UNITED STATES BANKRUPTCY COURT

FOR THE MIDDLE DISTRICT OF TENNESSEE

NASHVILLE DIVISION

IN RE:

Chapter 11

CS DIP, LLC (f/k/a Church Street Health Management, LLC)

Case No. 12-01573

SSHC DIP, LLC (f/k/a Small Smiles Holding Company, LLC)

Case No. 12-01574

FNY DIP, LLC (f/k/a FORBA NY, LLC),

Case No. 12-01575

Debtors

Jointly Administered
Under Case No.: 12-01573

OBJECTIONS DUE BY: MAY 26, 2015.

HEARING DATE: JUNE 2, 2015 AT 9:00 A.M. IN COURTROOM 2, CUSTOMS
HOUSE, 701 BROADWAY, NASHVILLE, TENNESSEE 37203
OBJECTION OF DANNY DEROSE, EDWARD J. DEROSE, MICHAEL A. DEROSE,
WILLIAM A. MUELLER, MICHAEL W. ROUMPH, RICHARD B. LANE AND ADOLPH R.
PADULA TO MOTION OF THE LIQUIDATING TRUSTEE FOR ORDER (A) APPROVING
SETTLEMENT WITH INSURERS, (B) GRANTING AN INJUNCTION IN FAVOR OF THE
INSURERS, AND (C) APPROVING TRUST DISTRIBUTION PROCEDURES
Danny DeRose, Edward J. DeRose, Michael A. DeRose, William A. Mueller, Michael
W. Roumph, Richard B. Lane and Adolph R. Padula (the Objectors), by and through counsel,
file this Objection to the Motion of the Liquidating Trustee for Order (A) Approving Settlement
with Insurers, (B) Granting an Injunction in Favor of the Insurers, and (C) Approving Trust
Distribution Procedures (the Motion) and in support thereof state as follows:
1.

On May 6, 2015, Dan B. Lain as Liquidating Trustee (the Liquidating Trustee)

filed the Motion.

2.

The Objectors are individuals who were owners of certain Dental Clinics as more

fully set forth below. The Objectors were served by mail on May 11, 2015.

Service was

effective only 23 days before the hearing scheduled on June 2, 2015.

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3.

The Motion seeks approval of a settlement with certain insurers of the Debtors.

4.

The Settlement and Release Agreement attached to the Motion (Settlement and

Release Agreement) contains the following defined term:

Insureds means SSHC, any Dental Clinic and any of the insureds,
named insureds and additional insureds scheduled at any time under any
of the SSHC Policies. Notwithstanding the foregoing, Insureds shall not
include any of the following individuals: Danny DeRose, Edward J.
DeRose, Michael A. DeRose, William A. Mueller, Michael W. Roumph,
Richard B. Lane or Adolph R. Padula.
While the Motion purports to exclude the Objectors from the definition of Insureds, the
Objectors are in fact insureds under some or all of the policies of insurance that are the subject of
the Motion and Settlement and Release Agreement.
5.

Attached to the Settlement and Release Agreement is a [Proposed] Order (A)

Approving Settlement with National Union Fire Insurance Company of Pittsburgh, PA, (B)
Granting Injunction and (C) Approval of Trust Distribution Procedures (the Proposed Order).
6.

Paragraph 6 of the Proposed Order provides as follows:

As provided in the Agreement, upon payment by the Insurers of the
Settlement Amount and regardless of any subsequent events: (1) all
provisions of the Agreement will be final and binding; (2) the Entities
Policies are exhausted by payment of the Settlement Amount, which is in
excess of the full amount of the aggregate coverage limits of all the
Entities Policies combined; (3) each of the SSHC Policies are deemed to
be bought-out by the Insurers free and clear of all other interests pursuant
to the Plan and/or Section 363 of the Bankruptcy Code, as applicable; (4)
the Insureds and Claimants are each deemed to have released the Insurers
from any further payment obligations under the SSHC Policies; (5) any
claims for coverage relating to the Small Smiles Claims under the NonSSHC Policies are deemed to be bought out by the Insurers free and clear
of all interests pursuant to the Plan and/or Section 363 of the Bankruptcy
Code, as applicable; and (6) the Clinic Dentists and Claimants are each
deemed to have released the Insurers from any further payment obligations
under the Non-SSHC Policies for any claims for coverage relating to the
Small Smiles Claims.

