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FILED: NEW YORK COUNTY CLERK 11/26/2012

NYSCEF DOC. NO. 3346-2

INDEX NO. 602825/2008 RECEIVED NYSCEF: 11/26/2012

Exhibit 13

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SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: TRIAL TERM PART 3 - - - - - - - - - - - - MBIA INSURANCE CORPORATION,
Plaintiff,

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- against -

COUNTRYWIDE COUNTRYWIDE COUNTRYWIDE COUNTRYWIDE and BANK OF

HOME LOANS, INC., SECURITIES CORP., FINANCIAL CORP., HOME LOANS SERVICING., L.P., AMERICA CORP.,
Defendants.

- - - - - - - - - - - - - - - - - - - - - - - Index No. 602825/08

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November 15, 2012 60 Centre Street New York, New York 10007
B E F 0 R E:

THE HONORABLE EILEEN BRANSTEN, Justice.

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APPEARANCES: McCUSKER ANSELMI ROSEN CARVELLI Attorneys at Law 210 Park Avenue, Suite 301 Florham Park, New Jersey 07952 BY: BRUCE S. ROSEN, ESQ. MBIA INSURANCE CORPORATION Plaintiff 113 King Street Armonk, New York 10504 BY: JONATHAN C. HARRIS, ESQ. Deputy General Counsel (Appearances continued on next page.)

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A P P E A RAN C E S:

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QUINN EMANUEL URQUHART & SULLIVAN, LLP Attorneys at Law 51 Madison Avenue, 22nd Floor New York, New York 10010 BY: MANISHA M. SHETH, ESQ. SARAH E. TROMBLEY, ESQ. GOODWIN PROCTOR LLP Attorneys at Law 620 Eighth Avenue New York, New York 10018-1405 BY: MARK HOLLAND, ESQ. SARAH HEATON CONCANNON, ESQ. DAVID FREEBURG, ESQ. O'MELVENY & MYERS LLP Attorneys at Law 7 Times Square New York, New York 10036 BY: DANIEL L. CANTOR, ESQ.

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Proceedings THE COURT: All right. We will begin.

Before we begin I have a statement to make which leads me to read my statement. Recently I hired a new principal court attorney. As you know, Mr. Hardman went on to better I don't know if I'll ever She

things, according to him. agree.

Her name is Kelly Mauceri, M-A-U-C-E-R-I.

comes to my chambers from the law firm of Patterson Belknap Webb & Tyler. I am disclosing Ms. Mauceri's work before me since Patterson Belknap represents monoline insurers Ambac in another case before me. As you all know this

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Ambac case, Ambac v. Countrywide, involves a suit brought against Countrywide and Bank of America alleging breaches of representations and warranties made in an insurance agreement pertaining to securitizations. As you likely know, the Ambac case is the most recently filed, and, therefore, the youngest case

of the three securitization cases that remain before me, MBIA, FGIC and Ambac. settled. We had Sakura, but that

Ambac is in its very preliminary stages. Comparing the cases, I would say Ambac is

like an eight year old while MBIA is a 21 year old graduating from college, a precocious 21 year old

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Proceedings graduating from college. The cases are in very

different stages in their development, and Ambac trails far behind them. Since Ms. Mauceri comes from Patterson Belknap, in an exercise of caution I asked the Advisory Committee on Judicial Ethics for an opinion on Ms. Mauceri's ability to work on securitization cases pending before me. Indeed, as I decided even before

Ms. Mauceri began working with me, she will not be working on the Ambac v. Countrywide litigation brought by Patterson Belknap. I think that's very clear.

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However, for this litigation and the litigation brought by FGIC against Countrywide I have consulted with the Advisory Committee on Judicial Ethics. I sought advice from the Advisory Committee as to whether Ms. Mauceri may work on MBIA and FGIC cases against Countrywide given that she worked at Patterson Belknap, but, this is very important, never worked on behalf of MBIA or FGIC, and never actually worked on the Ambac case at Patterson Belknap. I mean,

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she knew people who were working on Ambac cases, but she did not personally work on the Ambac case. And,

also, what I think is very important, is that she didn't attend any of the planning meetings involved in the Ambac case at Patterson Belknap.

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Proceedings She has never worked on any litigation brought by Patterson Belknap versus Countrywide and Bank of America. However, Ms. Mauceri did work on a

breach of contract suit involving securitization brought by a different monoline insured, Assured Guaranty, against a different bank, the bank, DB Structured Products. This case is pending before a

different judge, and to my knowledge neither the plaintiff in that matter nor the defendant has any MBIA related cases pending before me. I have been told

informally yesterday, I received an informal letter and also I talked to Judge Marlow and other members of the Advisory Committee that were involved in the decision making on my inquiry towards them, I have been told informally by the Advisory Committee that there is no bar to Ms. Mauceri working on the MBIA and FGIC matter. This decision as to whether she works on these cases for me is a matter which is actually conducive with my personal discretion. I await the formal letter from the Committee conveying this opinion. Unfortunately approval of the

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formal letter has taken some additional time, a great deal of additional time, given the logistic issues due to the hurricane. That is the reason why there is not

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a formal letter today.

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Proceedings However, I wanted to let the parties know as soon as possible that I intend for Ms. Mauceri to work on this case and on the FGIC case. Barring anything unforeseen and hearing any arguments that may change my mind, I believe that I can remain fair and impartial to the parties in this matter. I also believe that Ms. Mauceri, having not

worked on these cases or on behalf of the parties in these litigations, can be my principal court attorney for the MBIA and FGIC matters. When I get a formal letter from the Advisory Committee I will disseminate it to the parties. letter will also be made public. The

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I will probably get

the letter, I think, before its publication in the Law Journal. I believe you get a formal letter. what number it is. It is Opinion Number I have it I know so you can well, it's

keep it on your radar screen. one of those things. I have it upstairs. with me.

We will have to e-mail it to you. I'm sorry. I meant to have it

The informal letter says -- actually, I know there are a couple of little detail problems. called Ms. Mauceri a junior associate. They

She was not a So, I

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junior associate, she was a senior associate.

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Proceedings mean, those kind of little details are of tremendous importance to the parties and probably of no importance to anybody else. So hopefully with these corrections we will go on. That's what I wanted to let you know. Ms. Mauceri is not sitting next to me because the formal letter has not come down, but I think between now and the next time you come back there will be, I think, an opportunity, if you so wish, to make whatever comments. But, as I say, my inclination is, I

can't see any problems with that, but, you know, obviously you will want to discuss it with your clients and give it some thought. With that, on to sealing. I must say, we I know

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spent a good deal of time on sealing so far.

all of you made your best efforts for me to get all of the documents that I needed, et cetera, et cetera. really did do a good job doing that. I have read your memoranda of law, I have read your motions, I read Bloomberg's response to it, and I have come to certain decisions already which I think will facilitate continuing working on the subject. There is going to be -- there are issues that You

will not be resolved today, but we will go into what we need to do in order to get me to the point where I can

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Proceedings make decisions on it. So let's start at the beginning. Again, we

have written it out so I am actually going to read somewhat a decision on to the record because I think that's the easiest way instead of me writing a formal decision. We may do a formal decision later on, but I

think that what I need to say now will really obviate a lot of the piles and piles of questions that we have out there. Not that I want to quote from the federal judge, but today there was a headline in the Law Journal that says that -- this is on another case obviously -- it said there was a ''stew of material.'' don't think of it as a stew. goulash. Going on: The parties have philosophical I think of it as a I

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differences regarding the scope of documents that would be placed under seal in this case. As a framework for

our discussion today the court points out that there is ''a broad constitutional proposition arising from the First and Sixth Amendments as applied to the state by the Fourteenth Amendment that the public as well as the press is generally entitled to have access to court proceedings.'' Quoting from the Danco Labs, Ltd. v.

