52: Disputed. The cited evidence does not support the
statement. Fontainebleau held phone calls with Term Lenders in late September 2008. For
example, Jim Freeman held a phone call on September 23, 2008, with Brigade Capital's Doug
Pardon regarding the Lehman bankruptcy flJing, in response to Pardon's request for a call.
(Cantor Opp. Dec!. Exs. 7 (Pardon Dep. at 89:17-95:19); 48 [Dep. Ex. 92]; 46 [Dep. Ex. 278].)
Response to Paragraph 53: Undisputed that on September 30, 2008, BANA sent
Mr. Freeman a letter requesting a call to discuss issues related to Lehman's bankmptcy and that
the quoted statement is an excerpt from that letter. (Cantor Opp. Decl. Ex. 54 [Dep. Ex. 76].)
Response to Pat·agraph 54: Undisputed.
Response to Paragraph 55: Disputed. This statement is unsupported by the cited
evidence. Plaintiffs mischaracterize Mr. Freeman's deposition testimony. Mr. Freeman testified
that he was "not sure" whether he told BAi\lA that counsel advised him that there were
limitations on what he could say about the Lehman situation. (Cantor Opp. Decl. Ex. 17
(Freeman Dep. at 106: 11-20).) In addition, BANA's Brandon Bolio and Jeff Susman both
testified that they did not recall ever being told by Mr. Freeman that Fontainebleau was limited
in what it could discuss based on advice of counsel. (Id. Exs. 21 (Bolio Dep. at 81:13-82: 16); 26
(Susman Dep. at 156:9-157:22).) Moreover, the quoted L
anguage also does not appear in
Deposition Exhibit 254.
Response to Paragraph 56: Undisputed.
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Response to Paragraph 57: Disputed. Mr. Freeman's October 7, 2008 memorandum
answered BANA's question whether Lehman funded in September 2008. The memo assured the
Lenders that the August and September shared costs had been "funded in full" and that
Fontainebleau did not "believe there will be any intem1ption in the retail funding of the project."
(Cantor Opp. Dec!. Ex. 59 [Dep. Ex. 77].) The memo also stated that Fontainebleau was
"continuing active discussions with Lehman Brothers to ensure that, regardless of the Lehman
bankruptcy filing and related acquisition by Barclay's, there is no slowdown in fimdingfor the

project." (!d. (emphasis added).) In addition, BANA's Brandon Bolio testified that although the
memo did not provide "as much detail as would have been ... nice," it adequately "answer[ed]
the question." (!d. Ex. 21 (Bolio Dep. at 80:19-81:6).) BANA's Bret Yunker also testified that
he could not recall any dissatisfaction on the part of BANA employees with Fontainebleau's
memo responses, and that from his personal perspective Fontainebleau's response provided
sufficient clarity to resolve the issue. (Id. Ex. 6 (Yunker Dep. at 116:6-117:5).)
Response to Paragraph 58: Undisputed that on September 26, 2008, before disbursing
funds to Fontainebleau, BANA requested and received representations from Fontainebleau CFO
Jim Freeman re-affirming the Advance Request's certifications that all conditions precedent to
funding-including funding by the Retail Lenders-were satisfied. (Cantor Opp. Dec!. Ex. 51
[Dep. Ex. 75]; see also id. Exs. 6 (Yunker Dep. at 143:23-145:2); 17 (Freeman Dep. at 215:18217:14).) In addition, the cited evidence does not support the statement. The cited portions of
Mr. Freeman's testimony do not address the question of whether BANA followed up or not. (!d.
Ex. 17 (Freeman Dep. at 92:10-95:24).) Disputed to the extent the word "notified" is intended as
an assertion that Highland's September 26, 2008 e-mail was a notice of default under
Disbursement or Credit Agreements.
Response to Paragraph 59: Disputed. BANA disputes that Highland provided notice to
BANA that no disbursements may be made under the Loan Facility. BANA does not dispute
that on September 26, 2008 Highland sent BANA an e-mail expressing concerns regarding the
implications of Lehman's bankruptcy and its opinion that "[n]o disbursements may be made"
and sent additional e-mails expressing concerns about the Lehman bankmptcy's implications in
October 2008. (Cantor Opp. Dec!. Ex. 53 [Dep. Ex. 455].)
Response to Paragraph 60: Disputed. The cited evidence does not support this
statement. On October 6, 2008, Highland sent BANA an e-mail claiming that there were
unidentified "public reports" that "equity sponsors" had funded Lehman's September 2008

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Retail Advance portion. (Cantor Opp. Decl Ex. 58 [Dep. Ex. 81].) Then, on October 13,
Highland sent BANA a Merrill Lynch research analyst's e-mail that stated: "We understand that
FBLEAU equity sponsors have funded the amount required from Lehman on the retail credit
facility due this month ($4 million)." (ld. Ex. 62 (Dep. Ex. 80].) The Merrill Lynch report did
not identify a source or basis for the statement, and overstated Lehman's Shared Costs portion.

BANA also disputes
that Highland confirmed a "mutual understanding" that Lehman had not made disbursements
while in bankruptcy. Plaintiffs mischaracterize the quoted e-mail. The e-mail simply listed
Highland's position on several Lehman-related issues and asked BANA to confirm them. (ld.
Ex. 62 [Dep. Ex. 80].) Plaintiffs fail to identify any evidence that Mr. Scott or anyone from
BANA subsequently confirmed those self-serving assertions or came to any kind of "mutual
undeistanding" with H ighland. Moreover, the statement quoted by Plaintiffs is hearsay and is
inadmissible as evidence of the truth of the matters asserted therein. The statement at issue was
made in Mr. Dorenbaum's e-mail to Mr. Scott, copied to Highland' s Brad Means and Kevin
Rourke, and purports to recount a prior conversation between Messrs. Dorenbaum and Scott
Messrs. Scott, Dorenbaum, and Means have not been deposed in this case.

witnesses with personal knowledge of the conversation have testified about it, the statements
contained in Deposition Exhibit 80 purpmting to describe the conversation are inadmissible
hearsay,s Lastly, BANA did not understand that Lehman had made no disbursements while in
banla.uptcy. For example, internal BANA documents reflect BANA's be lief in 2008 that
Lehman funded in September 2008. (See, e.g., id. Ex. 76 [Dep. Ex. 905].)

s See Fed. R. Evid. 80 1-802; see also Read v. Teton Springs Golf& Casting Club, LLC, 08
Civ. 99, 2010 WL 5158882 at *6 (D. Idaho Dec. 14, 2010) (striking e-mail attached to the
plaintiff s opposition to the defendant's motion for summary judgment because although the
e-mail was authenticated in a deposition, it "contains hearsay statements not based on the
affiant's personal knowledge"); Design X Mfg., Inc. v. ABF Freight Sys., Inc., 584 F. Supp.
2d 464, 468 (D. Conn. 2008) (refusing to consider on swnmary judgment an e-mail
recounting what one non-deponent witness purportedly told another non-deponent witness
because the e-mail was inadmissible hearsay within hearsay).
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Response to Paragraph 61: Disputed to the extent that the word "informed" is intended
as an assertion that Highland provided BANA with evidence of an existing fact. At most,
Highland brought to BANA's attention an unsubstantiated and facially unreliable market rumor,
and claimed that it caused the condition precedent in Section 3.3.23 to fail. (Cantor Opp. Decl.
Ex. 62 [Dep. Ex. 80].) The Merrill Lynch research e-mail that Highland forwarded to BANA did
not identify a source or basis for the statement, and it erroneously overstated Lehman's Shared

As discussed in its
response to paragraph 60, BANA was unaware that Fontainebleau paid Lehman's portion of the
September 2008 Retail Shared Costs.
Response to Paragraph 62: Disputed. The cited evidence does not support the
statement. Although the impact of Lehman's bankruptcy on the Project was discussed at the
meeting in October 2008, the meeting's purpose was for the Retail Lenders to get a repott from
BANA (the Resort Lenders' agent) on the Project's overall progress. (Cantor Opp. Decl. Exs. 67
[Dep. Ex.l8 (meeting agenda)]; 17 (FreemanDep. at 110:23-111:9).)

But the cited evidence establishes only that a
conference call was scheduled for, and occtmed in, October 2008, and not what was discussed
during the call. The call's primary purpose was to provide an update on the Project to the Retail
Lenders, at the Retail Lenders' request. (See id. Ex. 13 (VameU Dep. at 198:1-7).)
Response to Paragraph 63: Disputed. Plaintiffs mischaracterize the evidence.

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Response to Paragraph 64: Disputed.

(See Cantor Opp. Decl. Ex. 4 (Kolbe.n Dep. at 175:19-176:9).) In

addition, Plaintiffs' Exhibit 19 is inadmissible and should be disregarded. The exhibit, a
National City Special Assets Committee Report, was never authenticated. (See id. E x . ;Ex. 6 (Yunker Dep. at 174: 16-175:5).) The exhibit is apparently an internal
memorandum prepared by non-party National City and obtained through non-party discovery
from PNC Bank. The document's contents are hearsay. Because the document is being offeJed
for the tn1th ofits contents, it is inadmissible under Fed. R. ofBvid. 802.6
Response to Paragraph 65: Disputed. The cited evidence does not support the
statement. The Retail Lenders asked BANA to take over Lehman's remaining commitment
under the Retail Facility, (Cantor Opp. Decl. Ex. 12 (Howard Dep. at 112:19-113:10, 146:1-13)),
but there is no evidence that Fontainebleau made the request at the October Retail meeting.
Furthetmore, much of the cited evidence has nothing to do with the October 2008 meeting. (See
id. Exs. 77 [Dep. Ex. 907]; 12 (HowardDep. at 112:9-18, 113:11-114:4); 26 (Susman Dep. at

277: 19-278:9).)
Response to Paragraphs 66 through 69: Undisputed.
Response to Paragraph 70: Disputed. The cited evidence does not support this
statement. Far from describing a "custom and practice," TriMont's Mac Rafeedie testified that
he could not "recall the exact things that were discussed" with BANA, but that "consistent with
[his] practice," he "could have" told BANA that FBR funded for Lehman. (Cantor Opp. Decl.
Ex. 5 (Rafeedie Dep. at 57:13-58:19; see also Rafeedie Dep. at 112:6-20).) Mr. Rafeedie
testified that the discussion "could have been just that Lehman's dollars were funded, not
necessarily who funded what." (Id. Ex. 5 (Rafeedie Dep. at 58:1-9).) BANA's Jeanne Brown
(Mr. Rafeedie's principal contact at BANA) testified that she did not remember TriMont telling

her that Lehman was not funding in September 2008. (!d. Ex. 16 (Brown Dep. at 57:1-8).) In
addition, in responding to Advance Requests, it was TriMont's practice to send a single wire
6

See Fed. R. Evid. 801(c), 802; see also Cortezano v. Salin Bank & Trust Co., 2011 WL
573755, at* 11 (S.D. Ind. Feb. 15, 2011) (ruling that e-mail containing excerpts of meeting

minutes sent by a non-party to plaintiff was inadmissible hearsay because "there was no
indication of who prepared these notes, when they were prepared, or whether they were taken
in the normal course of business").
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transfer to BANA fo r the entire requested Retail Shared Cost without identifying the specific
amotmts funded by each Retail Co-Lender. (ld. Exs. 5 (Rafeedie Dep. at 39:18-41:9); 26
(Susman Dep. at 204:9-10).) BANA further disputes that it was TriMont's "custom and
practice" to answer BANA's "questions regarding payments made pursuant to the Retail Facility
Agreement." The cited evidence does not support this statement, and Ms. Brown recalled that, at
times, she was "chasing" TriMont down, and would have to "call [TriMont], e-mail [TriMont}
asking where's my wire, what's the status of the wire." (ld. Ex. 16 (Brown Dep. at 59:4-60:4;
60:16-61:14).)
Response to P aragraph 71 : Undisputed.
Response to Pa t·agraph 72: Disputed. The cited evidence contradicts the statement.
Fontainebleau's Febt11a1y 23, 2009 response to BANA's February 20, 2009letter provided
assurances regarding the continued funding of Lehman's portion of the Retail Shared Costs by
Lehman and the Retail Lenders. The letter stated, among other things, that "(a]s relates to the
Retail Facility, we are continuing active d1scussions with Lehman Brothers and the co-lenders to
ensure that funding for the Project will continue on a timely basis. The Retail Facility is in full
force and effect, there has not been an interruption in the retail funding of the Project to date."
(Cantor Opp. Decl. Ex. 82 [Dep. Ex. 811].)
Response to P aragr aph 73: Undisputed.
Response to Pal'agr aph 74: Disputed. BANA did not !mow whether ULLICO would
assume Lehman's remaining commitment. In fact, Fontainebleau consistently reported that the
Retail Co-Lenders might fund for Lehman after Lehman's bankruptcy. For example, on October
7, 2008, Fontainebleau sent a memorandum to BANA and the Lenders, stating that it was
"actively talking with the co-lenders under the retail construction facility ... [and it did] not
believe there will be any interruption in the retail funding of the project." (Cantor Opp. Decl.
Ex. 59 [Dep. Ex. 77].) Fontainebleau provided similar assurances on October 22, 2008 and
February 23, 2009. (ld. Exs. 64 [Dep. Ex. 285]; 82 [Dep. Ex. 811].) Moreover, Jeff Susman
explained in his testimony that while he tmderstood that ULLICO's funding for Lehman was a
short-term arrangement "[a]s it was initially presented to [BANA]," he added that "Ullico could
decide to ftmd it on a long-term basis." (Id. Ex. 26 (Susman Dep. at 273:23-275:7).). . -

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Response to Paragraph 75: Undisputed
Response to Paragraph 76: Disputed. This statement is a legal conclusion, not a
factual statement. Moreover, it is unsuppmied by the cited evidence. To the extent a response is
requixed, the question of whether BANA would inquire fi.trther regarding information that was
allegedly inconsistent with the Bonowers' representations would depend on, among other things,
the reliability of the inconsistent information and the degree to which the information conflicted
with the Bonowers' representations. BANA's Jeff Susman testified that if he had infonnation
that contradicted the Borrowers' representations he would not allow funds to be disbursed, but he
also testified that the decision "would depend on the degree of inconsistency." (Cantor Opp.
Decl. Ex. 26 (Susman Dep. at 181:9-1 9; 182:22-183:20).) BANA's Jon Vamell testified only
that he believed that Mr. Susman "would undertake whatever he needed to satisfy himself that he
had a legitimate draw'' including obtaining additional infonnation if necessary. (ld. Ex. 13
(VameU Dep. at211:13-212:5).) BANA' s Brandon Bolio testified that he "would think" he

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would ask the Borrowers about discrepancies, but also testified that he was unaware of any
obligation under loan documents to do so. (/d. Ex. 21 (Bolio Dep. at 164:20-165:12; 175:6-18).)
Response to Paragraph 77: Disputed. This statement mischaracterizes the cited

evidence because BANA did not terminate the Revolver Loan. The Apri120, 2009 letter that
BANA, as Administrative Agent, sent to Jim Freeman informed Fontainebleau that "the
Required Facility Lenders under the Revolving Credit Facility have detem1ined that one or more
Events of Default have occurred and are continuing and that they have requested that the
Administrative Agent notify [Fontainebleau] that the Total Revolving Commitments have been
terminated." (Cantor Opp. Decl. Ex. 90 [Dep. Ex. 664].)
Response to l,aragraph 78: Disputed. The statement is not suppo1ted by the cited

evidence. Plaintiffs defme "Term Lenders" to mean the plaintiffs in this action "and/or their
predecessors in interest." (Pls.' SOUMF, Def. 7.) The cited documents reflect the total
disbursements of Initial Term Loan and Delay Draw Term Loan proceeds, not all of '''hich was
funded by Plaintiffs or their alleged predecessors-in-interest.
Response to Paragraph 79: Undisputed.

Rfiwnse to Paragraph 81: Undisputed that the cited document contains the auoted
languags

BANA'S STATEMENT OF ADDITIONAL UNDISPUTED
MATERIAL FACTS IN OPPOSITION TO PLAINTIFFS'
MOTION FOR PARTIAL SUMMARY JUDGMENT

I.

THE PARTIES
1.

BANA is a nationally chartered bank with its main office in Charlotte, North

Carolina. (See Cantor Opp. Decl. Ex. 30 at~ 102.)

2.

BANA was a Revolver Loan lender to Fontainebleau Las Vegas, LLC and

Fontainebleau Las Vegas II, LLC (collectively, the "Borrowers" or "Fontainebleau") under the
Credit Agreement. (See id. Ex. 30 at~ 102.)
3.

Plaintiffs are a group of sophisticated financial institutions who were lenders--or

in most cases, successors-in-interest to lenders--to Fontainebleau under the Credit Agreement.
(See id Ex. 29 at~~ 113, 117).
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II.

THE PROJECT

6.

