In re

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

Chapter 11

CORDILLERA GOLF CLUB, LLC1 dba The Club at Cordillera,

Case No. 12-11893 (CSS)

Hearing Date: July 16, 2012 at 10:00 a.m.

Debtor.

__________________ __]Ref. Docket Nos. 69, 77, 78 & 95

THE DEBTOR'S OMNIBUS OBJECTION TO THE MOTIONS TO TRANSFER VENUE AND/OR RELATED JOINDERS FILED BY (I) CHERYL M. FOLEY, THOMAS

WILNER, JANE WILNER, CHARLES JACKSON, MARY JACKSON AND KEVIN B. ALLEN, INDIVIDUALLY AND AS REPRESENTATIVES OF A CERTIFIED CLASS OF

MEMBERS, (II) ALPINE BANK, (III) CORDILLERA PROPERTY OWNERS ASSOCIATION, INC. AND CORDILLERA METROPOLITAN DISTRICT

Cordillera Golf Club, LLC dba The Club at Cordillera, the debtor and debtor in

possession in the above-captioned case (the "Debtor"), by and through its undersigned attorneys,

hereby submits this omnibus objection (the "Objection") to (i) the motion (the "Class Member

Motion") of Cheryl M. Foley, Thomas Wilner, Jane Wilner, Charles Jackson, Mary Jackson And

Kevin B. Allen, Individually And As Representatives Of A Certified Class Of Members

(collectively, the "Class Members") to transfer venue of this case, (ii) the motion (the

"CPOA/CMD Motion," and together with the Class Member Motion, the "Motions") of

Cordillera Property Owners Association, Inc. ("the "CPOA") and Cordillera Metropolitan

District ("CMD" or the "District"), to transfer venue of this case, and (iii) the joinders to the

Motions (the "Joinders," and collectively with the Motions, the "Venue Motions") filed by

Alpine Bank ("Alpine," and together with the Class Members, CPOA and CMD, the

"Movants"). In support of its Objection, the Debtor respectfully states as follows:

1 The Debtor in this chapter 11 case, and the last four digits of its employer tax identification number, is XX­XXX1317. The corporate headquarters address for the Debtor is 97 Main Street, Suite E202, Edwards, Colorado 81632.

01:12275800.2

PRELIMINARY STATEMENT

1. This case is not a liquidation case, but is instead a chapter 11 reorganization. The

Debtor's economic rehabilitation turns on the valuation of its real estate, its going concern

business, and its personal property and other assets. The Debtor alleges that the alleged first­

priority secured lender has a defective security interest in the Debtor's non-real estate personal

property assets. The fundamental issues to be resolved in this case are valuation, post-petition

financing, and going-forward capitalization. The issues currently pending in Colorado and the

focus of the Class Member's Motion and the Joinders, are at best peripheral to the central issues

in the bankruptcy case, and are matters which can be resolved in Colorado without threatening

the economic rehabilitation of the Debtor. Whether the Debtor wins its Colorado lawsuit as

plaintiff, and how much money that may bring into the estate, is peripheral to the Debtor's

capital restructure and financing plans, which are grounded in the financial markets of New York

and the Northeast U.S. Whether the class action case results in a defense verdict in favor of

Debtor (which Debtor anticipates), or a judgment for the class members (which, in any event, is

an insured claim and therefore not a serious threat to the Debtor's restructuring) is likewise

peripheral to the Debtor's capital restructure and financing plans, which are grounded in the

financial markets ofNew York and the Northeast U.S. A transfer of venue away from the

financial markets ofNew York and the Northeast U.S. makes the chapter 11 rehabilitation ofthis

Debtor significantly more expensive, significantly less efficient, and prejudices all creditors of

this estate that would expect a higher recovery on their claims with a recapitalization of the

Debtor that can and will be accomplished in this case.

2. On July 3, 2012, the Class Members filed the Class Member Motion on shortened

notice seeking to change the venue of this chapter 11 case to the United States Bankruptcy Court

for the District of Colorado. 01:12275800.2 2

3. On July 5, 2012, Alpine filed its joinder to the Class Member Motion. Alpine is

Debtor's secured lender, whose security interest is at issue in an adversary proceeding pending

before this Court. Alpine now complains about Delaware as a forum; yet, the Debtor's chapter

11 filing was precipitated by Alpine's unwillingness to extend the due date on its loan.

Declaration of Daniel Fitchett ("Fitchett Decl."). The Debtor was unable to find alternative

financing in Colorado and thus has been forced to look outside the local Colorado market.

4. To that end, the Debtor has engaged a national-based real estate advisor (GA

Keen Realty Advisors, based in NY) and a nationally-prominent Chief Restructuring Officer,

Alfred H. Siegel (the "CRO"), who is not domiciled in Colorado. At least in part because of the

stigma associated with the class action dispute, the Debtor's professionals have determined that

the Debtor's financial future is not grounded in the Midwest, but rather the financial markets of

New York and the east coast. See Declaration ofHarold Bordwin filed in support hereof

("Bordwin Decl.").

5. On July 5, 2012, CPOA and the District filed the CPOA/CMD Motion. The

Debtor believes these parties are not motivated to promote the best interests of the estate.

Rather, they seek to move this case to Colorado where the Debtor will be hampered by negative

public opinion fueled by unsubstantiated claims espoused by these parties. In contrast, the

Delaware forum provides a level playing field and affords the Debtor and all parties in interest a

proper forum to prosecute this chapter 11 case to a successful reorganization. Movants' cries of

inconvenience are simply not supported by compelling evidence. In fact, Movants have had no

difficulty voicing their views in this Court and not a single Movant has stated that they are

unable to attend hearings in Delaware.

01:12275800.2 3

6. Aside from the Movants, who represent only a fraction of the creditor body as a

whole, none of the other creditors in this case have lodged a complaint over the Debtor's choice

of venue. Indeed, it is anticipated that independent homeowners and Club members will join in

the within opposition to the Venue Motions.

7. No one disputes that venue of the Debtor's case is both proper and permissible in

Delaware under 28 U.S.C. § 1408; instead, Movants proceed under 28 U.S.C. § 1412. The

Venue Motions are focused on the fact that (a) the Debtor's headquarters and assets are in

Colorado and (b) the Debtor has many Colorado creditors, some with a pending action litigation

in Colorado.2

8. As discussed in detail below, these facts and what follows from them fall far short

of satisfying the Movants' heavy burden of showing that the interests of justice or the

convenience of parties in interest will be served by transferring this Chapter 11 reorganization

case to Colorado.

9. Contrary to the suggestions in the Venue Motions, the Debtor's selection of

Delaware for the venue of this case was and remains in the best interests of the estate because the

economic administration of the case and the rehabilitation of the Debtor hinges on contacts with

the financial markets in New York and on the East Coast, not locally in Colorado. While the

Debtor may be characterized as a regional operation insofar as the location of its real estate and

related amenities are concerned, its broad appeal on the national level is borne out by the fact

that nearly two-thirds of its members reside outside of Colorado. See Debtor's Schedules and

2 The Colorado litigation between the Movants and the Debtor is not the focus of the bankruptcy case. While the Debtor expects to prevail in its case as plaintiff (and the recovery will be an asset of the estate), and expects to be exonerated in the class action case (and even if not, the recovery is covered by insurance, so the outcome will have little impact on the estate), the overall outcome of that litigation is not central to the economic reorganization of this Debtor.