7.

Paragraph 8 of the Proposed Order provides as follows:

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Upon payment of the Settlement Amount by the Insurers, all Persons are
hereby permanently and forever barred, estopped and enjoined from
asserting against the Insurers any Settled Claims, in any way whatsoever,
whether known or unknown, whether foreseen or unforeseen, whether
contingent or actual, whether direct or indirect, liquidated or unliquidated,
whether statutory or common law, whether asserted or unasserted and
whether based on contract, negligence, bad faith, willful, wanton or
malicious conduct, or any other theory in law or equity concerning, arising
from or relating to any actual or alleged past, present or future act,
omission, defect, incident, event or circumstance from the beginning of
the world to the Effective Date, including but not limited to claims for
contribution or indemnity, in any way relating to or in connection with (i)
the Debtors, (ii) any dental treatment rendered or failed to be rendered at
any of the dental clinics that was under or is claimed to have been under a
management agreement with the Debtors during the effective dates of the
SSHC Policies and/or is scheduled as an insured, named insured or
additional insured under any of the Policies, (iii) the Agreement and/or the
Policies.
8.

The Objectors believe that some or all of the Claimants will continue pursuing

claims against the Objectors which claims are covered by the insurance policies that are the
subject of the Motion and Settlement and Release Agreement.
9.

National Union Fire Insurance Company of Pittsburgh, P.A. (National Union)

issued to Small Smiles Holding Company (SSHC), as first named insured, certain insurance
policies affording dental professional liability insurance coverage.

Included in those policies

was National Union Dentist Liability policy No. DNU3375848 (the Entities Policy).
10.

As set forth more thoroughly below, Danny DeRose, Edward J. DeRose, DDS,

Michael A. DeRose, DDS, William A. Mueller, DMD, Michael W. Roumph, Richard B. Lane
and Adolph R. Padula, DDS qualify as insureds under at least one of the policies issued to SSHC
by National Union.
11.

The Entities Policy is a claims made policy that provides, among other coverage,

Professional Liability Coverage. The retroactive date with respect to the Professional Liability
Coverage is February 1, 2001.

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12.

Upon information and belief, SSHC purchased a Supplemental Extended

Reporting Period Endorsement in connection with the Entities Policy, which, in relevant part,
modified the Professional Liability Coverage Part under that policy. Upon information and
belief, the Supplemental Extended Reporting Period Endorsement provides for a period of
unlimited duration during which claims arising from dental incidents that occurred after
the retroactive date (i.e., February 1, 2001) and before the end of the policy period (i.e.,
September 26, 2010) may be reported under the Entities Policy.
13.

Attached as Exhibit A is a letter dated September 13, 2011 (September 13, 2011

Letter) from AIG (formerly known as Chartis, the corporate parent of National Union) to Dr.
Padula. This 29-page letter discusses the coverage under the Entities Policy and under National
Union Policy DNU6360128 (the Individuals Policy). National Union agreed to defend Dr.
Padula under the Entities Policy under a reservation of rights.
14.

Additionally, attached as Exhibit B is a letter dated May 24, 2013 (May 24, 2013

Letter) from AIG (the corporate parent of National Union) to Dr. Padula. This 34-page letter
also discusses the coverage under the Entities Policy and under the Individuals Policy. By this
letter, National Union, again, agreed to defend Dr. Padula under the Entities Policy under a
reservation of rights. National Union has not changed its position.
15.

Adolph R. Padula, DDS is a named insured under the Entities Policy. Item 1 of

the Declarations of the Entities Policy identifies the First Named Insured as Small Smiles
Holding Company.

The Entities Policy further includes a Schedule of Named Insureds

Endorsement (unnumbered), which amends Item 1 of the Declarations to include as Named

Insureds those listed on file with the agent, including Adolph R. Padula, DDS.

