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PAUL R. GLASSMAN (State Bar No. 76536) LAURA L. BUCHANAN (State Bar No. 156261) KATHLEEN D. DeVANEY (State Bar No. 156444) STRADLING YOCCA CARLSON & RAUTH A Professional Corporation 100 Wilshire Blvd., Suite 440 Santa Monica, CA 90401 Telephone: (424) 214-7000 Facsimile: (424) 214-7010 E-mail: pglassman@sycr.com lbuchanan@sycr.com kdevaney@sycr.com Attorneys for Debtor City of San Bernardino UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA RIVERSIDE DIVISION In re: CITY OF SAN BERNARDINO, CALIFORNIA, Debtor. Case No. 6:12-BK-28006 MJ Chapter 9 DECLARATION OF PAUL R. GLASSMAN IN SUPPORT OF APPLICATIONS FOR ORDERS SETTING HEARINGS ON SHORTENED NOTICE OF: (1) MOTION FOR ORDER APPOINTING RUST OMNI, A DIVISION OF RUST CONSULTING, INC., AS CLAIMS, NOTICING AND BALLOTING AGENT PURSUANT TO 28 U.S.C. 156(c) AND RULE 2002 OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE; (2) MOTION FOR ENTRY OF AN ORDER (1) DIRECTING AND APPROVING FORM OF NOTICE; AND (2) SETTING DEADLINE FOR FILING OBJECTIONS TO PETITION; AND (3) MOTION FOR AN ORDER LIMITING NOTICE AND PERMITTING DEBTOR TO ESTABLISH AND MAINTAIN A PUBLICLY AVAILABLE INTERNET-ACCESSED WEBSITE IN LIEU OF NOTICE TO CERTAIN PARTIES

DECLARATION OF PAUL R. GLASSMAN

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I, Paul R. Glassman, declare: 1. I am an attorney licensed to practice law in the State of California and am

admitted to practice before this Court. I am a shareholder in the firm of Stradling, Yocca, Carlson & Rauth, a Professional Corporation, counsel of record for the City of San Bernardino, California, in this chapter 9 case. I make this declaration in compliance with Rule 90751(b)(2)(B) of the Local Bankruptcy Rules of the United States Bankruptcy Court for the Central District of California (Local Bankruptcy Rules) in support of the three applications seeking orders setting hearings on shortened notice on the following motions: (1) Motion For Order Appointing Rust Consulting/Omni Bankruptcy, A Division Of Rust Consulting, Inc., As Claims, Noticing And Balloting Agent Pursuant To 28 U.S.C. 156(c) And Rule 2002 Of The Federal Rules Of Bankruptcy Procedure (Claims Agent Motion); (2) Motion For Entry Of An Order (1) Directing And Approving Form Of Notice; And (2) Setting Deadline For Filing Objections To Petition (Case Notice and Objection Deadline Motion); and (3) Motion For An Order Limiting Notice And Permitting Debtor To Establish And Maintain A Publicly Available Internet-Accessed Website In Lieu Of Notice To Certain Parties (Website and Notice Limitation Motion) (collectively, the Motions). I have personal knowledge of the facts set forth below, and if called as a witness in this matter, would competently testify thereto. JUSTIFICATION FOR SETTING HEARINGS ON SHORTENED NOTICE 2. The City of San Bernardino, California (the City) filed its Voluntary Petition

seeking protection under chapter 9 of the Bankruptcy Code on an emergency basis on August 1, 2012 (the Petition Date). Data from the U.S. Census indicates that the City has a population of over 211,000 residents and the City estimates that it will have over 5,000 parties listed on its master mailing matrix to be filed in this case. I believe that the extremely high number of parties with an interest in this chapter 9 case necessitates that procedures are in place very early in the case to ensure that all creditors and parties in interest (as well as the residents of the City of San Bernardino) have access to important documents and notice of hearings, deadlines and papers filed in this case without overburdening this Courts resources and so that efforts are made to -1DECLARATION OF PAUL R. GLASSMAN