01:12275800.2 4

Statement of Financial Affairs, which will be on file herein. Moreover, the reality is that the

success of this chapter 11 proceeding will hinge on the participation of those located on the East

Coast, including the proposed DIP Lender. See Bordwin Decl. at 1 16.

10. As would be expected of a company that owns and operates high-end recreational

amenities in a residential community where many of the homes are second homes or vacation

homes, the vast majority of the Debtor's creditors are actually located outside of Colorado.3 The

statements by Movants that most creditors are in Colorado are simply not accurate; in fact, of the

six individuals that filed the Member Motion, only Ms. Foley lists her address in Edwards,

Colorado, and Mr. Allen lists his address in Cherry Hills Village, Colorado -the other four

Movants reside in Washington, DC or Illinois. See Exhibit B to the Foley Decl. And, as to Ms.

Foley and Mr. Allen, they have affirmatively sought and obtained a position on the Official

Committee of Unsecured Creditors ("Committee") in this case, thus consenting to their

availability to participate in this case no matter where it is pending.4 See Notice of Appointment

of Committee of Unsecured Creditors, Docket No.86. In fact, the Debtor expects that the major

issues in this case will tum on the involvement of parties located on the East Coast.

11. The ultimate question for the Court is whether the Movants have shouldered their

heavy burden and proved that administration of this chapter 11 case - and not the peripheral

3 In fact, Movants Thomas and Jane Wilner are located in Washington, DC (about 110 miles to the Delaware Court as opposed to 1657 miles to the Colorado Court) and Charles and Mary Jackson are located in Illinois (781 miles to Delaware Court and 1012 miles to Colorado). Additionally, the general creditor breakdown is as follows:

Members: 34% are in Colorado, 66% are outside of Colorado; Vendors Owed Money (excluding employees): 46% are in Colorado, 54% are outside of Colorado; All vendors (excluding employees): 55% are in Colorado, 45% are outside of Colorado. See Schedules and Statement of Financial Affairs. 4 On or about July 6, 2012, the U.S. Trustee appointed the seven-member Committee [Docket No. 86]. Of the seven Committee members, four of them are Class Members, two of whom are named class representatives and Movants herein. The Debtor understands that the Committee is likely to support the Venue Motion. However, while the Debtor recognizes that the bankruptcy courts often give some deference to official committees on matters such as the one at bar, the weight of any support of the Venue Motion by the Committee in this case should be appropriately discounted given that the majority composition of the Committee are actual Movants herein.

01:12275800.2 5

litigation already pending in Colorado- will be improved if the case is transferred to Colorado.

The Debtor submits that Movants have not done so and will not be able to do so.

12. By the time this Court considers the Venue Motions, it will have held three

separate hearings, including one status conference, in this case involving 8 motions and

applications, 7 of which were approved, and one of which was denied after an appearance by

some of the Movants. Additionally, the Debtor has filed its application to employ professionals.

Moreover, the vocal creditors, including the Movants, have already engaged local Delaware

counsel to represent their interests. Movants simply have not met their burden of showing they

cannot appear in Delaware. They, in fact, already have. And Ms. Foley and Mr. Allen have

volunteered to participate in the case no matter where it is venued by volunteering for the

Committee.

13. After a diligent interview process and search, the Debtor has retained Delaware

counsel, as well as non-Colorado based financial advisor, each of which is skilled and

experienced in chapter 11 reorganizations. Other parties have already retained Delaware

counsel, including the DIP lender. The Debtor's real estate advisor, who is involved in the East

Coast financial markets, is located in New York. All of the Debtor's professionals as well as the

proposed DIP lender believe that Delaware is the best venue for this case. These are the

constituents who are critical to the success of this Case and the financial rehabilitation and

reorganization of the Debtor, not the Movants.

01:12275800.2 6

14. Transferring this case to Colorado will create far more harm than it could ever

alleviate; it would necessitate a new judge; it would require new co-counsel for the Debtor (and

the Debtor anticipates difficulty and attendant delay with the retention of Colorado counsel based

upon possible conflicts of interest, see Fitchett Decl. at~ 1 0); transfer may affect (and will

certainly increase the costs associated with) the potential debtor in possession financing, which is

poised to provide sufficient funds for the Debtor to operate for the next year while it finalizes its

capital restructuring and confirms a plan ofreorganization. Moreover, it would inconvenience

the Debtor's real estate advisor, DIP lender, CRO, and financial advisors- the parties whose

testimony is most likely if the Debtor's plan is contested.

15. The Movants have not and will not be able to satisfy their heavy burden of

showing that a change in venue is necessary for the convenience of the parties or for the interests

of justice, and this Court should therefore deny the Motion.

BACKGROUND

A. The Debtor

16. The Debtor is a limited liability company incorporated under the laws of the state

of Delaware.

B. Company Background

17. The Debtor owns and operates the "Club Facilities" as defined in the Venue

Motion which are located in Vail Valley in Eagle County, Colorado.

18. The details of the Debtor's operations, current management and equity interests in

the Debtor, are set forth in the First Day Motion affidavit of the Debtor's CEO, DanielL.

Fitchett, Jr. filed herein on June 26, 2012 (Docket No.2) and are incorporated herein by

reference.

01:12275800.2 7

19. Prior to filing its bankruptcy in Delaware, the Debtor worked with local lenders in

Colorado, including Alpine Bank, but was not successful in generating any interest from the

local Colorado community to assist with financing for the business. Fitchett Decl. Indeed, the

Debtor attempted to negotiate a work-out with Alpine Bank for many months prior to the filing

of the bankruptcy petition herein without success. Fitchett Dec I. Therefore, Debtor was forced

to look outside Colorado- with the assistance of its New York-based real estate advisor, among

several alternatives, the Debtor identified Northlight Financial, LLC a New York based lender

and negotiated the terms of a DIP loan with its affiliate, Southlight Trust I, a Delaware statutory

trust (collectively "DIP Lender"), which is the subject ofthe July 19,2012 hearing scheduled to

proceed before this Court. [Docket Entry No. 59].

20. The main issues in this case, namely Alpine Bank's alleged perfection of a

security interest in personal property of the Debtor and the reorganization of the Debtor's capital

structure, are governed by Delaware law.

21. On June 26, 2012 (the "Petition Date"), the Debtor filed a voluntary petition for

relief under chapter 11 of the Bankruptcy Code.

C. Activity in the Bankruptcy Case

22. The Debtor continues to operate its business and manage its property as debtor in

possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. On June 27, 2012,

the Court presided over, and granted, the Debtor's seven (7) First Day Motions, and each of the

Movants participated through counsel in those proceedings.

