Case 16-10223-MFW Doc 665 Filed 04/27/16 Page 1 of 2 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: RCS CAPITAL CORPORATION, et al., Debtors. 1 Chapter 11 Case No. 16-10223 (MFW) (Jointly Administered) Related to Docket No. 475 CERTIFICATION OF COUNSEL WITH RESPECT TO AGREED ORDER ON MOTION OF ARIZONA PLAINTIFFS FOR LIMITED RELIEF FROM THE AUTOMATIC STAY AND FOR RELATED RELIEF Undersigned counsel for the Arizona Plaintiffs 2 hereby certifies as follows: 1. On April 4, 2016 the Arizona Plaintiffs filed with the Court, and served on parties requesting notice under Rule 2002 of the Federal Rules of Civil Procedure, the Motion of Arizona Plaintiffs for Limited Relief from the Automatic Stay and for Related Relief [Docket No. 475] (the Stay Relief Motion ). The objection deadline indicated on the Stay Relief Motion was April 25 2016. 1 The Debtors in these chapter 11 cases, are: RCS Capital Corporation; American National Stock Transfer, LLC; Braves Acquisition; LLC, DirectVest, LLC; J.P. Turner & Company Capital Management, LLC; RCS Advisory Services, LLC; RCS Capital Holdings, LLC; Realty Capital Securities, LLC; SBSI Insurance Agency of Texas, Inc.; SK Research, LLC; Trupoly, LLC; and We R Crowdfunding, LLC. The Debtors corporate headquarters and mailing address is located at 405 Park Avenue, 12th Floor, New York, NY 10022. 2 Arizona Plaintiffs means Vanguard Specialized Funds, on behalf of its Vanguard REIT Index Fund series; Vanguard Index Funds, on behalf of its Vanguard Mid-Cap Index Fund series, Vanguard Total Stock Market Index Fund series, Vanguard Extended Market Index Fund series, Vanguard Growth Index Fund series, Vanguard Mid- Cap Growth Index Fund series, and Vanguard Large-Cap Index Fund series; Vanguard Institutional Index Funds, on behalf of its Vanguard Institutional Total Stock Market Index Fund series; Vanguard International Equity Index Funds, on behalf of its Vanguard Total World Stock Index Fund series; Vanguard Scottsdale Funds, on behalf of its Vanguard Russell 1000 Index Fund series, Vanguard Russell 1000 Value Index Fund series, Vanguard Russell 2000 Index Fund series, Vanguard Russell 2000 Growth Index Fund series, Vanguard Russell 2000 Value Index Fund series, and Vanguard Russell 3000 Index Fund series; Vanguard Valley Forge Funds, on behalf of its Vanguard Balanced Index Fund series; Vanguard Variable Insurance Funds, on behalf of its Vanguard Variable Insurance Fund REIT Index Portfolio series and Vanguard Variable Insurance Fund Mid-Cap Index Portfolio series; Vanguard World Fund, on behalf of its Vanguard Financials Index Fund series; VFTC Total Stock Market Index Trust; VFTC Russell 1000 Value Index Trust; VFTC Russell 2000 Growth Index Trust; and VFTC Russell 2000 Value Index Trust. SL1 1413189v1 110304.00001
Case 16-10223-MFW Doc 665 Filed 04/27/16 Page 2 of 2 2. On April 6, 2016 the Arizona Plaintiffs filed and served a Notice of Hearing with respect to the Stay Relief Motion [Docket No. 489] which provided notice of the May 2, 2016 hearing on the Motion and again provided for an April 25, 2016 objection deadline for the Stay Relief Motion 3. No formal objections have been filed or served with respect to the Stay Relief Motion. 