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minimize the professional fees and costs that the City would otherwise incur without such procedures in place. 3. I believe that good cause exists to hear the Website and Notice Limitation Motion

on shortened notice because the City wants (and, presumably, its creditors and parties in interest want) to expedite and streamline notice procedures in this chapter 9 case to advance their mutual economic interests in minimizing professional fees and costs incurred with complying with notice requirements and ensuring that all creditors and parties in interest (as well as the residents of the City of San Bernardino) have access to important documents filed in the case via a website maintained on the City's website at the City's expense. The City estimates that its mailing matrix may contain approximately 5,000 names and submits that establishing notice procedures as early in the case as possible is critical, so that the City can focus on its paramount objective of adjusting its debts and achieving a balanced and sustainable budget. 4. I believe that good cause exists to hear the Claims Agent Motion on shortened

notice because, again, the City anticipates that its mailing matrix may contain approximately 5,000 names. Given the size of the Citys creditor body, I believe that it would be impracticable and inefficient for the City and the Court to undertake the task of sending notices to creditors and other parties in interest. Moreover, I believe that appointing a third party to maintain a claims register and process claims and ballots will greatly decrease the costs and burdens of administering the Citys case and will improve the accuracy and efficiency of the noticing, claims allowance, and solicitation processes. I believe that the appointment of the Claims Agent is in the best interests of the City, the Citys creditors, and the Court and the efficient administration of the case necessitates that such an appointment be done on an expedited basis becuase notices in the case will need to be sent to large numbers of parties as soon as the Court orders a notice to all parties on the mailing matrix or all creditors. The Debtor is concurrently filing the Case Notice and Objection Deadline Motion, which, if granted, will require service of a notice on all creditors shortly after entry of the related order. The Debtor has requested that the hearing on the Case Notice and Objection Deadline Motion and the Claims Agent Motion be set for the same date, so the Noticing Agent will be approved in time to send that notice. This will -2DECLARATION OF PAUL R. GLASSMAN

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minimize costs and ensure that notices are provided to parties as accurately and efficiently as possible. 5. I believe that good cause exists to hear the Case Notice and Objection Deadline

Motion on shortened notice because I believe that it will be very difficult for the City to focus on the paramount objective of adjusting its debts and achieving fiscal stability until it establishes its eligibility to be a chapter 9 debtor, and that cannot happen until after notice of the filing of the chapter 9 case and of the date to object to eligibility has been approved by the Court and the City has satisified the publication requirements of Bankruptcy Code section 923. I believe that it is important to obtain this Courts approval of the notice of this chapter 9 case and a deadline to object to the petition so the City can establish its eligibility at the earliest possible point, and then focus on its financial challenges in an efficient and effective manner while minimizing professional fees and costs incurred to the extent possible. PRIMA FACIE BASIS FOR GRANTING THE CLAIMS AGENT MOTION 6.
The Claims Agent Motion is made pursuant to Bankruptcy Code section 901(a), 28

U.S.C. 156(c), Bankruptcy Rule 2002, and Local Bankruptcy Rule 5075-1. The Court has jurisdiction pursuant to 28 U.S.C. 1334(b), and it is a core proceeding under 28 U.S.C. 157(b)(2).

As set forth in paragraph 4 above, I believe that the size of the Citys creditor body makes it both impracticable and inefficient for the City and the Court to undertake the task of sending notices to the creditors and other parties in interest. Moreover, I believe that appointing a third party to maintain a claims register and process claims and ballots greatly will decrease the costs and burdens of administering the Citys case and will improve the accuracy and efficiency of the noticing, claims allowance, and solicitation processes. I believe that unless the City is authorized to retain a Claims Agent, the Court and the City likely would be inundated with mailings and
electronic claim filings. I believe that appointment of the Claims Agent will improve the accuracy and efficiency of the claims allowance process and the solicitation and noticing process. /// /// ///

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7.