01:12275800.2 8

23. On July 3, 2012, this Court denied Debtor's emergency motion for co-debtor stay,

after vociferous and competent participation and opposition by these very Movants, through the

representation of Delaware counsel, who had little inconvenience appearing before this Court on

24-hours' notice.

24. The Debtor's motion for approval of debtor in possession financing, filed on

July 1, 2012, is set to be heard on July 19, 2012, and Alpine and the Debtor have worked

together, through local counsel, relative to streamline discovery and trial of that matter.

25. On June 29, 2012, Debtor filed an adversary complaint against Alpine Bank,

challenging the alleged security interest in certain of Debtor's assets, commencing adversary

case number 12-50785 (the "Adversary") [Docket Entry No. 60].

26. On July 3, 2012, the Member's Motion was filed to transfer venue, after they had

already appeared through same Delaware counsel in the First Day Motions and the co-debtor

stay hearings on June 27 and July 3, respectively. On July 5, 2012, Alpine Bank filed its joinder

in the Class Member Motion.

27. On July 5, 2012, the CPOA and the District- through counsel who represented

them at the First Day Motions - filed their motion to transfer venue.

28. On July 6, 2012, the United States Trustee presided over a formation meeting and

appointed the Committee, which includes as volunteers who have submitted to the jurisdiction

and venue of the Delaware court, the only Colorado residents that participated in the filing of the

Member's Motion.

29. On July 10, 2012, Debtor filed various professional retention applications and

related motions.

30. The Debtor anticipates filing its Schedules and Statements in short order.

01:12275800.2 9

31. To suggest that Movants are unable to avail themselves of competent Delaware

representation, or that somehow the Colorado-based members will be inconvenienced by their

own voluntary participation as members ofthe Debtor's Creditors Committee if this matter

proceeds in Delaware, is belied by facts; rarely do clients need to attend every hearing (indeed,

maybe not even most hearings) and Movants have made no effort to explain how often or why

they would need to personally appear, particularly given the ease of telephonic appearance.

D. The Movants

32. Some of the Movants allege to be court-approved representatives of a certified

class of club members in Case Number 11CV552 pending in the District Court of Eagle County,

Colorado. Only two of these named members live in Colorado (and both of the Colorado

residents have decided to forego any claims of inconvenience by traveling to Delaware on July 6,

2012 to be appointed as members ofthe Committee), the other four live in Illinois and

Washington, DC- both forums more convenient to Delaware than Colorado.

33. All Movants have engaged Delaware counsel to assist with their Member's

Motion (and to appear at the First Day Motions and the Stay Motion). See Court Docket Entry

No. 58, 61, 82, and 83.

34. Movants that are participants in the class action litigation have not provided any

evidence to this Court that they are authorized to speak for the alleged 609 other members of the

class they purport to represent, or whether this is simply rogue conduct on the part of the six

members.

01:12275800.2 10

35. Alpine clearly has shown no inconvenience as is evidenced by their active

participation in this case to date- it is uncertain whether the bank will challenge Debtor's claim

that Delaware law applies to the issue of perfection of its security interest in Debtor's personal

property assets.

36. Finally, CPOA and the District have also engaged Delaware counsel (who

appeared at the First Day hearings) and have shown no hardship in having the case proceed in

Delaware, including that they have shown no need to appear in person given the ease of

telephonic appearances. Moreover, Ms. VanDeusen, although she claims that Delaware is

inconvenient, actually has strong ties to the East Coast, is on the board of organizations in New

Jersey and works for a New Jersey based firm. See http://www.njisj.org/test site/about/boardll.php.

E. The Debtor's Assets

37. When the Debtor commenced this case, it operated four golf courses, a state-of-

the-art athletic club, the Trailhead Facilities, and owned restaurant facilities at the Mountain,

Summit and Valley Course facilities, swimming pools, tennis courts, and a family lodge, among

other amenities. The Debtor also owns significant accounts receivable owing from members

spread across the Country.

F. The Debtor's Secured Creditors

38. On the Petition Date, the Debtor's alleged secured lender, Alpine, had opposed

the Debtor's motion to use cash collateral and is the defendant in Debtor's Adversary

challenging the bank's perfected secured status in certain collateral. Alpine has also expressed

opposition to the Debtor's motion for approval of DIP financing from the DIP Lender, currently

scheduled for hearing on July 19, 2012.

01:12275800.2 11

39. David Wilhelm is also an alleged secured creditor of the Debtor, although Debtor

understands that Wilhelm consents to Delaware's choice of venue in Delaware and consents to

the terms of the Debtor's DIP financing.

G. The Debtor's Other Creditors

40. The Debtor's Schedules and Statements which will be on file herein by the

hearing date ofthe Venue Motions, as well as Exhibit A to the CPOA/District Motion,

demonstrate that there are potential creditors located in every state in the United States and

abroad. Of the vendors who have outstanding claims against the Debtor, over 50% are not

located in Colorado. Ofthe Debtor's club members, some of whom claim to be creditors ofthe

Debtor (these claims are disputed by the Debtor), approximately 66% reside outside Colorado.

In short, Colorado is not the most convenient forum for the vast majority of the pre-petition

participants in the Debtor's business.

ARGUMENT

I. TRANSFER OF THE DEBTOR'S CHAPTER 11 CASE

IS NOT IN THE INTEREST OF JUSTICE OR FOR THE CONVENIENCE OF THE PARTIES

41. "Change of Venue" pursuant to 28 USC 1412 provides: "A district court may

transfer a case or proceeding under title 11 to a district court for another district, in the interest of

justice or for the convenience of the parties." Section 1412 of title 28 applies to changes of venue

both of (a) cases under title 11 and (b) civil proceedings arising under title 11, or arising in or

related to cases under title 11. Section 1412 speaks ofthe interest of justice "or" the convenience

of the parties.

01:12275800.2 12

INTERESTS OF JUSTICE WEIGH IN FAVOR OF DELAWARE

42. A Debtor's choice of venue should only be disturbed when the balance weighs

heavily in favor of a defendant's motion for transfer. Oglebay Norton Co. v. Port (In re ONCO

Inv. Co.), 320 B.R. 577, 579 (Bank:r. D. Del. 2005). Movants bear the burden of demonstrating,

by a preponderance of the evidence, that a transfer of venue is warranted. HLI Creditor Trust v.

Keller Rigging Constr., Inc. (In re Hayes Lemmerz Int'l Inc.), 312 B.R. 44, 45 (Bank:r. D. Del.

2004) (citing Hechinger Liquidation Trust v. Fox (In re Hechinger Inv. Co. ofDel., Inc.), 296

B.R. 323, 325 (Bank:r. D. Del. 2003). The decision of whether venue should be transferred lies

within the sound discretion of the Court, though the moving party must demonstrate by a

preponderance of the evidence that such change is warranted. Lamari Ltd. v. Yes! Entm't Corp.,

244 B.R. 56, 61 (D.N.J. 2000).

43. In cases such as this one where the existing venue is entirely appropriate, the

Court must exercise its power to transfer cases cautiously. In re Enron Corp., 274 B.R. 327, 342

(Bankr. S.D.N.Y. 2002); In re Campbell, 242 B.R. at 746; A.R.E. Mfg. Co., Inc. v. D & M

Nameplate, Inc. (In re A.R.E. Mfg. Co., Inc.), 124 B.R. 912, 914 (Bankr. M.D. Fla. 1991); In re

Walter, 47 B.R. 240, 241 (Bank:r. M.D. Fla. 1985).

