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Alan J. Kornfeld (CA Bar No. 130063) Teddy M. Kapur (CA Bar No. 242486) PACHULSKI STANG ZIEHL & JONES LLP 10100 Santa Monica Boulevard 13th Floor Los Angeles, California 90067 Telephone: (310) 277-6910 Facsimile: (310) 201-0760 Counsel for Parthenon Capital Partners

UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA SANTA ANA DIVISION

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In re: WESTCLIFF MEDICAL LABORATORIES, INC., Debtor. __________________________________________ BIOLABS, INC.

Case No.: 8:10-bk-16743-TA Jointly Administered With Case No. 8:10-bk-16746-TA Chapter 11

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Debtor. __________________________________________ _________________________________________ Affects: All Debtors Westcliff Medical Laboratories, Inc. only Biolabs, Inc. only

REPLY TO OFFICIAL COMMITTEE OF UNSECURED CREDITORS OPPOSITION TO MOTION BY PARTHENON CAPITAL PARTNERS FOR ORDER: (1) DEEMING CLAIM ALLOWED, OR (2) GRANTING LEAVE TO FILE PROOF OF CLAIM Date: Time: Place: April 25, 2012 10:00 a.m. 411 West Fourth Street Santa Ana, CA 92701-4593 Courtroom 5B

Parthenon Capital Partners (Parthenon) hereby submits its reply (the Reply) to the opposition of the Official Committee of Unsecured Creditors (the "Committee") to the Motion by Parthenon Capital Partners for Order: (1) Deeming Claim Allowed, or (2) Granting Leave to File Proof of Claim [Docket No. 762] (the Motion). In support of its Reply, Parthenon states as follows:

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The claim asserted by Parthenon represents over 10% of the class 4 allowed unsecured claims - $1.68 million out of $13.1 million. The Debtors plan of liquidation references a list of allowed claims that includes the claim, and the amount of the claim is included in the projection of creditor recoveries in the plan. The Committee participated in the plan process and the plan was overwhelmingly approved by creditors. Thus allowance of the claim is consistent with the Committee's and creditor expectations. Now, however, the Committee seeks a windfall based on a mistake, even though it is uncontroverted that the Debtors have never disputed the claim and nobody had any expectation or understanding that it would not be allowed. There is no reason now that it should not either be deemed allowed pursuant to the plan or, at minimum, that Parthenon be permitted to file a proof of claim and any objection to the claim be made on its merits. The linchpin of excusable neglect is prejudice, and the Committee's claim of prejudice is specious. Distributions would not be delayed even if the Committee saw a reason to object and the Court permits it to do so. Claims objections are not nearly complete an initial hearing has not yet been held on certain claim objections , and even if the disbursing agent were otherwise prepared to make a distribution, he could simply reserve for the claim, and still pay creditors every bit as much as they expected to receive in the first place. Creditors voted for the plan assuming the Parthenon claim was allowed. Parthenon, too, assumed all along that it was allowed, since that is what it was told. Thus there would have been no need to file a proof of claim. The treatment of the claim as allowed in the Plan confirmed it. The Committee cannot contend it was not disclosed, or that it had any expectation that a proof of claim was required, or that it did not have ample opportunity to request the documents it now complains it has not seen. In any event, it is a straight-forward claim for fees under an advisory services agreement, which has been attached for the Committees review, with invoices, to Mr. Stein's supplemental declaration hereto. Parthenon allowed the fees to accrue in order to assist the Debtors with their cash flow. If Parthenon's understanding that the