4. The Arizona Plaintiffs and the Debtors have agreed on a form of order granting relief sought by the Stay Relief Motion. A form of such agreed order is attached hereto as Exhibit A. A comparison of the agreed form of order and the form of order attached to the Stay Relief Motion as filed with the Court is attached hereto as Exhibit B. WHEREFORE, undersigned counsel for the Arizona Plaintiffs respectfully requests that the Court enter the order attached hereto as Exhibit A. Dated: April 27, 2016 Wilmington, Delaware STEVENS & LEE, P.C. By: /s/ John D. Demmy John D. Demmy (DE Bar No. 2802) 919 N. Market Street, Suite 1300 Wilmington, Delaware 19801 Telephone: (302) 425-3308 Email: jdd@stevenslee.com Attorneys for the Arizona Plaintiffs SL1 1413189v1 110304.00001 2
Case 16-10223-MFW Doc 665-1 Filed 04/27/16 Page 1 of 5 EXHIBIT A
Case 16-10223-MFW Doc 665-1 Filed 04/27/16 Page 2 of 5 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: RCS CAPITAL CORPORATION, et al., Debtors. 1 Chapter 11 Case No. 16-10223 (MFW) (Jointly Administered) AGREED ORDER GRANTING MOTION OF ARIZONA PLAINTIFFS FOR LIMITED RELIEF FROM THE AUTOMATIC STAY AND FOR RELATED RELIEF Upon consideration of the Motion [Docket No. 475] of the Arizona Plaintiffs 2 in the securities litigation action pending in the United States District Court for the District of Arizona ( Arizona District Court ), styled Vanguard Specialized Funds, et al. v. VEREIT, Inc., et al. (15- CV-02157-PHX-ROS) (as further described below, the Arizona Litigation ), and any response thereto; the Court having determined that it has jurisdiction over the Motion pursuant to 28 U.S.C. 157 and 1334, that the Motion presents a core proceeding pursuant to 28 U.S.C. 1 The Debtors in these chapter 11 cases, are: RCS Capital Corporation; American National Stock Transfer, LLC; Braves Acquisition; LLC, DirectVest, LLC; J.P. Turner & Company Capital Management, LLC; RCS Advisory Services, LLC; RCS Capital Holdings, LLC; Realty Capital Securities, LLC; SBSI Insurance Agency of Texas, Inc.; SK Research, LLC; Trupoly, LLC; and We R Crowdfunding, LLC. The Debtors corporate headquarters and mailing address is located at 405 Park Avenue, 12th Floor, New York, NY 10022. 2 Arizona Plaintiffs means Vanguard Specialized Funds, on behalf of its Vanguard REIT Index Fund series; Vanguard Index Funds, on behalf of its Vanguard Mid-Cap Index Fund series, Vanguard Total Stock Market Index Fund series, Vanguard Extended Market Index Fund series, Vanguard Growth Index Fund series, Vanguard Mid- Cap Growth Index Fund series, and Vanguard Large-Cap Index Fund series; Vanguard Institutional Index Funds, on behalf of its Vanguard Institutional Total Stock Market Index Fund series; Vanguard International Equity Index Funds, on behalf of its Vanguard Total World Stock Index Fund series; Vanguard Scottsdale Funds, on behalf of its Vanguard Russell 1000 Index Fund series, Vanguard Russell 1000 Value Index Fund series, Vanguard Russell 2000 Index Fund series, Vanguard Russell 2000 Growth Index Fund series, Vanguard Russell 2000 Value Index Fund series, and Vanguard Russell 3000 Index Fund series; Vanguard Valley Forge Funds, on behalf of its Vanguard Balanced Index Fund series; Vanguard Variable Insurance Funds, on behalf of its Vanguard Variable Insurance Fund REIT Index Portfolio series and Vanguard Variable Insurance Fund Mid-Cap Index Portfolio series; Vanguard World Fund, on behalf of its Vanguard Financials Index Fund series; VFTC Total Stock Market Index Trust; VFTC Russell 1000 Value Index Trust; VFTC Russell 2000 Growth Index Trust; and VFTC Russell 2000 Value Index Trust.
