UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

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Inre: Chapter 11 ALLIED SYSTEMS HOLDINGS, INC., Case No. 12-c_[_ Alleged Debtor. _jl (LJ)

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In re: Chapter 11 ALLIED SYSTEMS, LTD. (L.P.), Case No. 12-L[_ Alleged Debtor. _jl (LJ)

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PETITIONING CREDITORS' MOTION PURSUANT TO DEL. BANKR. L.R. 9006-l(e) FOR AN ORDER SHORTENING TIME FOR NOTICE OF THE HEARING TO CONSIDER THE EXPEDITED MOTION OF PETITIONING CREDITORS FOR THE APPOINTMENT OF A TRUSTEE PURSUANT TO 11 U.S.C. lOS( a), 1104(a)(l) AND 1104(a)(2) Petitioning creditors BDCM Opportunity Fund II, LP, Black Diamond CLO 2005-1 Ltd, and Spectrum Investment Partners, LP (collectively, the "Petitioning Creditors") by and through their undersigned counsel, hereby submit this motion (the "Motion to Shorten") for an order shortening the notice and objection periods with respect to the Expedited Motion of Petitioning Creditors for the Appointment of a Trustee Pursuant to 11 U.S.C. 105(a), 1104(a)(l) and 1104(a)(2) (the "Trustee Motion"). The Trustee Motion is being filed and served concurrently herewith. In support of this Motion to Shorten, the Petitioning Creditors respectfully state as follows.

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BACKGROUND
I.

On May 14, 2012, the Petitioning Creditors filed involuntary petitions (the

"Involuntary Petitions") under section 303 and chapter II of title II of the United States Code against Allied Systems Holdings, Inc., and Allied Systems, Ltd. (L.P .) (together, the "Alleged Debtors"). Pursuant to Federal Rule of Bankruptcy Procedure ("Bankruptcy Rule") lOll (b), defenses and objections, if any, to the Involuntary Petitions are due by June 4, 2012. As of the date hereof, no order for relief has been entered in these cases. 2. The factual background relating to the filing of the Involuntary Petitions is set

forth in detail in the Statement ofPetitioning Creditors in Support of the Involuntary Chapter 11

Petitions Filed Against Allied Systems Holdings, Inc. and Allied Systems, Ltd. (L.P.), which was
filed contemporaneously with the Involuntary Petitions and is incorporated herein by reference.

JURISDICTION
3. This Court has jurisdiction to consider this matter pursuant to 28 U.S.C. !57

and 1334. This is a core proceeding under 28 U.S.C. 157(b) and venue is proper in this district pursuant to 28 U.S.C. 1408 and 1409. 4. The statutory predicates for the relief requested herein are section 105(a) of the

Bankruptcy Code and Rule 9006-1 (e) of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the "Local Rules").

RELIEF REOUESTED
5. By this Motion, the Petitioning Creditors seek authority pursuant to Bankruptcy

Code section 105(a) and Local Rule 9006-l(e) to shorten the notice required for a hearing on the Trustee Motion so that the Trustee Motion may be heard within two (2) days of its filing and

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service, or otherwise earliest available date, with objections to the relief sought in the Trustee Motion due at or before such hearing or on such other date as the Court shall order.
BASIS FOR RELIEF

6.

Pursuant to Del. Bankr. L.R. ("Local Rule") 9006-l(c), notice of a motion such as

the Trustee Motion must ordinarily be provided at least at least fourteen (14) days (and an additional three (3) days if service is by mail) prior to the hearing date, with the deadline for objection(s) to be no later than seven (7) days before the hearing date. However, the Court may order that a motion be heard on less notice than required by the Local Rules upon "written motion (served on all interested parties) specifying the exigencies justifying shortened notice." Local Rule 9006-1(e). No hearing on such a motion to shorten is required. See id. 7. As explained more fully in the Trustee Motion, exigent circumstances exist that

warrant hearing the Trustee Motion on shortened notice, as there is a risk of significant harm to the Alleged Debtors' creditors and stakeholders if the reliefrequested in the Trustee Motion is not heard and granted on the earliest possible timeframe. Specifically, Yucaipa American Alliance Fund I, LP and Yucaipa American Alliance (Parallel) Fund I, LP (collectively, "Yucaipa"), which has controlled the Alleged Debtors since their emergence from chapter 11 protection in 2007, has engaged in an ongoing, pervasive manipulation and control of the Alleged Debtors, and significant conflicts of interest leave the Alleged Debtors incapable of fulfilling their fiduciary obligations. The exigencies in support of hearing the Trustee Motion on shortened notice include, but are not limited to: Yucaipa's position as majority shareholder and purported controlling First Lien Lender, and its control of the Allied board of directors (the "Allied Board") and senior management, create conflicts of interest that prevent the Alleged Debtors from discharging their fiduciary duties; The Alleged Debtors have grossly mismanaged their business;
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As a result of the Alleged Debtors' conflicts of interest and loyalty to Yucaipa, as well as their gross mismanagement of the business, the Petitioning Creditors have no confidence in the Alleged Debtors' ability to reorganize their business or discharge their fiduciary duties; and The Alleged Debtors, under control of Yucaipa, have been unwilling to engage the Petitioning Creditors in restructuring negotiations, which has resulted in litigation between the Petitioning Creditors and Yucaipa and created an acrimonious relationship between Petitioning Creditors (on the one hand), and Yucapia and the Alleged Debtors (on the other hand), warranting appointment of a Chapter 11 trustee.