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claim was allowed was incorrect, it should at least be entitled to have the claim decided on its merits. The insinuations of improper insider dealing are contrived. The Committee is well aware that Parthenon is a significant equity holder of the Debtors, and it is hardly surprising that they discussed the claim during the case. Indeed, it is a significant reason that Parthenon had no reason to doubt that the Debtors' schedules were consistent with their communications that the claim would be treated as allowed. The declaration of Parthenon's representative, Jeffrey Stein, that he was told by the Debtors' CRO that the Parthenon claim would be treated as allowed, is not inadmissible "hearsay" at all. It is a statement by the authorized representative of the party against which the claim is asserted, and thus is admissible evidence that the statement was made; furthermore, Mr. Stein 's understanding is directly relevant to why Parthenon did not file a proof of claim. Finally, the Committee's supposed ethical concerns are unfounded. It was fully disclosed that Kirkland & Ellis LLP ("K&E") represented Parthenon. It is special counsel, not general counsel. So it is not unexpected or suspicious that Debtor's counsel notified K&E when it learned that the scheduling of Parthenon's claim was different than the parties had expected. K&E was not representing Parthenon in respect of its claim prior to confirmation of the Plan. Parthenon did not need representation on its claim, or so it thought. Now that an issue has arisen, however, it has retained separate counsel for the purpose. II. THE CLAIM IS TREATED AS ALLOWED IN THE PLAN The Committee minimizes the import of the schedule of allowed claims by characterizing it as an exhibit to the Disclosure Statement. But it is not just an exhibit to the Disclosure Statement, but is referenced in the Plan itself as the source of information about class 4 general unsecured claims. See Plan at 10 (the relevant excerpt of which is attached for ease of reference as Exhibit 1 hereto). The list itself, which is attached for ease of reference as Exhibit 2 hereto, has a column for "Allowed Claim (Est.)", under which the Parthenon claim is listed at $1,684,349.39. Exh. 2, ECF p. 94. It says nothing about the claim being disputed. 2
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If the Debtors intended to object to a claim representing over 10% of general unsecured claims, this intent should have been stated in the disclosure statement. The Ninth Circuit has ruled that a party is equitably estopped from asserting a cause of action not raised in a reorganization plan or otherwise mentioned in the debtor's schedules or disclosure statement. Hay v. First Interstate Bank of Kalispell, N.A., 978 F.2d 555, 557 (9th Cir. 1992). The Committee refers to general language reserving the Debtors' rights, but "a general reservation of rights [is] insufficient to prevent the application of res judicata." Kelley v. South Bay Bank (In re Kelley), 199 B.R. 698, 704 (9th Cir. BAP 1996). A final confirmation order precludes the raising of issues which could or should have been raised during the pendency of the case. Heritage Hotel Ltd. P'ship I v. Valley Bank of Nev.( In re Heritage Hotel Ltd. P'ship I), 160 B.R. 374, 377 (9th Cir. BAP 1993), aff'd, 59 F.2d 175 (9th Cir. 1995). See also Matter of Howe, 913 F.2d 1138, 1147 (5th Cir. 1990) ("When a confirmed plan discloses and specifically treats the creditor's claim, and the debtor has had a full opportunity to contest the creditor's claim in an adversary proceeding that is, in effect, settled in the plan, the debtor cannot collaterally attack the bankruptcy court's decision five years later in an action based on the same transaction."). III. THE PIONEER STANDARD IS EASILY MET The Committee relies on the narrow Ninth Circuit application of Pioneer in Kyle v. Campbell Soup Co., 28 F.3d 928, 931 (9th Cir. 1994) and similar cases that focus on the nature of the neglect, e.g., Kyle rejected that an attorney's misinterpretation of an unambiguous local rule could be excusable neglect. But the Ninth Circuit has expressly repudiated the Kyle standard as too narrow. In an en banc decision, the court cited the "narrow approach" of Kyle as an example of "our circuit's confusion." Pincay v. Andrews, 389 F.3d 853, 857 (9th Cir. Cal. 2004); see also De Jourday v. JP Morgan Chase Bank, N.A., 2012 U.S. Dist. LEXIS 40218, 6-6 (S.D. Cal. Mar. 15, 2012) ("the Court in Pincay recognized its approach as narrow and confused."). We are persuaded that, under Pioneer, the correct approach is to avoid any per se rule. Pioneer cautioned against "erecting a rigid barrier against late filings attributable in any degree to the movant's negligence." 507 U.S. at 395 n.14. There should similarly be no rigid 3
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legal rule against late filings attributable to any particular type of negligence. Instead, we leave the weighing of Pioneer's equitable factors to the discretion of the district court in every case. Pincay v. Andrews, 389 F.3d at 860 (emphasis added). "[W]e will ordinarily examine all of the circumstances involved rather than holding that any single circumstance in isolation compels a particular result regardless of the other factors." Id. at 856 (quoting Briones v. Riviera Hotel & Casino, 116 F.3d 379, 382 n.2 (9th Cir. 1997)). After all, "the concept of excusable neglect clearly anticipates neglect on the part of the party seeking to be excused." Wall St. Plaza, LLC v. JSJF Corp. (In re JSJF Corp.), 344 B.R. 94, 102 (9th Cir. BAP 2006) (citing Pioneer). Furthermore, while the Committee emphasizes that Parthenon was represented by a sophisticated law firm, not only did Pincay involve a sophisticated law firm, but in this case, Parthenon was not being represented by K&E in connection with its claim at any time prior to the bar date or, for that matter, plan confirmation. See Stein Decl., 9. Parthenon was told by the Debtors' CRO that its claim was allowed, and did not believe it needed representation. As the Committee concurs, prejudice is the most important factor, and here there is little to none. Creditors will, at worst, receive no less than they anticipated when they accepted the plan. The claim is a simple claim based on a formula set forth in an Advisory Services Agreement. Stein Decl., Exh. 1. There should be little or no delay, since even if the claim were objectionable, the initial hearing on certain other claim objections will not occur until May 30, 2012. In fact, even if there were a delay, reserving for the claim would still permit a distribution in accord with creditor expectations. Furthermore, "in a liquidating plan there is very little danger of prejudice." In re Premier Membership Servs., LLC, 276 B.R. 709, 714 (Bankr. S.D. Fla. 2002) ("Pioneer requires prejudice 'to the debtor,' not prejudice to other creditors"); In re Eagle Bus Mfg., Inc., 62 F.3d 730, 737 (5th Cir.1995) (under Pioneer, the central inquiry is whether the debtor will be prejudiced); In re Sacred Heart Hosp., 186 B.R. 891, 895 (Bankr. E.D. Pa. 1995) ([T]he danger of prejudice to the debtor and potential adverse impact of allowing a late claim on the debtor's reorganization process, are the polestars.). Here, there is no prejudice to the Debtors or to creditors.