Chemical Works of Gedeon Richter, Ltd. at 274 A.D.2d 1

Terry-Ann Volberg, CSR, CRR, Official Court Reporter

Page 9 Proceedings (First Department 2000) . 22 NYCRR 216.1 requires a showing of good cause for the court to seal documents in whole or in part. I think in another case the standard is In the court's point

basically a compelling standard.

of view compelling is basically higher than practically beyond a reasonable doubt. So we are talking about a

very high standard that the court has to find in order to actually seal any document whatsoever in an open proceeding. Here I want to make the differentiation that when we were doing discovery and we work under a confidentiality agreement put forth basically as amended, put forth by the city bar, that particular document has worked very well for all the extensive amount of discovery that has occurred in this case. But now we are at the summary judgment level which is a level that requires the court to consider public documents. today. Nonetheless, the parties and the courts are in agreement that certain information should be redacted from public filings to protect the privacy of borrowers who are not parties to this litigation and they include the borrowers names, the borrowers social Now that's the reason why we are here

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Proceedings security numbers, and the borrowers addresses. As to the borrowers occupation, the parties dispute whether the borrowers occupation should be made public. Countrywide argues that the borrowers

occupation should be redacted, while MBIA and Bloomberg argue they should be revealed to the public. My decision is as follows: There is a strong

public interest in the borrowers occupations, but such information should not be so specific as to reveal the identity of the individual borrowers. For example, if

a borrower is a sole owner of a business or if the borrower's job is described in great detail, such information should be modified in the following manner: Only a general job title, type of business and reasonably specific geographical information is necessary. All other information may be redacted. Let me give you an example. There were a

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couple of examples that I think were in the Countrywide briefs, but let me give you an example. Instead of

saying Borrower A is a receptionist at a clothing manufacturing plant in Boone County, West Virginia. the way, I looked it up, Boone County, et cetera. That's what you would have to do to see if the population of Boone County is such that saying that a person is a receptionist at a clothing manufacturing By

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Proceedings plant would be sufficiently unspecific. not work. It just does

There is not going to be an opportunity for You can't there are

anyone of us to go through that exercise. say to me, look, I took the geographic

1,000 clothing manufacturing plants in Boone County. Therefore, saying she is a receptionist at one of them would be sufficient. You wouldn't be able to identify

that particular person. So what I suggest we do is Borrower A is a receptionist at a manufacturing plant in southern West Virginia. That gives, I think, a sufficient amount of

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information as to that person's occupation that you don't have enough specificity. of others examples. I mean, I have a couple

If you want me to, we can go over,

try to work out a few examples to give us a good framework of what we are talking about in terms of what I want in terms of specificity. But, also, I want to

make sure that you are not going to be able to through that description find out it's Miss So-and-So, age 46, living at such an address. happen. So with that, we will work out that. course, I would say to you that I think you can probably work it out, the two of you, three of you, work it out so that we can have that kind of And, of That I don't want to

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Proceedings occupational description. I mean, for example, if you took in Manhattan, if you said that person was a receptionist at a manufacturing plant in Manhattan, this is no longer the manufacturing capital of the western world. I am not saying there is not a lot of manufacturing going on, but it just isn't. it's in Brooklyn. It's not even as though I

So, again, you have to -- I think,

mean, yes, there are a lot of clothing manufacturing businesses in Manhattan, but I don't think it's sufficient to really -- again, broader. I want it a little

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But at the same time the idea that that The

person is a receptionist, that's the key issue.

key issue is the nature of that person who got the loan, the nature of the occupation. Now, with that in mind, we get to Countrywide's 150 voluminous spreadsheets which, thank you, you did provide me in the end, and I did take a look at them. I didn't look at many of them, but I did

take a quick look at what you are talking about. Countrywide asserts that 150 voluminous spreadsheets are peppered with personal data that would be difficult to redact; therefore, the spreadsheets should be sealed in their entirety. I didn't -- you

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know, I couldn't spend, because it came in very late, I

Terry-Ann Volberg, CSR, CRR, Official Court Reporter

Page 13 Proceedings couldn't spend too much time on them, but my idea -let me ask a question. Off the record. (Discussion off the record.) THE COURT: It is my understanding of these

spreadsheets that, yes, indeed we have the name of the person, the next column is the address of the person, the next column is the social security number of the person. order. I don't know if I am doing it in the right Maybe the first column is the loan number, then

going forward. It is my view, and now I am not saying it's entirely everything that has to be done, but it is my view that you can, with my decision as to names and addresses and social securities, that you can eradicate those entire columns. I may not be a computer wizard, Maybe that's

but you can eradicate the entire column. a doable event. a doable event.

Whatever happens, it would have to be We will have to be able to, indeed,

clean up these spreadsheets, personal data, and then, again, I have not quite finished with all the decisions I

I made, maybe we can come back to the spreadsheet.

know there is a mechanism by which we can work with it. After that is said and done, and it is cleaned up, if it's personal, with the personal

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Proceedings information, it's a public document. There is nothing, nothing, despite the hard work it will be, there is nothing that makes it a proprietary interest of Countrywide or Bank of America to not disseminate the information. But, again, we have to clean it up. I don't

know if this is true, I am not a computer maven, but I think you can eradicate the entire columns. Okay. MR. HOLLAND: document. THE COURT: From what we looked at, we The others I am not exactly But, anyway, that's what I I am told it depends on the

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looked at some like that. sure how it's organized. want.

Now, we get to the loan numbers. important. entirety.

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Loan numbers need not be revealed in their The parties are to identify loan numbers

using the number of the securitization and the last four digits of the loan number. degree of identification. I mean, obviously if we eradicate all the other information you have to have something that makes it unique to securitization one or securitization 15, and also involving that particular loan number. So my That way we have some

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one, loan number 12345678, that will become 1-5678. It's a bit like we do with social security numbers. If

for the same securitization the last four digits of the number are repeated more than once, which it could happen because of the number of loan documents involved, the parties will add an A, dash A, dash B, dash C, to the end of the last four digits of the loan number. I had one case when I was in matrimonials where we went up to 32 As. B, C all the way up to Z. again. In other words, it went A, Then we started all over At one point we

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There was double A, et cetera.

had a couple of numbers, four As or eight As or whatever. Finally we decided, I came up one day and That was the

said this is ridiculous, we will do 10-A. tenth series of A, B, C.

It's doable even with the

numbers repeating each other. Now we get to the issue of witnesses names, names and job titles of witnesses that are being used in the summary judgment motions. Now, again, remember, It's

this has to do with the summary judgment motions.

the same thing, if you are in the medical malpractice environment, if you are using a doctor's -- I will get the experts in a second-- if you are using a doctor's

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Proceedings name to tell me that there was a deviation from the medical standards in the community, that doctor has to be identified. If you are using a witness, a witness

that you are saying, since there is nothing off the record or anything like that, that witness in the summary judgment motion has to be identified the same as if you called that witness to the witness stand, because, after all, summary judgment is in lieu of trial. That's the idea of it, right? It's defined

that there are no facts to be tried by a jury in this case. Likelihood of success, that's a different issue

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because there are lot of issues, but, anyway, that's what it is. And if a witness comes to court and raises his or her left hand -- right hand, and says they are going to tell the truth, that person then identifies themself on the record with their name and address. At

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that point, you know, the address and name, that person is a public person, in that sense. In the same way we will do that for, for

witnesses or materials that you will be using in your summary judgment motions. So if you use a witness

that -- if you are quoting from an affidavit or deposition of those witnesses in conjunction with the summary judgment motions, that name and job title of

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Page 17 Proceedings the witness must be revealed. An affidavit or

deposition submitted in support of a motion for summary judgment is akin to the trial, just as I stated.

No other personal information of that witness need be disclosed. Names and job titles of witnesses

who have not submitted affidavits need not be disclosed at this time because they are not part of the summary judgment motion. When we get to trial preparation, that's a different issue. If and when we do get to trial

preparation, we are now ready, and I do a disclosure, and I say you have to disclose the names of witnesses you will be calling, then you have to give me names, addresses -- not addresses names, job titles and

basically what that person will be saying. One thing: I want to make sure -- I don't

want ten persons saying the same thing just because we want cumulative type of information. That's why a

brief description of what that person will be saying is important at the trial stage. witnesses. Experts: motion, names, Experts even in a summary judgment But, again, this is

job titles and business experts,

addresses of expert witnesses, will also be made public because experts are different from ordinary witnesses.

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Proceedings Then came an issue of documents protected by confidentiality orders issued by other courts. And

that came out really basically -- what happened is that you had another case, and a deposition was taken in the other case, and now you subpoenaed, whoever did, each side subpoenaed the deposition testimony, and brought it into this case so that you didn't have to go, re-depose the person. So when it was brought in it

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was, that deposition was covered by a confidentiality order by another court. However, when it was

transformed into one of my documents, because now it became part of this case, it is my confidentiality order that protected that document, not the other judge's, because while I have great respect for any judge in the whole world, especially any other fellow state judge or federal judge, whoever they are, nevertheless, it is the confidentiality order that I have in this case that protects whatever documents. So, therefore, the idea that you say to me, oh, you can't see this, this document should remain sealed because there is a confidentiality order in place through another judge, does not hold water with this court. The confidentiality agreement is my

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confidentiality agreement, and, so, therefore, we have to go through the same exercise as we would had it been

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Proceedings produced pursuant to this particular case in full. Just to give it another explanation: Once

documents were subpoenaed and deemed produced they fell under the confidentiality order I issued in this case. The parties must then provide a compelling reason to seal each document that they believe should remain confidential. So that's the rubric there.

