aL INITED STATES OF meet (if 5 ivi > Dcivir Action 85-4929 Me NOY 14.2 V 14 I99. isu IGARHOUSE oe 1 ay »” Allentown, PA October 6, detandant?— 2 Mong Cleas 00 eee cies 2. Clery TRANSCRIPT OF HEARING BEFORE THE HONORABLE EDWARD N. CAHN UNITED STATES DISTRICT JUDGE UNITED STATES DISTRICT co} EASTERN DISTRICT OF PENNSYLVANIA |APPEARANCES: [For the Government: DAVID STREET, ESQUIRE US Department of Justice P.O. Box 7611 Washington, DC 20014 [For First Lehigh Bank: DAVID L. BRAVERMAN, ESQUIRE ANNA HOM, ESQUIRE Fellheimer, Eichen, Braverman & Kaskey One Liberty Place, 21st Floor Philadelphia, PA 19103-7334 IFor LHTW: CARL A. SOLANO, ESQUIRE KAETHE B. SCHUMACHER, ESQUIRE NICHOLAS J. LE PORE, III, ESQUIRE Schnader, Harrison, Segal & Lewis 1600 Market Street, Suite 3600 Philadelphia, PA 19103-4252 Audio Operator: ANTHONY TUMMINELLO [Transcribed by: DIANA DOMAN TRANSCRIBING P.O. Box 67 Audubon, New Jersey 08106 Off.: (609) 547-2506 Fax.: (609) 547-8973 corded by electronic sound recording; transcript lings re rroceeding: cna oduced by transcription7 8 10 1 12 13 14 15 16 7 18 19 20 21 22 23 24 25 Solano - Argument Page 5] MR. SOLANO: On the PCB matter. THE COURT: Yes. MR. SOLANO: Yes. Well, Your Honor, the owners are in bankruptcy as you know and there has been a lot of interest in property on the Delaware River waterfront by companies that loperate gambling establishments ever since there has been |discussion of the possibility of river boat gambling in Pennsylvania. I represent one of those companies, LHTW. Another company that has been involved in this case of the same| type is the Trump organization. And, one of the things that you see throughout the briefs and we've heard throughout this case is that my client ILHTW worked very hard, very aggressively to try to obtain this property on the Delaware River waterfront through the bankruptcy. THE COURT: Whatever Trump can do, your clients -- MR. SOLANO: We can do better. THE COURT: -- can do better. MR. SOLANO: And, Your Honor, that is true. My client laid seek this property very aggressively. And, Your Honor, as |, memult, there was the approval of « plan of confirmation that leertea SipkasteemSothauprépantiyttokbHIWepurstsnt to an-agree” Inent of sale that was approved by the Court with that plan. So, what happened? What happened, Your Honor, is that after LHTW gained access to this property and after it had an10 n 12 Solano - Argument = age 6 opportunity to inspect it, it found that the environmental Jcondition of this property was far worse than anything that it Inad been led to believe, -- THE COURT: Wasn’t there -- MR. SOLANO: -- anything it had believed. THE COURT: Wasn't there an as-is provision in the jagreement of sale or in the plan? MR. SOLANO: There was an as-is provision in the lagreement of sale. The as-is provision says that upon closing the property will be taken as is. And, part of this deal, Your Honor, was that LHTW, upon closing and gaining title to the property, would have responsibility for cleaning up all of the ladverse economic conditions on that property. The question here is did LHTW have to go forward with |closing?) We agree. One of the arguments that we keep hearing lin this case is there are no warranties of the condition of the |property. That’s true. We are not saying that if LHTW took jtstre to the property that at that point if it found there was some different environmental condition it could somehow rescind Ithe sale or try to get out of the deal. At that point, it was bound. The question is, did) LHTW have the right to withdraw lchese environmental.conditions? »,—Environmentel conditions that rere so-bad-that dtcturnedout.that«theEPA, which had agreed