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IV. THE SUGGESTION OF IMPROPRIETY IS UNFOUNDED The Committee complains of "troubling and unanswered questions," as if it was not aware that Parthenon was a major equity holder in the Debtors, that it asserted a significant claim, or that K&E represented Parthenon, which was disclosed in its application to be employed as special counsel. The Committee is well aware that Parthenon is an insider of the Debtors, and it should come as no surprise that they discussed the Parthenon claim, nor does it suggest any impropriety. The Committee asks "why upon discovering the problem with Parthenon's claim did Mr. Bender first contact K&E?" as if there were something sinister about notifying K&E, which notified Parthenon, which ultimately retained independent counsel. Truly disingenuous is the Committee's suggestion that "the disclosure of Parthenon's significant insider claim prior to the claims bar date could have impacted and altered the direction of the bankruptcy case and the Committee's response to a number of critical issues, including plan confirmation, substantive consolidation and subordination under 11 U.S.C. Section 510(b)." How so? The claim was scheduled. Further, the claim was identified and counted as a significant allowed claim in the Plan projections. The confirmed Plan is a liquidating plan. What is troubling is not the Motion, but that the Committee would so readily contrive and accuse Parthenon and the Debtors of serious misconduct solely to gain a unanticipated windfall at Parthenon's expense. V. THE EVIDENTIARY OBJECTIONS LACK MERIT A. Evidentiary Objections to Declaration of Jeffrey S. Stein: The most material evidentiary objection of the Committee to Mr. Stein's declaration is to his statement that: The Debtors CRO made clear to me that the management fees owed to Parthenon would be treated as allowed claims under the Debtors confirmed plan of reorganization. 5
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The Committee objects to this statement as hearsay. That is incorrect. As a statement made by the CRO of the party against which the claim is asserted, it is excluded from hearsay under Fed.R.Evid. 801, as a statement "made by the party in an individual or representative capacity," that "the party manifested that it adopted or believed to be true," that was "made by a person authorized by the party to make a statement on the subject" and that "was made by the party's agent or employee on a matter within the scope of that relationship and while it existed. Fed.R.Evid. 801 (d)(2). Thus Mr. Stein's testimony concerning the CRO's statement is admissible as evidence of the truth of the statement. Furthermore, even if the CRO's statement were not admissible for that purpose, Mr. Stein's testimony as to his own understanding is not hearsay and is relevant to the issue of excusable neglect. The same is true of Mr. Stein's statement that: "It was my understanding throughout these cases that Parthenon held valid claims against the Debtors on account of these fees, and that the Debtors ultimately would treat these liabilities as allowed claims in their bankruptcy cases." The Committee objects to this statement as hearsay. It is not hearsay: Mr. Stein states his own understanding of the treatment of Parthenon's claim, not to another person's oral assertion, offered for the truth of the matter asserted. Fed.R.Evid. 801(a)-(c). Furthermore, his understanding is relevant to the issue of Parthenon's excusable neglect. B. Evidentiary Objections to Declaration of Matthew Pakkala Mr. Pakkala testified that he became the Debtors' CRO on April 1, 2010, and the bankruptcies were filed on May 19, 2010. Pakkala Decl., 4. The Committee objects that the following statements are not based on personal knowledge, and that the first and fourth are hearsay: Prior to the Petition Date, the Debtors principal equityholder, Parthenon Capital Partners (Parthenon), provided certain management services to the Debtors, in return for which the Debtors promised to pay to Parthenon an agreed-upon fee. 6 "Hearsay" is a person's oral assertion. Fed.R.Evid. 801(a)-(c). Mr. Pakkala is not testifying