The Fontainebleau Las Vegas is a partially completed resort and casino

development on an approximately 24.4 acre parcel at the Las Vegas Strip's north end (the
"Project"). (See Cantor Opp. Decl. Ex. 91 [Dep. Ex. 298].)

7.

The Project's developer was the Bonowers' parent, Fontainebleau Resorts, LLC

("Fontainebleau Resorts" or "FBR"). (Id. Ex. 41 at 23,34 [Dep. Ex. 4].)
8.

FBR Chainnan Jeff Soffer was a developer with years of experience developing

major residential and commercial proj ects across the United States. (Jd. Ex. 41 at 55-57, 79
[Dep. Ex. 4 ].)
9.

FBR's Chief Executive Officer and President, Glenn Schaeffer, had overseen

numerous major Las Vegas development projects. (Id. Ex. 41 at 58-59, 79-80 [Dep. Ex. 4].)

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10.

The Project's general contractor was Turnberry West Construction ("TWC" or

"Contractor"), a member of the Turnbeny group of companies. (Id. Ex. 41 at 57 [Dep. Ex. 4].)
II.

The Tumberry group of companies had a 40-year track record building high-end

hotels and residential developments across the United States, including several prominent Las
Vegas projects. (Id. Ex. 41 at 57-58 [Dep. Ex. 4].)

III.

THE PROJECT'S FINANCING
12.

The largest individual financing component for the Project's resort component

was a $1.85 billion senior secured debt facility ("Senior Credit Facility"). (See Disbursement
Agmt., Recital B.)

13.

Fontainebleau Las Vegas, LLC, Fontainebleau Las Vegas II, LLC, BANA,

Plaintiffs (or their predecessors-in-interest), and other non-party lenders entered into a June 6,
2007 Credit Agreement creating the Senior Credit Facility which comprised three senior secured
loans: (!)a $700 million term loan (the "Initial Term Loan"); (2) a $350 million delay draw
term loan (the "Delay Draw Term Loan"); and (3) an $800 million revolving loan (the "Revolver
Loan"). (Credit Agmt. §§ 1.1, 2.1.)
14.

Additional financing sources included equity contributions by Fontainebleau and

its affiliates, $675 million in Second Mortgage Notes, and a $315 million loan earmarked for the
Project's retail space ("Retail Facility"). (Jd.)
15.

Plaintiffs own only Initial Term Loan and Delay Draw Term Loan notes. (See

Cantor Opp. Dec!. Ex. 29 (Second Am. Tmm Lender Compl. [D.E. 15], at '1[117).)
16.

The Project's retail space was to be developed by Fontainebleau Las Vegas

Retail, LLC (the "Retail Affiliate"), an FBR subsidiary distinct from the Borrowers. (See id. Ex.
41 at 28 [Dep. Ex. 4].)
17.

The Project's resort and retail components each had their own separate credit

facilities and constmction budgets. (See id. Ex. 26 (Susman Dep. at 173:18-174:3); see also
Disbursement Agmt., Recital C.)
18.

FBR specifically designed the retail space's financing to be separate and distinct

from the Senior Credit Facility. (See Cantor Opp. Dec!. Ex. 26 (Susman Dep. at 173:18-174:3).)
19.

The $315 million Retail Facility was subject to a separate June 6, 2007 agreement

between the Retail Affiliate and Lehman Brothers Holdings, Inc. ("Lehman") (the "Retail
Facility Agreement"). (See id. Ex. 43 (Retail Agmt.) [Dep. Ex. 8].)

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20.

BANA was not a party to the Retail Co-Lender Agreement or the Retail Facility

Agreement. BANA did not receive a copy of the Retail Co-Lender Agreement. (See Retail
Agmt.; see also Cantor Opp. Decl. Ex. 97 (Susman Decl. at, 9).)
21 .

The resort budget included $83 million in costs that were to be funded through the

Retail Facility ("Shared Costs"). (See Disbursement Agmt., Recital C.)
22.

The Shared Costs were used to fund constmction of portions of the Project's retail

space that were structurally inseparable from the resort. (Cantor Opp. Decl. Ex. 97 (Susman
Decl. ~ 12).)
23.

Lehman signed the Retail Facility Agreement as a lender and as agent for one or

more co-lenders (each a "Retail Co-Lender"). (See Retail Agmt. at 1.)
24.

Retail Facility Agreement Section 9.7.2 permitted Lehman "to sell ... all or any

part of [its] right, title, or interest in, and to, and under the Loan ... to one or more additional
lenders" without limiting how that interest could be divided up. Retail Facility Agreement
Section 9.7.2(b) granted any Retail Co-Lender the right "to make the defaulting Co-Lender's pro
rata shru·e of such advance pursuant to the Co-Lending Agreement," thereby allowing the
defaulting Co-Lender to avoid an actual Lender Default. (Retail Agmt. §§ 9.7.2, 9.7.2(b).)

25.

The Retail Facility was syndicated under a separate confidential agreement among

the RetaiJ Co-Lenders (the "Retail Co-Lending Agreement"). (See Cantor Opp. Decl. Ex. 49
[Dep Ex. 9].) The terms under which the Retail Facility was syndicated to the Retail Co-Lenders
were not disclosed to BANA. (See id Ex. 97 (Susman Decl. at,~ 8, 9).)
26.

The identity of the Retail Co-Lenders was unknown to BANA until the Borrowers

revealed the participants in late 2008. (See id. Ex. 97 (Susman Decl.
27.

at~

10).)

The Retail Facility Agreement permitted Lehman to "delegate all or any portion

of its responsibilities under [the Retail Facility Agreement] and the other Loan Documents to the
Servicer." (Retail Agmt. § 9.3.)

28.

Lehman designated TriMont Real Estate Advisors, Inc. ("TriMont") as the

Servicer for the Retail Facility. (Cantor Opp. Decl. Ex.
29.

)

Lehman delegated to TtiMont the responsibility for collecting the Retail Co-

Lenders' respective Shared Costs obligations in response to an Advance Request and transferring
those funds to BANA, as Disbursement Agent. (See id. Ex. 5 (Rafeedie Dep. at 18:22-19:8).)

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30.

The Bonower's access to the construction financing was govemed by a June 6,

2007 Master Disbursement Agreement ("Disbursement Agreement"). (See generally id. Ex. 6
(Yunker Dep. at 20:3-21:5).)
31.

No more than once per month, Fontainebleau submitted a Notice ofBonowing

that, subject to certain terms and conditions, would require Lenders to transfer funds into a
designated bank account (the "Bank Proceeds Account"). (See Credit Agmt. §§ 2.1(c), 2.4(c).)
32.

After Fontainebleau submitted an Advance Request, BANA was required to

"review the Advance Request and attachments thereto to detetmine whether all required
documentation has been provided." (Disbursement Agmt., § 2.4.4(a).)
33.

BANA was required to confum that each Advance Request contained all the

representations, wananties, and certifications necessary to satisfy Disbursement Agreement
Section 3.3's conditions precedent to an Advance. (See Disbursement Agmt. § 2.4.6.)
34.

Section 3.3 had twenty-four separate multi-part conditions precedent, including:

•

"Representations and Wananties. Each representation and wananty of ... [e]ach
Project Entity set forth in Article 4 ... shall be true and cmTect in all material respects
as if made on such date." (Disbursement Agmt. § 3.3.2.)

•

"Default. No Default or Event of Default shall have occuned and be continuing."
(Id. § 3.3.3.)

•

"Material Adverse Effect. Since the Closing Date, there shall not have occuned any
change in the economics or feasibility of constructing and/or operating the Project, or
in the financial condition, business or property of the Project Entities, any of which
could reasonably be expected to have a Material Adverse Effect." (Id. § 3.3.11.)

•

"Retail Advances. In the case of each Advance from the Bank Proceeds Account
made concunently with or after Exhaustion of the Second Mortgage Proceeds
Account, the Retail Agent and the Retail Lenders shall, on the date specified in the
relevant Advance Request, make any Advances required of them pursuant to that
Advance Request." (Jd. § 3.3.23.)

35.

Each Advance Request required Fontainebleau, among other things, to "represent,

wanant and certify" that "the conditions set forth in Section[] 3.3 ... of the Disbursement
Agreement are satisfied as of the Requested Advance Date." (Cantor Opp. Dec!. Ex. 96 (Bolio
Dec!.

at~

6, Ex. 2 (Disbursement Agmt. Ex. C-1, at 8)).)

36.

The Advance Request also included multiple specific representations that tracked

the substance of Section 3.3 's conditions precedent. (Id. at 5-8.) In addition, Fontainebleau
certified that each of the seventeen Advance Request attachments "is what it purports to be, is

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accurate in all material respects, ... and reflects the information required by the Disbursement
Agreement to be reflected therein." (Id. at 1.)
37.

After receiving the Retail Co-Lenders' funds, TriMont sent a single wire transfer

for the entire requested Shared Cost amount to BANA-it did not identify the specific amounts
funded by each Retail Co-Lender. (See Cantor Opp. Dec!. Exs. 5 (Rafeedie Dep. at 40:22-41 :9);
26 (Susman Dep. at 204:9-10).)
38.

The Disbursement Agent's receipt of the requested Shared Costs was an Advance

Request condition precedent under Disbursement Agreement Section 3.3.23. (See Disbursement
Agrnt. § 3.3.23.)
39.

If an Advance Request's conditions precedent were satisfied, BANA (as

Disbursement Agent) and Fontainebleau were required to execute an Advance Confirmation
Notice. (See Disbursement Agmt. § 2.4.6.)
40.

In the Advance Confitmation Notice, Fontainebleau expressly confitmed "that

each of the representations, warranties and certifications made in the Advance Request ...
(including the various Appendices attached thereto), ... are true and conect as of the Requested
Advance Date and Disbursement Agent is entitled to rely on the foregoing in authorizing and
making the Advances herein requested" and "that the [Advance Request] representations,
warr-anties and certifications are conect as of the Requested Advance Date." (Cantor Opp. Dec!.
Ex. 96 (Bolio Dec!.
41.

at~

14, Ex. 20 (Disbursement Agmt. Ex. E)).)

The Advance Confirmation Notice instructed the Bank Agent-BANA in its

capacity as Administrative Agent-to transfer the requested funds from the Bank Proceeds
Account to payment accounts on the Scheduled Advance Date for further disbursement to the
Borr-owers. (See Disbursement Agmt. § 2.4.6.)
42.

If the conditions precedent were not satisfied, the Disbursement Agent was

required to issue a Stop Funding Notice. (See Disbursement Agmt. § 2.5.1.)
43.

A Stop Funding Notice would be issued if"the [Funding Agent] notifies the

Disbursement Agent that a Default or an Event of Default has occurr-ed and is continuing."
(Disbursement Agmt. § 2.5.1.)
44.

A Stop Funding Notice temporarily suspended the Lenders' obligations to fund

loans under the Credit Agreement. (See Disbursement Agrnt. § 2.5.2.)

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IV.

CONTRACTUAL PROTECTIONS FOR DISBURSEMENT AGENT AND
ADMINISTRATIVE AGENT
45.

Disbursement Agreement, Section 9.3.2 expressly provides, among other things,

that BANA "may rely and shall be protected in acting or refraining from acting upon"
certifications and other statements by Fontainebleau and IVI, and that "[n]otwithstanding
anything else in this Agreement to the contrary, in ... approving any Advance Requests, ...
[BANA] "shall be entitled to rely on ce1tifications from the Project Entities ... as to satisfaction
of any requirements and/or conditions imposed by this Agreement." Section 9.3.2 also states
that BANA "shall not be required to conduct any independent investigation as to the accuracy,
veracity or completeness of any such items [in the Advance Request] or to investigate any other
facts or circumstances to verify compliance by the Project Entities with their [Disbursement
Agreement] obligations." (Disbursement Agmt. § 9.3.2.)
46.

If a default occurred under the Disbursement Agreement, Fontainebleau was

required to "provide to the Disbursement Agent, the Construction Consultant and the Funding
Agents written notice of: Any Default or Event of Default of which the Project Entities have
knowledge, describing such Default or Event of Default and any action being taken or proposed
to be taken with respect thereto." (Disbursement Agmt. § 5.4.1.)
47.

Disbursement Agreement Section 9.10 limits BANA's duties as Disbursement

Agent, providing, among other things, that:
•

" ... [BANA] shall have no duties or obligations [under the Disbursement Agreement]
except as expressly set forth herein, shall be responsible only for the perfmmance of
such duties and obligations and shall not be required to take any action otherwise than
in accordance with the tmms hereof';

•

" ... nothing in this Agreement, expressed or implied, is intended to or shall be so
construed as to impose upon [BANA] any obligations in respect of this Agreement
except as expressly set forth herein or therein"; and

•

" ... [BANA] shall have no duty to inquire of any Person whether a Default or an
Event of Default has occurred and is continuing."

48.

Disbursement Agreement Section 9.10 limits BANA's potential liability to bad

faith, fraud, gross negligence or willful misconduct:
Neither the Disbursement Agent nor any of its officers, directors, employees or
agents shall be in any manner liable or responsible for any loss or damage arising
by reason of any act or omission to act by it or them hereunder or in connection
with any of the transactions contemplated hereby, including, but not limited to,
any loss that may occur by reason of forgery, false representations, the exercise of
its discretion, or any other reason, except as a result of their bad faith, fraud, gross
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negligence or willful misconduct as finally judicially determined by a court of
competent jmisdiction.
49.

The Credit Agreement contained similar provisions to the Disbursement

Agreement that expressly permitted BANA, as Administrative Agent, to rely on representations
by Fontainebleau and others, did not require BANA to investigate those representations, placed
the bmden on Fontainebleau to report defaults, and limited BANA's liability to gross negligence
or worse. (See Credit Agmt. §§ 6.7, 9.3, 9.4.)
50.

Section 9.3 of the Credit Agreement states that "[t]he Administrative Agent shall

not be liable for any action taken or not taken by it (i) with the consent or at the request of the
Required Lenders ... or (ii) in the absence of its own gross negligence or willful misconduct."
51.

Section 9.3(b) of the Credit Agreement provides that "[T]he Administrative

Agent: ... shall not have any duty to take any discretionaty action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or by the other
Loan Documents that the Administrative Agent is required to exercise as directed in writing by
the Required Lenders (or such other number or percentage of the Lenders as shall be expressly
provided for herein or in the other Loan Documents), provided that the Administrative Agent
shall not be required to take any action that ... may expose the Administrative Agent to liability
or that is contrary to any Loan Document or applicable law."
52.

Section 9.4 of the Credit Agreement provides that "[t]he Administrative Agent

shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice,
request, cettificate, consent, statement, instmment, document or other writing ... believed by it to
be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by telephone ... and
shall not incm any liability for relying thereon."

V.

LEHMAN'S BANKRUPTCY FILING AND ITS AFTERMATH
53.

Fontainebleau requested nearly $3.8 million in Retail Facility funds as part of its

$103.7 million September 2008 Advance Request. (See Cantor Opp. Dec!. Ex. 96 (Bolio Dec!.
~

13, Ex. 7).)

A.

BANA Determines That the September 2008 Advance Request's Conditions
Precedent Are Satisfied.

54.

If the Retail Facility did not fund its entire portion of the Advance Request, no

funds would be disbmsed to Fontainebleau from the Bank Proceeds Account, which could cause

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Fontainebleau to be unable to pay that month's Project construction costs. (Disbursement Agmt.
§ 3.3.23.)
55.

It was understood that Fontainebleau's failure to remain timely in paying

subcontractors could adversely impact the Project. (See Cantor Opp. Dec!. Ex. 97 (Susman Dec!.
at 'PI).)
56.

In the days after Lehman's bankruptcy filing, BANA held a series of calls with

Fontainebleau to obtain additional information regarding the Lehman bankruptcy's implications
for the September 2008 Advance Request. (See id. Ex. 6 (Yunker Dep. at 24:19-25:6).)
57.

The calls that BANA held with Fontainebleau after Lehman's bankruptcy filing

focused on whether Lehman would fund its portion of the Advance Request and on potential
alternative financing anangements if Lehman did not fund, including funding by the other Retail
Facility Lenders or Fontainebleau. (Id. Ex. 6 (Yunker Dep. at 81:13-83:14).)
58.

During the phone calls with Fontainebleau after Lehman's bankruptcy filing,

BANA listened to Fontainebleau discuss its financing options if Lehman did not fund, but did
not make any recommendations. (Jd. Ex. 6 (Yunker Dep. at 25:8-12).)
59.

BANA believed that it was required to honor Fontainebleau's September 2008

Advance Request if the entire requested Shared Costs were received from TriMont, and the
Advance Request certifications remained in effect. (Jd. Exs. 26 (Susman Dep. at 173:22-174:3);
12 (Howard Dep. at 80:21-81:8).)
60.

On September 26, 2008, TriMont sent BANA a single wire tt·ansfer for the entire

Retail Shared Costs requested amount. (Jd. Ex. 50 [Dep. Ex. 241]; see also id. Ex. 16 (Brown
Dep. at 78:20-79:5).)
61.

