of the Official Committee of Unsecured Creditors (Dec 2, 2013)

Looks like DL is trying hard to work around the provisions already in place pursuant to the JV agreement whereby if TPL fails to make its contributions to PDS, Patriot gets a larger percentage. (See footnote 5 below)

the Debtor has proposed the November Plan which patently is in

conflict with the objectives of the Bankruptcy Code as it is geared only towards funneling disbursements to the Debtor’s insiders and preserving exclusivity. It purports to grant to the Committee the right to receive 100% of revenues from the MMP Portfolio and to temporarily allow the Committee to fill TPL’s seat on the PDS board so that “all control over the commercialization and licensing of the MMP Portfolio (and what is paid to entities related to TPL and Mr. Leckrone from MMP proceeds) will then be in the hands of OCC representatives).”

…..Yet, the November Plan provides (a) for Alliacense to continue to drain proceeds that would otherwise be distributable to TPL with no ability by the Committee to terminate Alliacense [November Plan, § 4.09], and (b) that revenue from the MMP Portfolio does not include fees and expenses paid to TPL by PDS. [November Plan, § 1.29]. The November Disclosure Statement does not describe these fees and expenses, nor their amounts. Instead, the November Plan explicitly grants TPL the right, in its business judgment, to continue to pay Alliacense and, moreover, to enter into new agreements to pay additional amounts towards patent litigation and prosecution efforts. [November Plan, § 4.09]. In other words, the November Plan empowers one entity wholly-owned by Daniel Leckrone, in its sole discretion, to pay another entity wholly-owned by Daniel Leckrone, without the ability for any party in interest to challenge or terminate such payments.

22. To exacerbate matters, the November Plan calls for the Committee to be dissolved as of its “Effective Date,” ostensibly minimizing the monitoring of TPL’s compliance with the

November Plan post-confirmation. [November Plan, §10.15]. Finally, the November Plan provides that TPL need not comply with funding requirements provided for in the agreements between Patriot and PDS and, moreover, that Daniel Leckrone be restored to the PDS Management Committee if PDS requires TPL to provide necessary funding [November Plan, § 4.08]. This proposed provision is patently improper and is more appropriately governed by applicable agreements between PDS and TPL5, but, regardless, reeks of the Debtor’s coercive attempts to circumvent its obligations. The November Disclosure Statement does not discuss the effect of the various agreements described on its pages 46-49 and 62-69 would have on the ability of the Committee representative of the PDS board to exert control over the commercialization of the MMP Portfolio. In short, the November Plan, despite the claims of the Summary, does not provide for control of all commercialization and

licensing of the MMP Portfolio.

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5 Indeed, the Committee believes that the applicable Joint Venture Agreement precludes the arrangement proposed in the November Plan. For example, if PDS requires funding from a TPL ownership interest that is unpaid and instead must be funded by Patriot, TPL’s ownership interest necessarily will be reduced.

http://photos.imageevent.com/banos/tplbk/298%20Objection%20Of%20Official%20Committee%20Of%20Unsecured%20Creditors%20To%20Debtorqus%20Disclosure%20Statement%20Re%20TPL%20Plan%20Of%20Reorganization%20Filed%20by%20Creditor%20Committee%20Official%20Committee%20Of%20Unsecured%20Creditors.pdf