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EXHIBIT "A"
Declaration of Raymond J. Minehan
I, Raymond J. Minehan, make this Declaration in San Francisco, California, under the penalty of perjury of the laws of the State of California and show:
I am Raymond J. Minehan. I am over the age of eighteen years. I am competent to be a witness. I have personal knowledge of the events to which I attest. I acquired my personal knowledge in my role as an employee of the California Conservation and Liquidation Office ("CLO"). I am the chief financial officer for the CLO.
I have over twenty years' experience in the preparation of financial statements. I am familiar with the financial statements for Mission Insurance Company Trust and Mission National Insurance Company Trust. These financial statements are prepared by the CLO in the ordinary course of its business. I attach as Exhibit "A-l" a true and correct copy of the Mission National Insurance Company Trust financial statements through September 30, 2005. I attach as Exhibit "A-2" a true and correct copy of the Mission Insurance Company Trust financial statements through September 30, 2005. These financial statements are developed for the purpose of assessing distributions of assets pursuant to Section 1033 of the California Insurance Code. They do not take into account any issues as to any separate entries appropriate as to "latent deficiency claims", if any, pursuant to any agreement with Danielson Holding Corporation, now known as Covanta Holding Corporation. Rather, this presentation shows assets available as to cash distributions of the estate. These financial statements have been presented in this declaration for this purpose only.
The CLO has prepared financial statements for Mission National Insurance Company Trust since 1999. Prior to that time, such statements were prepared by Mission National Insurance Company personnel, subject to such auditing and review requirements employed during the time periods in question. CLO and I did not prepare them, but we maintain them among the business records of Mission National Insurance Company Trust. I attach as true and correct copy of these earlier financial statements as Exhibit "B" to this Declaration. These are presented as business records of Mission Insurance Company Trust and Mission National Insurance Company Trust, maintained in a systematic manner in the ordinary course of business, with entries being made into the records on or about the time of the condition being recorded.
Based upon the financial statements attached, it is my recommendation that the following distribution be made:
to policyholders of Mission Insurance Company Trust and Mission National Insurance Company Trust, a distribution sufficient to bring them up to one hundred percent of the principal amount of their approved claims;
to general creditors of Mission Insurance Company Trust, an amount sufficient to bring them up to thirty percent of the principal amount of their approved claims;
to general creditors of Mission National Insurance Company Trust, an amount sufficient to bring them up to one hundred percent of the principal amount of their approved claims.
The remaining assets, including cash assets and intangible assets, are recommended to be reserved pending the expiration of all relevant tax periods, and to ensure that the sufficient amount is maintained for the closing administration of the trusts, as well as any other unforeseen matters and contingencies. As to Mission Insurance Company Trust, these assets may amount to as much as one hundred ninety million dollars in assets if all potential recoveries are made. The sum of approximately fifty eight million dollars in Mission Insurance Company Trust assets on hand will be in the current holdback. As to Mission National Insurance Company Trust, the assets on hand for holdback are approximately twenty nine million dollars, while the future collections may increase the assets to the amounts set forth on the balance sheet. I believe this is a reasonable and prudent holdback in this matter.
I hereby execute this declaration under the penalty of perjury of the laws of the State of California in San Francisco, California, on the 30 day of November, 2005.