On September 26, 2008, before disbursing funds to Fontainebleau, BANA

received representations from Fontainebleau CFO Jim Freeman re-affirming the Advance
Request's certifications that all conditions precedent to funding-including funding by the Retail
Lenders-were satisfied. (!d. Ex. 51 [Dep. Ex. 75]; see also id. Exs. 6 (Yunker Dep. at 143:23145:2); 17 (Freeman Dep. at 215:18-217:14).)
62.

As of September 26, 2008, Lehman had not announced that it would reject the

Retail Facility Agreement as a result of its bankruptcy and, thus, BANA had no reason to believe
that agreement was invalid. (Jd. Ex. 97 (Susman Dec!.
63.

at~

19).)

Based on information from Fontainebleau and BANA's own involvement in other

syndicated loans, BANA understood in September 2008 and thereafter that Lehman was
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continuing to honor some loan commitments. (Jd. Exs. 26 (Susman Dep. at 176:21-177:12); 97
(Susman Dec!.
64.

at~ 20).)

BANA concluded that the Lehman bankruptcy did not provide a basis for

rejecting Fontainebleau's September 2008 Advance Request. (!d. Ex. 97 (Susman Dec!. at
~

16).)
B.

Fontainebleau Conceals that FBR Had Funded Lehman's Portion ofthe
September 2008 Advance Request.

65.

Unbeknownst to BANA, Lehman's portion of the September 2008 Advance

Request was funded by FBR, which made a $2,526,184 "equity contribution" to "prevent an
overall project funding delay and resulting disruption of its Las Vegas project" after Lehman
failed to fund its required September 2008 Retail Shared Costs p01tion. (Cantor Opp. Dec!. Ex.
52 [Dep. Ex. 14].)
66.

Internal BANA documents reflect BANA's belief in 2008 that Lehman funded the

September 2008 Advance Request. (See, e.g., id. Ex. 76 [Dep. Ex. 905].)
67.

Jim Freeman was instructed by Fontainebleau's counsel not to reveal that FBR

had funded for Lehman. (Id. Ex. 17 (Freeman Dep. at 227:8-20; 237:5-11).)
68.

Mr. Freeman testified that he was "not sure" whether he told BANA that

Fontainebleau's counsel had advised him that there were limitations on what he could tell them
about the Lehman situation. (Id. Ex. 17 (Freeman Dep. at 106:11-20).)
69.

BANA's Brandon Bolio and Jeff Susman both testified that they did not recall

ever being told by Mr. Freeman that Fontainebleau was limited in what it could discuss with
them about the Lehman situation based on the advice of its counsel. (!d. Exs. 21 (Bolio Dep. at
81:13-82:16); 26 (Susman Dep. at 156:9-157:22).)
70.

Mac Rafeedie testified that he could not "recall the exact things that were

discussed in that call" with BANA but that "consistent with [his] practice," he "could have" told
BANA that FBR funded for Lehman; but he also testified that the discussion "could have been
just that Lehman's dollars were funded, not necessarily who funded what." (Id. Ex. 5 (Rafeedie
Dep. at 57:13-58:19).)
71.

BANA's Jeanne Brown (Mr. Rafeedie's main BANA contact) testified that she

did not recall ever discussing with Mr. Rafeedie whether Lehman itse1ffunded in September
2008. (!d. Ex. 16 (Brown Dep. at 57: 1-8; 64: 17-65:3; 66: 15-24); see also id. Ex. 5 (Rafeedie
Dep. at 33:2-9).)
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72.

Ms. Brown communicated all information she obtained as Disbursement Agent

regarding Lehman to BANA's Corporate Debt Products group. (!d. Ex. 16 (Brown Dep. at
39:17-40:2; 57:1-12; 58:10-13).)
73.

There is no evidence that Ms. Brown told the CDP group either that FBR funded

for Lehman in September 2008 or that Lehman did not fund in September 2008.
74.

On October 6, 2008, Jim Freeman told Moody's that "Retail funded its small

portion last month." (!d. Ex. 56 [Dep. Ex. 283].)
75.

Jim Freeman did not tell Moody's that FBR had funded for Lehman in September

2008 because "(b ]ased on the discussion that I had, the advice of counsel, I was --I was not
talking to people about the source of funding." (!d. Ex. 17 (Freeman Dep. at 250: 10-12).)
76.

Jim Freeman told BANA's Jeff Susman that Retail Lenders had fhnded the

September 2008 Shared Costs. (!d. Ex. 26 (Susman Dep. at 193:20-194:4).)
77.

Fontainebleau's CEO Glenn Schaeffer told Bill Newby that Lehman itself had

funded in September 2008. (!d. Ex. 3 (Newby Dep. at 64:11-65:3).)
C.

Fontainebleau Provides Repeated Assurances that the Advance Request
Conditions Precedent Were Satisfied Despite Lehman's Bankruptcy.

78.

On September 22, 2008, BANA asked Fontainebleau to schedule a call with

Lenders to address their Lehman-related questions. (Cantor Opp. Dec!. Ex. 47 [Dep. Ex. 901].)
79.

In anticipation of the Lender call, BANA sent Fontainebleau a list of potential

Lender questions, including whether Lehman funded its September 2008 Shared Costs pmtion,
the identity of any entity that funded on Lehman's behalf, and the Lehman bankruptcy's effect
on Fontainebleau's ability to complete the Project. (!d. Ex. 54 [Dep. Ex. 76].)
80.

Fontainebleau agreed to participate in the Lender call that BANA requested but

later backed out. (See id. Ex. 55 [Dep. Ex. 205].)
81.

On October 7, 2008, Fontainebleau sent BANA and the Lenders a memo

addressing the Retail Facility's status. (!d. Ex. 59 [Dep. Ex. 77].)
82.

The October 7, 2008 memorandum assured the Lenders that the August and

September Shared Costs had been funded in full. (!d.)
83.

The October 7, 2008 memo stated that Fontainebleau was "continuing active

discussions with Lehman Brothers to ensure that, regardless of the Lehman bankruptcy filing and
related acquisition by Barclay's, there is no slowdown in funding for the project." (!d.)

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84.

The October 7, 2008 memo stated that Fontainebleau did not "believe there will

be any intem1ption in the retail funding of the project." (Jd.)
85.

At the time, BANA believed that Fontainebleau's memo had confirmed funding

by Lehman. (!d. Exs. 21 (Bolio Dep. at 80: 19-81:6); 6 (Yunker Dep. at 116:6-117 :5).)
86.

On October 22, 2008, Fontainebleau provided the Lenders with another memo,

stating that Lehman's "commitment to the Retail Facility had not been rejected in bankruptcy
cowt and remained in full force and effect." (Id. Ex. 64 [Dep. Ex. 285].)
87.

Fontainebleau's October 22, 2008 update stated that "Lehman Brothers has

indicated to us that it has sought the necessaty approvals to fund its commitment this month,"
and that Fontainebleau had been assured by the "co-lenders to the retail facility" that "[i]f
Lehman Brothers is not in a position to perfo1.111 ... that they would fund Lehman's portion of the
draw." (/d)
88.

-

(Cantor Opp. Decl. Ex. 4 (Kolben Dep. at 62:12-64:2).)
89.

The October 23,2008 meeting's purpose was for the Retail Lenders to get a

report from BANA (the Resort Lenders' agent) on the Project's overall progress. (/d. Exs. 67
[Dep. Ex. 18]; 17 (Freeman Dep. at 110:23-111 :9).)
90.

(Jd. Ex. 4 (Kolben Dep. 176:22-177:3).)

91.

On December 5, 2008, FBR issued financial statements for the period ended

September 30, 2008 that included disclosures regarding the Retail Facility's status. (/d. Ex. 72
[Dep. Ex. 286].)
92.

FBR's fmancial statements represented that "[t]he Company has been working

diligently with Lehman Brothers and the co-lenders to ensure that there is no interruption in
funding for the retail component." (!d.)
93.

The FBR financial statements' "Equity Contributions" disclosure made no

mention of its September 2008 equity contribution on Lehman's behalf. (Id at FBRO 1281 007.)
94.

Lehman funded its Shared Costs p01tion for the October and November

Advances. (See Cantor Opp. DecL Exs. 5 (Rafeedie Dep. at 63:13-21, 66:3
; 64 [Dep. Ex. 285].)

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95.

In December 2008, BANA learned that Union Labor Life Insurance Company

("ULLICO") would fund Lehman's Shared Costs portion. (!d. Exs. 26 (Susman Dep. at 269:24270:19); 76 [Dep. Ex. 905].)
96.

ULLICO was a Retail Co-Lender under the Retail Co-Lending Agreement. (ld.

see also id. Ex. 49 [Dep Ex. 9].)

Ex.
97.

Each month from October 2008 through March 2009, TriMont wired BANA the

full requested Shared Costs, and BANA waited until after it received the wire from Trimont to

make any disbursements to Fontainebleau. (See id. Exs. 96 (Bolio Decl.

at~

16, Ex. 29-34); 16

(BrownDep. at 72:16-73:1).)

D.
98.

99.

In December 2008, ULLICO entered an agreement with the Guarantors under

which ULLICO would pay Lehman's December 2008 Retail Advance portion, and the
Guarantors would guaranty repayment within 90 days. (See id. Ex. 75 [Dep. Ex. 24].)
100.
-

-

(See id. Exs. 79 [Dep. Ex. 30]; 80 [Dep. Ex. 36]; 86 [Dep. Ex. 42].)

(!d. Ex. 4 (Kolben Dep. at 95:16-96:18).)

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E.

BANA Evaluates Highland's Claim that Lehman's Bankruptcy was a Default
Under the Loan Documents.

105.

Funds managed by Highland Capital Management ("Highland") were Initial Term

Loan and Delay Draw Term Loan Lenders. (See Cantor Opp. Decl. Ex. 29 (Second Amended
Compl. (Jan. 15, 201 0) at~~ 38-40, 117).)
106.

On September 26,2008, Hjghland sent BANA an e~mail claiming that: "As a

result of [Lelnnan] 's bankruptcy filing earlier this month, the financing agreements are no longer
in full force and effect, triggering a number of breaches under the Loan Facility- resulting in the
following consequences; (i) No disbursements may be made under the Loan Facility; and (ii)
The BotTower should be sent a notice of breach immediately to protect the Lenders' rights and
ensure that any cure period commence as soon as possible." (ld. Ex. 53 [Dep. Ex. 455].)
107.

Through its counsel Sheppard Mullin Richter & Hampton LLP ("SMRH"),

BANA told Highland that the Bankruptcy Code specifically provides that "no executory contract
may be tenninated or modified solely based on the commencement of a Chapter 11 case," and
asked Highland to identify any "authority or documents supporting a contrary conclusion." (!d.
Ex. 60 [Dep. Ex. 904].)
108.

Following communications with Highland and further internal analysis, BANA

concluded that Lehman's bankruptcy filing did not provide a basis for rejecting Fontainebleau's
September 2008 Advance Request. (Id. Ex. 97 (Susman Decl. at 1f 16).)
I09.

BANA provided additional information to Highland in a September 29, 2008

Sheppard Mullin e-mail, explaining that it had been "monitoring all [Lehman] court orders" and
was "unaware of a restriction on perf01mance of this agreement." (Id.

at~ 22,

Ex. 5.) Thee-

mail also rejected Highland's suggestion that Lehman's bankruptcy filing was an "anticipatory
repudiation ofthe contract." (/d.)
110.

On September 30, 2008, Highland sent BANA another e-mail, this time claiming

that Lehman's bankruptcy filing constituted a Material Adverse Effect. (Jd.. at~ 23, Ex. 5.)
111.

BANA concluded that Highland's September 30, 2008 claim was incorrect

because there was no indication that there would be a shortfall in Retail Funds, or that Lehman
would be unable to honor its obligations under the Retail Facility. (Id.

at~ 23.)

112.
(Cantor Opp. Decl. Ex. 57 [Dep. Ex. 458].)
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113.

On October 13, 2008, Highland forwarded to BANA a Merrill Lynch research

analyst's e-mail that discussed nine industry developments and, in the only sentence referring to
Fontainebleau, stated: "We understand that FBLEAU equity sponsors have funded the amount
required from Lehman on the retail credit facility due this month ($4 million)." (Cantor Opp.
Decl. Ex. 61 [Dep. Ex. 459].) The Menill Lynch report that Highland fol'\Varded to BANA cited
no source or basis for the statement, and overstated Lehman's Shared Costs p01tion. (/d.)
114.

Highland claimed that the market rumor created "a breach concem under the

Disbursement Agreement" and that "Lehman [was] in breach of the [Retail] [A]greement
because it failed to fund and thus the agreement [was] not in full force and effect." (Jd.)
115.

In its October 13, 2008 e-mail, Highland also reqtJested that because of these

concerns, BANA "confirm" certain matters concerning the Retail Facility, including: (i) "wiring
confirmations from the Retail Lenders or funding certificates from the Retail Lenders to confirm
that fw1ding is made by the Retail lenders (rather than other sources)" and (ii) a legal opinion

from the "borrower's legal counsel ... that the Lehman funding agreement is in thll force and
effect." (Jd.) Highland cited no provision of any agreement requiring such information be
provided to the agent or the lenders. (Id.)
116.

(Cantor Opp. DecL Ex. 20 (Rourke Dep. at 103:6-16).)
117.

BANA evaluated Highland's claim, but rejected it in view of the numerous

representations and wan·anties made by Fontainebleau in the September and October 2008
Advance Requests, the continued receipt of the requested Shared Costs from TriMont, and the
other statements by Fontainebleau. (!d. Ex. 97 (Susman Dec!. at 1 24).)
118.

In September 2008, numerous credible publications reported that certain Highland

ftmds had suffered losses and faced a liquidity cnmch. (!d. Ex. 28 (P. Paulden, Highland Shuts
Funds Amid 'Unprecedented' Disruption, BLOOMBERG (Oct. 16, 2008).)
119.

(!d. Ex. 20 (Rourke

Dep. at 70:24-72:2).)

29

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120.

In September and October 2008, BANA facilitated calls between Fontainebleau

and numerous Lenders (including Highland, Brigade and Halcyon) to discuss the Lehman
banlouptcy. (!d. Exs. 20 (Rourke Dep. at 92:12-93:16); 95 [Dep. Ex. 279]; 12 (Howard Dep. at
52:19-53:19).)
121.

On October 22,2008, Highland had a one-on-on phone call with Freeman and

asked him numerous questions about Lehman. (Id. Exs. 65 [Dep. Ex. 254]; 66 [Dep. Ex. 465].)
122.

(!d. Ex. 20 (Rourke Dep. at 126:2-127:2; 136:21-137:12).)

123.

On October 23, 2008, Highland sent an e-mail to Freeman asking whether FBR
(!d.

funded Lehman's September 2008 Advance Request share,
Exs.

66 [Dep. Ex. 465].)
124.

There is no evidence that Highland ever submitted a formal Notice of Default or

raised any further concerns with BANA regarding Lehman's bankruptcy.
125.

and is no longer a

see also Order Dismissing Parties

Plaintiff. (See id. Ex.
Without Prejudice (May 3, 2010) [D.E. 68].)
126.

On February 20, 2009, BANA sent a letter to Fontainebleau seeking information

regarding, among other things, the Retail Facility. (Id. Ex. 81 [Dep. Ex. 498].)
127.

On February 23,2009, Fontainebleau sent BANA a letter stating that it was

"continuing active discussions with Lehman Brothers and the co-lenders to ensure that funding
for the Project will continue on a timely basis," and that the "Retail Facility is in full force and
effect, [and] there has not been an intenuption in the retail funding of the Project to date." (Id.
Ex. 82 [Dep. Ex. 811].)
128.

On February 23, 2009, in response to Lender requests, BANA asked

Fontainebleau to schedule a Lender call. (See id. Exs. 96 (Bolio Dec!. at, 17), 35).)
129.

On March 4, 2009, BANA sent Fontainebleau a letter requesting a Lender

meeting because it was "critical that the Company meet and interact with its Lenders." BANA's
letter attached a list of Lender information requests concerning Project costs, which mirrored
BANA's ptior information requests. (!d. Ex. 84 [Dep. Ex. 814].)
130.
(Id. Ex. 20 (Rourke Dep. at 160: 19-162:2).)

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131.

On March 20, 2009, Fontainebleau held a Lender meeting in Las Vegas where it

delivered a presentation on the Project's construction budget and other issues relating to the
Project's financial condition. (See id. Ex. 85 [Dep. Ex. 97].)
132.

During the March 20, 2009 Lender meeting, Fontainebleau presented a slideshow

to the attendees. (Jd.)
133.

The Credit Agreement provides that "Each Lender ... acknowledges that it will,

independently and without reliance upon the Administrative Agent or any other Lender ...
continue to make its own decisions in taking or not taking action under or based upon this
Agreement, any other Loan Document or any related agreement or any document nrrnished
hereunder or thereunder." (Credit Agmt. § 9.7.)