A. The Case will Turn on Involvement of the East Coast Based Lenders/ Investors/Buyers

44. The most important consideration in deciding whether to transfer venue of this

case is where economic administration of a chapter 11 case can best be accomplished. See In re

Enron Corp., 274 B.R. at 348; In re Commonwealth Oil Ref. Co., 596 F.2d at 1247; In re Int'l

Filter Corp., 33 B.R. 952, 956 (Bank:r. S.D.N.Y. 1983). The economic administration of a

bankruptcy estate involves the need to obtain post-petition financing, the need to obtain

financing to fund reorganization, and the location of the sources of such financing and the

01:12275800.2 13

management personnel in charge of obtaining it. Huntington Nat'l Bank v. Indus. Pollution

Control, Inc. (In re Indus. Pollution Control, Inc.), 137 B.R. 176, 182 (Bankr. W.D. Pa. 1992);

see also In re Int'l Filter Corp., 33 B.R. at 956; In re Enron Corp., 274 B.R. at 348; In re Garden

Manor Assocs., L.P., 99 B.R. 551, 554-55 (Bankr. S.D.N.Y. 1988) (court denied motion to

transfer even when sole asset was located in another jurisdiction because ability to raise capital,

renegotiate loan terms and likely sources of capital were located in current venue.)

45. The Movants' arguments focus largely on peripheral litigation in Colorado and

the situs of the Debtor's primary assets rather than on the true driver of this restructuring, which

will be financing from sources outside Colorado, such as the proposed DIP Lender. The post­

petition economic administration of this case is East Coast centric as there is little or no

economic market in Colorado or the Midwest for the sources of post-petition capital for the

Debtor as are available to it on the East Coast. See Bordwin Decl. at~ 13. See also Fitchett

Decl. at~ 4-6 and 8.

B. Disruption To Debtor, Their Estates and Their Creditors

46. The Debtor's goal of maximizing the recovery for creditors can best be achieved

through a speedy and efficient chapter 11 process. Transfer of venue of this case would thwart,

or at least hamper, that goal. There is no question that a transfer of venue of this case at this time

would delay, disrupt, and add unnecessary expenses (especially to the DIP financing) to the

administration of the cases, and take the Debtor back to a financial market that has already

turned its back on the Debtor.

4 7. If this Court were to grant the Venue Motion and transfer venue, the Colorado

court would need to expend time and effort to become familiar with the cases, the relief granted

to date, and the pending matters. The professionals would need to retain a new set of local

01:12275800.2 14

counsel (with attendant problems being anticipated by the Debtor) and may need to file

duplicative motions. All with additional expense to the Debtor.

48. Moreover, as to the adversary proceeding contesting Alpine's security interest, the

inevitable delays in resolving that issue would unquestionably result in additional expense for the

estate and would not be in the best interests of creditors. Thus, it is in the best interests of the

Debtor, their estates and their creditors for the venue of this case to remain in Delaware.

II.

THE CONVENIENCE OF THE PARTIES IS AT BEST NEUTRAL, AND LIKELY IN DEBTOR'S FAVOR, IN LIGHT OF THE REALITY THAT THE MAJOR CREDITORS, THE DEBTOR, AND DEBTOR'S PROFESSIONALS (INCLUDING ITS REAL ESTATE ADVISOR), AND PROPOSED DIP LENDER ALL HAVE AVAILED THEMSELVES OF

THIS COURT AND HAVE ENGAGED COMPETENT DELAWARE COUNSEL

49. The criteria that many courts employ in determining whether to transfer a title 11

case for convenience of the parties is: (1) the proximity of creditors of every kind to the court;

(2) the proximity of the bankrupt (debtor) to the court; (3) the proximity of the witnesses

necessary to the administration of the estate; ( 4) the location of the assets; ( 5) the economic

administration of the estate; and (6) the necessity for ancillary administration ifliquidation

should result. See, Commonwealth of Puerto Rico v. Commonwealth Oil Refining Co., Inc. (In

re Commonwealth Oil Refining Co., Inc.), 596 F.2d 1239, 1241 (5th Cir. 1979), cert. denied, 444

U.S. 1045, 100 S. Ct. 732, 62 L. Ed. 2d 731 (1980). Accord In re Enron Corp., 274 B.R. at 343

(using CORCO factors but also relying upon Gulf States Exploration Co. v. Manville Forest

Prods. Corp. (In re Manville Forest Prods. Corp.), 896 F.2d 1384 (2d Cir. 1990), even though

that case involved a motion to transfer an adversary proceeding); In re Land Stewards, L.C., 293

B.R. 364 (Bankr. E.D. Va. 2002); In re Campbell, 242 B.R. 740 (Bankr. M.D. Fla. 1999); In re

Pope Vineyards, 90 B.R. 252 (Bankr. S.D. Tex. 1988); In re Walter, 47 B.R. 240 (Bankr. N.D.

Fla. 1985). 01:12275800.2 15

50. Third Circuit case law requires the Court to apply a twelve-factor test in

determining whether to grant a motion to transfer venue. 5 See Hayes, 312 B.R. at 46 (citing

Jumara v. State Farm Ins. Co., 55 F.3d 873, 879-80 (3d Cir. 1995)). The twelve factors are:

(1) Plaintiffs choice of forum, (2) defendant's forum preference, (3) whether the claim arose

elsewhere, (4) the location ofthe books and records and/or the possibility of viewing premises if

applicable, (5) the convenience of the parties as indicated by their relative physical and financial

condition, (6) the convenience of the witnesses, but only to the extent that the witnesses may

actually be unavailable for trial in one of the fora, (7) the enforceability of the judgment,

(8) practical considerations that would make the trial easy, expeditious, or inexpensive, (9) the

relative administrative difficulty in the two fora resulting from congestion of the court's dockets

(1 0) the public policies of the fora, (11) the familiarity of the judge with the applicable state law,

and (12) the local interest in deciding local controversies at home.

Movants argue that the Chapter 11 case should be transferred to the District of Colorado for

several asserted reasons- none of which ultimately weigh in favor of transferring venue -- as

follows: (1) there is pending litigation in Colorado, involving some of the members (Debtor's

response: these members do not explain why this should prevent the bankruptcy case from

proceeding in Delaware); (2) the majority of creditors are in Colorado (Debtor's response: as

noted above, this is not accurate. The majority of both creditors and members are located outside

of Colorado, and the majority of members filing the Member Motion do not reside in Colorado.