Now we get into more complex areas, and there really are three of them, three different categories. By the way, before I get into the next portion of it, I think that those guidelines will reduce the number of documents that eventually the court will have to review in order to make a decision on whether or not something should be sealed or not sealed. So I think that if you go through those

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parameters, you have reduced the pile substantially, substantially, because even glancing at any one of your documents, as, an example, taking the Countrywide one -- no, this is not Countrywide, this is -- I am talking randomly -- I want to take not an agreement I see a lot of them are already agreed to which is great, I am happy when they are agreed. All right. This is in the Countrywide spreadsheet that was on a disk that finally carne out. Written up it's Here's one.

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Proceedings better. Document number, roll number 712 comes from It's an e-mail from I will

Sheth affidavit, Exhibit 200.

Sharif Abdul (ph.) to, etcetera, etcetera. not get into too much. number. It's an e-mail.

It has a Bates

The party proposing the initial designation is

Countrywide, and what Countrywide wants is to redact the whole paragraph beginning with ''Cindy'' on page one. The reason why, proprietary. MBIA disagrees. They

want, MBIA wants it to be public.

And the status of

that particular one is no agreement. Now I have not gone through and found that first paragraph. I don't know why, just reading this,

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apart from a general statement, I don't know why that first paragraph should be redacted. sufficient for me to make a decision. To say to me proprietary information in the nature of current and future business strategy in disclosure which will give competitors an unearned advantage does not do it. It needs to be much more This is just not

detailed for me to actually come to a reasonable conclusion, for me to come to a conclusion. Never mind

that I could come up with a conclusion, that's not the issue. The issue is not that I could figure out a

mechanism to say, yes, that is proprietary and accepted. It does not provide me with a compelling

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detailed for me to come to a decision that this is a compelling reason for me to do it. I can think of a dozen reasons. I will not

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get into that document and read it out loud and make the analysis, but I can think of why it might be, but, then again, the first paragraph of an e-mail, I don't know, I really don't know. do. And, as I say, that won't

That will not be a reason for me to give you a

sealing order. Now getting into the testimony related to Countrywide's and Bank of America's current nonpublic financial information: Countrywide seeks to seal

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testimony related to Countrywide's current profitability, shareholder equity, and legal fees and Bank of America's internal capital management strategies. Countrywide asserts this information is

proprietary and could potentially ''cause Countrywide competitive harm." Countrywide claims that the revelation of these transcripts would harm Countrywide and Bank of America, but Countrywide does not sufficiently explain how and why such harm would incur. Countrywide must

flesh out these arguments in greater detail to show good cause for sealing documents pursuant to 22 NYCRR

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Proceedings 216.1. So that's problem number one. Problem number two: Documents pertaining to In this motion

Countrywide's repurchase process.

Countrywide also represents that documents and portions of documents and transcripts related to Countrywide's proprietary repurchase process should be sealed. Countrywide does not provide much explanation as to the types of documents and transcripts it seeks to seal. However, in considering this request it strikes me that Countrywide is discussing three distinct categories of repurchase related documents each of which presents a different analysis: One, documents related to MBIA's

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repurchase requests to Countrywide for the securitizations at issue in this case. Two, documents

related to repurchase requests from other entities to Countrywide for other securitizations. And, three,

documents discussing general procedures, processes and principles related to repurchase requests sent to Countrywide. As to the first category, which is documents related to MBIA's repurchase requests, these documents involved disputes central to this case including whether Countrywide complied with contractual repurchase remedies in the operative documents. Countrywide claims that disclosure of these documents

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Proceedings will cause Countrywide competitive harm. However,

Countrywide has not provided a sufficiently detailed analysis of these documents, of how these documents might harm it, nor has Countrywide weighed any potential harm against the public interest. Again, remember that it's always a balancing thing, it is public interest versus compelling need, compelling need for Countrywide to have it sealed. Very, very important, both very important. compelling. But it's

That's what is missing in everything that

we have seen so far. As to the second category which is documents related to repurchase requests from other entities, these documents will be sealed for the purpose of this motion for summary judgment. While there may be a

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public interest in the disclosure of these documents, they concern securitizations that are not directly at issue in this case. I, therefore, do not feel that I

should order those documents to be made public at this time. I will be open to revisiting this issue on a document-by-document basis if necessary before trial. I don't know who sealed them or who has not sealed them, and what status they are in before other judges, whether arguments have been made before the other

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Proceedings judges, what the decisions of the other judges were. It's just a whole -- it is just, I think, asking this court to indeed undertake an exercise that's not appropriate for this court to do at this time. sealed on that. I'm not

I am not saying that I will never

consider it, but I just think I need a lot more information to be able to balance my stepping in on somebody else's purview before, and making a decision that affects them or her and not having a good basis for it. So at this point I am sealing it. It remains

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sealed until we certainly discuss it a good deal further. The third category of documents discussing general procedures, processes and principles related to the repurchase requests sent to Countrywide will not be sealed if those documents do not reveal trade secrets or other proprietary business information belonging to Countrywide. And in this series of categories

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Countrywide has not sufficiently shown how these documents will reveal trade secrets or cause competitive harm to Countrywide. Once again,

Countrywide must balance the publics interest in assessing those documents against any harm to Countrywide. So in a sense it falls a little bit --

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it's a different category, but it falls in the same

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Proceedings analysis as the first category. That in a sense ends -- I have other things to talk about, about resubmitting the motions, Bank of America's sealing motions and summary judgment motions, but they are more timely. Hold on a second. (Discussion off the record.) THE COURT: Yes.
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I have talked quite a long time.

am

interested if you have any comments, any discussion. I have to say that we started with 63, motion sequence 63, that was Countrywide's, followed by 64, which was MBIA's. So by order of sequence, we will go

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with Countrywide first. MS. CONCANNON: Thank you.

The court obviously spent an enormous amount of time working through these issues. We really do

feel with the guidance you provided that MBIA and Countrywide should be able to work out agreements with regard to the remaining documents. Just to put this in context, there are 1,118 documents and exhibits that have been relied upon by one or the other party in connection with summary judgment. The other 640 of those are already public,

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they have been docketed through the court system.

Terry-Ann Volberg, CSR, CRR, Official Court Reporter

Page 26 Proceedings Another 45 have been made public with very minor redactions. It's that remaining 400 universe, the

majority of which are those borrower-type documents, that with the instructions the court has provided we should be able to reach relatively quick agreements with regard to. The really only thing I wanted to speak to was with regard to the logistics of the loan number modifications that the court has proposed. I think for

trial what the court has described is absolutely correct, and, in fact, is what Judge Rakoff recently

did with the Flagstar trial which just completed a few days ago. For summary judgment purposes, to put this in context, those voluminous spreadsheets often have a borrower loan number in every single line. Mr. Freeburg informs me that there could be hundreds of thousands of loan numbers that would need to be modified across the documents. We do believe that under New York law a loan number is a bank account number. There is a risk that

a borrower could be identified through this number. There is an obligation to keep it confidential both under New York law and federal and state Privacy Acts. But for these purposes, concentrating on the

Terry-Ann Volberg, CSR, CRR, Official Court Reporter

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Proceedings 1,100 plus documents that are currently in front of the court, it seems that without undue prejudice to the public's right of access to this information we can simply redact off the loan numbers as we have in the briefs that have been submitted to the court without them. THE COURT: How do you identify -- the

reason why I came up with this one, with the last four numbers is, how do you identify that loan versus another loan? MS. CONCANNON: Well, we could, your Honor,

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for the briefs and also the 19-a statements submitted to the court use the methodology that you proposed with regard to those documents, and those are the loans that are really being discussed and relied upon in connection with summary judgment. My concern is with regard to these voluminous exhibits where no party has referenced lines 1 through 1,000, but that's what is in the exhibit. If that

particular loan is not being discussed it would be far more administratively possible to expedite the publication of these documents to the public if we can simply redact out that information. THE COURT: All right.

Is there any problem with that?

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Proceedings MS. SHETH: Yes, your Honor. We have a

strong objection to the redaction of the loan ID numbers. I don't believe that Countrywide has made any

showing that you can use a loan identification number to identify a specific borrower. THE COURT: I can't take that chance. As

the court I have to be the protector, the third-party borrower. I mean, that's my job. I don't know. I don't know. It's

as simple as that.