VI.

THE TERM LENDERS AND THE LEHMAN BANKRUPTCY
134.

Plaintiffs who were lenders in September 2008 testified that they "believe[d)" that

"at least one [of Lehman's Retail] advance[s] had been made by another retail lender." (Cantor
Opp. DecL Exs. 7 (Pardon Dep. at 83:10-20); see also id. Exs. 23 (Mule Dep. at 161:19-22); 93
[Dep. Ex. 91]; 92 [Dep. Ex. 154]; 94 [Dep. Ex. 182 at 3];
135.

)

Because they were concerned with potential liability, the Lenders did not direct

BANA to deny the Advance Requests. (ld Ex. 23 (Mule Dep. at 253:2-20).)
136.

There is no evidence that any Lender sent a notice of default to BANA based on

the Retail Co-Lenders funding for Lehman.
137.

Plaintiffs increased their exposure to Fontainebleau Term Loans following the

Lehman bankruptcy filing. (!d. Ex. 23 (Mule Dep. at 172: 10-174:25).)

- ( S e e id. Ex. 15 (Sheffield Dep. at 188:5-13).)
139.

(See id. Ex. 15 (Sheffield

Dep. at 199:13-18).)

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Dated: November 16, 20ll

Respectfully submitted,

0 ' ~. VENY & MYERS LLP
Bradle J. Butwin (pro hac vice)
Jonathan Rosenberg (pro hac vice)
Daniel L. Cantor (pro hac vice)
William J. Sushon (pro hac vice)
7 Times Square
New York, New York 10036
Telephone: [phone]
Facsimile: [phone]
E-mails: [e-mail];
[e-mail]; [e-mail];
[e-mail]
- andHUNTON & WILLIAMS LLP
Jamie Zysk Isani (Fla. Bar No. 728861)
Matthew Mannering (Fla. Bar No. 39300)
1111 Brickell Avenue, Suite 2500
Miami, Florida 33131
Telephone: [phone]
Facsimile: [phone]

E-mail: j [e-mail];
[e-mail]
Attorneys for Bank ofAmerica, N.A.

32

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36

EXHIBIT A- DEFINED TERMS
BANA --Bank of America, N.A, Defendant
Bank Proceeds Account -- The designated bank account into which Lenders transferred Project
funds
CDP -- BANA's Corporate Debt Products Group
Credit Agreement or Credit Agmt. -- Credit Agreement dated as of June 6, 2007 attached as
Exhibit 2 to the Declaration of DanielL. Cantor in Support ofBANA's Opposition to Plaintiffs'
Motion for Partial Summary Judgment.
Delay Draw Term Loan --The $350 million delay draw term loan under the Credit Agreement
Disbursement Agreement or Disbursement Agmt. -- Master Disbursement Agreement dated
as of June 6, 2007 attached as Exhibit I to the Declaration of Daniel L. Cantor in Support of
BANA's Opposition to Plaintiffs' Motion for Partial Summary Judgment
FBR or Fontainebleau Resorts --Fontainebleau Resorts, LLC
Fontainebleau or Borrowers-- Fontainebleau Las Vegas, LLC and Fontainebleau Las Vegas II,
LLC
Guarantors-- Jeffrey Soffer, Fontainebleau Resorts, LLC, and Turnberry Residential Limited
Pmtner, L.P ., together.
Highland -- Highland Capital Management
Initial Term Loan --The $700 million initial term loan under the Credit Agreement.
Lehman --Lehman Brothers Holdings, Inc.
Lenders -- Lenders under the Credit Agreement for the Senior Credit Facility.
MAE -- Material Adverse Effect

Project-- The Fontainebleau Las Vegas, a partially completed resort and casino development on
an approximately 24.4 acre parcel at the Las Vegas Strip's north end.
Retail Affiliate-- Fontainebleau Las Vegas Retail, LLC
Retail Co-Lending Agreement-- The confidential Retail Co-Lending Agreement dated as of
September 24, 2007 attached as Exhibit 49 to the Declaration of DanielL. Cantor in Suppmt of
BANA's Opposition to Plaintiffs' Motion for Partial Summmy Judgment.

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Retail Facility Agreement or Retail Agmt. --Retail Facility Agreement dated as of June 6,
2007 attached as Exhibit 43 to the Declaration of DanielL. Cantor in Support ofBANA's
Opposition to Plaintiffs' Motion for Partial Summary Judgment
Retail Facility-- The $315 million in loans earmarked for the Project's retail space
Retail Lenders --Lenders among whom the Retail Facility was syndicated under the Retail CoLending Agreement
Revolver Loan --The $800 million revolving loan under the Credit Agreement.
Senior Credit Facility-- The $1.85 billion senior secured facilities under the Credit Agreement.
Shared Costs --The $83 million in resort costs to be funded through the Retail Facility.
SMRH -- Sheppard Mullin Richter & Hampton LLP
TriMont -- TtiMont Real Estate Advisors, Inc.
TRLP -- Turnberry Residential Limited Partners

TWC or Contractor-- Tumbeny West Construction
ULLICO -- Union Labor Life Insurance Company

2

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CERTIFICATE OF SERVICE
I hereby certify that on November 16, 201 1, a true and correct copy of the foregoing was
served by electronic means pursuant to an agreement between the parties on all counsel or parties
of record listed below.

Kirk D illman~ Esq.
Robe1t Mockler, Esq.
MCKOOL SMITH HENNIGAN
865 South Figueroa Street, Suite 2900
Los Angeles, California 90017
Telephone: [phone]
Fascimile: [phone]
E-mail: [e-mail]

[e-mail]
Attorneys for Plaintiffs Avenue CLO Fund, Ltd. et al.

Case 1:09-md-02106-ASG Document 388-3 Entered on FLSD Docket 12/06/2013 Page 1 of 38

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Miami Division
CASE NO.: 09-2106-MD-GOLD/GOODMAN
INRE:
FONTAINEBLEAU LAS VEGAS
CONTRACT LITIGATION
MDLN0.2106

This document relates to all actions.

I

DEFENDANT BANK OF AMERICA, N.A. 'S REVISED
RED LINED REPLY TO PLAINTIFFS' REVISED REDLINED
RESPONSE TO DEFENDANT'S STATEMENT OF
UNDISPUTED MATERIAL FACTS AND STATEMENT OF
ADDITIONAL MATERIAL FACTS IN OPPOSITION TO
DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

O'MELVENY & MYERS LLP
Bradley J. Butwin (pro hac vice)
Jonathan Rosenberg (pro hac vice)
Daniel L. Cantor (pro hac vice)
William J. Sushon (pro hac vice)
Times Square Tower
7 Times Square
New York, New York 10036
Telephone: [phone]
-andHUNTON & WILLIAMS LLP
Jamie Zysk Isani (Fla. Bar No. 728861)
Matthew Mannering (Fla. Bar No. 39300)
1111 Brickell Avenue, Suite 2500
Miami, Florida 33131
Telephone: [phone]

Attorneys for Bank ofAmerica, N.A.
CONTAINS INFORMATION THAT IS "CONFIDENTIAL" AND "HIGHLY
CONFIDENTIAL" UNDER PROTECTIVE ORDER
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BANK OF AMERICA, N.A.'S REVISED REDLINED RESPONSE~TO
PLAINTIFFS' REVISED REDLINED STATEMENT OF ADDITIONAL
UNDISPUTED MATERIAL FACTS
Response to Paragraphs 1 through 5: Undisputed.
Response to Paragraph 6: Disputed. The Credit Agreement and Retail Agreement

have different definitions of"Defaulting Lender." Undisputed that the quoted language appears
only in the Credit Agreement. This quoted language does not appear in the Retail Agreement.
Response to Paragraph 7: Undisputed.
Response to Paragraph 8: Disputed. The cited evidence does not support this

statement. Undisputed that Bank of America, N.A. ("BANA") received a copy of the Retail
Facility Agreement, but the cited evidence reflects no amendments to that agreement.
Response to Paragraph 9: Undisputed.
Response to Paragraph 10: Disputed. The cited evidence reflects neither that

Ms. Brown's and Mr. Naval's positions were "nominal," nor that they described their roles as

"ministerial.''
Response to Paragraph 11: Disputed. The cited evidence does not support this

statement. Although BANA's CDP group decided whether to disburse funds to the Borrowers

(see Dec!. of DanielL. Cantor in Support ofBANA's Reply Mem. of Law in Further Support of
its Mot. for Summ. Judg. ("Cantor Reply Dec!.") Exs. 11 (Bolio Dep. at 83:3-7); 7 (Brown Dep.
at49:7-50:19); 14 (Susman Dep. at 49:22-50:15; 52:2-7)), BANA's Agency Management and
Credit Services and Administration groups also had responsibilities relating to BANA's agent
roles. For example, Credit Services reviewed the BmTowers' monthly draw packages to ensure
that all required documents were included. (!d. Exs. 11 (Bolio Dep. at 30: 1-32:20); 7 (Brown
Dep. at 39:8-12).) Undisputed that Mr. Naval and Ms. Brown reported to the CDP group.

Defendant submits this Revised Redlined Reply to respond to Tetm Lender Plaintiff~'
Revised Redlined Response to Defendant Bank of America, N.A.'s Statement of Undisputed
Material Facts and Statement of Additional Material Facts in Opposition to BofA's Motion
for Summmy Judgment filed with this Court under seal on November 14 2011.
2

Defined tetms are listed in Exhibit A hereto.

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Response to Paragraph 12: Undisputed that Mr. Susman was a CDP Senior Vice
President until mid-February 2009, when he left BANA. (Cantor Reply Dec!. Ex. 14 (Susman
Dep. at 16:1-4).)

Response to Paragraph 13: Disputed. The cited evidence does not support the
statement that Mr. Yunker was an architect of the Disbursement Agreement. The cited evidence
reflects only that Mr. Yunker participated in drafting the agreement. (See Cantor Reply Dec!.
Ex. 4 (Yunker Dep. at 84: 18-85:8).) Undisputed that Mr. Yunker was Vice President of the
Global Gaming Team at BAS.

Response to Paragraph 14: Undisputed that Mr. Howard was a Managing Director of
Syndications at BAS until March 31, 2009, when he left BAS. (Cantor Reply Dec!. Ex. 5
(Howard Dep. at 10:16-23).)

Response to Paragraph 15: Undisputed.
Response to Paragraph 16: Disputed. This statement is ambiguous and is unsuppmied
by the cited evidence. The Special Assets Group ("SAG") became involved with BANA's
Administrative and Disbursement Agent roles in February 2009, but initially only at an advisory
level. (Cantor Reply Dec!. Ex. 12 (Yu Dep. at 39: 11-17).) Mr. Yu was the SAG officer who
was assigned to the Project. (Id. at 13:6-14:7.)

Response to Paragraph 17: Disputed. This statement is unsupported by the cited
evidence. Mr. Susman testified only that if he had evidence that was inconsistent with the
borrowers' representations, the decision to disburse "would depend on the degree of
inconsistency," and that if he actually knew a representation to be false, he would not disburse.
(Cantor Reply Dec!. Ex. 14 (Susman Dep. at 181:9-19; 182:22-183:20).)

Response to Paragraph 18: Disputed. This statement is unsupported by the cited
evidence. BANA's Brandon Bolio testified that he "would think" he would ask the Borrowers
about discrepancies, but also testified that he was unaware of any obligation under loan
documents to do so. (Cantor Reply Dec!. Ex. 11 (Bolio Dep. at 164:20-165:12; 175:6-18).) Nor
does the cited testimony establish that Mr. Bolio was Mr. Susman's "right hand man." And Mr.
Varnell testified only that he believed that Mr. Susman "would undertake whatever he needed to
satisfy himself that he had a legitimate draw" including obtaining additional information if
necessary. (Id. Ex. 6 (Vamell Dep. at 211:13-212:5).) The cited evidence also lends no support
to the statement that Mr. Varnell was involved in drafting the Disbursement Agreement.

2

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Response to Paragraph 19: Disputed. This statement is not a "fact"; it is an expert
opinion. Moreover, the statement is unsupported by the cited evidence. Mr. Lupiani simply
testified that in certain cases it would be commercially reasonable, but not mandatmy, for an
agent to investigate information indicating that conditions precedent were not satisfied, as long
as the information was sufficiently reliable and definitive. (Cantor Reply Dec!. Ex. 15 (Lupiani
Dep. at 131:10-132:19).)

Response to Paragraph 20: Disputed. This statement is not a "fact"; it is an expert
opinion. Mr. P1yor' s opinion is inadmissible because it offers legal conclusions under the guise
of an expert opinion by purporting to explain BANA's agent duties under the Disbursement
Agreement.l (See, e.g., Pls. Ex. '1[37 (interpreting conditions precedent).) In addition, the cited
portions ofPls.' Ex. 1503 do not discuss bank agents' duties. Moreover, Mr. Pryor does not
have 35 years of expe1ience acting as an agent. He testified that he has been the agent in
connection with fewer than ten credit facilities. (Cantor Reply Dec!. Ex. 16 (P1yor Dep. at
12:ll-17).) Moreover, Mr. Pryor retired from banking in 1991. (See id. Ex. 33 [Dep. Ex. 932
(P1yor Rep. Ex. A)].) Since that time, the syndicated lending industry has evolved significantly,
away from small bank-only syndicates and virtually no secondary market to widely held loans
that are actively traded in the secondary market by hedge fund investors-such as Plaintiffs
here.4
3

4

See, e.g., Montgomery v. Aetna Cas. & Surety Co., 898 F.2d 1537, 1541 (lith Cir. 1990) ("A
witness ... may not testify to the legal implications of conduct"); In re FedEx Ground
Package Sys., Inc. Employment Practices Litig., 2010 WL 1838400, at *5 (N.D. Ind. May 4,
2010) ("Whether the contract allows FedEx to control the manner and means of the work is a
legal question for the court and isn't the proper subject of expert testimony."); Smith v.
Cant'! Cas. Co., 2008 WL 4462120, at *I (M.D. Pa. Sept, 30, 2008) ("It is well-settled that
expert testimony regarding legal conclusions, such as the interpretation of an insurance
policy, is impermissible.").
See Allison Taylor & Alicia Sansone, THE HANDBOOK OF LOAN SYNDICATIONS AND
TRADING, xv (McGraw-Hi112007) (cited in Pis. Opp. at 4) ("The business of corporate loan
syndications, trading, & investing has changed at an astounding rate over the last fifteen
years. Back then, banks would lend large amounts of money to their corporate borrowers
and hold the loans on their books. Today, these loans are sold to other banks, institutional
investors, mutual funds ... and hedge funds. Loans are traded, similar to equity and bonds;
indices are made on the performance of loans; loans are put into stmctured vehicles to attract
different types of investors, credit derivatives are made when loans are the underlying
instmment; and loans are bought and sold around the globe."); see also id. at 39 ("Over the
last 20 years, the corporate loan asset class has changed dramatically. It has developed fi·om
3

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Response to Paragraph 21: Disputed. This statement is not a "fact"; it is an expert
opinion. Mr. Pryor's opinion is inadmissible because it offers legal conclusions under the guise
of an expert opinion by purporting to explain when BANA should reject the Borrowers' Advance
Requests lmder the Disbursement Agreement. (See Resp.

to~

20.) Moreover, the cited portions

ofPls.' Ex. 1503 do not discuss a bank agent's duties. In addition, Mr. Ptyor lacks knowledge
and expetience concerning the role of a bank agent on a large scale syndicated construction loan

(see supra Resp. to ~ 20), and is therefore not qualified to opine on the duties of a bank agent.
Response to Paragraph 22: Disputed. This statement is not material or relevant to the
resolution ofBANA's motion for summary judgment.

Response to Paragraph 23: Undisputed.
Response to Paragraph 24: Disputed. The statement is not supported by the cited
evidence. The September 2008 disbursement occurred on September 26, 2008 (Dep. Ex. 625);
the November 2008 disbursement occurred on November 26, 2008 (Dep. Exs. 245, 627), and the
February 2009 disbursement occurred on February 27, 2009 (Dep. Exs. 251, 622-624). In
addition, the cited evidence reflects that $67,178,114.44 of the Delay Draw Term Loan was
disbursed on March 10, 2009, rather than $68,000,000. (See Dep. Exs. 634-636.) Thus, the total
amount of Term Loans disbursed between September 2008 and March 2009 is $787,142,302.06.
The cited documents reflect the total disbursements of Initial Term Loan and Delay Draw Term
Loan proceeds, not all of which were funded by Plaintiffs or their alleged predecessors-ininterest.

Response to Paragraph 25: Undisputed. Plaintiffs' citation to Exhibit 1504 is improper
as its contents are inadmissible hearsay. Exhibit 1504 is a September 2009 filing by non-party
Fontainebleau Las Vegas Retail, LLC in the Lehman bankruptcy. The document is not in
evidence and cannot be introduced to prove the truth of any matter asserted in the filing.