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16.

In the September 13, 2011 Letter and the May 24, 2013 Letter, National Union

acknowledged Dr. Padula was an insured under the Entities Policy and that the allegations being
made against Dr. Padula were potentially covered under the Entities Policy.

National Union

agreed to defend Dr. Padula under the Professional Liability Coverage Part of the Entities Policy
under a reservation of rights in civil actions styled:

Shantel Johnson, as parent and natural guardian of infant Kevin Butler; Veronica

Robinson, as parent and natural guardian of infant Ariana Flores; Demita Garrett, as
parent and natural guardian of infant IYana Garcia Santos; Kathryn Justice, as parent
and natural guardian of infant BreYonna Howard; Elizabeth Lorraine, as parent and
natural guardian of infant Shiloh Lorraine Jr.; Laporsha Shaw, as parent and natural
guardian of infant Alexis Parker; Robert Ralston, as parent and natural guardian of infant
Brandie Ralston; Katrice Marshall, as parent and natural guardian of infant Lesana Ross;
Tiffany Henton, as parent and natural guardian of infant Corey Smith; Janet Taber, as
parent and natural guardian of infant Jon Taber v. FORBA Holdings, LLC n/k/a Church
Street Health Management, LLC; FORBA N.Y., LLC; FORBA, LLC n/k/a LICSAC,
LLC; FORBA NY, LLC n/k/a LICSAC NY, LLC; DD Marketing, Inc.; DeRose
Management, LLC; Small Smiles Dentistry of Rochester, LLC; Daniel E. DeRose;
Michael A. DeRose, D.D.S.; Edward J. DeRose, D.D.S.; Adolph R. Padula, D.D.S.;
William A. Mueller, D.D.S.; Michael W. Roumph; Shilpa Agadi, D.D.S.; Khoury Bonds,
D.D.S.; Ismatu Kamara, D.D.S.; Keivan Zoufan, D.D.S.; Kathleen Poleon, D.D.S.; Sonny
Khanna, D.D.S.; Kim Pham, D.D.S.; Doug Gardner, D.D.S.; Gary Gusmerotti, D.D.S.;
Ellen Nam, D.D.S. and Lawana Fuquay, D.D.S.; and

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Timothy Angus, as parent and natural guardian of infant Jacob Angus; Jessalynn

Purcell, as parent and natural guardian of infant Isaiah Berg; Brain Cater, as parent and
natural guardian of infant Briana Carter; April Ferguson, as parent and natural guardian
of infant Joseph Ferguson; Sherain Rivera, as parent and natural guardian of infant
Shadaya Gilmore; Tonya Potter, as parent and natural guardian of infant Desiraee Hager;
Nancy Ward, as legal custodian of infant Aalyiarose Labombard-Black; Nancy Ward, as
legal custodian of infant Manual Laborde Jr.; Jennifer Bacon, as parent and natural
guardian of infant Ashley Parker; and Courtney Conrad, as parent and natural guardian of
infant Zakary Wilson v. FORBA Holdings, LLC n/k/a Church Street Health
Management, LLC; FORBA N.Y., LLC; FORBA, LLC n/k/a LICSAC, LLC: FORBA
NY, LLC n/k/a LICSAC NY, LLC; DD Marketing, Inc.; DeRose Management, LLC;
Small Smiles Dentistry of Albany, LLC; Albany Access Dentistry, PLLC; Daniel E.
DeRose; Michael A. DeRose, D.D.S.; Edward J. DeRose, D.D.S.; Adolph R. Padula,
D.D.S.; William A. Mueller, D.D.S.; Michael W. Roumph; Maziar Izadi, D.D.S.; Evan
Goldstein, D.D.S.; Keerthi Golla, D.D.S.; Nassef Lancen, D.D.S.; Wadia Hanna, D.D.S.;
and Bernice Little-Mundle, D.D.S.
National Union appointed counsel to represent Dr. Padula in the actions.
17.