When I thought about

it when we were discussing it yesterday in chambers I said to myself, yeah, I don't know. is. But what about trying to do, the number of the securitization and the last four digits seemed to me to identify the loan in terms of talking about -- we are not going get in securitization number 2-654. In That's where it

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other words, we are going to be able to identify what we are talking about, and yet at the same time secure the privacy of the borrower. So the idea that we are

going to have it out there, I don't know. With my little bit of knowledge of what computer mavens can do, which is one person I am not, it's not a question of what I can do, but there are people out there who can transform that information and maybe get the name. I am not saying that anybody

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Proceedings sitting at this table could do it, but somebody in their organization might be able to do it. point. That's the

The point is, I can't allow that to happen. MS. SHETH: Our concern, your Honor, is that

there are so many loan identification numbers, these are long numbers, and there could be a chance of miscommunication about which specific loan we are talking about. THE COURT: MS. SHETH: THE COURT: I don't think so. We have I don't think so because I

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think, yes, there is going to have to be a private document with the original loan number and now the transformed loan document. That will have to be one

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document that, frankly, will not be revealed to the public at any time ever because it really is of no consequence to public knowledge, but which will allow all of us to be sure that there is not a duplication. That's the reason why I came up with the idea. Yes, you may have numbers that do duplicate because there are so many of them and there are so many loans we are talking about. So if you have the same

numbers with an A, with a B, with a C, and if there is two of the same, then AA, AAA, AAAA, you know, et cetera. I mean, it can be done.

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Terry-Ann Volberg, CSR, CRR, Official Court Reporter

Page 30

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Proceedings MS. SHETH: Two things: We will endeavor to do that. We did some additional

investigation based on Countrywide's assertions in their papers, and we actually found a free writing prospectus for one of the deals which is available on the SEC website on the EDGAR database. That free

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writing prospectus for the deal actually lists the loan numbers. We have serious concerns about the argument

that one can use loan numbers which are publicly available, are on the mortgage loan schedules, to identify borrowers. THE COURT: Ms. Sheth, I don't care, I don't

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care if they put the loan number with the name next to it. Now it's my job. It's a whole different

perspective. My job is to ensure that the public has a right to know what's going on, and, therefore, has a right to have access to the documents. On the other

hand, it is my job to ensure that the name of that person that took out that particular loan is private, and that at no time in the future there is a knock on somebody's door saying, I understand you took out a loan, and what did you think about it? not happen on my watch. MS. SHETH: That's my job. Understood, your Honor. No, that will

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Terry-Ann Volberg, CSR, CRR, Official Court Reporter

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Proceedings THE COURT: can't help that. The fact that it's out there, I What I

That's not under my control.

can do is make sure it does not happen when I am doing it. That's the key. MS. SHETH: THE COURT: MR. ROSEN: Thank you, your Honor. So, I think -- yes. Sorry.

I appreciate your Honor's hard work. Bloomberg appreciates your Honor's hard work in going through this. Just a couple of very brief comments. One thing, we certainly agree with the court's position that not enough information has been given to show compelling need to keep a lot of this information out of the public access, but I came away from the last hearing thinking that there would be some version of Exhibit A that Bloomberg would be able to look at. It's impossible for Bloomberg to go to these documents and look at these various reasons. What we

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were basically given was generalized reasons for three categories. Now your Honor has said give us more We would

specific reasons for individual documents. like to see those individual reasons.

We would like to

see what document it is they are talking about so that

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Proceedings we can make an argument on a particular document the that we may be interested in. That's the first -- I don't know if you want me to stop there. THE COURT: being. We will stop there for the time

Ms. Concannon wants to say something on that. MS. CONCANNON: Thank you, your Honor. Because of

We did reach out to Mr. Rosen.

the nature of the documents which are described in Exhibit A, Exhibit A itself becomes a document that contains the substance of the very communications that we are trying to keep sealed. We reached out to Mr. Rosen and offered to provide him unredacted versions of all the parties submissions in connection with the sealing motions provided he would represent to us in writing that he would not provide that information to his client or use it for any other purpose other than opposing the sealing motion. Mr. Rosen declined that offer. All right. That's important to

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THE COURT: know.

I didn't get to the last few points that I will make today. Maybe I should. Then we should

discuss it because now I am faced with a dilemma, as I have explained already.

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Terry-Ann Volberg, CSR, CRR, Official Court Reporter

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Proceedings The parties -- in order for me to make a decision, and I have not made a decision on any one of the disputed documents because I find that what has been submitted is just not sufficient. So, of course,

I mean, one way of handling it would be, well, not sufficient, therefore, I unseal it. But, no, I cannot

do that because there are some really important things that I think are private to Countrywide, and I can see that it would do Countrywide and then later on Bank of America tremendous harm to have that information out in the public realm. I think there is a balance there. is There

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it's basically, you might say, in the realm of a So I am very -- I have to question that. The parties are

trade secret.

So this is what I'm doing.

going to be allowed to resubmit their sealing motions with the following point of view: One, the testimony

related to Countrywide's and Bank of America's current nonpublic financial information, and, two, documents pertaining to Countrywide's repurchase process. Countrywide needs to provide good cause, compelling cause to seal such documents or portions thereof. Countrywide must also carry out a balancing test for the reasons of sealing documents against public interest.

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Page 34

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Proceedings Now we get into the real issue as to what Mr. Rosen just brought up which is a very important issue: How can Mr. Rosen argue against Countrywide's

request that a document be sealed because it is in the nature of a trade secret if he can't look at it? is a real issue. At the same time, if that document in the end is sealed, and I give reasons why I believe that document should be sealed, then that's a decision of the court which is, by the way, appealable. That's why That

we have case law at all because other judges have done it and it immediately has gone to the Appellate Division. I don't think anything has ever gone to the That process then happens.

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Court of Appeals.

Of course, in order for the Appellate Division to make a decision on that the original document has to be produced and what portion of it then gets sealed? That's what happens when it goes up. May I?

MR. ROSEN:

I really appreciate Countrywide's offer, but what it does, it puts me in a very precarious position with my client. I discussed it with my client. I have had

this situation occur many times in the past, and basically it gives the attorney much more knowledge

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Terry-Ann Volberg, CSR, CRR, Official Court Reporter

Page 35 Proceedings than the client. The client's a news organization. Basically

It's a very uncomfortable position to be in.

you can't get access to this, I know why, and I can't tell you. So there is a better way. The way is to

provide us with Exhibit A with a description of what it is, but not exactly what it is. The reason why we want

to -- this provides an explanation and some detail of what kind of explanation it is. It does not have to be

the actual explanation itself, but there are other ways to describe it just as you would describe a redaction in a privilege log. There are ways to describe it that There are ways to

do not break the privilege.

describe, especially when it comes to these transcripts, there are ways to describe what is being discussed that would give us enough information that we can say that's not enough, their reasons aren't enough. It may be that they convince us that we just sort of waive that and move on from there. MS. CONCANNON: My concern, your Honor, is

that the court obviously wants a great deal more specificity in Exhibit A than currently exists in that document. I believe that it would be walking a very

fine line to provide the court with the detailed grounds, showing of good cause, showing of compelling

Terry-Ann Volberg, CSR, CRR, Official Court Reporter

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Proceedings interest to seal without really describing the contents of the documents with some degree of detail which we are more than happy to do to satisfy the request of the court. However, that then is effectively handing over

the documents that we are asking to seal to Mr. Rosen. We do believe the appropriate course is essentially an attorney's eyes only approach which is something frequently done routinely with protective orders. We have no concern with regard to Mr. Rosen's We want to make sure the documents don't

discretion.

inadvertently become disclosed. THE COURT: End up in the press. I mean,

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there comes a time, if you describe it enough, that you don't have to get the document, you know, because it's all out there. That is exactly what Countrywide wants

to stop the press from having because they say it's akin to a trade secret, the information. I mean, some of the information, for example, how much is the worth of the shares of stock, et cetera, et cetera, that is secret to a time that there is a shareholder, that there is a disclosure that has to be made to the SEC, and then it becomes a public document. So, I mean, yes, it's secret as of

November 15th, 2012, but when it has to be revealed to the SEC or when you have a shareholders meeting and a

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Terry-Ann Volberg, CSR, CRR, Official Court Reporter

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Proceedings vote of the amount of distributions will have to be made, when something happens it changes and morphs into something public. public document. There is that consideration. It seems to me, this is something that I don't know, but it seems to me that the documents for 2006 and 2007 may be something that is not something at this moment that is sealable because of the date involved. And if you request that it remain sealed, there will have to So then as to that year it becomes a

then there will be an additional

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be an additional explanation why in 2012 that document pertaining to 2007 has any impact on 2012. I mean,

those are the things that you will have to provide writings on. I know that you're trying to seal current financial information, but, nevertheless, again, it has that kind of like a morphing outwards, and I don't know when the morph comes. For example, if you tell me that Or

morph has to come on April 15, that's one date. does the morph happen on January 15?

There are a lot I don't

of corporate disclosures that have to be made. know.

