VERIFIED STATEMENT OF OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP PURSUANT TO BANKRUPTCY RULE 2019(a)

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1 OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP Park Avenue Tower 65 East 55 th Street New York, New York Michael S. Fox (MF 2612) Robert Sadowski (RS 4473) Adam Friedman (AF 5125) Andrea Fischer (AF 2591) UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK X In re: CHAPTER 11 THE 1031 TAX GROUP, LLC, et al., Case No MG Debtors X VERIFIED STATEMENT OF OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP PURSUANT TO BANKRUPTCY RULE 2019(a) Olshan Grundman Frome Rosenzweig & Wolosky LLP ( Olshan ) hereby submits this Verified Statement pursuant to Rule 2019(a) of the Federal Rules of Bankruptcy Procedure, respectfully states as follows: 1. Olshan is a law firm that maintains an office at Park Avenue Tower, 65 East 55 th Street, New York, New York On or about June 6, 2007, Olshan filed a notice of appearance and request for service of papers in the above-captioned cases on behalf of 222 Central Avenue Corp. ( Central Ave. ), a party whose claims and interests arose in connection with the entrustment of proceeds of sales of investment property in one or more of the Debtors, which were to be held by such 1

2 Debtor, in its capacity as a qualified intermediary under section 1031 of the Internal Revenue Code. 3. On or about October 8, 2007, Olshan was retained by the Ad Hoc Exchangers Committee of Unsecured Creditors of 1031 Tax Group, LLC (the Ad Hoc Exchanger Committee ), whose members consist of the parties set forth on the attached Exhibit A, and include Central Ave. 4. Each of the parties listed on Exhibit A are the original holders or assignees of claims and interests that arose in connection with the entrustment of proceeds of sales of investment property in one or more of the Debtors, which were to be held by such Debtor, in its capacity as a qualified intermediary under section 1031 of the Internal Revenue Code. 5. The Ad Hoc Committee has requested that Olshan represent its interests in these cases. 6. Annexed hereto as Exhibit B is a copy of the instrument giving the Ad Hoc Committee authority to act on behalf of its members. 7. Counsel reserves the right to revise and supplement this Verified Statement. Dated: New York, New York October 9, 2007 OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP By:/s/ Michael Fox Michael S. Fox (MF 2612) Robert Sadowski ( RS 4473) Adam Friedman (AF 5125) Andrea Fischer (AF 2591) Park Avenue Tower 65 East 55 th Street New York, New York (212)

3 EXHIBIT A Creditor s Name Creditor s Address Claim Amount Purchase Date 222 Central Avenue Corp. assignee of Patricia Petersen assignee of Medicine Springs LLC assignee of 409 Sherman Ave LLC assignee of Guy V. Nanney and Sharon G. Nanney assignee of Colin Barton assignee of Sam L. Braswell assignee of Flabuless Lowe s II, Inc. assignee of Avron Investments, LLC ASM Capital, L.P. as assignee of John and Monica Bradley 223 Underhill Blvd., Syosset, NY 7600 Jericho Turnpike Suite 302, Woodbury, NY $1,400,000 Original holder $89, /10/07 $478, /4/07 $3,136, /14/07 $17, /28/07 $135, /28/07 $51, /4/07 $82, /28/07 $555, /28/07 $110, /4/07 3

4 ASM Capital, II LP assignee of Smith, Milton and Sherry assignee of Soix Realty Corp. assignee of Red Bird Ranch #3 LP and Red Bird Ranch #5 LP assignee of Charles Sourmaidis and Maria Sourmaidis assignee of Andrew Allen assignee of South Texas TH Management LLC TH Ranch 885 Third Avenue, NY, NY $352, /13/07 $3,916, /28/07 $3,882, /28/07 $1,960, /28/07 $ /28/07 $27, /28/07 4

5 EXHIBIT B MINUTES OF A MEETING OF THE AD HOC EXCHANGER COMMITTEE OF 1031 TAX GROUP, LLC ET AL. October 8, 2007 A meeting of the Ad Hoc Exchanger Committee of 1031 Tax Group, LLC et al., (the Debtor ) was held on Monday, October 8, 2007, at 11:00 a.m., via telephonic means. Present at the meeting were the following members of the Ad Hoc Exchanger Committee constituting a quorum: 222 Central Avenue Corp. by Ernest Barbella, David Fensterstock ASM Capital, L.P. by Doug Wolfe, Adam Moskowitz ASM Capital II, L.P. by Doug Wolfe, Adam Moskowitz Partners, L.P. by Michael Stern Also present at the meeting were the following invited guests: Michael S. Fox, Esq. Robert W. Sadowski, Esq. Andrea Fischer, Esq. At various times during the call, a number of other parties participated: Jay Teitelbaum, Esq. Jonathan Flaxer, Esq. Jeffrey Cohen, Esq

6 The meeting was chaired by Mr. Wolfe. At the meeting, the Committee adopted the by-laws circulated on October 5, The Committee also selected Olshan Grundman Frome Rosenzweig & Wolosky LLP to represent the Committee in the 1031 Tax Group LLC, et al. chapter 11 case, case number , pending in the United States Bankruptcy Court for the Southern District of New York (the Case ). The Committee directed Olshan Grundman Frome Rosenzweig & Wolosky LLP to prepare and submit a statement pursuant Bankruptcy Rule 2019 in the Case. The Committee also discussed ongoing strategy in the Case as well as various pending motions. There being no further business to come before the meeting, the meeting was adjourned. /s/doug Wolfe Douglas Wolfe, Chair