5

Response to Paragraphs 26 and 27: Undisputed.

a primary-market and bank-oriented asset class into one with well-structured primmy and
secondary markets and a diversified investor base."); id at 3-7, 21-34, 61-65.
5

See Autonation, Inc. v. O'Brien, 347 F. Supp. 2d 1299, 1310 (S.D. Fla. 2004) ("A cowt may
take judicial notice of a document filed in another court not for the truth of the matters
assetted in the other litigation, but to establish the fact of such litigation and related filings.")
(citations omitted).

4

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Response to Paragraph 28: Disputed. The cited evidence does not support this
statement. David Howard, Jeff Susman and Bret Yunker testified that credit market conditions
created challenges if Lehman needed to be replaced, but offered no opinion regarding the
likelihood that a Lehman replacement would need to be found , or the likelihood of finding a
replacement lender if one was needed. (Cantor Reply Decl. Exs. 5 (Howard Dep. at 117: 17-24);

14 (Susman Dep. at 147:25-148:9); 4 (Yunker Dep. at 37: 19-38:8; 39:8-23).)=-

j],

9, 11.}

Response to Paragraph 29: Disputed. The evidence cited does not establish that "any
failure by Lehman to fund the Project" could have caused the Project to "shutdown." The cited
evidence shows that "the way the documents were constructed, that if retail funds were not
funded, then the [resort] lenders were not required ... to fund." (Cantor Reply Decl. Exs. 5
(HowardDep. at 39:23-40:3); 14 (SusmanDep. at 146:10- 18).) As explained by Bret Yunker:
"That's different from the project shutting down." (ld. Ex. 4 (Yunker Dep. at 37:2- 11).)

Response to Paragraph 30: Disputed. The statement is ambiguous and is not supported
by the cited evidence. Dep. Ex. 896 is an e-mail Mr. Susman sent on the day of Lehman's

5

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bankruptcy and Mr. Susman testified that his remark that Lehman was a "big issue'' reflected
only his immediate reaction to the "potential impact" of that event. (See Cantor Reply Decl.
Ex. 14 (Susman Dep. at 150:25-151:2).)
Response to Paragraph 31: Disputed. The cited evidence does not support the
statement. Dep. Ex. 67 is an e-mail Mr. Yunker sent on the day of Lehman's bankruptcy.

Mr. Yunker testified that the e-mail merely reflects his uninformed reaction to that event.
(Cantor Reply Decl. Ex. 4 (Yunker Dep. at 40: 13-18).) Moreover, the e-mail states, "Lehman

may be the death nail for FB,-Plaintiffs misleadingly omit the word "may."
Response to Paragraph 32: Disputed. This is a nonsensical statement to which no
response is required. Among other things, the statement does not identify the payment the nonRetail Lenders would be making.
Response to Paragraph 33: Disputed. Plaintiffs distort Mr. Yunker's testimony.

Mr. Yunker testified to his belief that "part ofthe purpose was to q1..1ell concerns not only from
BofA but other lenders as to compliance with the condition precedent regarding the retail
funding." (See Cantor Reply Dec!. Ex·. 4 (Yunker Dep. at 111 :9-13).) He fu1ther testified that
BANA's September 26,2008 call was intended to address other Lender concerns raised by the
Lehman bankruptcy filing. (!d. at 111: 13-19.)
Response to Paragraph 34: Disputed. The cited evidence does not support this
statement. On September 22, 2008, BANA asked Fontainebleau to schedule a call with the
Lenders to address their Lehman-related questions. (Decl. of Daniel L. Cantor in Support of
BANA's Mot. for Summ. Judg. ("Cantor Dec!.") Ex. 37 [Dep. Ex. 901].) Fontainebleau agreed
to participate in the Lender call in October 2008, but later declined to hold the call. (Id. Ex. 43
[Dep. Ex. 205].) Fontainebleau later discussed the Lehman bankruptcy's implications with
Lenders on numerous occasions, including an October 29, 2008 call, a November 18, 2008
meeting, an early-December 2008 call, and a March 2009 presentation. (See Cantor Reply Decl.
Exs. 23 [Dep. Ex. 158]; 24 [Dep. Ex. 377]; 26 [Dep. Ex. 379]; 27 [Dep. Ex. 381]; 28 [Dep. Ex.

160].) In addition, numerous Lenders held meetings or calls with Fontainebleau during the fall
of 2008, during which the Lehman bankruptcy's implications were discussed. (Jd. Exs.
17
[Dep. Ex. 382 (Mule's notes of Caspian's call with Freeman)]; 25 (Brigade e-mail thanking
Fontainebleau for ammging call).)

6

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Response to Paragraph 35: Disputed. Plaintiffs' statement is a fabrication. There is no
evidence that Fontainebleau's Jim Freeman told BANNs Jeff Susman or David Howard that he
did not want to have a Lender meeting because there were "limitations on what we were and
weren't allowed to say, based on our discussions with counsel." Mr. Freeman testified that he
was " not sure" whether he told BANA that counsel advised him that there were limitations on
what he could say about t he Lehman situation. (Cantor Reply Decl. Ex. 8 (Freeman Dep. at
106: 11-20).) And Mr. Susman testified that he did not recall ever being told by Mr. Freeman
that Fontainebleau was limited in what it could discuss based on advice of counsel. (Id Ex. 14
(Susman Dep. at 156:9-157 :22).) The lack of a reasonable basis for Plaintiffs' statement is
fiuther reflected by the fact that (i) the cited Howard testimony has nothing to do with Lehman
and concems his employment by BAS, and (ii) the cited Susman and Yunker testimony makes
absolutely no reference to Fontainebleau's counsel's alleged advice to Mr. Freeman.
Response to Paragraph 36: Disputed. Plaintiffs' statement is a fabrication. -

And Plaintiffs' characterization ofDep.
Ex. 254 is false. This is an e-mail from Mr. Freeman to BAl'\J"A, but it makes no mention of an
inability to discuss the Lehman situation. To the contrary, Mr. Freeman indicates that he spoke
with Highland about the Lehman situation.
Response to Paragraph 37: Disputed. The cited evidence lends no support for the
statement. The notes are undated and there is no indication that Mr. Bolio was referring to the
September 2008 Shared Retail Costs. The dollar amounts-"25 mm" and "2mm Lehman"-do
not con-espond to the Shared Costs requested by t he Borrowers in September 2008. -

-

(See Cantor Reply Decl. Ex. 20 [Dep. Ex. 11].) Finally, Mr. Bolio testified that he

could not recall what the notes referred to. (Id. Ex. 11 (Bolio Dep. at 59: 15-60:25).)
Response to Paragraph 38: Disputed. This statement is unsupported by the cited
evidence. None of the cited documents~itioa exhibits reflects that BANA believed that
Lehman's failure to fund was "material and adverse to the Project." Moreover, none of the
dej'lasittefl-€*h.iliitscited documents -reflects BANA's knowledge that Lehman did not fund its
portion of the Retail Shared Costs in September 2008. Indeed, contemporaneous internal BANA
documents reflect BANA's belief that Lehman had funded the September 2008 Shared Costs.

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(Cantor Decl. Ex. 56 [Dep. Ex. 905].) Further, Plaintiffs misleadingly claim that BANA's
employees considered Lehman's failure to fund "material and adverse" while citing only to their
immediate reaction in the days following Lehman's bankruptcy filing, and not to ULLICO's later
decision to fund for

Response to Paragraph 39: Disputed. The cited evidence does not support this
statement. Far from describing a "custom and practice," TriMont's Mac Rafeedie testified that
he could not "recall the exact things that were discussed" with BANA, but that "consistent with
[his] practice," he "could have" told BANA that FBR funded for Lehman. (Cantor Reply Decl.
Ex. 3 (Rafeedie Dep. at 57:5-58: 19; 112:6-20).) Mr. Rafeedie testified that the discussion
"could have been just that Lehman's dollars were funded, not necessatily who funded what."

(ld. at 58:1-9.) BANA's Jeanne Brown (Mr. Rafeedie's principal BAJ.'\TA contact) testified that
she did not remember TriMont telling her that Lehman was not ftmding in September 2008. (!d.
Ex. 7 (Brown Dep. at 57: 1-8).) In addition, in responding to Advance Requests, it was
TriMont's practice to send a single wire transfer to BANA for the entire requested Retail Shared
Cost without identifying the amounts ftmded by each Retail Co-Lender. (ld. Exs. 3 (Rafeedie
Dep. at 39:18-41:9}; 14 (Susman Dep. at 204:9-10).)
Response to Paragraph 40: Disputed. The cited evidence does not supp01t the
statement. BANA's Bret Yunker and Fontainebleau's Jim Freeman both testified that they did
not recall whether they had a conversation regarding the impact ofFBR's funding on the
conditions precedent to disbursement, but left open the possibility that a discussion took place
between Freeman and BANA. (See Cantor Reply Decl. Exs. 8 (Freeman Dep. at 74:12- 24,
88:19-91:11); 4 (Yunker Dep. at 96:1 i-98:14).)
Response to Paragraph 41: Disputed. The cited evidence does not support this
statement. BANA disputes that Highland confirmed a "mutual understanding" that Lehman had

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not made disbursements while in bankn.tptcy. Plaintiffs miscbaracterize the quoted e-maiL The
e-mail simply listed Highland's position on several Lehman-related issues and asked BA...i\l'A to
confhm them. (Dep. Ex. 80; Pis.' Ex. 1502.) Plaintiffs fail to identify any evidence that

Mr. Scott or anyone fi·om BANA subsequently confirmed those self-serving assertions or came
to any kind of "mutual understanding" with Highland. Moreover, the statement quoted by
Plaintiffs is hearsay and is inadmissible as evidence of the truth of the matters asserted therein.
The statement at issue was made in Mr. Dorenbaum's e-mail to Mr. Scott, copied to Highland's
Brad Means and Kevin Rourke, and purports to recount a prior conversation between Messrs.
Dorenbaum and Scott. Messrs. Scott, Dorenbaum, and Means have not been deposed in this

•

Thus, Dep. Ex. 80 and Pls.' Ex. 1502 are inadmissible hearsay and double hearsay.l

Lastly, BANA did not understand that Lehman had made no disbursements while in bankruptcy.
For example, internal BANA documents reflect BANA's belief in 2008 that Lehman funded in
September 2008. (See, e.g., Cantor Decl. Ex. 56 [Dep. Ex. 905].)
Response to Paragraph 42: Disputed. This statement is not material. The extent to
which the Highland e-mail was distributed has no relevance to the resolution ofBANA's motion.
Moreover, the cited evidence does not supp011 that the Merrill Lynch report was "widely
disseminated." The e-mail was sent to a handful of recipients.
Response to Paragraph 43: Disputed. The cited evidence does not support the
statement. It reflects that only three Lenders received Mr. Maxwetrs rep011s, and.
Moreover, none of the cited
evidence establishes that Fontainebleau commtmicated to .tv1r. Maxwell before October 2008.
Dep. Exs. 274 and 399 are e-mails from Mr. Maxwell to undisclosed recipients stating that ''[w]e
spoke with Company management." This is inadmissible hearsay to the extent it is offered to
6

See Fed. R. Evid. 801-802; see also Read v. Teton Springs Golf & Casting Club, LLC, 2010
WL 5158882 at *6 (D. Idaho Dec. 14, 2010) (striking e-mail attached to the plaintiff's
opposition to the defendant's motion for summary judgment because although the e-mail was
authenticated in a deposition, it "contains hearsay statements not based on the affiant's
personal .knowledge"); Design X Mfg.• Inc. v. ABF Freight Sys., Inc., 584 F. Supp. 2d 464,
468 (D. Conn. 2008) (refusing to consider on stunmary judgment an e-mail recounting nondeponent witness' alleged statement to another non-deponent witness because the e-mail was
inadmissible hearsay within hearsay).

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support the statement that Mr. Maxwell was in direct communication with Fontainebleau.'
lvlr. Maxwell was not deposed, and no Fontainebleau deponents testified that they communicated
with Mr. Maxwell. Dep. Ex. 275 is an e-mail from Mr. Maxwell to Jim Freeman requesting an
update, but Plaintiffs offer no evidence that Fontainebleau responded to Mr. Maxwell's request.
Response to Paragraph 44: Disputed. The cited evidence offers no support to the
statement. Dep. Exs. 274, 275 and 399 are self-contained e-mails, and do not attach or even
refer to a "more detailed report." Moreover, the alleged separate report is not in evidence.

(Rourke Dep. at 104:8-10).)
Response to Paragraph 45: Disputed. BANA's acquisition of Merrill Lynch & Co.,
Inc. is not material to the resolution of any issue. Moreover, the cited evidence does not support
this statement. It does not specify when the transaction closed.
Response to Paragraphs 46, 47 and 48: Undisputed.
Response to Paragraph 49: Disputed. Mr. Freeman's October 7, 2008 memorandum
answered BANA's question whether Lehman funded in September 2008. The memo assured the
Lenders that the August and September shared costs had been "funded in full" and that
Fontainebleau did not "believe there will be any interruption in the retail funding of the project."
(Cantor Decl. Ex. 47 [Dep. Ex. 77].) The memo also stated that Fontainebleau was "continuing
active discussions with Lehman Brothers to ensure that, regardless of the Lelunan bankruptcy
filing and related acquisition by Barclay's, there is no slowdown infimdingfor the project." (!d.
(emphasis added).) In addition, BANA's Brandon Bolio testified that although the memo did not
provide "as much detail as would have been ... nice,'' it adequately "answer[ed] the question."
(Cantor Reply Decl. Ex. 11 (Bolio Dep. at 80:19-81:6).) BANA's Bret Yunker also testified that
he could not recall any dissatisfaction on the part ofBANA employees with Fontainebleau's
memo responses, and that from his personal perspective Fontainebleau's response provided
sufficient clru.ity to resolve the issue. (/d. Ex. 4 (Yunker Dep. at 116:6-117:5).)
Response to Paragraph 50: Disputed. This statement is a gross mischaracterization of
7

See id.
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the cited evidence. Dep. Ex. 903 is a letter from Highland to BANA stating that Fontainebleau's
October 7, 2008 memorandum to Lenders "doesn't address our concerns." The e-mail makes no
mention of BANA' s alleged question regarding Lehman.
Resp<mse to Paragraph 51: Disputed to the extent that the word ''informed" is intended
as an assertion that Highland provided BANA with evidence of an existing fact. As discussed in

its response to paragraph 38, BANA was unaware that Fontainebleau paid Lehman's portion of
the September 2008 Retail Shared Costs.
Response to Paragraph 52: Disputed. The cited evidence does not support the

-

The cited evidence (Dep. Exs. 231, 232) establishes only that a conference call was

scheduled for, and occurred in, October 2008, and not what was discussed during the call. In
fact, the call's primary purpose was to provide an update on the Project to the Retail Lenders, at
the Retail Lenders' request. (See Cantor Reply Dec!. Ex. 6 (VameH Dep. at 198:1- 7).) And
although the Lehman bankruptcy's implications were discussed at the October 2008 meeting, the
cited evidence makes clear that the meeting's purpose was for the Retail Lenders to get a report
from the Resort Lenders' agent (i.e., BANA) on the Project's overall progress. (Dep. Ex. 18;
Cantor Reply Decl. Ex. 8 (Freeman Dep. at 110:23- 111 :9).)
Response to Paragraph 53: Disputed. Plaintiffs mischaracterize the evidence.

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(See Cantor Reply Decl. Ex. 2 (Kolben Dep. at 175:19-176:9).) In

addition, Dep. Ex. 19 is inadmissible and should be disregarded. It is a National City Special
Assets Committee Report, which was never authenticated. (See id. Exs .
•

; 4 (Yunker Dep. at 174: 16-175:5).) The exhibit is apparently an internal memorandum

prepared by an unidentified employee of non-party National City and obtained from non-party
PNC Bank, and its contents are hearsay and lack foundation. Because the document is being
offered for the tmth of its contents, it is inadmissible tmder Fed. R. ofEvid. 802.8
Response to Paragraph 55: Disputed. The cited evidence does not support the
statement. The Retail Lenders asked BANA to take over Lehman's remaining commitment
under the Retail Facility, (Cantor Reply Decl. Ex. 5 (Howard Dep. at 112:19-113:10; 146:113)), but there is no evidence that Fontainebleau made the request at the October Retail meeting.
Furthermore, much of the cited evidence has nothing to do with the October 2008 meeting. (See
Dep. Ex. 9 0 7 ; - Cantor Reply Decl. Exs. 5 (Howard Dep. at 112:9-18;
113:11-114:4); 14 (Susman Dep. at 277: 19-278:9).)
Response to Paragt·aph 56: Disputed. The statement is not a "fact;" rather it is
conclusion of law that does not create a disputed issue of material fact. Moreover, it is a gross
distortion of the cited evidence. The Intercreditor Agreement provision cited by Plaintiffs grants
"to the Bank Agent the right (without any obligation) to purchase, at any time after the
occurrence of a Retail Purchase Option Event, all . .. of the principal of and interest on the Retail
Secured Obligations," but they offer no evidence that a Retail Purchase Option Event ever
occurred. For a "Retail Purchase Option Event" to occur there must be a "failure of the Retail
Agent to fund any Advance requested by the Project Credit Parties for Shared Costs, which the
Retail Agent is required to fund in accordance with the tenns of the Disbursement Agreement."
(Dep. Ex. 884 at 4.) There is no evidence that a Retail Purchase Option Event ever occtmed.
And the cited Howard deposition testimony makes no reference to the Intercreditor Agreement.