That's something that I would want to know

because I think that makes a very distinct difference. If it will happen on December 15, you know, that

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Terry-Ann Volberg, CSR, CRR, Official Court Reporter

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Proceedings changes that entire quality and character of that request. Since I have not the vaguest idea of what I am talking about you will have to let me know on that. That's one of the things I will be very interested in. It will be part of my decision-making process. The only other thing I can say, Mr. Rosen, is that they made a very good offer to you. If you feel

uncomfortable with that, you will have to rely on the court. Then if you say later on -- I will put in my

decision that this offer has been made -- it's on the record, also -- an offer was made, it was declined. So, therefore, the fact that you can't comment, you can't give me your views on the documents that I will have to make decisions on, that's up to you to make that decision. MR. ROSEN: court's position. Your Honor, I appreciate the

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I feel that based on the case law

and the burden that it's their burden to provide a public presentation of what it is that they are trying to seal, and the compelling reasons that they need to seal it is their burden to do so, not my burden to know something that my client doesn't know and for me to essentially say I can't tell you why, but we are going to lose this or I can't tell you why we shouldn't

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Terry-Ann Volberg, CSR, CRR, Official Court Reporter

Page 39

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Proceedings approach this aggressively. mechanism. THE COURT: I understand. So, therefore, It's really an intrusive

you have to rely on the court just as everybody out there in the public in a privilege log has to depend on the court. That's what the court -- that's what you do

in a privilege log, you have to put in certain information, and the court has to then -- I usually send it to a referee. A referee usually says

privileged, not privileged, the first three words are privileged -MR. ROSEN: THE COURT: I understand. -- the next six words are not.

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The person I send it to, Justice Bradley, that's how he comes up with it. Amazing. That's his decision.

MR. ROSEN:

I understand that.

Even with a privilege log there is enough information where you can tell who sent it and what the general topic is and I don't have that now. What I

have are three basic categories of information and a general reason that your Honor has dismissed. already dismissed. I think there is a burden on the movant to provide more information to the public so that we can make the argument. I understand they can't tell me

Terry-Ann Volberg, CSR, CRR, Official Court Reporter

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Proceedings what the actual document is. And if my client declines

to allow me to see attorney's eyes only, so be it, however, I believe there is another step that can be taken, a more detailed step that can be taken. THE COURT: I think I already ordered that.

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At this stage we are premature in worrying about it. We don't know what they will come up with.

We do know they will have to come up with much more detailed information to have me find a compelling reason. You may take Mr. Rosen's idea that maybe you do want to say it's this topic, it's that topic, what kind of et cetera. You will have to develop that.

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That's something that's not been done so far. So at the stage we are, at this moment, I would say everything could be unsealed. However, I am

giving another opportunity for you to work on it to give me good reasons why X should be sealed. And I

think when you go through the exercise a good deal of it will fall into the unsealing portion of it because I think now that we looked over a lot of things, I think that that high degree that has to be met, I am not saying it does not get met, but I am saying it's a very high level, and, you know, you will have to weigh it whether you will even get there.

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Terry-Ann Volberg, CSR, CRR, Official Court Reporter

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Proceedings That's something you have to -- I can't tell you how to do it, but I do think it will have to be a lot more detail. And you may think about that I mean,

privilege log and how we get around doing it.

usually what happens in a privilege log is that, of course, it's always in a string, you know, 35 e-mails of which e-mail number 15 involved the lawyer or conveniently involved the lawyer. And the rest of it,

naturally the whole string should be -- that does not happen. So we get down to 15, the 15th e-mail out of

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the string of 35, and then that is looked over, which I will have to do to make a decision on the sealing issue. referee. It's looked over by usually I send it to the

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The referee looks at it, a special master,

and says that out of this e-mail, all right, line six is privileged, that one line is privileged, and the rest is unprivileged. amazes me. That's more often than not. It

Talk about detail work. Anyway, to go into how to do this: The

parties are going to provide the court with one hard copy so I don't spend the whole afternoon trying to decipher something, a complete set of motion papers including copies of all exhibits that the parties seek to seal. Don't give me document number. I am We spent a

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interested in actually seeing the document.

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Proceedings good deal of time going through trying to find documents so I could get a sampling of it. Give me the

document you want me to consider in the unsealed version. Then you will have to give me the document, You will have to do two

how you want it sealed.

versions of the same document. No placeholders, no references to affidavits submitted on other motions. Again, I want it clear. I want me to have in

front of me what I am considering in the sealing, whether it will be sealed or not. Of course, I want

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your argument, I want your argument why it should be sealed, and good reasons, and then I want the documents, proposed sealing, or proposed sealing and original document. Now also do that in two other copies, but they can be on disk. That's for my younger crew. That's what They

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love disks and I like to see things. happens when you grow old.

I used to be the only

person using a computer in the entire City of New York. I had my own computer, and I used it. nothing, it's true, about computers. Back to Bank of America's sealing motion: know Bank of America is here. Given the guidelines I Now I know

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provided by the court today, and the detailed analysis

Terry-Ann Volberg, CSR, CRR, Official Court Reporter

Page 43 Proceedings the court expects to see on the sealing motions, the party should consider whether they need additional time to complete the briefing on Bank of America's sealing motion. MR. CANTOR: right now. THE COURT: to discuss it. I know you can, but we will have Then the same issue I think we can answer on that

We will get to it.

on the summary judgment motion. Let's understand each other: You can't get

to the summary judgment motion unless the summary judgment motion is submitted in full. It can't be

considered by the court if it's not a full document. So that, for example, you're relying on the testimony of a witness, and that testimony of a witness is going to be sealed as to three pages, and the rest of it will be used, but of course, these three pages are the key three pages that you want to quote. That's the purpose of this entire testimony and the deposition that lasted 160 pages. The three

pages that you really want to rely on, agreed, all sides, all three people agree those are the three pages you want to rely on, those are the ones you want sealed. I have to -- I have to decide the sealing

Terry-Ann Volberg, CSR, CRR, Official Court Reporter

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Proceedings issue before I can consider it in my summary judgment motion. That has to be done. That's a preliminary

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step because I frankly do not want placeholders in my summary judgment motion. I want it to be either

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redacted copies as we talked about redacting the copies, or I want something that I decided should be sealed. I want a summary judgment motion that in a

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sense is a public document to the extent that we can make it public. thing. Otherwise, we are doing a half-baked

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Oh, yeah, you have very good arguments, but we We can't do that.

can't talk about those.

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The summary judgment motions that I have before me now, and I have also I rely on documents
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that really, that can't be public at this moment.

think that after what we discussed today, in the end there's going to be, I think, a relatively few number of documents that I will have to consider. has been resolved. Most of it

I mean, most of it, I think at the

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end of the period of time necessary to clean up the documents, can be released to the general public, and if they are interested they can read them. That's a

different issue, but they will be, they will be available. Then they can be referred to in the summary

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judgment motion because they will be available as redacted.

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Terry-Ann Volberg, CSR, CRR, Official Court Reporter

Page 45 ' Proceedings As I redacted them, I had no problem. ask you, Mr. Rosen, would you have a problem as I redacted them? MR. ROSEN: THE COURT: statements today. MR. ROSEN: Generally I believe Bloomberg If your Honor redacted them? As I redacted them in my I will

agrees with just about everything your Honor said. THE COURT: Okay. So we can use them. Then we get into the

That's the important thing. thorny issues. deal with.

Those are the ones that we will have to

I don't think we can do the summary judgment motions until we have decided. time to do the work. And I have to give you

Now, the bottom line is, I can't

see how we are doing our summary judgment motions in the month of December. I just don't see it. I mean,

look, I'm not working Thanksgiving. that right now.

I am telling you

So, I mean, you may want me to -No, we don't, your Honor. I think your

MS. SHETH:

We think we can accomplish

Honor has given us very specific advice as to what types of information should be sealed and what types of information should be redacted. And for the most part

the vast majority of the papers the pleadings, as well

Terry-Ann Volberg, CSR, CRR, Official Court Reporter

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Proceedings as the exhibits, can now be filed with the court system open without placeholders, with very few redactions. So I think the parties can endeavor to get all of this done before the next hearing date on the Bank of America's sealing motion which is on November 29th. That gives the parties a week and a half, almost two weeks to get all of this done for your Honor so we can still have the hearing for the summary judgment motions on December 5th and 6th. that time for a long time. I know the court set aside This hearing keeps getting

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pushed back for a variety of reasons, but the parties are ready. The court has set aside that time for the

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parties and we are ready to proceed. To the extent there are any remaining issues and disputes pertaining to the complex categories relating to repurchase documents or Countrywide's nonpublic financial documents, we obviously will try to present them to your Honor well in advance of the summary judgment hearing, but certainly in advance of November 29, the next hearing date on the Bank of America sealing motions. And we would submit that in order to decide the summary judgment motions the court can decide them on the basis of sealed information to the extent where we don't reach a resolution or the court is unable to

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Page 47

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Proceedings decide this issue, but we can limit the presentation of the public evidence at that time in the hearing and deal with the more thornier issues after the hearing. That's always an option, as well, for those limited subset of documents. THE COURT: One second, please.