Bankruptcy Code section 923 requires that notice be given of the commencement

of a chapter 9 case and of the order for relief. I believe that the Notice of Commencement of the Case appended to the Notice and Objection Deadline satisfies the requirements of section 923. Section 921(d) provides for the entry of an order for relief unless the petition is dismissed under section 921(c), which authorizes the dismissal of a petition if, after an objection to the petition is filed, the court determines that the petition was not filed in good faith, or that the petition does not meet the requirements of Title 11 of the United States Code. However, while section 921(c) contemplates the possibility of objections to a chapter 9 petition, it does not set a deadline for filing such objections. I believe that it is prudent and practical to set a deadline by when parties must submit objections contending that the petition was not filed in good faith or does not meet the requirements of the Bankruptcy Code. I believe that it is in the best interests of the Debtor and its creditors to expedite the entry of an order for relief in this case in order to remove any uncertainty created by the absence of express timing provisions in section 921(d) and to set a deadline for filing objections to the petition as requested by the City in order to give parties in interest appropriate time to object and to give the Debtor the ability to move forward with its case as soon as practicable. PRIMA FACIE BASIS FOR GRANTING THE WEBSITE AND NOTICE LIMITATION MOTION Bankruptcy Rule 9007 grants the Court general authority to regulate notice. Fed. R. Bankr. P. 9007. The Bankruptcy Rules further provide that the court may from time to time enter orders designating the matters in respect to which, the entity to whom, and the form and manner in which notices shall be sent except as otherwise provided by these rules. Fed. R. Bankr. P. 2002(m). Bankruptcy Code 102(1) provides that where the Bankruptcy Code provides for an action to occur after notice and a hearing, such action may occur after such notice as is appropriate in the particular circumstances, and such opportunity for a hearing as is appropriate in the particular circumstances. . . . 11 U.S.C. 102(1)(A). The Court has -4DECLARATION OF PAUL R. GLASSMAN

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additional broad authority under the Bankruptcy Code to implement section 102(1)(A) by establishing appropriate notice procedures that are not inconsistent with express provisions of the Bankruptcy Code. I believe that the Bankruptcy Code and the Bankruptcy Rules provide authority for this Court to approve the notice procedures described and set forth in the Website and Notice Limitation Motion in order to expedite and streamline notice procedures in this chapter 9 case to advance the interests of the City, its creditors and parties in interest while minimizing professional fees and costs incurred with complying with notice requirements, and ensuring that all creditors and parties in interest (as well as the residents of the City of San Bernardino) have access to important documents filed in the case via a website maintained on the City's website at the City's expense. I also believe that the proposed notice procedures will minimize the administrative burden on the City and the Court without diminishing creditor participation in the case. I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on August 7, 2012 at Santa Monica, California. /s/ Paul R. Glassman Paul R. Glassman

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PROOF OF SERVICE OF DOCUMENT