Moreover, the two who do reside in Colorado having volunteered to accept the convenience of

the Delaware forum by joining the UCC); (3) little has happened in the case (Debtor's response:

this is incorrect, the Debtor has filed and this Court ruled on 7 first day motions, the financial

5 These 12 factors include the six (6) factors related to the convenience ofthe parties discussed above.

01:12275800.2 16

support for the Debtor is located in the East Coast, Debtor's CRO, financial advisor and real

estate advisor are not in Colorado, the Debtor's counsel is in Delaware and San Diego, not

Colorado; a committee has been formed, and the major creditors have all engaged Delaware

counsel. All is in place in Delaware to move the case expeditiously forward); ( 4) the assets are

in Colorado (Debtor's response: the location of the assets is not a critical issue in a motion to

transfer venue in a Chapter 11 proceeding, but may be relevant in a liquidation. See Garden

Manor Assoc., supra. But, in any event, a significant asset of the Debtor,- accounts receivable

owing from members- are owed by members located throughout the Country); (5) Colorado

law applies to some agreements (Debtor's response: this Court is well positioned to address the

potential issues in this case, even if it must interpret contracts governed by laws of other

jurisdictions- although, it is unclear, at best, whether even the membership agreements are all

governed by Colorado law (see below), and even then, while Colorado law may be relevant to

the litigation matters pending there, it has little relevance to the financial restructuring that is the

central issue in this case. See In re Visteon Corporation v. Governor Business Solutions, Inc.,

2011 Bankr. LEXIS 4008 (this court held that "where issues will be resolved through basic

contractual interpretation, and the location of the underlying events is not germane, this factor is

neutral.")).

51. As discussed more fully below, Movants simply have not met their heavy burden

to justifY such a drastic remedy of transferring this case to Colorado. In re Delaware and Hudson

Railway Co., 96 B.R. 467, 468 (D. Del. 1988), affd, 884 F.2d 1383 (3d Cir. 1989); see also In re

01:12275800.2 17

Commonwealth Oil Refining Co., Inc., 596 F.2d at 1241; In re Fairfield Puerto Rico, Inc., 333 F.

Supp. 1187, 1189 (D. Del. 1971).6

52. The burden of proof in connection with the Venue Motions is on the Movants, not

the Debtor. Nevertheless, the Debtor will demonstrate that, utilizing the twelve-factor test

relating to venue transfer, Movants have not and cannot meet their burden.

III.

TWELVE FACTOR TEST WEIGHS IN DEBTOR'S FAVOR IN RETAINING VENUE IN DELAWARE

53. The first factor, Debtor's forum preference, weighs in Debtor's favor. "Transfer

is a cumbersome disruption of the Chapter 11 process." In re Pavilion Place Associates, 88 B.R.

32, 35 (Bankr. S.D.N.Y. 1988). Consequently, when venue is proper, a debtor's choice of forum

is to be accorded substantial weight and deference. See In re Delaware and Hudson Railway

Co., 96 B.R. at 469; In re Visteon Corp., 2011 Bankr. LEXIS 4008. A movant must demonstrate

that a transfer of venue is necessary to achieve the statutory purposes by a preponderance of the

evidence. In re Commonwealth Oil Refining Co., 596 F.2d at 1241 (citing, In re Fairfield Puerto

Rico, Inc., 333 F. Supp. 1187, 1189 (D. Del. 1971)).

6 In considering these factors, courts also rely on decisions construing 28 U.S.C. § 1404, which is the federal statute governing transfer of venue of civil actions. Jumara v. State Farms Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995); In re Spillane, 884 F.2d 642, 645 (1st Cir. 1989); Pursuit Athletic Footwear, Inc. v. Save Power Ltd., C.A. No. 96-40-MMS, 1996 WL 328596, at *5 (D. Del. June 7, 1996) ("The decision to transfer venue under either section 1404 and 1412 has been determined to tum on the same issues."). Courts considering venue transfer motions in nonbankruptcy cases recognize that "a plaintiffs choice of forum is a paramount consideration in any determination of a transfer request, and the court should not disturb the plaintiffs choice lightly." Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (3d Cir. 1970).

01:12275800.2 18

54. Some courts suggest that something more than a preponderance of the evidence

must weigh in favor of transfer:

[W]here after balancing all factors, the equities lean but slightly in favor of the movant, the plaintiffs choice of forum should not be disturbed.

49 B.R. 935, 938 (Bankr. E.D.N.Y. 1985); see also In re Garden Manor Assoc., L.P., 99 B.R. at

553 ("where a transfer would merely shift the inconvenience from one party to the other, or

where after balancing all the factors, the equities leaned but slightly in favor of the movant, the

[debtor's] choice of forum should not be disturbed.").

55. In Matsushita Battery Indus. Co. v. Energy Conversion Devices, Inc., the

Delaware District Court described the movant's burden of proof on a venue transfer motion as

follows:

As a general rule, "[b ]ecause plaintiffs choice of forum is accorded substantial weight, the burden is on the defendants to establish that the balance of convenience of the parties and witnesses strongly favors the defendants."

C.A. No. 96-101-SLR, 1996 WL 328594, at *4 (D. Del. April23, 1996) (quoting, Bergman v.

Brainin, 512 F. Supp. 972, 973 (D. Del. 1981)).

56. A Delaware entity's election to commence a chapter 11 case in the District of

Delaware is not to be disregarded or downplayed in the context of a venue transfer motion.

Indeed, it is the well-settled law of this District that, even if Delaware is not a plaintiff's "home

turf," deference should be accorded to the Delaware entity's choice of venue. See Waste

Distillation Technology, Inc. v. Pan American Resources, 775 F. Supp. 759, 766 (D. Del. 1991)

("[T]his Court rejects the assertion that 'lack of doing business' here makes it unfair to try the

case here.").

01:12275800.2 19

57. Wilmington, Delaware is a ninety-minute train ride from both New York City and

Washington D.C. It is a thirty minute drive from the Philadelphia International Airport.

Conversely, Cordillera is over a hundred miles from Denver, through at least three mountain

passes. For the vast majority of the parties in interest that will be attending hearings in this case

on a regular basis, Wilmington is at least if not a far more convenient venue than Colorado,

including for some of the Movants, contrary to their self-serving and unsupported claims of

. . mconvemence.

58. Consider the parties in interest that are certain to attend every hearing in this case,

the Debtor, their proposed DIP lender, the Committee and the U.S. Trustee. Their respective

counsel are each located in San Diego, Detroit and Delaware. Should contested hearings be

necessary, the likely witnesses will be the Debtor's financial advisors who are based in the East

Coast. And the only Colorado-based Class Members among the Movants have voluntarily

elected to join the Committee and should be viewed as consents to the convenience of these

cases no matter where they are venued.

59. All of the major parties in this case have already retained Delaware bankruptcy

counsel. Of the numerous professionals who have appeared in this case, only Alpine's counsel

has offices in both Colorado and Delaware.