(Discussion off the record.) MR. ROSEN: I appreciate MBIA's need to have

expediency here, but I believe your Honor set out the law correctly, set out a procedure correctly, and that these decisions -- the public should have the ability to look at everything that is going to be public before there is an argument. If the parties would like to do

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this on an expeditious basis, Bloomberg is willing to do whatever it needs to do within that so that these arguments can be held the first week of December. I believe your Honor was absolutely correct that we don't just put this off and that the public needs to have access before a hearing is held. THE COURT: Like everything else, we are I don't know how But

dealing with something we don't know.

many documents are going to in the end boil down to the, boil down to the documents I will have to make a decision on. Frankly, if I have to make decisions on,

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and I have 300 documents, that's one kind of work that

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Proceedings needs to be finished. If, on the other hand, I am down

to 20 documents, that's another portion of work. That's something that might -- then there are other issues. I mean, that is something else. So if I have

20 documents,

I have to deal with, yes, maybe I can Three

handle that within a very short period of time.

hundred is a different story because each one of them, in my book, requires my analysis as to why I'm going to agree with you or not agree with you. MR. HOLLAND: So that depends.

Your Honor, to echo what you I

said, we appreciate all the work you put into this.

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think it shows how much time it consumes for the court. I don't know if we can meet very expedited deadlines. I think trying to get this done, and also

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have you be ready for the summary judgment motion by December 5th and 6th is imposing a tremendous burden on the court because you will be spending all your time sorting out sealing issues instead of focusing on what's in the motion. I know the court had its schedule disrupted because of the hurricane. Of course, we will do

whatever the court wants, but I think it might be too ambitious to keep the current dates for arguing the summary judgment motion. Maybe we can keep those dates If the

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for finally sorting out the sealing issues.

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Proceedings court wants to hear us in December, that's fine, or January, that's fine. THE COURT: Like everything else, the court

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is a big believer of if you don't have to make a decision sooner, don't do it. effort.
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Let's try to make a huge

don't know, with all the other things I have

said, there is a lot of work that needs to be done, but
I

think it's a lot of mechanical work.

I

don't see

that it requires -- I

see somebody having to do a lot

of work, I am not saying all of you have to do the work. Maybe you do. MR. HOLLAND: THE COURT: Mr. Freeburg. That's what I mean.
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just

don't know what the parameters of the problem will be. Until I know that I can't make a decision, and I can't really, I really don't know. Therefore, let's keep our dates where we are now. Let's keep our dates where we are now. Let's see

how it goes.

Try to tell me how it's going on an Let me know. Let

updated basis through communication.

me know how it's going because in addition to everything else we have Thanksgiving, and then we are basically getting closer to that Christmas event. So, I mean, there is a lot of work that needs to be done. Let's get going on it. I won't take you

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Terry-Ann Volberg, CSR, CRR, Official Court Reporter

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Proceedings up this afternoon. You have plenty of time this Let's see where we go.

afternoon to go back to work.

I am not a computer expert so I don't know whether if I say this it's a question of putting a code in and all of Column A disappears, that's all the names, or all of Column B disappears. If you say to me, Miss Concannon says to me we can't transform the loan documents to one at this time, however we will do this for the loan documents that we will use in the summary judgment motions, I am willing to buy that, that's fine. into the more technical. Later on we will get

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The one thing I am worried

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about if you do that is if you do, if it is loan sequence number 422 of securitization three that you want to transform, then when you get to loan 3-422, that loan number, you have to make sure it corresponds to what it has been changed into. headache, it's yours. to be conscious about. MR. HOLLAND: We just don't know. While I But that's not my

It's the kind of thing you have

too once was considered avant-garde with computers, I too am no longer conversant in the subject. Until we

go back to our computer people, we don't know what we are doing. THE COURT: Keep in communication with each

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Proceedings other. Try to work it out. Yes. MR. CANTOR: There is one important

difference between the Bank of America aspect of this and the Countrywide aspect of this. For all the folks

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at the table both their summary judgment motions and their sealing motions are fully submitted. the case for us. Neither is

So we have an existing schedule that

was, frankly, based on a different view of the world in terms of sealing, and that sealing happened simultaneously with the preparation of our summary judgment reply brief which got pushed back because of the storm. We are in a situation right now where the hearing on the sealing motion was supposed to be November 29. on the 27th. The summary judgment reply briefs are due Despite everyone's best intentions I have

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no doubt that there will be documents in the reply briefs that were not, not in any of the briefs. will have to deal with those. Right now our motion on, an open brief on the motion to seal is due tomorrow, tomorrow at 5:00. My We

team was in the office until 2:30 in the morning last night to try to get the chart of documents that the parties, per your suggestion, had agreed to exchange in

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Terry-Ann Volberg, CSR, CRR, Official Court Reporter

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Proceedings advance of the hearing done. That chart, it sounds

like it may not be what your Honor is looking for anymore. THE COURT: charts. MR. CANTOR: Right. No longer, having looked at the

What I am saying is that these folks have work to do to get you a new set of what it is exactly you want. We have not even gotten as far as they do,

and we are doing all of this while we are trying to complete our summary judgment reply briefs by the 27th with the Thanksgiving holiday in the middle. I think we need to come up with a new schedule. I think at a minimum the 29th is going to be I think what makes the most sense is to

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problematic.

have the parties submit one set of papers after the reply briefs are in so we are not doing a helter-skelter process of opening and opposition briefs and then supplementing if there is something in the reply. If the reply briefs go in on the 27th, we can get something comprehensive in, for your Honor, that week. The 27th, I think, is a Tuesday, if I recall Yes, we can get something in for you that

correctly. week.

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Proceedings I don't know how long your Honor needs to be with those materials before you are ready to hear us on the sealing. THE COURT: Remember, basically what I did

today is I gave you the outline of what is not going to be in any document, okay, names, addresses, social security numbers, et cetera, et cetera. over it fairly clearly. Now when you provide me with a big chart, which I am sure everyone will want to see, basically it's all going to be public, the redacted public, because it's no longer something that we have to discuss. But then we get into the key documents, the Those are the ones that I'm going I think I went

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important documents. to have to consider. MR. CANTOR: documents.

There are other categories of

I know it's going to be in my motion.

There are other categories of documents that are different from the categories of documents raised by the Countrywide parties, and we have got arguments as to why those documents are sensitive to Bank of America, and why there is little or no public interest in those documents because they don't relate to any of the issues on the motions. make all of those arguments. And we are going to need to

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Terry-Ann Volberg, CSR, CRR, Official Court Reporter

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Proceedings And while your Honor's rulings today certainly are constructive on some of what was going to be the subject of our sealing motion, it does not reach other parts of it. Again, I think we need to be, you

know, practical, and not have a situation where, you know, for the sake of getting the sealing motion done as quickly as possible we are leaving ourselves in the position where it is both extremely difficult to get the sealing motion done and to get the summary motion done, and leave your Honor enough time to have time to deal with the summary motion. At this point I will not take a position on whether your Honor needs to move the summary judgment hearing or not. I know what a charged issue that is.

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I think it in terms of sealing, I think what makes the most sense is to wait until we get to the end of summary judgment briefing process and have us submit a comprehensive motion to seal, have the other side oppose it, and leave your Honor how much time you need to deal with it at a hearing. THE COURT: Mr. Rosen. MR. ROSEN:
I

Yes.

actually agree that i t would

be good to have the briefing completed after the reply brief.
I t makes no sense to do this two-step process.

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Proceedings THE COURT: done, That's why, because I wanted it

I have not looked at the supplemental things. But, again, I don't think that I mean, one

of my views is that, guess what, a reply brief, yes, you're entitled to put in new documents if the opposition brought up such new concepts that you couldn't possibly have done it before your main brief, so, therefore, you are allowed to have an answer to this, to the opposition, okay. But as to the number of

documents that happened as a result of that, I don't know. Remember how many times I have written I have

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no -- I am not taking that into consideration because that's brand new material that should not have been brought up in the reply. MR. CANTOR: All I am saying is that based

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on the fact that there was supplemental briefing on Countrywide's motion to seal as a result of documents in the Countrywide and MBIA v. Countrywide reply briefs, I can anticipate the same issue will happen in Bank of America, and we are going to be in a situation where right now on that schedule we have a day to deal with those documents. MR. HOLLAND: Your Honor, we didn't put any

additional documents in our reply. MR. CANTOR: I believe MBIA did.