Case 16-10223-MFW Doc 665-1 Filed 04/27/16 Page 3 of 5 157(b)(2) and that venue is proper pursuant to 28 U.S.C. 1408 and 1409; and notice of the Motion having been adequately provided to all parties in interest; and the Court being of the understanding that the Parties have agreed that cause exists to grant the Arizona Plaintiffs limited relief from the automatic stay pursuant to section 362(d) of the Bankruptcy Code, it is hereby ORDERED as follows: 1. The Motion is GRANTED as set forth in this Order. 2. The Arizona Plaintiffs are hereby granted limited relief from the automatic stay otherwise in effect pursuant to section 362(d) of the Bankruptcy Code and, if and when applicable, the plan discharge and injunction provisions set forth in any confirmed chapter 11 plan for the Debtors (a Chapter 11 Plan ), without the need for further order of this Court, solely to prosecute and/or settle the claims asserted in the Arizona Litigation against the Debtor Defendants (the Claims ), including through final judgment in the Arizona District Court and any appellate courts of appropriate jurisdiction, and in connection therewith to enter into and/or enforce any settlements or judgments in such courts with respect to such Claims solely from any insurance proceeds under any insurance policies that may provide coverage for any liability of the Debtor Defendant in such litigation, provided however, that to the extent any settlement with or judgment against the Debtor Defendant exceeds any funded insurance payments (an "Excess Claim"), this Court shall, unless hereafter otherwise ordered by this Court, retain jurisdiction with respect to the treatment of such Excess Claim under a Chapter 11 Plan or in a superseding case under chapter 7 of the Bankruptcy Code. 3. The Debtors, any reorganized Debtors ( Reorganized Debtors ), and/or any transferee of their books and records (including books, records, documents, files, electronic data (in whatever format, including native format) and any tangible objects) relevant or potentially relevant to the
Case 16-10223-MFW Doc 665-1 Filed 04/27/16 Page 4 of 5 Arizona Litigation (collectively, the "Books and Records") shall preserve and maintain such Books and Records in a manner consistent with the applicable provisions of the Private Securities Litigation Reform Act, 15 U.S.C. 78u(b)(3)(C), and Federal Rules of Civil Procedure 26 and 34 as if the Debtors or the Reorganized Debtors, as applicable, were parties to the Arizona Litigation and subject to a continuing request for the production of documents with respect thereto, until the earlier to occur of (a) entry of a final and nonappealable order of judgment or settlement with respect to all defendants in the Arizona Litigation and (b) entry of an order of the Bankruptcy Court or the court in which the Arizona Litigation is pending authorizing the destruction of certain Books and Records. Any motion seeking the order referenced in paragraph 3(b) shall be on reasonable notice to counsel of record for all plaintiffs and defendants in the Arizona Litigation, and with an opportunity to be heard. 4. Nothing herein is intended or shall be deemed to be a stipulation, agreement, representation, warranty or admission by the Debtors and their estates that: (i) the Debtors and their estates are liable to the Arizona Plaintiffs for any amounts at all; and (ii) any causes of action, claims and damages alleged or asserted in the Arizona Litigation are covered, in whole, in part, or at all under any of the Debtors insurance policies. Notwithstanding anything herein to the contrary, (a) any recoveries against any of the Debtors on account of the Securities Litigation Claims shall be limited to any proceeds of the Debtors insurance policies and any distributions from the Creditor Trust (as defined in the Chapter 11 Plan) solely to the extent provided in the Chapter 11 Plan; and (b) although they may choose to do so, nothing herein shall create any duty or obligation on the Debtors or their estates to defend against the claims asserted in the Arizona Litigation or to incur any costs in connection therewith. For the avoidance of doubt, nothing