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to a person's oral assertion. Further, Mr. Pakkala had personal knowledge from, at the latest, April 27 1, 2010 forward, nearly two months before the bankruptcy was filed. 28 6
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As of the Petition Date, I understand that that approximately $1,684,349.39 remained owing from the Debtors to Parthenon on account of the management fees. 6 There is no basis to question Mr. Pakkala's testimony on personal knowledge that he, as the Debtors' CRO, understood the debt to be $1,684,349.39. The categorization of Parthenons claim as disputed was a clerical error. 7 There is no basis to question Mr. Pakkala's testimony that he, as the Debtors' CRO, has personal knowledge that the categorization as "disputed" was clerical error. I understood throughout these cases that Parthenon held valid claims against the Debtors and that the Debtors always intended that they would be treated as valid. 7 There is no basis to question Mr. Pakkala's testimony that he, as the Debtors' CRO, has personal knowledge that he understood and intended that the claims would be treated as valid. The Committee also objects to this statement as hearsay, but his testimony as to his understanding as CRO that the claims are valid and are intended to be valid is simply not hearsay, and he does not testify to any oral statement that could constitute hearsay in any event. I believe the categorization of Parthenons claim as allowed in the Debtors Disclosure Statement was correct and I believe it to be an uncontested claim against the estates. 8 Finally, there is no basis to question Mr. Pakkala's testimony that he, as the Debtors' CRO, has personal knowledge that he believed it to be correctly classified as "allowed" and that it is uncontested. In sum, the evidentiary objections should be overruled.

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WHEREFORE, Parthenon respectfully requests that the Court deem the Parthenon claim allowed, or alternatively grant it leave to file a proof of claim, and issue such other and further relief as the Court deems appropriate. Dated: April 18, 2012 PACHULSKI STANG ZIEHL & JONES LLP By /s/ Alan J. Kornfeld Alan J. Kornfeld Teddy M. Kapur Attorneys for Parthenon Capital Partners

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RON BENDER (SBN 143364) TODD M. ARNOLD (SBN 221868) JOHN-PATRICK M. FRITZ (SBN 245240) LEVENE, NEALE, BENDER, YOO & BRILL L.L.P. 10250 Constellation Boulevard, Suite 1700 Los Angeles, California 90067 Telephone: (310) 229-1234; Facsimile: (310) 229-1244 Email: rb@LNBYB.com; tma@LNBYB.com; jpf@LNBYB.com Attorneys for Chapter 11 Debtors and Debtors in Possession

UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA (SANTA ANA DIVISION) In re: WESTCLIFF MEDICAL LABORATORIES, INC., Debtor. __________________________________ BIOLABS, INC., Debtor. __________________________________ Affects Both Debtors Affects WESTCLIFF MEDICAL LABORATORIES, INC. only Affects BIOLABS, INC. only Lead Case No. 8:10-bk-16743-TA Jointly Administered with Case No. 8:10-bk16746-TA Chapter 11 Cases FIRST AMENDED LIQUIDATING REORGANIZATION CHAPTER PLAN 11 OF

Disclosure Statement Hearing: Date: November 30, 2011 Time: 10:00 a.m. Plan Confirmation Hearing: Date: February 8, 2012 Time: 10:00 a.m. Place: Courtroom 5B 411 West Fourth Street Santa Ana, CA 92701-4593