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Proceedings MS. SHETH: I think Bank of America is

creating a mountain out of a molehill here. I know our client MBIA wants to be directly heard on the issue of timing. What your Honor has done is helped the parties by reducing the amount of disagreements. So,

if anything, this process is going to be made easier, not harder. Second, your Honor has said there is nothing new here. Your Honor repeated what the First

Department, Court of Appeals -- it's well-established and longstanding case law on the standard for sealing. It's a high standard. It's good cause. There is

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nothing new that Bank of America or Countrywide, for that matter, could not have done on the initial motions to seal. In fact, your Honor is giving them a second

bite of the apple to establish that very high showing. In light of that fact we respectfully would say there is no reason for further delaying the resolution of this case. This has been pending -- we

have been appearing before your Honor since 2008, the fall of 2008. resolved. And we are very anxious to get this case

We are being prejudiced by this continual

pattern of delay by defendants. But let me defer to my client, Jonathan

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Proceedings Harris. MR. HARRIS: Good morning, your Honor.

Just to follow up on something that Mr. Rosen said, something that your Honor said, these are arguments THE COURT: MR. HARRIS: Speak up. -- these are arguments that We have delayed And as

should have been made prior to today.

the summary judgment hearing several times now.

Ms. Sheth noted, this is an important matter for MBIA. What we have seen throughout this case is precisely what we are seeing now. We are seeing Bank of America,

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Countrywide, coming to this court with one reason or another why matters have to be delayed. Your Honor was very clear at the last hearing that the dates we set for these hearings, December 5th and 6th, and the 12th and 13th, were etched in stone. There is no reason why the charts that were presented couldn't have been better, couldn't have been more detailed, couldn't have met the standard that the law requires. As Mr. Rosen points out it's their burden. If they failed to meet it, that's their problem, frankly. And if your Honor wants to give them some

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leeway to fix that problem, that's fine, too, but it

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Proceedings really shouldn't come to the detriment of MBIA. For example, if they want to take a couple of days to get their chart better, have it done before the Thanksgiving break, I think that would give Mr. Rosen time to respond to it, and your Honor time to consider it before the hearing on the 29th. But allowing them

to take time, talk it through, work it out, I can just see where it's going. weeks delay. Frankly, the time for that has passed, as far as MBIA is concerned. your Honor who, I say that with all respect to We will get, you know, weeks and

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I agree, needs time to consider

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everything that is going to be put before her. But we have seen a pattern of delay. Sanctions have not been imposed, and that's your Honor's prerogative. But this is the time for you to

tell Bank of America and Countrywide to meet the standards that you have imposed, and not to come back with requests for more time that will prejudice MBIA significantly. MR. CANTOR: Your Honor, if I could,

briefly, on that, because the description of what's going on here, I think, is entirely inaccurate: We

were prepared to and are prepared to defend our sealing calls based on affidavits and briefing and

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Page 59

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Proceedings document-by-document review of those documents. What

was never the order of this court, and I think what is resulting in your Honor telling the parties to go back and change their chart, is the idea that the chart would be the end all and be all of this sealing analysis here. parties. That was never the understanding of the

The chart was to assist your Honor in walking It was never

through the documents at the hearing.

anyone's understanding, and I defy anyone to find it in the record from that October hearing that we had where your Honor said that all of the detailed reasons why a document should be sealed must be set forth in the chart. Remember, we were supposed to give a reason.

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We said the problem -THE COURT: Look, Mr. Cantor, I don't think

if you went over what I said before, that -- which you would be glad to know Mr. Rosen quoted in his papers what I said before is that you have a very high standard. Now we are faced with, I think, complex

issues in terms of the repurchasing, et cetera, et cetera. I tried to analyze it to give you a little bit better view. You're saying to me in response, oh,

we have additionally complex issues that you will have to deal with. I can understand that. But those

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Proceedings additional complex issues you have known about, and you have been prepared about, and, you know, the time has come to let me know about it too. And the 29th is a

good day to think about it, the day we set aside for you. Now that means you have to provide me with the

information before then, and I will have to spend time and analyze it the way I analyzed this, and I have to see where we go with it. inclined to change dates. I realize, I am very, very much aware that, I am very much aware that, indeed, holidays are coming up and people have the right to be with their family on that day, and if you're the designated cooker you have the right to cook the turkey. human lives involved here. adhered to. That happens. There are But right now I am not

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So I really do want that

But at the same time right now I don't see I am giving

a reason to unilaterally delay anything. everybody a heads up. consider.

It's something I have to

I do not want -- I will not deal with doing summary judgments motions that are half-baked. come to the conclusion in a sense they are I may

half-backed, that they have, they have placeholders instead of documents there. I will consider a slight

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compromise which would be a document goes in, but the

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Proceedings redaction portion of it is larger, it will be part of my final decision. know yet. I may have to do that. I don't

I have not made up my mind. But I really want a real effort so that you

can come and Ms. Concannon can say to me they are now, in the Countrywide portion of life, there are now six documents left for to you consider, Judge. Then I can

make a decision about whether I can do those six documents in a quick enough time to be able to make those documents public before summary judgment motion argument, or maybe those six documents also have to be, remain sealed until I have a chance to do them, and I may do them concurrently with my summary judgment decision. That's where I stand. I just don't know.

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Right now keep working, okay, Mr. Cantor. Keep working. MR. CANTOR: All I'm saying -- I was not

suggesting there is a lower burden -- I was saying we were prepared to show that burden in a way that sounds like it's different than your Honor wants it, from a pure presentation standpoint, that your Honor wants it all in the chart as opposed to in briefs, and affidavits, and in oral argument, and that's all I'm saying is different than what we understood before. The standard is the standard.

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Proceedings THE COURT: Maybe you didn't hear me.
I

said there was a new form, okay, there is a new section that I am giving everybody an opportunity to do. want the document there. next to it. I

I want the proposed redaction

Do it in a form that, you know -- you know Even I

how to do it, red line, et cetera, et cetera. know how to do that. It's doable. MS. SHETH:

That I know a computer can do.

To be clear, your Honor, Bank of

America's summary judgment reply papers are still due on the existing schedule; is that right? MR. CANTOR: otherwise. I never intended to suggest

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I'm talking about -- the one thing I'm

talking about, your Honor, most urgently is the submission of a chart with our motion. We are prepared

to file our motion tomorrow, file our brief tomorrow, file our affidavits tomorrow. I think providing the

chart in the nature of what you're talking about although, again, now if you are talking now about documents and a description of the documents THE COURT: was Ms. Sheth's idea. The chart was a grand idea. It

I think you're the first person I thought that would

that talked to me about a chart. work perfectly. of time on it.

As it turned out, I spent now a period It has not worked out. It requires --

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Proceedings it did provide me the sufficient information to come up with a whole series of decisions today which is what I put on the record today, which I may not have been able to do it had I not had the chart. way. It was a useful event. We will put it that

However, we are in a

different category. When you get the record, if you have a chance to go over it, you will see my categories are different now. I want much more specificity that are not You can do it in a chart, but We are not into

contained in the chart.

you don't have to do it in a chart.

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charts as much as we are compelling reasons. MS. SHETH: We asked Bank of America's

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counsel for those reasons during these negotiations about the chart. And initially they refused to provide This is an issue that they have We actually compared it to a

us with any reason. been on notice of.

privilege log so we would have a basis to assess whether or not the documentation was sealed. They have done the analysis. So there is

nothing additional that needs to be done here that would warrant a delay of even the chart. MR. CANTOR: What we argued with them about

was whether we were required to give them our reasons two days before we were filing the motion with the

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Proceedings court for them to review. about. That's what the dispute was

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It wasn't over whether we would provide reasons We know we have to provide reasons for

for sealing. sealing.

The issue now, your Honor, is just whether in order to be able to give you the side-by-side documents and all of that we can have more time than tomorrow at five. MS. SHETH: Your Honor, we don't have an All

objection if they want more time until tomorrow.

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we are saying is that the chart must be done before the 22nd, which I think is Thanksgiving, and so that will give the court and the parties enough time to get this before your Honor, before the 29th. THE COURT: the 15th all day. weekend. Today is the 15th. It remains

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I suggest that you spend a wonderful That's my suggestion. So that we

All right.

will give you to the 20th. MR. CANTOR: THE COURT: Okay. Not at 5:00 on the 20th. Let's

make it noon on the 20th. All right. MR. ROSEN: THE COURT: MR. ROSEN: This is for the sealing motion? Yes, sealing. When would our response be due?

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Proceedings THE COURT: MR. ROSEN: beforehand? THE COURT: No, no, I do. Again, that's why They are coming in on the 29th. You don't want to see anything

I said noon to give you the afternoon. MR. HARRIS: THE COURT: Okay. Again, i f you are not the Then the 26th, 27th.

cooker, maybe you have the 21st.