The Entities Policy also includes an Additional Insured Endorsement

(unnumbered), which modifies the insurance provided and amends Section III of the Entities
Policy (Who is an Insured) to include as an insured the person or entity shown in the Schedule.
Included in the Schedule, among others, are the following dental clinics:

6th St. of Denver Dental Clinic, PC;

Albany Access Dentistry, PLLC;
Childrens Dental Clinic of Charleston, LLC;
Childrens Dental Clinic of Florence;

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Childrens Dental Clinic of Gary, LLC;

Childrens Dental Clinic of Oklahoma City, PLLC;
Childrens Dental Clinic of Thornton, PC;
Childrens Dental Clinic of Tucson, LLC;
Childrens Dental Clinic of Tulsa, PLLC;
Childrens Medicaid Dental Clinic, PC;
Small Smiles Dental Centers of Columbia, LLC formerly Childrens Medicaid
Dental of Columbia, LLC;
Small Smiles Dental Centers of Greenville, LLC formerly Childrens
Medicaid Dental of Greenville, LLC;
Dental Clinic of Indianapolis at Eagledale Plaza, LLC;
DeRose Childrens Dental Clinic, PC;
Small Smiles Dental Clinic of Boise, PLLC;
Small Smiles Dentistry for Children Albuquerque, PC;
Small Smiles Dentistry for Children, P.C.;
Small Smiles Dentistry for Children, Santa Fe, PC;
Small Smiles Dentistry of Rochester, LLC;
Small Smiles Dentistry of Syracuse, LLC;
Small Smiles of Cincinnati, LLC;
Small Smiles of Columbus, LLC;
Small Smiles of Dayton, LLC;
Small Smiles of East Albuquerque, PC;
Small Smiles of Fort Wayne, LLC;
Small Smiles of Lawrence, LLC;
Small Smiles of Lynn, LLC;
Small Smiles of Mattapan, LLC;
Small Smiles of Myrtle Beach, LLC;
Small Smiles of Reno, LLC;
Small Smiles of Roselawn, LLC;
Small Smiles of Spartanburg, LLC;
Small Smiles of Springfield, LLC;
Small Smiles of Toledo, LLC;
Small Smiles of Worcester, LLC;
Smile High Dentistry for Children, PC; and
The Childrens Dental Clinic of Indianapolis, LLC.

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18.

Section III of the Entities Policy further provides that members of a limited

liability company and executive officers, directors and shareholders of a dental corporation are
insureds. More specifically, Section III provides as follows:
III.
A.

WHO IS AN INSURED
If you are shown in the Declarations as:

3.
A limited liability company, you and your members are
insureds, but only with respect to the conduct of your dental
business;
4.
A dental corporation or an organization other than a
partnership, joint venture, or limited liability company, you are an
insured but only with respect to the conduct of your dental
business. Your executive officers, directors and shareholders are
insureds, but only with respect to the conduct of your dental
business.
19.

At times, between the period of February 1, 2001 and September 26, 2006, Danny

DeRose was a member, shareholder, director and/or officer of the following clinics:

Childrens Medicaid Dental Clinic, PC;

Childrens Dental Clinic of Tucson, LLC;
Small Smiles of Lawrence, LLC;
Small Smiles of Lynn, LLC;
Small Smiles of Mattapan, LLC;
Small Smiles of Springfield, LLC;
Small Smiles of Worcester, LLC;
Childrens Dental Clinic of Charleston, LLC;
Small Smiles Dental Centers of Columbia, LLC formerly Childrens Medicaid
Dental of Columbia, LLC;
Childrens Dental Clinic of Florence, LLC;
Small Smiles Dental Centers of Greenville, LLC formerly Childrens
Medicaid Dental of Greenville, LLC;
Small Smiles of Myrtle Beach, LLC; and
Small Smiles of Spartanburg, LLC.

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20.

At times, between the period of February 1, 2001 and September 26, 2006,

Edward J. DeRose, DDS was a member, shareholder, director and/or officer of the following
clinics:

21.