Case 16-10223-MFW Doc 665-1 Filed 04/27/16 Page 5 of 5 herein relieves the Debtors from any obligations imposed by the Federal Rules of Civil Procedure. 5. This Court shall retain jurisdiction to hear and determine all issues and disputes arising in connection with the enforcement or interpretation of this Order. 6. This order is immediately effective and is not stayed by operation of law, notwithstanding the stay provisions of Fed. R. Bankr. P. 4001(a)(3). Dated:, 2016 Wilmington, Delaware HONORABLE MARY F. WALRATH UNITED STATES BANKRUPTCY JUDGE US 4177334v.2
Case 16-10223-MFW Doc 665-2 Filed 04/27/16 Page 1 of 5 EXHIBIT B
Case 16-10223-MFW Doc 665-2 Filed 04/27/16 Page 2 of 5 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: RCS CAPITAL CORPORATION, et al., Debtors. 1 Chapter 11 Case No. 16-10223 (MFW) (Jointly Administered) AGREED ORDER GRANTING MOTION OF VANGUARDARIZONA PLAINTIFFS FOR LIMITED RELIEF FROM THE AUTOMATIC STAY AND FOR RELATED RELIEF Upon consideration of the Motion [Docket No. 475] of the VanguardArizona Plaintiffs 2 in the securities litigation action pending in the United States District Court for the District of Arizona ( Arizona District Court ), styled Vanguard Specialized Funds, et al. v. VEREIT, Inc., et al. (15-CV-02157-PHX-ROS) (as further described below, the VanguardArizona Litigation ), and any response thereto; the Court having determined that it has jurisdiction over the Motion pursuant to 28 U.S.C. 157 and 1334, that the Motion presents a core proceeding pursuant to 28 1 The Debtors in these chapter 11 cases, are: RCS Capital Corporation; American National Stock Transfer, LLC; Braves Acquisition; LLC, DirectVest, LLC; J.P. Turner & Company Capital Management, LLC; RCS Advisory Services, LLC; RCS Capital Holdings, LLC; Realty Capital Securities, LLC; SBSI Insurance Agency of Texas, Inc.; SK Research, LLC; Trupoly, LLC; and We R Crowdfunding, LLC. The Debtors corporate headquarters and mailing address is located at 405 Park Avenue, 12th Floor, New York, NY 10022. 2 VanguardArizona Plaintiffs means Vanguard Specialized Funds, on behalf of its Vanguard REIT Index Fund series; Vanguard Index Funds, on behalf of its Vanguard Mid-Cap Index Fund series, Vanguard Total Stock Market Index Fund series, Vanguard Extended Market Index Fund series, Vanguard Growth Index Fund series, Vanguard Mid-Cap Growth Index Fund series, and Vanguard Large-Cap Index Fund series; Vanguard Institutional Index Funds, on behalf of its Vanguard Institutional Total Stock Market Index Fund series; Vanguard International Equity Index Funds, on behalf of its Vanguard Total World Stock Index Fund series; Vanguard Scottsdale Funds, on behalf of its Vanguard Russell 1000 Index Fund series, Vanguard Russell 1000 Value Index Fund series, Vanguard Russell 2000 Index Fund series, Vanguard Russell 2000 Growth Index Fund series, Vanguard Russell 2000 Value Index Fund series, and Vanguard Russell 3000 Index Fund series; Vanguard Valley Forge Funds, on behalf of its Vanguard Balanced Index Fund series; Vanguard Variable Insurance Funds, on behalf of its Vanguard Variable Insurance Fund REIT Index Portfolio series and Vanguard Variable Insurance Fund Mid-Cap Index Portfolio series; Vanguard World Fund, on behalf of its Vanguard Financials Index Fund series; VFTC Total Stock Market Index Trust; VFTC Russell 1000 Value Index Trust; VFTC Russell 2000 Growth Index Trust; and VFTC Russell 2000 Value Index Trust.