8

See Fed. R. Evid. 80l(c), 802; see also Cortezano v. Salin Bank & Tntst Co., 2011 WL
573755, at *11 (S.D. Ind. Feb. 15, 2011) (mling that e-mail containing excerpts of meeting
minutes sent by a non-party to plaintiff was inadmissible hearsay because "there was no
indication of who prepared these notes, when they were prepared, or whether they were taken
in the normal course of business").
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Response to Paragraph 57: Disputed. Undisputed that Lehman funded its portion of
the Shared Retail Costs in October and November 2008. The cited evidence does not reflect
whether Lehman funding was "touch and go." The cited testimony reflects only TriMont's Mac
Rafeedie's recollection, and not that of FB, BANA or Lehman.

Response to Paragt·aph 58: Disputed.
Dep. Ex. 804 is a February 2009 e-mail which
only states after the fact that Lehman bad failed to fund since December 2008.

22, 28, 34, 40.) And the cited Freeman testimony reflect<; only his understanding in December
2008 and January 2009 that Lehman would not be funding those months.
Response to Paragraph 59: Undisputed, but BANA disputes that the cited evidence
supports the statement. Dep. Exs. 206, 609, 814, 831, 906 and 907 do not suppott the statement
because they do not reflect that ULLICO did not agree to pe1manently pay or to assume
Lehman's obligations under the Retail Facility.

Response to Pa.-agraph 60: Undisputed.
Response to Paragraph 61: Disputed. The cited evidence does not support the
statement. There is no evidence that BANA knew that Retail Lenders National City Bank,
Sumitomo or ULLICO would not agree to assume Lehman's remaining commitment. -

- = T he cited documents reflect that Fontainebleau informed BANA that discussions with
the Retail Lenders regarding the Retail Facility were ongoing. The cited deposition testimony
likewise lends no support to Plaintiffs' statement. It is limited to an October 23, 2008 meeting
between Fontainebleau, the Retail Lenders and BANA during which ULLICO stated that it was
considering funding for Lehman. (Cantor Reply Decl. Ex. 5 (Howard Dep. at 150:22-151 :13).)
In fact, after the meeting, Fontainebleau consistently rep01ted that the Retail Co-Lenders could

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fund for Lehman after Lehman's bankruptcy. For example, in a February 23, 2009letter to
BANA, Fontainebleau stated that it was "continuing active discussions with Lehman Brothers
and the co-Lenders to ensure that funding for the Project will continue on a timely basis."
(Cantor Decl. Ex. 63 [Dep. Ex. 811].) Moreover, Mr. Susman explained in his testimony that
while he understood that ULLICO was a shmt-term deal "[a]s it was initially presented to
[BANA]," he added that "Ullico could decide to fund it on a long-tenn basis." (Cantor Reply
Decl. Ex. 14 (Susman Dep. at 273:23- 275:

Response to Paragraph 62: Undisputed.
Response to Paragraph 63: Disputed. The cited evidence does not support the
statement. The cited evidence reflects no "funding gap." In fact, the evidence demonstrates that
ULLICO funded Lehman's share of the Retail Shared Costs
-

demonstrating that there was n.o "fmancing gap." Moreover, as described in

BANA's response to paragraph 61, Fontainebleau consistently reported to BANA that the Retail
Co-Lenders would fund for Lehman after Lehman's bankruptcy

Response to Paragraph 64: Undisputed.
Response to Paragraph 65: Disputed. The cited evidence does not reflect that
Fontainebleau failed to provide a meaningful response to the questions raised by BANA's
FeblUary 20, 2009letter. In fact, Fontainebleau responded to several ofBANA's questions in a
February 23,2009 letter. (See Cantor Decl. Ex. 63 [Dep. Ex. 811).)

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Response to Paragraph 66: Undisputed.
Response to Paragraph 67: Disputed.

Response to Paragraphs 68 and 69: Undisputed.
Response to Paragraph 70: Disputed. Dep. Ex. 868-a June 2008 report prepared by
the Construction Consultant-does not support this statement as it does not reflect $201 million

in change orders. In addition, Dep. Ex. 216 does not supp01t this statement as it does not identify
previously disclosed change orders.
Response to Paragraph 71: Disputed. This statement is not material or relevant to the
resolution ofBANA's motion for summary judgment. To the extent a response is required, the
statement is false. Dep. Exs. 216, 868, and 917 do not indicate whether the costs had been
disclosed to IVI and/or BANA before May 2008. Additionally, BANA's Jeff Susman testified
that he did not recall whether BANA was informed of these change orders before May or June of
2008. (Cantor Reply Decl. Ex. 14 (Susman Dep. at 93:2-8).)
Response to Paragraph 72: Disputed. This statement is not material or relevant to the
resolution ofBANA's motion for summary judgment. To the extent a response is required, the
statement tacks any support in the evidence. Dep. Exs. 891 and 915 address a single change
order. Dep. Ex. 891 is an unauthenticated Owner Change Order ("OCO") signed by non-pa1ties

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Fontainebleau Resorts and Tumberry West Construction on May 23, 2008. The OCO is
accompanied by numerous letters from TWC to FBR or from WW Steel to TWC. No fact
witness has authenticated Dep. Ex. 891 or testified about its contents. The document was
introduced as an exhibit during Mr. Susman's deposition but he testified that he had never seen
it. Moreover, the document's signers-TWC's Robert Ambridge and Fontainebleau's Deven
Kumar-were both deposed but neither witness was asked about this document. Thus, it is
inadmissible and may not be considered for the trutb of its contents. Moreover, even if it were
admissible, Dep. Ex. 891 lends no suppmt to the statement. To the contrary, tbe change order is
accompanied by numerous letters, botb from TWC to FBR and the subcontractor to TWC,
demonstrating that the proposed change was still being negotiated as late as May 8, 2008. Thus
Plaintiffs' assertion that the change order had been known to the Borrowers for a year is false.
Dep. Ex. 915-Plaintiffs' expett Donald Boyken's report-should also be disregarded. Plaintiffs
cannot circumvent Dep. Ex. 891 's hearsay and foundation issues by having their expert put his
spin on its contents.9

Response to Paragraph 73: Disputed. This statement is not material or relevant to the
resolution of BANA's motion for summary judgment. To the extent a response is required, tbis
statement lacks any suppott in the evidence. Dep. Ex. 891 is inadmissible as explained in
BANA's response to paragraph 72, supra. In addition, Plaintiffs' expert's testimony sheds no
light on when the Borrowers learned about the OCO and should be disregarded as explained in
BANA's response to paragraph 72, supra.

Response to Paragraph 74: Disputed. This statement is not material or relevant to the
resolution ofBANA's motion for summary judgment. To tbe extent a response is required, the
cited testimony does not support tbis statement. Plaintiffs offer no admissible evidence
9

See Fed. R. Evid. 801(c), 802; see also Marvel Worldwide, Inc. v. Kirby, 777 F. Supp. 2d
720, 729 (S.D.N.Y. 20 11) (striking expett reports because they were "merely factual
narratives based on their review of secondary sources and interviews that attempt to
reconstruct events about which neither has first-hand knowledge. Although Rule 703 of the
Federal Rules of Evidence permits an expett to rely on hearsay in reaching his own opinion,
a party cannot call an expett simply as a conduit for introducing hearsay under the guise that
the testifYing expert used the hearsay as the basis of his testimony.") (quotations omitted);
Estate ofParsons v. Palestinian Auth., 715 F. Supp. 2d 27,32-33 (D.D.C. 2010)
(disregarding expert's affidavit and granting summary judgment to the defendant because
expett opinions "may be based on hearsay, but they may not be a conduit for the introduction
of factual assertions that are not based on personal knowledge").

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establishing that BANA was fumished with documentation relating to a structural steel change
order in mid-2008. Plaintiffs attempt to cite BANA's expert Peter Badala's testimony in support
of their statement, but Mr. Badala's expert opinion cannot be used to establish facts about which
he has no personal knowledge any more than Mr. Boyken's expert opinion, as explained in
BANA's response to paragraph 72, supra.
Response to Paragraph 75: Disputed. This statement is not material or relevant to the
resolution ofBANA's motion for summary judgment. To the extent a response is required, the
cited evidence does not support this statement. Neither the cited document nor testimony
supports Plaintiffs' statement that learning about $201 million in additional costs was important
toBANA.
Response to Paragraph 76: Disputed. The cited evidence does not support this
statement. Dep. Ex. 217-an internal BANA e-mait-states NI believed there were "additional
known cost increases," but it says nothing about BANA's belief, or untepm1ed change orders.
Moreover, the record is clear that BANA promptly followed up with lVI on the construction cost
increases disclosed by Fontainebleau, and gained closure on the issue. (Cantor Reply Decl.
Ex. 18 (Dep. Ex. 892].) And in IVI's next project status report, dated June 25, 2008, IVI further
stated that "[a]t this time, the construction costs are anticipated to increase but not exceed the
Developer's revised direct cost budget of$1,909,734,213 plus $190,265,021 in equity with the
new direct cost budget of$2,099,999,234." (ld. Ex. 19 [Dep. Ex. 868].) Thus any concerns that
may have existed were limited to early June 2008, and were addressed by Fontainebleau and NI.

Response to Paragraph 77: Disputed. The cited evidence and testimony do not support
this statement. Nl's Robert Barone stated that he raised concerns about the completeness and
accuracy of the additional costs in the fomth quarter of 2008, but he did not mention raising
concerns about the timeliness of reporting, or to whom the concerns were raised. (Dep. Ex. 851
at~

14.) BANA's Jeff Susman testified that he did not recall whether IVI raised concerns with

BANA in Q4 2008. (Cantor Reply Decl. Ex. 14 (Susman Dep. at 134:10-135:14).)
Response to Paragraph 78: Disputed. This is a nonsensical statement to which no
response is required. This statement does not indicate or provide any context as to what
concerns ofBANA and the other Lenders are at issue. To the extent a response is required, the

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statement does not support that BANA had concerns about the accuracy and timeliness of the
Borrowers' reporting anticipated construction costs. Mr. Newby's testimony does not specify
when the concerns arose, and Mr. Susman testified that he did not recall whether !VI raised
concerns with BANA in Q4 2008. (Cantor Reply Decl. Ex. 14 (Susman Dep. at 134:10135: 14).) While Messrs. Howard and Bolio testified that Deutsche Bank e-mailed BANA about
Project costs, its questions were tmsubstantiated. When Deutsche Bank asked BANA in
December 2008, about Project costs, BANA responded by asking Deutsche Bank to provide
additional infmmation because BANA was unaware of any such issues. (Id. Ex. 11 (Bolio Dep.
at 171 :3-172:7.) There is no evidence that BANA received a response from Deutsche Bank.

~ANA'sResp. to,r"9 1

p.j

Response to Paragraph 79: Undisputed.
Response to Paragraph 80: Disputed. IVI's Robert Barone raised concerns about the
completeness and accuracy of the additional costs in the fourth quarter of 2008, but did not raise
concerns about the timeliness of reporting. Moreover, Plaintiffs have offered no evidence as to
whom M's concerns were raised. (Dep. Ex. 851

at~

14.) BANA,s Jeff Susman testified that he

did not recall whether IV! raised concerns with BANA in the fourth quarter of2008. (Cantor
Reply Decl. Ex. 14 (Susman Dep. at 134:10-135: 14).)
Response to Paragraph 81: Disputed. The statement mischaracterizes the evidence.
!VI's January 30, 2009 Project Status Report No. 21 identified as concerns "that all the
subcontractor claims have not been fully incorporated into the [Anticipated Cost Rep01t] and
potential acceleration impact to meet the schedule has not been included" and "that the LEED
credits are tracking behind projects." (Cantor Dec]. Ex. 59 at 7 [Dep. Ex. 809].)

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Response to Paragraph 82: Disputed. The cited testimony does not support this

statement. The cited Jeanne Brown testimony makes no reference to concerns raised by IVI.
(Cantor Reply Dec!. Ex. 7 (Brown Dep. at 96:3-7).)
Response to Paragraph 83: Disputed. The cited evidence does not support this

statement. The evidence makes no reference to the accuracy of LEED credit reporting. (See
Cantor Dec!. Ex. 84 at~ 20 [Dep. Ex. 808 (Dec!. of Henry Yu)]; Dep. Ex. 851

at~

15; Cantor

Reply Dec!. Ex. 12 (Yu Dep. at 105:12-23).)
Response to Paragraphs 84 and 85: Undisputed.
Response to Paragraph 86: Disputed. The cited evidence and testimony do not support

this statement. While IVI continued to be concerned that there were unreported costs, IVI's
March and April 2009 Project Status Reports stated that the Anticipated Cost Reports issued by
the Developer indicated the project was expected to stay within budget. (Dep. Exs. 600 at 23;
828 at 22.) IVI also reported a potential issue with LEED credits tracking behind projections,
but was awaiting an audit by Fontainebleau that would provide additional infmmation. (Dep.
Exs. 600 at 23; 828 at 22.) The cited Bolio testimony consists solely of his interpretation of
IVI's February 2009 report, and does not address his view of whether BANA received
satisfactory information from the Borrowers. (Cantor Reply Dec!. Ex. 11 (Bolio Dep. at 204:9206: 19).) The cited Henry Yu testimony recounts Mr. Freeman's initial refusal to meet with
BANA around March 2009, but again contains no assessment of whether BANA was receiving
satisfactory information at the time. (Id. Ex. 12 (Yu Dep. at 49:24-51 :5).)
Response to Paragraph 87: Undisputed.
Response to Pa1·agraph 88: Undisputed, but the cited testimony does not support this

statement.
Response to Paragraph 89: Disputed. Plaintiffs mischaracterize the cited evidence.

The letter is a request for elaboration on issues that were raised in IVI's January 2009 report
rather than an indication of concern by JP Morgan Chase. (Cantor Dec!. Ex. 61 [Dep. Ex. 810].)
Response to Paragraph 90: Undisputed.
Response to Paragraph 91: Disputed. The cited testimony does not reflect that BANA

thought it was a "bad sign" that Fontainebleau refused to meet with Lenders in February 2009.
(See Cantor Reply Dec!. Ex. 12 (Yu Dep. at 128: 1-13).) In fact, Mr. Yu testified that he

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understood in Febmary 2009 that Fontainebleau was meeting with other Lenders, but refused to
meet with him. (Id at 127:4-12; 129:6-15.)

Response to Paragraph 92: Undisputed.
Response to Paragraph 93: Disputed. The cited evidence does not support this
statement. The cited evidence concerns Mr. Yu's opinion as of March 4, 2009 concerning
Fontainebleau's answer to the questions posed in its Febmary 23, 2009letter. (Cantor Reply
Dec!. Ex. 12 (Yu Dep. at 143:17-144:4).)

Response to Paragraph 94: Undisputed.
Response to Paragraph 95: Disputed. Plaintiffs mischaracterize the evidence.
According to the letter, IVI's concerns were based on a review of the TWC Requisition for
Febmmy 2009 and the January 2009 ACR. (Cantor Dec!. Ex. 69 [Dep. Ex. 604].)

Response to Paragraph 96: Undisputed that, upon being asked during his deposition
whether IVI's concerns about unreported project costs were a "pretty big deal," Brandon Bolio
responded, "[i]t is." (See Cantor Reply Dec!. Ex. 11 (Bolio Dep. at 229:20-230:5).)

Response to Paragraph 97: Disputed. The cited evidence does not support the
statement. There was no "refusal" by Fontainebleau to meet. During the weekend of March 78,2009, BANA offered to meet with Fontainebleau, but as of March 10,2009, Fontainebleau
had "still not agreed to meet" with BANA. (See Cantor Dec!. Ex. 71 [Dep. Ex. 819].)

Response to Paragraphs 98 and 99: Undisputed.
Response to Paragraph 100: Disputed. The cited evidence does not support the
statement. There were no discussion between Bon·owers and NI in mid-2009. The cited
evidence reflects that in mid-March 2009, following discussions with NI, the Borr-owers
acknowledged that there were outstanding costs in addition to the $35 million in costs initially
disclosed, and agreed to increase the Project's budget by a further $50 million. (Dep. Ex. 851 at
~

26; see also BANA SOUF ~ 153; Cantor Reply Dec!. Ex. 9 (Kumar Dep. at 165:22-166:24).)