Childrens Medicaid Dental Clinic, PC;

Childrens Dental Clinic of Tucson, LLC;
DeRose Childrens Dental Clinic, PC;
Small Smiles Dentistry for Children, P.C;
Smile High Dentistry for Children, PC;
6th St. of Denver Dental Clinic, PC;
Childrens Dental Clinic of Thornton, PC;
Small Smiles of Lawrence, LLC;
Small Smiles of Lynn, LLC;
Small Smiles of Mattapan, LLC;
Small Smiles of Springfield, LLC;
Small Smiles of Worcester, LLC;
Childrens Dental Clinic of Charleston, LLC;
Small Smiles Dental Centers of Columbia, LLC formerly Childrens Medicaid
Dental of Columbia, LLC;
Childrens Dental Clinic of Florence, LLC;
Small Smiles Dental Centers of Greenville, LLC formerly Childrens
Medicaid Dental of Greenville, LLC;
Small Smiles of Myrtle Beach, LLC; and
Small Smiles of Spartanburg, LLC.

At times, between the period of February 1, 2001 and September 26, 2006,

Michael A. DeRose, DDS was a member, shareholder, director and/or officer of the following
clinics:

6th St. of Denver Dental Clinic, PC;

Childrens Dental Clinic of Charleston, LLC;
Childrens Dental Clinic of Florence;
Childrens Dental Clinic of Gary, LLC;
Childrens Dental Clinic of Oklahoma City, PLLC;
Childrens Dental Clinic of Thornton, PC;
Childrens Dental Clinic of Tucson, LLC;
Childrens Dental Clinic of Tulsa, PLLC;

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22.

Childrens Medicaid Dental Clinic, PC;

Small Smiles Dental Centers of Columbia, LLC formerly Childrens Medicaid
Dental of Columbia, LLC;
Small Smiles Dental Centers of Greenville, LLC formerly Childrens Medicaid
Dental of Greenville, LLC;
Dental Clinic of Indianapolis at Eagledale Plaza, LLC;
DeRose Childrens Dental Clinic, PC;
Small Smiles Dentistry for Children Albuquerque, PC;
Small Smiles Dentistry for Children, P.C.;
Small Smiles Dentistry for Children, Santa Fe, PC;
Small Smiles of East Albuquerque, PC;
Small Smiles of Fort Wayne, LLC;
Small Smiles of Lawrence, LLC;
Small Smiles of Lynn, LLC;
Small Smiles of Mattapan, LLC;
Small Smiles of Myrtle Beach, LLC;
Small Smiles of Spartanburg, LLC;
Small Smiles of Springfield, LLC;
Small Smiles of Worcester, LLC;
Smile High Dentistry for Children, PC; and
The Childrens Dental Clinic of Indianapolis, LLC.
At times, between the period of February 1, 2001 and September 26, 2006,

William A. Mueller, DMD was a member, shareholder, director and/or officer of the following
clinics:

6th St. of Denver Dental Clinic, PC;

Childrens Dental Clinic of Charleston, LLC;
Childrens Dental Clinic of Florence;
Childrens Dental Clinic of Gary, LLC;
Childrens Dental Clinic of Oklahoma City, PLLC;
Childrens Dental Clinic of Thornton, PC;
Childrens Dental Clinic of Tucson, LLC;
Childrens Dental Clinic of Tulsa, PLLC;
Childrens Medicaid Dental Clinic, PC;
Small Smiles Dental Centers of Columbia, LLC formerly Childrens Medicaid
Dental of Columbia, LLC;

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23.

Small Smiles Dental Centers of Greenville, LLC formerly Childrens

Medicaid Dental of Greenville, LLC;
Dental Clinic of Indianapolis at Eagledale Plaza, LLC;
Small Smiles of Fort Wayne, LLC;
Small Smiles of Lawrence, LLC;
Small Smiles of Lynn, LLC;
Small Smiles of Mattapan, LLC;
Small Smiles of Myrtle Beach, LLC;
Small Smiles of Spartanburg, LLC;
Small Smiles of Springfield, LLC;
Small Smiles of Worcester, LLC; and
The Childrens Dental Clinic of Indianapolis, LLC.