60. In addition, the Debtor's Delaware counsel has extensive understanding of

numerous aspects of the Debtor's business, as they took the lead in assisting the Debtor in the

preparation of its first day motions. Transferring this case to Colorado would require the Debtor

to engage and educate local counsel in Colorado (with an anticipated delay and potential conflict

issue) and would saddle the estate with additional expenses arising from the time and expense for

travel to and from Colorado. These expenses could be substantial in light of the fact that the

01:12275800.2 20

Debtor's counsel are located in San Diego, California, and Delaware, and the financial advisors

are located on the East Coast (Detroit and New York). Moreover, at least in part because of the

action of Movants, there is no market for financing to the Debtor in Colorado, and the financial

markets in New York and the East Coast are the most likely source of the Debtor's post-petition

financing. See Bordwin Decl. at~ 16.

61. Notably, the DIP Lender, located in New York, also supports venue in Delaware

(the DIP Lender has advised the Debtor that it intends to file a joinder in the Debtor's opposition

to the transfer of venue). And several of the dues paying members support venue in Delaware.

62. Accordingly, the Debtor's decision to commence this case in the District of

Delaware is entitled to substantial weight and deference and should not be disturbed unless the

equities strongly favor the Movants, which it does not. This factor weighs in favor of a

Delaware forum.

63. As to the second factor, Defendant's Forum Preference, Movants obviously

prefer the District of Colorado. Thus, the second factor superficially appears to weigh in favor of

transferring venue. Upon more careful scrutiny, Movants have not presented evidence to show

that they are unable to participate in Delaware, nor can they because they have already been very

active in the case and the only Colorado-based initial Movants have essentially waived their

preference for the Colorado forum, having subsequently consented to the Delaware forum by

agreeing to serve on the Creditor's Committee, a decision undertaken after the filing of the

Members Motion. Moreover, the Movants don't speak for all creditors, and as noted, dues

paying members and homeowners support Debtor's decision to file in Delaware.

01:12275800.2 21

64. Additionally, the majority of the Debtor's other creditors and members are located

outside of Colorado and thus, under Movants' logic, could face substantial travel burdens if the

Debtor had filed their cases in Colorado. Even Colorado creditors would face long trips by car

or plane, as the Colorado Bankruptcy Court, which is a greater than a two-hour car ride from

Cordillera, is far from being centrally-located. For example, a creditor in Washington, DC

(which include Movants Thomas and Jane Wilner) would be forced to traverse a greater distance

to Colorado than they would to attend a hearing in Wilmington.

65. Finally, Debtor believes that other Club members favor a speedy resolution of the

Debtor's economic rehabilitation in the Delaware venue, and Debtor expects those members to

file Joinders in the Debtor's Opposition to the Venue Motion.

66. The Debtor's alleged secured creditor- whose businesses are national in scope

and thus render them generally agnostic on matters of geography- not surprisingly has already

engaged Delaware counsel and from the Court docket has had no difficulty in making its position

known to the Court. Moreover, it is now a defendant in the adversary proceeding before this

Court (Adversary Number 12-50785) and has filed a joinder in the Member's Motion.

67. This factor is at best neutral or weighs in favor of the Debtor given that Debtor's

preference for a forum takes precedence. See Garden Manor, supra.

68. As to the third factor, whether The Claim Arose Elsewhere, Movant contends

that the claims relate to issues in Colorado. The Debtor does not dispute that the majority of the

assets are located in Colorado. The Debtor contends that the relevant law for the fmancial

restructuring, the post-petition finance, and the corporate restructuring is Delaware. The Debtor

filed in Delaware for the convenience of the parties that the Debtor expects will be instrumental

in the Debtor's reorganization, namely the DIP financing lender, the financial advisor, the

01:12275800.2 22

bankruptcy counsel, the real estate advisor, and expected "exit financing" lenders. Here,

Debtor's goal is to submit a plan that will allow the Debtor to proceed with a recapitalization and

new investment that will allow the Debtor to profitably manage its operation and satisfy claims

of creditors. It is well-settled that "where the issue will be resolved through basic contractual

interpretation and the location of the underlying events is not germane, this factor is neutral."

Visteon, supra, citing DHP Holdings II, 435 B.R. at 273. 7

69. This factor is in favor of the Debtor.

70. As to the fourth factor, Location Of Books And Records, this is also a neutral

factor. Debtor concedes that the computers on which it's electronic "books and records" are

maintained are located in Colorado - but these electronic books and records can be easily

accessed without regard to the location of the computer on which they are maintained. However,

given the goal, and likelihood, of rehabilitation, this is not an important factor here and should

7 It is uncertain to what extent Colorado law does apply to the interpretation of the member documents. In essence, there are four (4) documents or instruments that govern memberships and membership rights and obligations in the Club at Cordillera, namely: (1) The Club at Cordillera Membership Plan; (2) The Club at Cordillera Rules and Regulations; (3) The Club at Cordillera Application for Membership Privileges; and (4) the Addendum to Application for Membership Privileges (Premier Memberships) or Addendum to Application for Membership Privileges (Charter Memberships).

All members of the Club at Cordillera (Signature Golf, National, Gold Medallion, Corporate, Social, Resident Owner and Honorary), were required to execute and deliver to Debtor an Application for Membership Privileges. Similarly, pursuant thereto, all members of the Club at Cordillera are bound by the Membership Plan and the Rules and Regulations, as those are from time to time amended. The Membership Plan, the Rules and Regulations and the Application for Membership Privileges are all silent as to governing law. In other words, neither the Membership Plan, the Rules and Regulations nor the Application for Membership Privileges specify any governing law. Debtor asserts that all members of the Club at Cordillera are bound by these documents, as they are amended from time to time.

Certain Signature Golf Members of the Club at Cordillera elected to convert their Signature Golf Membership to either a Premier Membership or a Charter Membership. In order to make this election, these members executed and delivered to the Debtor an Addendum to Application for Membership Privileges (Premier Memberships) or an Addendum to Application for Membership Privileges (Charter Memberships). In these Addendums, the governing law is specified as Colorado. These documents only apply to a limited number of Signature Golf Members. These are the only documents that specify the governing law. Given that nearly two-thirds of the members are not Colorado residents, there is at least a question of whether Colorado law governs the claims grounded in these documents.

01:12275800.2 23

not be the basis for the transfer of venue of this chapter 11 case. See In re Commonwealth Oil

Ref. Co., 596 F.2d 1239, 1248 (5th Cir. 1979) (holding that "the location of the assets is not as

important where the ultimate goal is rehabilitation rather than liquidation). See also In re Land

Stewards, L.C., 293 B.R. 364, 371 (Bankr. E.D. Va. 2002) .");In re Marina Enterprises, 14 B.R.

327 (Bankr. S.D. Fla. 1981) (venue proper in Florida although debtor's sole asset, undeveloped

land for hotel/casino, was located in New Jersey). Venue should be retained in the location

where the debtor can most successfully reorganize, even if the sole asset is located in another

jurisdiction. See In re Emon, 274 B.R. at 328 (citing In re Garden Manor Assocs., L.P., 99 B.R.

551, 554-55 (Bankr. S.D.N.Y. 1988)).