I would like to get papers in, I do want papers in for me to consider no later than really the 26th. say to me 10:00 on the 27th, I will buy that. time for myself. I do need time. MBIA can have its opposition to If you I need

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MS. SHETH:

Bank of America's papers by the 23rd which is that Friday. If we can get Monday, that's better. THE COURT: will give you the 26th. I assume Countrywide will not be opposed. MR. HOLLAND: No, your Honor. We will make Yes. There's Thanksgiving. I

our best efforts to get our supplemental submissions to you by then, as well. MR. CANTOR: Your Honor, at the risk of

looking stupid, which happens not infrequently, I want to make sure I understand specifically what you want us to submit to you.

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Terry-Ann Volberg, CSR, CRR, Official Court Reporter

Page 66 Proceedings You still want a chart; correct or no? THE COURT: Look, you have a chart. That

chart basically --Ms. Sheth's chart, we have Countrywide's chart. If you have additional documents

that are not contained in these charts then you have to have some sort of mechanism of identification, and if you have just, let's say, Bank of America Exhibit 32 made up, and that you're redacting all names and everything else, and it's to go public, you have no problems with it, all right, that's a conclusion. Most

of these documents, Ms. Concannon is right, most of the documents here have already gone public. already in the system, right? So we are talking out of the thousand, 630 were all public, and then an additional 400, whatever number, 600 and 400 are not public at this moment. Now that I've given reasons we should be down to important documents, maybe 20. The lesser the better. Maybe there are 15. They are

Those are the ones that we are

going to be having arguments on whether or not they should be sealed or not sealed. MS. CONCANNON: Countrywide side. That's true on the

Your Honor, there are different

sets, I believe, of approximately 1,000 documents on the Bank of America side.

Terry-Ann Volberg, CSR, CRR, Official Court Reporter

Page 67 Proceedings MR. CANTOR: thousand documents. A thousand exhibits, not a But as I said, there are going to

be additional documents on, additional categories, descriptive categories of documents on our motion that has not been raised yet that your Honor will be hearing ' the first time when you get our papers on the 20th. raise that issue. You wanted redacted and unredacted I

copies of the each of the documents at issue, as well as the chart with the description on it, and obviously briefing and affidavits, as well, I assume? THE COURT: MR. CANTOR: MS. SHETH: Right. Right. To be clear, the November 20th

deadline, that applies to any party, including MBIA and Countrywide, who wants to make a supplemental or further motion to seal? And the oppositions would be due the 26th? THE COURT: I'm not sure about that.

Are you capable of doing that? MR. HOLLAND: I thought we were talking

about make our supplemental submission by the 26th. MS. SHETH: That gives us very little time If they make another

to reply to that opposition. supplemental motion -THE COURT:

Look, look, I will give you to

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Proceedings the 26th for the redact-able documents so we know what we are doing. time. That's mechanical. That takes a lot of

We do have an awful lot of that. I really do want on the 20th the ones that

will be the issues, the -MS. SHETH: The complex ones, the

repurchase, the nonfinancial, those categories. THE COURT: The important documents. Your Honor, if we take the

MS. CONCANNON:

court's instructions today as an order with regard to witness information, essentially take those documents off the table, we are talking about a relatively discrete number of documents falling into these categories of repurchase loan, loss reserves, current financial information. We would be intending to submit a supplement to the court that solely concerns that relatively discrete universe. I would request respectfully until Simply, among other

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after the Thanksgiving holiday. things,

I'm leaving immediately after this hearing for

a memorial service that's taking me through the weekend. I personally will not be available. That

would enable Mr. Freeburg, who has been working around the clock for about the last three weeks on these issues, to have a little bit of a Thanksgiving break.

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Terry-Ann Volberg, CSR, CRR, Official Court Reporter

Page 69 Proceedings MS. SHETH: bite at the apple. enough. THE COURT: break. middle. Enough already. Give them a Your Honor, this is the second I think your Honor indulged them

I can't help that Thanksgiving comes in the Maybe you should change the holiday. That way

we will have more time. MS. SHETH: THE COURT: We need time to respond to that. I understand, but guess what? I

think that you, knowing the documents itself, it's not as though you don't know the documents. know what the documents are. the answer right now. You do. You do. You

You can begin

You don't have to -- you can But And

tweak it when you get their wonderful arguments. you already know what they are going to be saying. if I were you I would start putting the response together. MS. SHETH:

We will, but I am saying the It's their documents

same argument applies to them.

right now they are saying they need to be sealed. THE COURT: They will have to make a

compelling reason, and that's going to be very hard on them. By the way, on the -- I shouldn't say anything.

Terry-Ann Volberg, CSR, CRR, Official Court Reporter

Page 70 Proceedings Let's see. So you will have the documents

in, the new batch of documents, the ones that we are really caring about, on the 26th. the 26th? Noon on the 26th. I don't know how you will do it, but you probably can give me an answer. on it. We will see where we go. MS. SHETH: the 27th or the 28th? THE COURT: at noon MS. SHETH: THE COURT: All right. Very well. Would you like our opposition on We are happy -I will give you to the 28th, but We will have argument Did I say noon on

-- so I can see it.

By the way, we don't have to have oral argument on this. papers. MR. ROSEN: THE COURT: For the continuation of this? Of the Countrywide issue. The This portion will be basically on

29th is devoted to Bank of America, an additional thousand documents, and many more wonderful salient arguments. Now that Mr. Cantor knows what I want, he can tell me the compelling reasons in a much more, in a manner where they'll be bowled over. MR. ROSEN: Your Honor, I would like to make

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Proceedings it clear that while no one has to -- if they don't want ' to give us access to the chart, that's fine, but there needs to be a public expression of the compelling reasons in whatever documents, whether the briefs or otherwise, enough explanation of why they, what is in there that requires this compelling reason. THE COURT: true. Absolutely true. Absolutely

Of course you have to have a decision of this

court telling you that I agree with the compelling reasons or not agree with the compelling reasons. So

there has to be a written decision on the court's part. In terms of Countrywide, I don't think I need to have -- I invite you to come on the 29th, but I don't think I need, I don't need to have oral argument on that. 29th. MS. SHETH: The parties will be here anyway. We will concentrate on Bank of America on the

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If your Honor has any questions, we are happy to answer them. THE COURT: That's true, but I will not make

decisions on the record on those because they have to have a writing. No writing, no decision. Thank you, Judge. Otherwise, how could you appeal

MR. ROSEN: THE COURT:

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it, which is something to think about because that puts

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Proceedings a different issue on everything too. worry about that. But I will not

First you have to have a decision to

decide if you will appeal or not. So with that, that's where that stands. Okay. MR. HOLLAND: Thank you very much, Judge.

Have a good Thanksgiving. THE COURT: Happy Thanksgiving. I won't see

you until the 29th, I don't think. Apparently there is something we left undone. Yes, Ms. Sheth. MS. SHETH: Sorry.

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Very quickly, MBIA's motion, sequence number 64, just to cover briefly, I think out of the five

categories of the information that we moved to seal, four of which are unopposed by both Bloomberg and Countrywide, MBIA, there is one category, due diligence employees, the names of the due diligence employees who we will now withdraw our motion to seal as to those individuals given your Honor's statements. And the fifth category was the banking information relating to the account numbers which your Honor covered in the context of Countrywide's motion. Generally I want to make sure that also gets sealed for MBIA's purposes.

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Proceedings MS. CONCANNON: Honor. THE COURT: So, let's see now. Let me go We have no objection, your

over it so I have it because what I will have to do, I will have to give you a writing on what I said basically on the record. But we are getting and I will give you

expedited copy of the record.

basically what we already have written, but I will maybe amplify a little bit the standard based on the case law that, again, I referred to. I referred to one

of the cases, but I probably will do a little more on that, and give you the outline basically exactly what I said on the record. But to go back over 64, what am I to do on 64? Four categories are agreed to. MS. SHETH: Yes. Those four categories are

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the personal information concerning the witness which would include date of birth and social security number, category two are documents produced in response to third-party subpoenas issued to borrowers, employers and accountants, the third category is names and addresses as well as social security and date of birth of third-party borrowers which was covered on the Countrywide motion, and the fourth category is banking information, bank account information relating to

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Page 74

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9

Proceedings specific transactions. So those are the four that are And the

unopposed by both Countrywide and Bloomberg.

last category was names of due diligence employees which we had initially moved to seal, but in light of your Honor's guidance this morning we will withdraw that portion of the motion. THE COURT: MS. SHETH: THE COURT: That completes your 64? That's correct, your Honor. Good. Good. Thank you. Thank

10 11 12 13

you for clarifying that.

I think that was it. I am

glad we had that cleared up. Happy Thanksgiving, again. Happy holidays.

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*

*
C E R T I F I C A T E

*

I, Terry-Ann Volberg, C.S.R., an official court reporter of the State of New York, do hereby certify that the foregoing is a true and accurate transcript of my stenographic notes.

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