At times, between the period of February 1, 2001 and September 26, 2006,

Michael W. Roumph was a member, shareholder, director and/or officer of the following clinics:

24.

Small Smiles of Lawrence, LLC;

Small Smiles of Lynn, LLC;
Small Smiles of Mattapan, LLC;
Small Smiles of Springfield, LLC; and
Small Smiles of Worcester, LLC.

At times, between the period of February 1, 2001 and September 26, 2006,

Richard B. Lane was a member, shareholder, director and/or officer of the following clinics:

25.

Small Smiles of Lawrence, LLC;

Small Smiles of Lynn, LLC;
Small Smiles of Mattapan, LLC;
Small Smiles of Springfield, LLC; and
Small Smiles of Worcester, LLC.

At times, between the period of February 1, 2001 and September 26, 2006,

Adolph R. Padula, DDS was a member, shareholder, director and/or officer of the following
clinics:

6th St. of Denver Dental Clinic, PC;

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Albany Access Dentistry, PLLC, formerly Small Smile Dentistry of Albany,

LLC;
Childrens Dental Clinic of Charleston, LLC;
Childrens Dental Clinic of Florence;
Childrens Dental Clinic of Gary, LLC;
Childrens Dental Clinic of Oklahoma City, PLLC;
Childrens Dental Clinic of Thornton, PC;
Childrens Dental Clinic of Tucson, LLC;
Childrens Dental Clinic of Tulsa, PLLC;
Childrens Medicaid Dental Clinic, PC;
Small Smiles Dental Centers of Columbia, LLC formerly Childrens Medicaid
Dental of Columbia, LLC;
Small Smiles Dental Centers of Greenville, LLC formerly Childrens
Medicaid Dental of Greenville, LLC;
Dental Clinic of Indianapolis at Eagledale Plaza, LLC;
Small Smiles Dental Clinic of Boise, PLLC;
Small Smiles Dentistry for Children Albuquerque, PC;
Small Smiles Dentistry for Children, P.C.;
Small Smiles Dentistry for Children, Santa Fe, PC;
Small Smiles Dentistry of Rochester, LLC;
Small Smiles Dentistry of Syracuse, LLC;
Small Smiles of Cincinnati, LLC;
Small Smiles of Columbus, LLC;
Small Smiles of Dayton, LLC;
Small Smiles of East Albuquerque, PC;
Small Smiles of Fort Wayne, LLC;
Small Smiles of Lawrence, LLC;
Small Smiles of Lynn, LLC;
Small Smiles of Mattapan, LLC;
Small Smiles of Myrtle Beach, LLC;
Small Smiles of Reno, LLC;
Small Smiles of Roselawn, LLC;
Small Smiles of Spartanburg, LLC;
Small Smiles of Springfield, LLC;
Small Smiles of Toledo, LLC;
Small Smiles of Worcester, LLC;
Smile High Dentistry for Children, PC; and
The Childrens Dental Clinic of Indianapolis, LLC.

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26.

Based on the foregoing, Danny DeRose, Edward J. DeRose, DDS, Michael A.

DeRose, DDS, William A. Mueller, DMD, Michael W. Roumph, Richard B. Lane and Adolph
R. Padula, DDS, as members and/or executive officers, directors and/or shareholders of various
Small Smiles clinics which are additional insureds under the Entities Policy, qualify and are
entitled to insured status and have a right to coverage, including defense and indemnification,
under the Entities Policy.
27.

Small Smiles Claims, as defined in the Settlement and Release Agreement, have

been asserted against Danny DeRose, Edward J. DeRose, DDS, Michael A. DeRose, DDS,
William A. Mueller, DMD, Michael W. Roumph, Richard B. Lane and Adolph R. Padula, DDS
by or on behalf of certain Claimants and additional Small Smiles Claims may be asserted. The
Small Smiles Claims that have been asserted fall within the coverage period of the Entities
Policy.
28.

As discussed above, despite a SSHC Policy affording coverage to Danny DeRose,

Edward J. DeRose, DDS, Michael A. DeRose, DDS, William A. Mueller, DMD, Michael W.
Roumph, Richard B. Lane and Adolph R. Padula, DDS, the Settlement and Release Agreement
expressly excludes said individuals from the definition of Insureds.
29.