71. Movants and Alpine place great emphasis on the fact that the Debtor's

headquarters (and thus, their pre-petition executives) are located in Colorado. But, physical

location of a debtor's headquarters (or the computers on which the electronic books and records

are maintained) does not dictate the venue of a chapter 11 reorganization case, especially in light

of the geographic diversity of the majority of Debtor's current creditors and members, the

universe of Debtor's prospective investors, financial partners, and Chief Reorganization Officer.

As recognized by the Court in In reUnited Button Co., 137 F. 668, 672, 673-74 (D. Del. 1904):

01:12275800.2

Proximity of place ofbusiness of the bankrupt to the court entertaining proceedings in bankruptcy, though a circumstance sometimes entitled to weight, is by no means conclusive.

Much stress was laid by counsel for the petitioning creditors upon the fact that the principal place ofbusiness ofthe bankrupt was located in New York City. Assuming this to be the case ... I am unable to perceive that the fact has much materiality or relevancy, as orders and directions may be sent to the manufacturing plants in Massachusetts from the receiver in Wilmington, as well as from one in New York or Chicago.

24

See also Fairfield Puerto Rico, 333 F. Supp. at 1190 ("[T]he location of principal assets and ...

principal place of business or residence does not necessarily control whether transfer should be

ordered."); In re Int'l Filter Corp., 33 B.R. 952, 956 (Bankr. S.D.N.Y. 1983) ("the location of the

[debtor's] assets ... [has] greater weight ifthe proceeding is brought in Chapter 7.").

72. As a matter of geography, Delaware is the convenient forum for east coast

investors, and the available financing for the success of the Debtor's Chapter 11 case. See

Bordwin Decl. at ,-r 16.

73. Moreover, it is well recognized that "Because of the "ease of transporting [paper

and electronic] documents" when discovery is "largely limited to 'paper exchanges"' the physical

location of books and records is frequently considered a "neutral" factor. See In re Viteon, supra,

citing DHP Holdings II, 435 B.R. at 273-274. Movants have not asserted that this matter

"involves excessive or significant paperwork or that that there will be a copious amount of

document production, which, in tum, would make it difficult to produce evidence to this court."

ONCO, 320 B.R. at 580. Movant also has not distinguished the amount of non-electronic books

and records in this case from the amounts considered non-problematic in comparable cases in

this Circuit.

74. This factor is in favor of the Debtor.

75. As to the fifth factor, Convenience Of The Parties, Movants argue that the

majority of creditors, including Debtor's secured creditor Alpine, are located in Colorado. As

stated above, the facts are otherwise: a majority of Debtor's creditors, and a super-majority of

Debtor's "members" are located outside of Colorado.

76. Movants claim Delaware would be inconvenient, ignoring the reality that

Movants and joinder parties have already engaged competent Delaware counsel and have

01:12275800.2 25

appeared before this Court with little inconvenience. Moreover, Movants ignore the reality that

the existing secured creditor, Alpine, to date has been unwilling to work with the Debtor and thus

the Debtor was forced to seek out alternative financing. The only Colorado-based Movants have

availed themselves of a seat on the Creditor's Committee, consenting to the convenience of

forum no matter where this case is pending. The Debtor was unable to find any lenders in

Colorado willing to work with the Debtor. See Bordwin Decl. at 1 10-11. Thus the Debtor has

had to seek out and has found, the DIP Lender, who is located on the east coast, convenient to

the Delaware court. 8

77. A motion is before this Court for approval of the DIP financing which motion is

to be heard on July 19, 2012. The importance of expedited treatment for approval of financing

bodes against transferring venue. Moreover, the Debtor has already retained Delaware counsel

familiar with the case and without an office in Colorado. The Debtor has engaged a real estate

advisor who advises the debtor that the best chance for locating additional investors/buyers - not

just the DIP lender- are on the east coast, not Colorado. See Bordwin Decl. at 1 13. Thus,

Delaware is optimally located to assist in the reorganization. As noted in ONCO, 320 B.R. at

580 and cited by this Court in its In re Visteon decision: "transferring the dispute to another

forum may actually increase the administrative expenses of the estate, lower the amounts

available for distribution ... and sap the temporal and financial resources of the Plaintiff."

Movants have failed to show any concrete evidence that it would be less expensive overall to

handle the reorganization matters of this case anywhere but Delaware. As a result, the

convenience factor is neutral at best for Movants and likely weighs in favor of denial of the

motion.

8 Indeed, all of Debtor's received DIP proposals and interest in take-out finance are with non-Colorado based entities.

01:12275800.2 26

78. Debtor concedes that many- but not the majority- of the creditors are located in

Colorado, a fact not determinative that the cases should be transferred to Colorado. See In re

Indus. Pollution Control Inc., 137 B.R. at 181. The majority of creditors who are owed money,

and the super-majority of members, are located outside Colorado. Based on their moving papers,

four of the six Movants are not residents of Colorado: two are from Illinois, two from

Washington, DC. And both Colorado-based Movants can hardly be heard to complain given that

they volunteered to sit on the creditors committee no matter where this case is venued.

79. No creditor other than Movants have expressed a concern over the Delaware

venue. Other creditors and members support venue in Delaware. In fact the Debtor's key

constituents to its reorganization, including the DIP lender, oppose transfer of venue to Colorado.

80. Attendance at meetings of the Committee and with the Debtor's professionals will

occur irrespective of the venue of the Chapter 11 cases. In many instances, these meetings will

be conducted by conference call. In fact, not one of the Movants stated that they, individually,

intended to appear at hearings. Given that the Colorado bankruptcy court is at least a two-hour

drive for most of the Committee Members, for example, it is unlikely they will attend any routine

hearings. Thus, their claims of inconvenience should not sway this Court as there is simply no

substance behind those claims. This is likely to be particularly true in cases, such as these, where

the Committee members are located in states across the country.

81. Movants profess concern for Colorado creditors, arguing that the Delaware

hinders their participation in this case. While this may be true in a few limited instances, the

venue of this case likely has very little to do with why these creditors are not likely to take an

active participation in this case. Their lack of participation likely stems from the fact that the

size of their claim, if any, is too small to justify the expenditure of time necessary to effectively

01:12275800.2 27

participate in a chapter 11 case. Congress's solution to this problem of collective action was to

provide for the formation of an official committee of unsecured creditors. This Committee has

been formed in this case and the members have not presented any reason why they will need to

personally appear at any of the hearings- indeed, the only two Colorado-based Movants have

joined that committee.

82. It is also unlikely that there will be a need for ancillary administration if

liquidation should result. This factor has little bearing on the case proceeding in Delaware. This

Court is more than capable of conducting sale motions of assets located outside its borders - but,

as set forth herein, and evidenced by the speed and efficiency with which this Debtor acquired a

post-petition DIP commitment, this case demonstrates a strong likelihood of reorganization.

83. As described above, the Debtor maintains that Delaware is more convenient than

Colorado for parties that are most likely to routinely participate in court hearings and that

Colorado would present a substantial travel burden even for Colorado creditors. Thus, this factor

weighs in favor of the Debtor.