Case 16-10223-MFW Doc 665-2 Filed 04/27/16 Page 3 of 5 U.S.C. 157(b)(2) and that venue is proper pursuant to 28 U.S.C. 1408 and 1409; and notice of the Motion having been adequately provided to all parties in interest; and the Court having determinedbeing of the understanding that the Parties have agreed that cause exists to grant the VanguardArizona Plaintiffs limited relief from the automatic stay pursuant to section 362(d) of the Bankruptcy Code, it is hereby ORDERED as follows: 1. The Motion is GRANTED as set forth in this orderorder. 2. VanguardThe Arizona Plaintiffs are hereby granted limited relief from the automatic stay otherwise in effect pursuant to section 362(d) of the Bankruptcy Code and, if and when applicable, the plan discharge and injunction provisions set forth in any confirmed chapter 11 plan for the Debtors (a Chapter 11 Plan ), without the need for further order of this Court, to permitsolely to prosecute and/or settle the claims asserted in the Arizona Litigation against the Debtor Defendants (the Claims ), including through final judgment in the Arizona District Court and any appellate courts of appropriate jurisdiction, to fully adjudicate the claims of the Vanguard Plaintiffs in the Vanguard Litigation against the Debtor Defendant, and in connection therewith permitting the Vanguard Plaintiffs to enter into and/or enforce any settlements or judgments in such courts with or against the Debtor Defendant obtained in connection with the Vanguard Litigation solely to the extent ofrespect to such Claims solely from any insurance proceeds under any insurance policies that may provide coverage for any liability of the Debtor Defendant in such litigation, provided however, that to the extent any settlement with or judgment against the Debtor Defendant exceeds any funded insurance payments (an "Excess Claim"), this Court shall, unless hereafter otherwise ordered by this Court, retain jurisdiction with respect to the treatment of such Excess Claim under a chapterchapter 11 Plan or in a superseding case under chapter 7 of the Bankruptcy Code.
Case 16-10223-MFW Doc 665-2 Filed 04/27/16 Page 4 of 5 3. The Debtors, any reorganized Debtors ( Reorganized Debtors ), and/or any transferee of the Debtors their books and records (including books, records, documents, files, electronic data (in whatever format, including native format) orand any tangible objectobjects) relevant or potentially relevant to the Arizona Litigation (collectively, the "Books and Records") shall (i) preserve and maintain all of the Books and Records, and (ii) not destroy, abandon, transfer or otherwise render unavailable such Books and Records absent further order of this Court or any court of competent jurisdiction, upon reasonable notice to parties in interest, including counsel for the Vanguard Plaintiffs in the Vanguardsuch Books and Records in a manner consistent with the applicable provisions of the Private Securities Litigation Reform Act, 15 U.S.C. 78u(b)(3)(C), and Federal Rules of Civil Procedure 26 and 34 as if the Debtors or the Reorganized Debtors, as applicable, were parties to the Arizona Litigation and subject to a continuing request for the production of documents with respect thereto, until the earlier to occur of (a) entry of a final and nonappealable order of judgment or settlement with respect to all defendants in the Arizona Litigation and (b) entry of an order of the Bankruptcy Court or the court in which the Arizona Litigation is pending authorizing the destruction of certain Books and Records. Any motion seeking the order referenced in paragraph 3(b) shall be on reasonable notice to counsel of record for all plaintiffs and defendants in the Arizona Litigation, and with an opportunity to be heard. 4. Nothing herein is intended or shall be deemed to be a stipulation, agreement, representation, warranty or admission by the Debtors and their estates that: (i) the Debtors and their estates are liable to the Arizona Plaintiffs for any amounts at all; and (ii) any causes of action, claims and damages alleged or asserted in the Arizona Litigation are covered, in whole, in part, or at all under any of the Debtors insurance policies. Notwithstanding anything herein to the contrary, (a) any recoveries against any of the Debtors on account of the Securities Litigation
Case 16-10223-MFW Doc 665-2 Filed 04/27/16 Page 5 of 5 Claims shall be limited to any proceeds of the Debtors insurance policies and any distributions from the Creditor Trust (as defined in the Chapter 11 Plan) solely to the extent provided in the Chapter 11 Plan; and (b) although they may choose to do so, nothing herein shall create any duty or obligation on the Debtors or their estates to defend against the claims asserted in the Arizona Litigation or to incur any costs in connection therewith. For the avoidance of doubt, nothing herein relieves the Debtors from any obligations imposed by the Federal Rules of Civil Procedure. 5. 4. This Court shall retain jurisdiction to hear and determine all issues and disputes arising in connection with the enforcement or interpretation of this orderorder. 6. 5. This order is immediately effective and is not stayed by operation of law, notwithstanding the stay provisions of Fed. R. Bankr. P. 4001(a)(3). Dated:, 2016 Wilmington, Delaware HONORABLE MARY F. WALRATH UNITED STATES BANKRUPTCY JUDGE US 4177334v.2