By excluding Danny DeRose, Edward J. DeRose, DDS, Michael A. DeRose,

DDS, William A. Mueller, DMD, Michael W. Roumph, Richard B. Lane and Adolph R. Padula,
DDS from the definition of Insureds under the Settlement and Release Agreement, the
Settlement and Release Agreement purports to terminate their rights to assert a claim against
National Union based upon, arising out of or in any way relating to the Small Smiles Claims,
thus cutting off any contractual rights or interest they may have under the Entities Policy.

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30.

Under the Settlement and Release Agreement, upon payment of the Settlement

Amount the Entities Policies are exhausted, each of the SSHC policies shall be deemed to be
bought out by the Insurers with all rights, title and interest in the Policies, free and clear of all
interests. More specifically, the Proposed Order approving the settlement with National Union
provides that all claims against the Insurer under the insurance policies are permanently barred
and enjoined, and any claims are channeled to the proceeds of the Settlement and Release
Agreement.

The result of the foregoing would be to preclude Danny DeRose, Edward J.

DeRose, DDS, Michael A. DeRose, DDS, William A. Mueller, DMD, Michael W. Roumph,
Richard B. Lane and Adolph R. Padula, DDS, who qualify as insureds under at least one of the
SSHC Policies, to bring any claim for defense or indemnification under the policies of insurance
to which they are entitled.
31.

The Objectors fear that the Claimants and the insurance companies will try to use

the Settlement and Release Agreement to deprive Objectors of contractual rights they have under
the various insurance policies and subject them to the risk of continued litigation; all without any
proceeding wherein they are parties where they will have an opportunity to have their contractual
rights adjudicated. Basic principles of due process require that before the contractual rights of
Objectors can be affected the Objectors must be joined as party in an adversary proceeding and
have an opportunity to have their rights adjudicated in such adversary proceeding.
32.

Inasmuch as the Objectors are not parties to this action, the Settlement and

Release Agreement cannot be binding upon them. As a part of that, the Objectors retain all
rights against the insurance companies. No insurance company, including National Union, can
unilaterally terminate the contractual rights of the Objectors.

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33.

Objectors pray that the Court deny the Motion and refuse to approve the

Settlement and Release Agreement.

34.

Alternatively, if the Settlement and Release Agreement is amended to include the

Objectors as Insureds and the Proposed Order is amended to provide that the Objectors are
released and the injunction contained in the Proposed Order will also protect them such that no
claims can be asserted against the Objectors then the Objectors will withdraw this Objection.
WHEREFORE, the Objectors pray that the Court deny the Motion for the reasons set
forth above and provide the Objectors such other and further relief as is just and proper.
Respectfully submitted,

NEAL & HARWELL, PLC

By: /s/ Marc T. McNamee
James R. Kelley, BPR #5525
Marc T. McNamee, BPR #6634
Stephen M. Montgomery, BPR #26489
150 Fourth Avenue North, Suite 2000
Nashville, TN 37219
(615) 244-1713 telephone
(615) 726-0573 facsimile
jkelley_br@nealharwell.com
mmcnamee_br@nealharwell.com
smontgomery@nealharwell.com
Counsel for Danny DeRose, Edward J. DeRose,
Michael A. DeRose, William A. Mueller,
Michael W. Roumph, Richard B. Lane and
Adolph R. Padula

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CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing has been served by the
Courts CM/ECF system on all parties registered to receive electronic notice in this case on this
26th day of May, 2015.
I further certify that a true and correct copy of the foregoing has been served by first-class
mail, postage prepaid, on the following on this 26th day of May, 2015:
John H. Rowland
Baker, Donelson, Bearman,
Caldwell & Berkowitz, PC
Baker Donelson Center
Suite 800
211 Commerce Street
Nashville, Tennessee 37201

Lawrence Klein
Sedgwick LLP
Brookfield Place
225 Liberty Street, 28th Floor
New York, New York 10281

/s/ Marc T. McNamee

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