84. As to the sixth factor, Convenience Of The Witnesses, this factor is only relevant

to the extent that Movants show that witnesses are "actually unavailable for trial in Delaware."

In re Visteon, 2011 Bankr. LEXIS 4008 (citing Hayes, 312 B.R. at 4 7. ). "Without such a

showing, 'witnesses are presumed to be willing to testify in either forum, despite the

inconvenience that one of the forums would entail."' Id.

85. Movants have not suggested that any relevant witnesses would be unavailable for

trial in Delaware- this can hardly be the case for the two Colorado-based Movants, who have

arguably waived the inconvenience argument by volunteering to participate as members of the

statutory committee, and one of whom is a declarant who is expected to be in Court for the

01:12275800.2 28

hearing on the Motion. Moreover, Movants have not established that they will hereafter be

witnesses in these bankruptcy proceedings. They may or may not. However, "a mere shift of

inconvenience from one party to another will not suffice for a change of venue pursuant to 28

U.S.C. § 1412. Russell, Bankruptcy Evidence Manual, 2002 Ed.,§ 301.33. See In re Campbell,

242 B.R. 740, 747 (Bankr. M.D. Fla. 1999) ("While the Court is concerned for the convenience

of witnesses in every case, this factor concerns the proximity of those witnesses necessary for

administration of this estate.") The "Court needs more than mere allegations ... that witnesses

will be needed and why their inconvenience in traveling to this district outweighs the Debtor's

choice to file its petition here." In re Stony Brook Dev., LLC, No. 06-13781-WIL, 2006 Bankr.

LEXIS 4246, 2006 WL 4547184, at 2 (Bankr. D. Md. Sept. 8, 2006). Other than the alleged

facts asserted in the Class Action case, of which they may testify in the already pending cases in

Colorado (and as to which the Debtor maintains insurance coverage), there is not likely an issue

that arises in the reorganization for which their testimony is even relevant, much less likely.

Therefore, this factor favors keeping the action in Delaware.

86. As to the seventh factor, Enforceability Of The Judgment, Movants have not

even mentioned this factor, have not objected to personal jurisdiction, and have not provided any

reason why a judgment from this Court would not be given full faith and credit in the State of

Colorado, if ever relevant. Therefore, this factor favors keeping the action in Delaware. See

Hechinger, 296 B.R. at 326.

87. As to the eighth factor- Practical Considerations that Would Make the Trial

Easy, Expeditious, or Inexpensive- the Movants have introduced no evidence. Practically, this

Chapter 11 case is about value, enterprise value, and an East Coast based market valuation and

refinance. This factor weighs greatly in favor of venue in Delaware.

01:12275800.2 29

88. As to the ninth factor- the Relative Administrative Difficulty in the Two Fora

Resulting from Congestion of the Court's Dockets- is likely a neutral or weighs in Debtor's

favor as this Court has already demonstrated the alacrity in which it moves matters along.

89. As to the tenth factor- the Public Policies of the Fora- weigh in Favor of this

Court where the emotional, charged dynamic that obviously exists in Colorado can be defused in

a fresh location free oflocal acrimony. See Bordwin Decl. at~ 7-8; Fitchett Decl. at~ 3.

90. As to the eleventh factor- the Familiarity of the Judge with the Applicable State

Law- is likely a neutral issue. Little need be said in response to Movants' assertion that

Colorado is a more "convenient and logical forum" because issues in the Debtor's case will

require application of Colorado law. First, if that is true about the pending litigation brought by

the Members and the Debtor's likely counter-claims, there is no truth to the fact that the

reorganization issues central to the Chapter 11 have anything to do with Colorado law.

Moreover, as to such peripheral issues even if they are relevant, bankruptcy courts regularly deal

with state law issues without any difficulty, and the geographic scope of the Debtor's operations

makes it highly unlikely that Colorado law will be the only state law at issue. Moreover, the

perfection, or lack thereof, of the alleged Alpine security interest in certain personal property will

tum on Delaware law, not Colorado law. Thus, Delaware, is likely better situated to deal with

laws of different states given the more diverse types of creditor bodies in cases filed in

Delaware.9

9 Movants claim that Colorado law governs the rights of members under the membership documents. This is a red herring. First, it may not be true- see footnote 7, supra. Second, this is not the issue in the reorganization, where the relevant law is Delaware or possibly New York law (because the DIP and prospective fmancing partners are New York based, and it is common to expect New York law to govern post-petition fmancing arrangements in a reorganization).

01:12275800.2 30

91. As to the twelfth and final factor -the Local Interest in Deciding Local

Controversies at Home -- Movants have not shown any prejudice to a Delaware forum. In fact,

for reasons discussed, the financial market in Colorado is foreclosed to the Debtor, forcing the

Debtor to look outside the local environment and to East Coast participants. The local

community has turned its back on this Debtor and thus this factor weighs in favor of a Delaware

forum.

CONCLUSION

92. Under the facts of this case, neither the "convenience of the parties" nor the

"interest of justice" either necessitate or justify the transfer of this chapter 11 reorganization case

to Colorado. In fact, the opposite is true. The Movants have not, and will not, sustain their

burden of showing, by a preponderance of the evidence, that the interests of justice or

convenience of parties are better served ifthis case were transferred to Colorado. Indeed, it is

clear that such a transfer, at this juncture, will negatively affect the Debtor's rehabilitation, will

increase the Debtor's expenses relative to its DIP loan and future refinance, and will be of utmost

inconvenience to the Debtor's professionals and likely post-petition financing sources.

01:12275800.2 31

93. Delaware is well-suited to the convenience of the parties in interest that are most

likely to play an active role in this case: the Debtor and its professionals, the Committee (with

both of its 2 Colorado-based Movants having consented to participating in the Committee) and

its professionals, the DIP lender, and other creditors that have retained local Delaware counsel.

And, far from serving the interests of justice, transferring this case would work an injustice on

this estate because it would be costly and disruptive to the Debtor's efforts to reorganize.

Accordingly, the Debtor respectfully requests that this Court deny the Venue Motion, allow the

Debtor to proceed with its efficient rehabilitation in this Court, and grant the Debtor such other

and further relief as is necessary and appropriate under the circumstances

Dated: July Jj_, 2012

01:12275800.2

FOLEY & LARDNER LLP Christopher Celentino (CA No. 131688) Mikel Bistrow (CA No. 1 02978) 402 West Broadway, Suite 2100 San Diego, California 921 01 Telephone: (619) 234--6655 Facsimile: (619) 234-3510

-and-

YOUNG CONAWAY STARGATT & TAYLOR, LLP

(72 ~ ~ Michael R. Nof(N0:3526) Joseph M. Barry (No. 4221) Donald J. Bowman, Jr. (No. 4383) Kenneth J. Enos (No. 4544) Rodney Square 1000 N. King Street Wilmington, Delaware 19801 Telephone: (302) 571-6600 Facsimile: (302) 571-1253

Proposed Counsel for Debtor and Debtor in Possession

32