Document Page 1 of 5 IN THE UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF TEXAS SHERMAN DIVISION In re: COLOR STAR GROWERS OF COLORADO, INC., VAST, INC., and COLOR STAR, LLC, Debtors. Chapter 11 Case No. 13-42959 (Jointly Administered) BELL, NUNNALLY & MARTIN LLP AND NIKKI GIBSON S RESERVATION OF RIGHTS CONCERNING THE MOTION FOR APPROVAL OF COMPROMISE AND WITHDRAWAL OF WITNESS AND EXHIBIT LIST Bell Nunnally & Martin LLP and Nikki Gibson, an attorney with BNM (collectively, BNM ) file this Reservation of Rights Concerning the Motion to Compromise and Withdrawal of Witness and Exhibit List (the Reservation of Rights ) in connection with the Motion for Approval of Compromise and Settlement Pursuant to Bankruptcy Rule 9019 [Docket No. 378] (the 9019 Motion ). 1. Each of the Debtors in this jointly administered case filed chapter 11 petitions on December 15, 2013 (the Petition Date ). 2. Prior to the Petition Date, BNM represented the Debtors in connection with a loan transaction (the Color Star Loan Transaction ) with the Debtors pre-petition lenders. The Color Star Loan Transaction closed on or about November 15, 2012. 3. Through the 9019 Motion, the Debtors are seeking approval of a proposed global settlement between the Debtors and their pre-petition lenders. Under the proposed settlement, all of the Debtors Commercial Tort Claims will be assigned to the Litigation Trust. 1 Among other 1 Capitalized terms used in this Reservation of Rights and not otherwise defined have the meanings given to them in the Non-Binding Settlement Term Sheet attached to the 9019 Motion. 1
Document Page 2 of 5 things, the Litigation Trustee will investigate and possibly bring any claims the Debtors may have against... Nikki Gibson and the law firm of Bell, Nunnally and Martin. 4. In the 9019 Motion, the Litigation Trustee is authorized to employ Lynn Tillotson Pinker & Cox, LLP ( Lynn Tillotson ) to investigate and bring the Litigation Trust s claims. See 9019 Motion, Exhibit A, pp. 7-8. The 9019 Motion is ambiguous as to whether Lynn Tillotson would investigate and bring the claims against BNM, if any such claims exist (which BNM denies). 5. Lynn Tillotson defended Bell Nunnally & Martin LLP and a transactional attorney at Bell Nunnally & Martin LLP in a negligence lawsuit during the same period of time that BNM was representing the Debtors in connection with the Color Star Loan Transaction. 2 BNM asserts that because of Lynn Tillotson s prior representation of Bell Nunnally & Martin LLP, Lynn Tillotson cannot represent the Litigation Trustee in the investigation, evaluation or prosecution of claims as set out in the 9019 Motion. 6. After the 9019 Motion was filed, BNM contacted Lynn Tillotson regarding the ambiguity in the 9019 Motion. Lynn Tillotson provided written agreement that it will not participate in the evaluation, investigation, pursuit and/or compromise of any claims against BNM in connection with BNM s representation of the Debtors. 7. Based on Lynn Tillotson s agreement, BNM does not oppose the 9019 Motion and accordingly withdraws its previously filed witness and exhibit lists. BNM does, however, reserve its rights to contest or seek disqualification of any law firm or other professional employed by the Litigation Trustee in connection with the investigation, evaluation, or prosecution or compromise of claims against BNM by the Litigation Trust. BNM also reserves 2 American Communications, LLC v. Bell Nunnally & Martin LLP, Cause No. DC-11-04259, 116 th Judicial District Court, Dallas County, Texas. 2
Document Page 3 of 5 its defenses and objections to any suit brought against it in connection with the Color Star Loan Transaction. DATED: July 14, 2014 Respectfully submitted by: /s/ James H. Billingsley James H. Billingsley (TX 00787084) Sherri T. Alexander (TX 20331100) Alexis L. Angell (TX 24085182) POLSINELLI, P.C. 2501 N. Harwood, Suite 1900 Telephone: (214) 661-5549 Facsimile: (214) 279-2335 jbillingsley@polsinelli.com salexander@poslinelli.com aangell@polsinelli.com COUNSEL FOR BELL NUNNALLY & MARTIN LLP AND NIKKI GIBSON 3
Document Page 4 of 5 CERTIFICATE OF SERVICE I certify that on July 14, 2014, a true and correct copy of the foregoing Reservation of Rights was served on the following parties by regular mail, postage prepaid, in addition to service they received electronically through the Court s ECF System. Evan R. Baker Marcus Helt GARDERE WYNNE SEWELL LLP 3000 Thanksgiving Tower 1601 Elm Street Suite 3000 COUNSEL FOR DEBTORS COLOR STAR GROWERS OF COLORADO, INC., COLOR STAR, LLC, AND VAST, INC. Robert W. Gifford Kenneth C. Johnston John J. Kane George H. Barber Jason Binford Michael Ridulfo KANE, RUSSELL COLEMAN & LOGAN PC 3700 Thanksgiving Tower 1601 Elm Street Daniel P. Winikka SIMON, RAY & WINIKKA LLP 2525 McKinnon St., Suite 540 COUNSEL FOR DEBTORS COLOR STAR GROWERS OF COLORADO, INC. AND COLOR STAR LLC Michael Ridulfo KANE, RUSSELL COLEMAN & LOGAN PC 919 Milam Suite 2200 Houston, Texas 77002 REGIONS BANK REGIONS BANK Robert J. Diehl, Jr. Brian Trumbauer Bodman PLC 6 th Floor at Ford Field 1901 St. Antoine Street. Detroit, MI 48226 COMERICA BANK Judith Weaver Ross Judith Ross, PC 700 North Pearl Street Suite 1610 COUNSEL FOR COMERICA BANK 4
Document Page 5 of 5 Isaac Joseph Brown Jay H. Ong Deborah M. Perry Raymond J. Urbanik MUNSCH HARDT KOPF & HARR, PC 500 N. Akard St., Suite 3800-6659 Constantine Z. Pamphilis Kasowitz, Benson, Torres & Friedman, LLP 700 Louisiana, Suite 2200 Houston, Texas 77002 MCG CAPITAL CORPORATION COUNSEL FOR AD HOC COMMITTEE OF UNSECURED CREDITORS, AND OFFICIAL COMMITTEE OF UNSECURED CREDITORS Michael D. Warner Cole Schotz Meisel Forman & Leonard, PA 301 Commerce Street, Suite 170`0 Fort Worth, Texas 76102 NEXBANK SECURITIES, INC. D/B/A BARRIER ADVISORS /s/ James H. Billingsley James H. Billingsley 5