Response to Paragraph 101: Disputed. The cited evidence does not suppmt this
statement. The cited evidence reflects that IVI sent an update to BANA about anticipated costs,
and noted that NI expected to receive a summary of the construction budget exposure based on
updated projections from the general contractor. (Cantor Dec!. Ex. 72 [Dep. Ex. 608].) NI's
Robe1t Barone testified that he remained skeptical about whether all subcontractor claims were
incorporated into the disclosed costs. (Cantor Reply Dec!. Ex. 13 (Barone Dep. at 75:19-24).)

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Response to Paragraph 102: Disputed. The cited evidence does not support this
statement. Mr. Yu testified that IVI held this belief in early-March 2009. (See Cantor Reply
Dec!. Ex. 12 (Yu Dep. at 145:6-24).)

Response to Paragraph 103: Disputed. This statement mischaracterizes the evidence.
On Febmary 23, 2009, Fontainebleau wrote to BANA and explained that it was engaging
auditors with respect to the Project's LEED credits. (See Cantor Dec!. Ex. 63 [Dep. Ex. 811].)
On March 5, 2009, IVI requested that the audit be expedited. (See Dep. Ex. 851

at~

25.) On

March 20, 2009, the Borrowers informed the Lenders that it had retained KPMG to conduct the
LEED audit, and that an intemal LEED review was ongoing. (See Cantor Reply Dec!. Ex. 29 at
ING014067 [Dep. Ex. 346].) But before the results of the LEED audit were disclosed, the
revolving lenders terminated the Revolver Loan under the Credit Agreement and litigation
commenced. (See Cantor Dec!. Ex. 82 [Dep. Ex. 827].)

Response to Paragraph 104: Disputed. The statement mischaracterizes the cited
evidence. Henry Yu testified that he told Mr. Freeman that the LEED audit should be completed
as soon as possible, but could not remember whether BANA gave Mr. Freeman a deadline for
completion of the LEED audit. (See Cantor Reply Dec!. Ex. 12 (Yu Dep. at 121 :6-15).)

Response to Paragraph 105: Disputed. The statement mischaracterizes the cited
evidence. The March 11, 2009 Advance Request did not reflect ce1iain additional costs that
Fontainebleau's Deven Kumar disclosed to IVI on March 11,2009. (See Dep. Ex. 851

at~

27.)

Response to Paragraph 106: Disputed. The statement mischaracte1izes the stated
evidence. IVI refused to approve the Borrowers' March 11, 2009 Advance Request because of
material errors in the Request, and did so through a Construction Consultant Advance Ce1iificate
that identified those errors. (Bolio Dec!. Ex. 36 [Dep. Ex. 860]; Cantor Reply Dec!. Ex. 12 (Yu
Dep. 193:5-9).) Mr. Barone testified that IVI refused to ce1iify the Advance Request because it
"no longer believed it" (see Cantor Reply Dec!. Ex. 13 (Barone Dep. at 60:24-62: 16)), but this
was not reflected in the IVI Construction Consultant Advance Certificate provided to BANA.

(See Bolio Dec!. Ex. 36 [Dep. Ex. 860].)
Response to Paragraph 107: Disputed. The cited evidence does not support the
statement. The March 11 Advance Request contained errors that were resolved through
negotiations between the Borrowers and IVI. (Cantor Reply Dec!. Exs. 30 [Dep. Ex. 861]; 13
(Barone Dep. at 65:6-66:2).) These negotiations added costs and shifted the Project's opening

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date. The cited evidence does not establish that the March 11 Advance Request "failed to
include all of the cost oven11ns that had been identified and failed to indicate that the opening
date for the Resort would have to be moved back by a month" because it implies that such facts
were known to Bo!Towers as of March 11, 2009, an asse1tion for which the cited evidence lends
no support.
Response to Paragraph 108: Disputed. The statement is not supported by the cited
evidence. The cited evidence makes no mention of cost overmns. IVI' s concerns were limited
to Fontainebleau's representations regarding disclosure of subcontractor claims. (See Dep.
Ex. 828 at 7, 21-22; Cantor Reply Dec!. Ex. 13 (Barone Dep. at 75:19-24).) Moreover, IVI also
concluded that "construction costs are anticipated to increase but not exceed the Developer's
revised direct cost budget." (Dep. Ex. 828 at 22.)
Response to Paragraph 109: Disputed. Mr. Barone's testimony concerns subcontractor
claims in late March 2009. (See Cantor Reply Dec!. Ex. 13 (Barone Dep. at 75:19-24).)
Response to Paragraph 110: Disputed. The cited evidence does not suppmt this
statement. While it is tme that IVI expressed concerns about Fontainebleau's cost disclosures in
January and February 2009, IVI executed the Constmction Consultant Advance Certificates for
the January and Febmary 2009 Advance Requests indicating that it had identified no material
e!Tors in the BoiTowers' Advance Request. (Barone Dec!.~~ 15, 20, Exs. 3, 6; Cantor Dec!.
Exs. 59 at 7 [Dep. Ex. 809]; 66 at 23 [Dep. Ex. 600].) IVI also executed a Constmction
Consultant Advance Ce1tificate approving the Bo!Towers' Revised March 2009 Advance
Request. (Cantor Reply Dec!. Ex. 31 (Dep. Ex. 862).) Moreover, IVI indicated that the Project
was expected to remain within budget in both of its Project Status Reports for January 2009 and
Febmary 2009. (Cantor Dec!. Exs. 59 at 7 [Dep. Ex. 809]; 66 at 23 [Dep. Ex. 600].) Any
concerns IVI may have had were based only on its "gut" feelings, and IVI lacked evidence
supporting its suspicions. (Barone Dec!.~ 17.) Moreover, IVI pressed the BoiTowers for
additional information and received responses the BoiTowers represented were accurate and that
IVI believed to be "credible." (Barone Dec!.~ 28; Cantor Reply Dec!. Ex. 30 [Dep. Ex. 861].)
Response to Paragraph 111: Disputed. The cited evidence does not support the
statement. Henry Yu testified that the BoiTower did not answer some of !VI's questions that had
been pending since January 2009. (Cantor Reply Dec!. Ex. 12 (Yu Dep. at 195:2-10).)

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Response to Paragraph 112: Disputed. Plaintiffs mischaracterize the evidence. lVI
never raised the possibility of an audit of the Borrower's construction costs. Rather, lVI
acknowledged that it had not "conducted an audit of the information presented," but it
nonetheless believed that "the information presented appears reasonable at this stage in the
project." (Dep. Ex. 861.) Undisputed that BA..~A never conducted an audit of information
presented by the Bonowers.
Response to Paragraph 113: Disputed. BANA's acquisition of Merrill Lynch & Co.,
Inc. is not material to the resolution of any issue. In addition, the cited evidence does not support
this
. . While BANA was aware of Merrill Lynch's involvement in fundraising efforts by
Turnbeny (not Fontainebleau), it did not know for what purpose. (Dep. Ex. 222; Cantor Reply
Decl. Ex. 4 (Yunker Dep. at 58:2-19).) The cited evidence does not reflect that Borrowers were
trying to raise hundreds of millions of dollars in added capital for the Project.= -

Response to Paragraph 114: Disputed. The Notice of Borrowing was originally
submitted on March 2, 2009, and a corrected version was submitted on March 3, 2009. (See Pis.'
Ex. 1507 at BA.t'\JA_FB00215940.) The Notice of Borrowing submitted on March 3, 2009
requested an aggregate amount of$1,006,522,698.00, composed of$350,000,000.00 under the
Delay Draw Loan, and $656,522,698.00 under the Revolver. (See id. at BANA_FB00215942.)

Response to Paragraph 115: Disputed. The statement mischaracterizes the cited
evidence. .tvfr. Yu did not testify that the Borrowers' proposal to enter into a pre-negotiation
agreement "increased BofA's concern that the Bon-owers were not providing accurate or
complete information about the Project." Mr. Yu testified that he found the standstill provision

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of the proposed pre-negotiation agreement to be "objectionable" and that he viewed it as a
"continuation of [the BmTowers'] behavior of not providing information." (Cantor Reply Dec!.
Ex. 12 (Yu Dep. at 179:7-22).)

Response to Paragraph 116: Disputed. The cited evidence does not suppmt the
statement. Plaintiffs cite to IVI's May 15, 2009 Cost-to-Complete Report and an April13, 2009
e-mail from Henry Yu to Robert Barone and others. Neither document references anticipated
change orders totaling over $350 million, nearly $190 million of which were admitted to be for
previously committed construction costs.

Response to Paragraph 117: Disputed. Mr. Barone testified that he was "stunned" to
learn of the additional unreported costs revealed by the BotTowers in mid-April2009. (See
Cantor Reply Dec!. Exs. 13 (Barone Dep. at 81:3-82:7; 85:10-86:8); 32 at '1[33 [Dep. Ex. 851]
("I was stunned to see such an enormous increase in anticipated costs, which had not been
previously repmted to us, despite our repeated requests that all such information be disclosed.").)

Response to Paragraph 118: Disputed. Plaintiffs mischaracterize the cited evidence.
BANA does not dispute that the evidence cited is an e-mail from Mr. Bonvicino stating, "Pretty
close to my 150 mil." But when Mr. Barone was asked if he recalled "Mr. Bonvicino
predict[ing] or ... know[ing] that there were 150 million dollars in cost ovemms," he stated only
that he remembered Mr. Bonvicino "speculating" about cost overruns. (Cantor Reply Dec!.
Ex. 13 (Barone Dep. at 85:1-5).)

Response to Paragraph 119: Disputed. The statement is not a "fact;" rather it is a
conclusion of law.

Response to Paragraphs 120 and 121: Undisputed.
Response to Paragraph 122: Disputed. This statement is a legal conclusion, not a
factual statement. Moreover, the cited evidence offers no support for this statement. Plaintiffs'
Exhibit 1503 is a repmt by Plaintiffs' expert Shepherd Pryor IV. Paragraph 35 deals with
borrower representations and makes no reference to lender defaults. And even if it did,
Mr. Pryor (who retired from banking in 1991) is not qualified to testify about current practices

concerning widely held and actively traded syndicated loans. (See Cantor Reply Dec!. Exs. 16
(Pryor Dep. at 75:24-76:3 (testifying that he did not rely on anything "other than [his]
experience and the ... materials that appear in [Pryor Repmt] Ex. B."); id. at 11:25-12:10
(testifying that he did not recall working as an agent on any constmction loans); id. at 12:7-9;

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19:19-24 (testifying typically served as agent on credits with "15 or 20 participating lenders"
and at most, 30 banks)); 33 [Dep. Ex. 932 (Pryor Rep. Ex. B)]; supra Resp. to Para. 20.) Peter
Badala's deposition testimony likewise makes no reference to lender defaults. Nor could it, as
Mr. Badala is BANA's expett on constmction-related issues.
Response to Paragraph 123: Undisputed.
Response to Paragraph 124: Disputed. The cited evidence does not support the

statement. Dep. Ex. 291-B is a March 30,2009 e-mail from Whitney Thier to Albert Kotite,
Sony Ben-Moshe, Jed Bergman, Michael Krietzer, Jim Freeman, Augusto Sasso and Todd
Kaplan attaching letters from Fontainebleau Las Vegas, LLC-signed by Ms. Thier-to Z
Capital Partners, L.L.C. and the Guggenheim lenders. Neither the e-mail, nor the attached letters
use the phrase "defaulting lender" or reference Mr. Howard. And to the extent Plaintiffs imply
that Mr. Howard testified that a lender's failure to fund constituted a "default" under any of the
loan agreements, that would be inaccurate. Mr. Howard testified: "we had lots of cases where
Lehman was involved, other transactions where it didn't constitute a default under the
agreement, it just created a shortfall ... It didn't necessarily create a default under the
document." (Cantor Reply Dec!. Ex. 5 (Howard Dep. at 193:3-15).)
Response to Paragraph 125: Disputed. None of the cited evidence refers to "defaulted

DDTL Loans." Dep. Ex. 104 is a March 23, 2009letter from BANA to Lenders stating:
"Several Lenders ... have not funded the $350MM Delay Draw Term Loan requested by the
Bonower.... Bank of America's position is that it is willing to include the $21,666,667 for the
March 25 Advance, pending further information about whether these lenders will fund. Absent
any other changes, note that the exclusion of the $21,666,667 amount from Available Funds
would result in a failure to satisfy the In-Balance Test. ... We request that any Lender which
does not suppott these interpretations immediately inform us in writing of their specific
position." (Cantor Dec!. Ex. 76 [Dep. Ex. 104].)
Response to Paragraph 126: Disputed. The statement is not supported by the cited

evidence. Ms. Brown's testimony was limited to receipt of the retail funds. She testified that
BANA "wouldn't go forward [and disburse the funds] unless [it] had [the retail] patt. That was
part of the protocol. Each step had to come in order." (Cantor Reply Dec!. Ex. 7 (Brown Dep. at
72:16-73:1).) And as for the Term Lenders' funds, Ms. Brown testified "I don't even remember
anything about the term lenders." (Id at 109:22-110:3.)

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Response to Par·agraph 127: Disputed. "Defaulting DDTL Lenders" is not a defined
term in any of the loan agreements. Moreover, Mr. Yu did not testify that he was "never sure"
that certain DDTL lenders would make payments. He testified only that he did not want to
represent to the other Lenders in writing "don't worry, the Guggenheim money is coming in, so
that's going to be okay" because, in general, "[u]ntil the money comes in, you're never sure" and
"until something happen[s], there's always a chance that it's not going to happen." (Cantor
Reply Decl. Ex. 12 (Yu Dep. at 232:3- 23; 233:8-23).)
Response to Paragraph 128: Disputed. "Defaulting DDTL Lenders" is not a defmed
term under any of the loan agreements. Undisputed that in early April2009, the Guggenheim
lenders funded $10,000,000 in Delay Draw Term Loan funds. (Dep. Ex. 643 .)
Response to Pal'agraph 129: Disputed. "Defaulting Delay Draw Lenders" is not a
defined term under any of the loan agreements. The cited evidence does not support this
statement. Mr. Yu's testimony concerned a Lender disagreement over whether the Bot1·owers
would be permitted to borrow under the Revolver in April2009-not whether the unfunded
Delay Draw funds should be included in the Available Sources for purposes of the In Balance
Test as suggested by Plaintiffs. Mr. Yu was testifying about the March 23,2009 letter from
BANA to the Lenders stating that there was "a divergence of opinions as to the reading of
2.l(c)(iii) of the Credit Agreement." (Cantor Dec!. Ex. 76 [Dep. Ex. 104].) Section 2.1(c)(iii)
concerns borrowings under the Revolver, not the In Balance Test's computation.
Response to Paragraphs 130, 131 and 132: Undisputed.
Response to Paragraph 133: Disputed. The statement is unsupported by the cited
evidence. None of the cited testimony supports an assertion that "[e}arly 2009 was a time of
stress in ... the Las Vegas market in particular." Undisputed that early-2009 was a time of
economic stress in the financial markets in general.
Response to Paragraph 134: Disputed. This statement is overly broad and ambiguous,
and not material or relevant to the resolution of BANA 's motion for summary judgment. The
cited evidence reflects only that BANA internally monitored the Project as a Lender in 2008 and
2009, a role that was distinct fi.·om its agent

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Response to Paragraph 135: Disputed. This statement is not material nor relevant to
the resolution ofBANA's motion for summary judgment because BANA's internal analysis of
its future post-construction credit risk exposure as a lender is irrelevant in determining its good
faith as agent. (See Cantor Reply Decl. Ex. 11 (Bolio Dep. at 11:22-16:25).)
Response to Paragraphs 136 and 137: Disputed. (See Resp. to 1 135.)
Response to Paragraph 138: Disputed. This statement is not material nor relevant to
the resolution ofBANA's motion for summary judgment because BANA's internal analysis of
its future post-construction credit risk exposure as a lender is irrelevant in determining its good
faith as agent. (See Resp. to, 135.)This statement is also unsupported by the cited evidence.
Dep. Ex. 831 is a Scheduled Exposure Report ("SER") dated April 6, 2009 and does not reflect
any "continuing concern" by BANA regarding condo sales. Moreover, while Dep. Ex. 831 states
that "it is tmlikely that the Company will sell the 933 condo units," it notes that "the Company
has the ability to convert the unsold condos into hotel rooms." (Dep. Ex. 831 at 4.)
Response to Paragraph 139: Disputed. This statement is not matelial nor relevant to
the resolution ofBANA's motion for summaty judgment because BANA's internal analysis of
its future post-construction credit risk exposure as a lender is irrelevant in detennining its good
faith as agent. (See Resp.

to~

135.) To the extent a response is required, the cited evidence does

not support Plaintiffs' statement. Credit Agreement § 2.11(a)(ii) refers to "mandatory
prepayments," not repayments. While some of the cited docwnents indicate that condo sales
would be a source of debt repayment, they do not indicate that that condo sales would
"substantially repay outstanding debt." Similarly, Messrs. Varnell and Yunker testified that both
condo sales and operating cash flows from the casino and hotel would service the debt, but he
did not testify that they would substantially repay outstanding debt after the Project's opening.
(Cantor Reply Decl. Exs. 4 (Yunker Dep. at43:16-44:17); 6 (Varnell Dep. at 67:6-11).)