I am over the age of 18 and not a party to this bankruptcy case or adversary proceeding. My business address is: 100 Wilshire Blvd., Suite 440, Santa Monica, CA 90401. A true and correct copy of the foregoing document entitled: DECLARATION OF PAUL R. GLASSMAN IN SUPPORT OF APPLICATIONS FOR ORDERS SETTING HEARINGS ON SHORTENED NOTICE OF: (1) MOTION FOR ORDER APPOINTING RUST OMNI, A DIVISION OF RUST CONSULTING, INC., AS CLAIMS, NOTICING AND BALLOTING AGENT PURSUANT TO 28 U.S.C. 156(c) AND RULE 2002 OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE; (2) MOTION FOR ENTRY OF AN ORDER (1) DIRECTING AND APPROVING FORM OF NOTICE; AND (2) SETTING DEADLINE FOR FILING OBJECTIONS TO PETITION; AND (3) MOTION FOR AN ORDER LIMITING NOTICE AND PERMITTING DEBTOR TO ESTABLISH AND MAINTAIN A PUBLICLY AVAILABLE INTERNET-ACCESSED WEBSITE IN LIEU OF NOTICE TO CERTAIN PARTIES will be served or was served (a) on the judge in chambers in the form and manner required by LBR 5005-2(d); and (b) in the manner stated below: 1. TO BE SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (NEF): Pursuant to controlling General Orders and LBR, the foregoing document will be served by the court via NEF and hyperlink to the document. On August 9, 2012, I checked the CM/ECF docket for this bankruptcy case or adversary proceeding and determined that the following persons are on the Electronic Mail Notice List to receive NEF transmission at the email addresses stated below: Jerrold Abeles abeles.jerry@arentfox.com Joseph M Adams jadams@lawjma.com Andrew K Alper aalper@frandzel.com, efiling@frandzel.com;ekidder@frandzel.com Thomas V Askounis taskounis@askounisdarcy.com Anthony Bisconti tbisconti@bmkattorneys.com J Scott Bovitz bovitz@bovitz-spitzer.com Jeffrey W Broker jbroker@brokerlaw.biz Deana M Brown dbrown@milbank.com Michael J Bujold Michael.J.Bujold@usdoj.gov Alex Darcy adarcy@askounisdarcy.com Susan S Davis sdavis@coxcastle.com Paul R. Glassman pglassman@sycr.com Everett L Green everett.l.green@usdoj.gov James A Hayes jhayes@cwlawyers.com M Jonathan Hayes jhayes@hayesbklaw.com, roksana@hayesbklaw.com;carolyn@hayesbklaw.com;elizabeth@hayesbklaw.com Bonnie M Holcomb bonnie.holcomb@doj.ca.gov Whitman L Holt wholt@ktbslaw.com Steven J Katzman SKatzman@bmkattorneys.com Gregory A Martin gmartin@winston.com Scott H Olson solson@seyfarth.com Dean G Rallis drallis@sulmeyerlaw.com Kenneth N Russak krussak@frandzel.com, efiling@frandzel.com;dmoore@frandzel.com Gregory M Salvato gsalvato@salvatolawoffices.com, calendar@salvatolawoffices.com Benjamin Seigel bseigel@buchalter.com, IFS_filing@buchalter.com United States Trustee (RS) ustpregion16.rs.ecf@usdoj.gov Anne A Uyeda auyeda@bmkattorneys.com Annie Verdries verdries@lbbslaw.com Brian D Wesley brian.wesley@doj.ca.gov Service information continued on attached page

This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California. June 2012

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2. SERVED BY UNITED STATES MAIL: On _______, I served the following persons and/or entities at the last known addresses in this bankruptcy case or adversary proceeding by placing a true and correct copy thereof in a sealed envelope in the United States mail, first class, postage prepaid, and addressed as follows. Listing the judge here constitutes a declaration that mailing to the judge will be completed no later than 24 hours after the document is filed. Service information continued on attached page 3. SERVED BY PERSONAL DELIVERY, OVERNIGHT MAIL, FACSIMILE TRANSMISSION OR EMAIL (state method for each person or entity served): Pursuant to F.R.Civ.P. 5 and/or controlling LBR, on August 9, 2012, I served the following persons and/or entities by personal delivery, overnight mail service, or (for those who consented in writing to such service method), by facsimile transmission and/or email as follows. Listing the judge here constitutes a declaration that personal delivery on, or overnight mail to, the judge will be completed no later than 24 hours after the document is filed. Honorable Meredith A. Jury (Personal Delivery) U.S. Bankruptcy Court 3420 Twelfth Street, Suite 325 Riverside, CA 92501-3819 Service information continued on attached page I declare under penalty of perjury under the laws of the United States that the foregoing is true and correct.

August 9, 2012
Date

Christine Pesis
Printed Name

/s/ Christine Pesis

Signature

This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California. June 2012

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