These serious conflicts and issues, among others that are more fully described in the Trustee Motion, pose a serious threat to the interests of the Alleged Debtors' creditors and stakeholders. To allow Yucaipa to maintain control over the Alleged Debtors during these Chapter 11 proceedings would severely impact the integrity of the bankruptcy process and materially and adversely affect the prospects of a successful reorganization. Unless a disinterested fiduciary is appointed as soon as possible, Yucaipa will strategically direct any restructuring process for its benefit and to the detriment of other creditors. The risk of mismanagement and adverse impact to the Alleged Debtors' creditors and stakeholders grows with each passing day and necessitates the hearing of the Trustee Motion on an expedited timeframe. 8. Local Rule 9006-1 (e) grants this Court the authority to order that a motion be

heard on less notice than is required by the Bankruptcy Rules, and provides that the Court may rule on a motion for the same "promptly without need for a hearing." Additionally, Bankruptcy Code section lOS(a) provides that the Court "may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title." Together, Local Rule 9006l(e) and Bankruptcy Code section lOS(a) provide ample authority for the Court to grant this Motion to Shorten. The exigencies in support such relief are clear. Accordingly, the Petitioning Creditors respectfully request that the Motion to Shorten be granted at the Court's earliest converuence. 4
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NOTICE AND NO PRIOR REQUEST

9.

The Petitioning Creditors have provided notice of this Motion to Shorten and the

Trustee Motion to the Alleged Debtors and the Office of the United States Trustee by hand and/or overnight delivery. In light of the nature of the relief requested herein, the Petitioning Creditors submit that no other or further notice is required. 10. other court. No previous request for the relief requested herein has been made to this or any

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WHEREFORE, the Petitioning Creditors respectfully request that this Court enter an order granting the relief requested herein and grant the Petitioning Creditors such other and further relief as is just and proper. Dated: May 17, 2012 Wilmington, Delaware

dam G. Landis (No. 3407 Kerri K. Mumford (No. 4186) Jeffrey Drobish (No. 5437) 919 Market Street, Suite 1800 Wilmington, Delaware 19801 Telephone: (302) 467-4400 Facsimile: (302) 467-4450 Email: landis@lrclaw.com mumford@lrclaw.com drobish@lrclaw.com -andAdam C. Harris Robert J. Ward Victoria A. Lepore SCHULTE ROTH & ZABEL LLP 919 Third Avenue New York, New York 10022 Telephone: (212) 756-2000 Facsimile: (212) 593-5955
Counsel to the Petitioning Creditors

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UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ------------------------------------------------------------------------------------------X In re: Chapter 11 ALLIED SYSTEMS HOLDINGS, INC., Case No. 12-.__[_ Alleged Debtor. __.] (LJ)

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In re: Chapter 11 ALLIED SYSTEMS, LTD. (L.P.), Case No. 12-._[_ Alleged Debtor.
Ref No.

_,] (LJ)

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ORDER GRANTING PETITIONING CREDITORS' MOTION PURSUANT TO DEL. BANKR. L.R. 9006-l(e) FOR AN ORDER SHORTENING TIME FOR NOTICE OF THE HEARING TO CONSIDER THE EXPEDITED MOTION OF PETITIONING CREDITORS FOR THE APPOINTMENT OF A TRUSTEE PURSUANT TO 11 U.S.C. 105(a), 1104(a)(l) AND 1104(a)(2) Upon consideration of the Petitioning Creditors' Motion Pursuant to Del. Bankr.

L.R. 9006-1 (E) For an Order Shortening Time For Notice of the Hearing to Consider the Expedited Motion of Petitioning Creditors For the Appointment of a Trustee Pursuant to 11 US.C. 105(a), 1104(a)(1) and 1104(a)(2) (the "Motion to Shorten"); 1 and the Court having
determined that granting the relief requested in the Motion to Shorten is in the best interests of the Alleged Debtors, their creditors and other parties in interest; and it appearing that due and adequate notice of the Motion to Shorten has been given under the circumstances, and that no other or further notice need be given; and after due deliberation and sufficient cause appearing therefor, it is hereby:
Capitalized terms used but not otherwise defmed herein have the meanings ascribed to them in the Motion to Shorten.
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ORDERED, that the Motion to Shorten is granted; and it is further

ORDERED, that the Trustee Motion shall be heard on May _ , 2012 at

_ : _ _ _ .M.; and it is further

ORDERED, that any objections to the relief requested in the Trustee Motion, if any, shall be filed and served no later than May_, 2012 at_: _ _ _.M.; and it is further ORDERED, that this Court shall retain jurisdiction over any and all matters arising from or related to the implementation or interpretation of this Order.

Dated: May_, 2012 Wilmington, Delaware United States Bankruptcy Judge

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