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Response to Paragraph 140: Disputed. This statement is not material nor relevant to

the resolution of BANA's motion for summary judgment because BANA's internal analysis of
its future post-construction credit risk exposure as a lender is inelevant in determining its good
faith as agent. (See Resp.

to~

135.) To the extent a further response is required, it is

unsupported by the cited evidence. Mr. Bolio did not testify that the Project could be "in
default" upon opening. Mr. Bolio testified that while Fontainebleau Las Vegas "[c]ouldhave a
difficulty meeting its covenants when it opened," that "[w ]as not the expectation. It was
something that could happen, and it was [CDP's] job to factor that in." (Cantor Reply Dec!.
Ex. 11 (Bolio Dep. at35:14-36:2).)
Response to Paragraph 141: Disputed. This statement is not material nor relevant to

the resolution ofBANA's motion for summary judgment because BANA's internal analysis of
its future post-construction credit risk exposure as a lender is inelevant in detetmining its good
faith as agent. (See Resp.

to~

135.) To the extent a response is required, the statement is not

supported by the cited evidence. Moreover, the cited evidence is inadmissible because it was
never authenticated and contains hearsay. Pls.' Ex. 1508 is an October 18,2007 e-mail from Jon
Varnell to BAS' Michael Malone and others at BAS, stating that Mr. Varnell had heard that
Fontainebleau's Jeff Soffer told Mr. Malone that the Borrowers had decided not to sell condos.
The e-mail also states that Jim Freeman told Mr. Varnell that although Mr. Soffer had raised the
idea of not selling condos "internally," his idea had "no support from any other FB or Turnbeny
executive, particularly Glenn." Neither the sender, nor any of the recipients that were deposed
were questioned about the e-mail during their depositions. Messrs. Freeman and Varnell did not
testify about the purpm1ed conversations and Messrs. Soffer and Malone have not been deposed
in this case. Because no witnesses with personal knowledge of the e-mail or conversations have
testified about them, the speculative statements contained in Pls.' Ex. 1508 purporting to
describe those conversations are inadmissible hearsay.lO
Response to Paragraph 142: Disputed. This statement is not material nor relevant to

the resolution ofBANA's motion for summary judgment because BANA's internal analysis of
its future post-construction credit risk exposure as a lender is inelevant in determining its good
10

See Fed. R. Evid. 801-802; Design X Mfg., Inc. v. ABF Freight Sys., Inc., 584 F. Supp. 2d
464, 468 (D. Conn. 2008) (refusing to consider on summary judgment an e-mail recounting
what one non-deponent witness purportedly told another non-deponent witness because the
e-mail was inadmissible hearsay within hearsay).
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faith as agent (see Resp. to ~ 135), and is not supported by the cited evidence. Plaintiffs offer no
evidence of a condo sale schedule or projections. Moreover, Pis.' Ex. 1509 is inadmissible
because it contains hearsay statements. It is a March 27, 2008 e-mail from Kyle Bender to Jon
Varnell and Bret Yunker forwarding a Barclays Capital analyst report that purports to summarize
conversations that Barclays had with Fontainebleau "management." The report's contents lack
foundation and constitute inadmissible hearsay because the analyst was never deposed and
Plaintiffs cite the report for the truth of its contents.'' Because no witnesses with personal
knowledge of the analyst report or purported conversations testified about them, the speculative
statements contained in Pis.' Ex. 1509 are inadmissible hearsay.
Response to Paragraph 143: Disputed. This statement is not material nor relevant to

the resolution ofBANA's motion for summary judgment because BAL"'IA's internal analysis of
its future post-constmction credit risk exposure as a lender is irrelevant in detennining its good
faith as agent (see Resp. to~ 135), and is not supported by the cited evidence. Dep. Ex. 831, an
internal BANA report dated April 6, 2009, states " it is unlikely that the Company will sell the
933 condo units." (Dep. Ex. 831 at p. 4 (emphasis added).)

&wgnse to Paragraph 145: Undi§l2JJ}Jtd that the cited d_o~t COntfll!JS the quoted
hm~

II.

DEFENDANT'S REVISED REDLJNED REPLY TO PLAINTIFF'S REVISED
REDLINED RESPONSE TO DANA'S STATEMENT OF UNDISPUTED
MATERIAL FACTS
Pursuant to Fed. R. Civ. P. 56 and S.D. Fla. L.R. 7.5(c) and (d), BANA submits this reply

to Plaintiffs' Response to Defendants' Statement of Undisputed Material Facts. BANA's initial
statement establishes that the facts are undisputed and are supp01ted by the cited evidence.
Constrained by page limitations, BANA writes to address certain issues raised by Plaintiffs'
Response. BANA does not concede that any statement to which Plaintiffs have objected is either
disputed or not material and relevant.
11

See United States v. Baker, 432 F.3d 1189, 1211 (11th Cir. 2005)(news report inadmissible
as hearsay}.

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h1 a transparent attempt to manufacture the appearance of disputed issues of material fact
where none exists, Plaintiffs' response mischaracterizes the evidence on several key points:
•

Pls.' Resp. to BANA SOUF Paras. 72, 75, 118. Plaintiffs do nothing more than repeat
their baseless claim that BANA knew that Fontainebleau Resorts funded Lehman's share
of the Retail Shared Costs in September 2008. Plaintiffs fail to offer any evidence
supporting their assertions. As explained in BANA's Response to Plaintiffs' Statement
of Undisputed Material Facts, the factual record shows Plaintiffs' assertions to be false.

•

Pis.' Resp. to BANA SOUF Para. 79. There are no documents supporting Plaintiffs'
concLusory assertion that BANA was aware that Lehman did not fund its share of Shared
Costs in September 2008. Dep. Ex. 204 is an e-maiL sent a week before the Shared Costs
were received by BANA from TriMont. And Dep. Ex. 475--Bolio's undated
handwritten notes-are clearly inelevant as the noted dollar amounts-"25 mm" and
"2mm Lehman"-do not coJTespond to the September 2008 Shared Costs. -

(See Cantor Reply DecI. Ex. 20 [Dep. Ex. 11].)

•

Pis.' Resp. to BANA SOUF Para. 73. Plaintiffs' claim that BANA received more than
one wire from TriMont, the Retail Servicer, is contradicted by the evidence they cite.
Bolio Decl. Ex. 29 is a December 30, 2008 Jerume Brown e-mail clearly reflecting that a
single wire was received that day by BANA from TriMont for the Retail Costs requested
by Fontainebleau in the December 2008 Advance Request. Ms. Brown writes 'The wire
in the amount of $4,969,135.00 bas been received." The accompanying Advance
Request states that the "Amounts to be Advanced From the Retail Facility for Shared
Costs" are $4,969,135.00. The cited Brown testimony is likewise off point-it refers
only to when she learned there were muLtiple Retail Lenders. and not about whether
multiple wires were sent by TriMont to BANA.

•

Pis.' Resp. to BANA SOUF Para. 83. Jeanne Brown's testimony is tmambiguous that
she did not recall discussing with TriMont's Mac Rafeedie whether Lehman funded in
September 2008: "Q. And in September 2008, which as I stated was the month Lehman
filed bankruptcy, so the month Lehman filed bankruptcy, did Mr. Rafeedie tell you that
Lehman was not funding? Would that have been one ofyour sources ofinfom1ation? A.

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I doll 't remember him telling me that." (Cantor Reply Decl. Ex. 7 (Brown Dep. at 57:18) (emphasis added).) Plaintiffs nonetheless attempt to manufacture a factual dispute.

•

Pis.' Resp. to BANA SOUF Paras. 100 and 103.

~A's Resp. to 1MJ9.

•

ill

Pis.' Resp. to BANA SOl.JF Para. 115. Plaintiffs dispute that BANA concluded that
Highland's September 30, 2008 claims were incorrect. While they cite an evidentiary
kitchen sink, almost none of the cited evidence has anything to do with Highland's eIndeed, most of it consists of documents and
testimony conceming events that occuned long after September 30, 2008. Incredibly,
Plaintiffs even cite a September 2009 filing in the Lehman bankmptcy by Fontainebleau
Las Vegas Retail, LLC (Pis.' Ex. 1504), a document created more than a year after the
events at issue. Plaintiffs clearly lack any good faith basis for their response to Paragraph

115.

•

Pis.' Resp. to BANA SOUF Paras. 121 and 123. Plaintiffs' assertion that BANA "did
not evaluate Highland's claims but turned a blind eye to them" or that it "dismissed
Highland's claims out of hand" is shown to be false by the evidence that Plaintiffs
themselves have submitted. Plaintiffs introduced numerous e~mails between BANA and
Highland reflecting BANA's attempts to address Highland's Lehman-related concerns.

(See Cantor Reply Dec!. Exs. 21 [Dep. Ex. 81]; 22 [Dep. Ex. 80]; Cantor Decl. Ex. 49

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[Dep. Ex. 904]; see also Susman Decl. Ex. 5; id.
Exs.
•

~fll4-16, 22-24;

Cantor Reply Decl.

5 (Howard Dep. at 52:19-53:19).)

Pis.' Resp. to BANA SOUF Paras. 137 and 146. There is no material dispute that
concerns raised by Min Project Status Report 2 1 were only "gut" feelings, and IVI bad
no evidence supporting its suspicions. In fact, the documents Plaintiffs rely upon make
clear that IVI's concems were only a "gut" feeling and there was nothing concrete that

IVI could point to as evidence of problems.
•

Pls.' Resp. to BANA SOUF Para. 193. Plaintiffs ignore the unambiguous deposition
testimony cited by BANA where Henry Yu explained that Guggenheim informed him
that it was "rounding up all the parties" and intended to fund its $l 0 million Delay Draw

commitment in March 2009: "I believe I had a conversation with Guggenheim, with
Guggenheim saying, "Yes, we're rounding up all the paLties, all our investors, and we
intend to send those funds, and as they come in, we have been sending them, that's why
you already got some and the rest are coming." (Cantor Reply DecI. Ex. 12 (Yu Dep. at
228: 15-229:4).)
In addition, while claiming to dispute certain statements, Plaintiffs concede certain key
facts:
•

Pis.' Resp. to BANA SOUF Para. 57. Plaintiffs do not dispute that BANA received all
required certifications from Fontainebleau, TWC, and BWA for September 2008 through
March 2009 or from IVI for September 2008 through February 2009. Plaintiffs admit in
response to Paragraph 162 that IVI provided BANA with a certificate for March 2009
before BANA approved funding of the March 2009 Advance Request.

•

Pis.' Resp. to BANA SOUF Para. 74. Plaintiffs do not dispute that on September 26,
2008, before disbursing fimds to Fontainebleau, BANA received representations from
Fontainebleau CFO Jim Freeman re-affirming the Advance Request's certifications that
conditions precedent to funding were satisfied.

•

Pis.' Resp. to BANA SOUF Para. 76. Plaintiffs do not dispute that BANA understood
in September 2008 and thereafter that Lehman was continuing to honor some loan
commitments. The Susman testimony cited by Plaintiffs is entirely consistent with this
statement.

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•

Pis.' Resp. to BANA SOUF Para. 120.

•

Pls.' Resp. to BANA SOUF Para.l54. Plaintiffs admit that the March 19, 2009

Constmction Consultant Certificate was the f1rst time that IVI declared it had discovered
material errors in the Advance Request and supporting documentation.
•

Pis.' Resp. to BANA SOUF Para. 196. Plaintiffs' assertion that two Lenders> Highland

and Deutsche Bank, "replied" to BANA's letter misses the point: there is no evidence
that those Lenders tlisagreed with BANA's position. As Plaintiffs point out, Highland
refused to "state a position" and reserved its right to sue BANA regardless of whether it
funded the March Advance. (See Dep. Ex. 471.) And the Deutsche Bank e-mail simply
asked BANA to schedule a call to discuss certain Advance-related issues. (Dep.
Ex. 832.) Contrary to Plaintiffs' claim, BANA did hold that that call, which addressed

Deutsche Bank's concerns. (See Pls.' Ex. 1505.)
Dated: November 16,2011

Respectfully submitted,

Byis:::.~
~&MYERSLLP

0'
Bradley J. Butwin (pro hac vice)
Jonathan Rosenberg (pro hac vice)
DanielL. Cantor (pro hac vice)
William J. Sushon (pro hac vice)
7 Times Square
New York, New York 10036
Telephone: [phone]
Facsimile: [phone]
E-mails: [e-mail];
[e-mail]; [e-mail];
[e-mail]

-andHUNTON & WILLIAMS LLP
Jamie Zysk Isani (Fla. Bar No. 728861)
Matthew Mannering (Fla. Bar No. 39300)
1111 Brickell Avenue, Suite 2500
33

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Miami, Florida 33131
Telephone: [phone]
Facsimile: [phone]
E-mail: [e-mail];
[e-mail]
Attorneys for Bank ofAmerica, N.A.

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EXHffiiT A- DEFINED TERMS
ACR- Anticipated Cost Report
BANA- Bank of America, N .A, Defendant
Bank Proceeds Account- The designated bank account into which Lenders transferred Project
funds.
BAS - Bane of Ame1ica Securities, LLC
CDP- BANA's Corporate Debt Products Group
Credit Agreement or Credit Agmt. - Credit Agreement dated as of June 6, 2007 attached as
Exhibit 2 to the Declaration of DanielL. Cantor in Supp01t of BANA's Opposition to Plaintiffs'
Motion for Partial Summary Judgment.
Delay Draw Term Loan- The $350 million delay draw te1m loan under the Credit Agreement.
Disbursement Agreement or Disbursement Agmt. Master Disbursement Agreement dated as
of June 6, 2007 attached as Exhibit 1 to the Declaration of Daniel L. Cantor in Support of
BANA's Opposition to Plaintiffs' Motion for Partial Summary Judgment.
FBR or Fontainebleau Resorts- Fontainebleau Resmts, LLC
Fontainebleau or Borrowers- Fontainebleau Las Vegas, LLC and Fontainebleau Las Vegas II,
LLC
Guarantors-Jeffrey Soffer, Fontainebleau Resorts, LLC, and Tumberry Residential Limited
Partner, L.P., together.
Highland - Highland Capital Management
Initial Term Loan- The $700 million initial term loan under the Credit Agreement.
lVI or Construction Consultant- Inspection and Valuation International, Inc.
LEED - Leadership in Energy and Environmental Design.
Lehman - Lehman Brothers Holdings, Inc.
Lenders - Lenders under the Credit Agreement for the Senior Credit Facility.
MAE -Material Adverse Effect
National City- National City Bank

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OCO - Owner Change Order
Project- The Fontainebleau Las Vegas, a partially completed resort and casino development on
an approximately 24.4 acre parcel at the Las Vegas Strip's north end.
Retail Affiliate- Fontainebleau Las Vegas Retail, LLC
Retail Co-Lending Agreement- The confidential Retail Co-Lending Agreement dated as of
September 24, 2007 attached as Exhibit 49 to the Declaration of DanielL. Cantor in Suppmt of
BANA's Opposition to Plaintiffs' Motion for Partial Summary Judgment.
Retail Facility Agreement or Retail Agmt.- Retail Facility Agreement dated as of Jtme 6,
2007 attached as Exhibit 43 to the Declaration of DanielL. Cantor in Support ofBANA's
Opposition to Plaintiffs' Motion for Partial Summary Judgment.
Retail Facility- The $315 million in loans earmarked for the Project's retail space.
Retail Lenders- Lenders among whom the Retail Facility was syndicated under the Retail CoLending Agreement.
Revolver Loan - The $800 million revolving loan under the Credit Agreement.
Senior Credit Facility- The $1.85 billion senior secured facilities under the Credit Agreement.
Shared Costs- The $83 million in resort costs to be funded through the Retail Facility.
SMRH- Sheppard Mullin Richter & Hampton LLP
Sumitomo- Sumitomo Mitsui Banking Corp.
TriMont- TriMont Real Estate Advisors, Inc.
TRLP - Turnberry Residential Limited Partners
TWC or Contractor- Tumberry West Construction
ULLICO- Union Labor Life Insurance Company

2

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CERTIFICATE OF SERVICE
I hereby certify that on November 16, 2011, a true and con·ect copy of the foregoing was

served by electronic means pursuant to an agreement between the parties on all counsel or parties
of record listed below.
Kirk Dillman, Esq.
Robert Mockler, Esq.

MCKOOL SMITH HE~MGAN
865 South Figueroa Street, Suite 2900
Los Angeles, California 90017
Telephone: [phone]
Fascimile: [phone]
E~mail: [e-mail]
[e-mail]
Attorneys for Plaintiffs Avenue CLO Fund, Ltd. et al.

Jarrue Zysk lsaru