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is practical). In the event that a timely objection is filed to any such non-tax priority claims, then those disputed non-tax priority claims will be paid in full out of the Estates Funds on the later of the Effective Date and the date the Bankruptcy Court enters an order allowing any such

disputed non-tax priority claims (or as soon thereafter as is practical). All non-tax priority
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claims will be deemed to be collectively included in class 3 under this Plan and will be considered to be not impaired since they are being paid in full in cash on the Effective Date (or upon entry of a Bankruptcy Court order allowing such non-tax priority claims if a timely objection is filed to them). 3. Classes of General Unsecured Claims

General unsecured claims are unsecured claims not entitled to priority under
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Bankruptcy Code Section 507(a). The following chart identifies this Plan's treatment of the
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classes containing all of the non-priority general unsecured claims (see Exhibit 1 to the Disclosure Statement for detailed information about each class 4 general unsecured claim):

CLASS # 4

DESCRIPTION All general unsecured claims excluding the general unsecured deficiency claim of the Senior Lenders which is being separately classified in class 5 in accordance with the terms of the Asset Allocation Agreement. The Debtors have filed objections to most of their disputed general unsecured claims. Based upon the outcome of these claims objections and the Debtors analysis of

IMPAIRED (Y/N) Impaired; allowed claims in this class are entitled to vote on this Plan.

TREATMENT All Estates Funds remaining after all allowed secured claims, all allowed administrative claims, all allowed priority tax claims, and all allowed priority (non-tax) claims have been paid in full and the Administrative Reserve Fund has been funded (Net Estates Funds) will be distributed to holders of class 4 allowed claims on a pro rata basis based upon the allowed amount of their class 4 claims until each holder of a class 4 allowed claim has received payment equal to 10% of the amount of their class 4 allowed claim. The Net Estates Funds remaining after each holder of a class 4 allowed claim has received payment equal to 10% of the amount of their class 4 allowed claim (Remaining Net Estates Funds) will be distributed to holders

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their books and records and claims asserted, the Debtors currently estimate that there will be a total of approximately $13,087,870 of class 4 allowed claims, inclusive of the class 4 claims of any parties to rejected executory contracts and unexpired leases. All objections to any remaining disputed class 4 claims must be filed prior to the Effective Date.

of class 4 allowed claims and to the Senior Lenders on account of their class 5 allowed claim on a pro rata basis based upon the remaining allowed amounts of their respective class 4 and class 5 allowed claims after taking into account the 10% distribution received by holders of class 4 allowed claims as described immediately above. The Debtors estimate that holders of class 4 allowed claims will receive a total of approximately $4,679,745 of the Estates Funds under this Plan.5 This total represents the estimated portion of the Estates Funds for class 4 as of the Effective Date, after funding of the Administrative Reserve Fund, and payment of all allowed secured, administrative and priority claims. With an estimated $13,087,870 of class 4 allowed claims, the Debtors estimate that holders of class 4 allowed claims will receive a distribution equal to approximately 35.75% of the amount of their class 4 allowed claims before taking into account any Net Avoidance Action Recoveries (defined below) or the Debtors General Litigation Recoveries. The distribution to holders of class 4 allowed claims of their portion of the Net Estates Funds will be made within thirty days following the entry of a Bankruptcy Court order resolving the final remaining disputed claim, unless the Estate Representative obtains an order of the Bankruptcy Court following notice and a hearing authorizing the Estate Representative to make an interim distribution to holders of class 4 allowed claims because of the time delay that is expected to be incurred in resolving any outstanding disputed claims. The Debtors estimate that the initial distribution to holders of class 4 allowed claims will be made by

5 This figure is based on the following assumptions: (i) there will be total Estates Funds on the Effective Date of $8,600,000; (ii) there will be a total of $1,326,045 of allowed administrative claims; (iii) there will be a total of $14,486 of allowed priority tax claims; (iv) there will be a total of $79,053 of allowed class 1 secured claims; and (v) there will be a total of $54,030 of allowed non-tax priority claims. If any of these assumptions proves to be incorrect, then the total amount of Estates Funds that will be available for distribution to holders of class 4 allowed claims will be impacted (either up or down) accordingly.

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around March 31, 2012. The estimated percentage distribution to holders of class 4 allowed claims set forth above is just an estimate. The Debtors will not know the actual percentage distribution until the claims objection process has been completed and final applications for approval of the fees and expenses of the professionals employed in these cases have been ruled upon. By voting to accept this Plan, class 4 claim holders are acknowledging that their actual percentage recovery may be higher or lower than as estimated above. The foregoing estimated figures do not include any Net Avoidance Action Recoveries or the Debtors General Litigation Recoveries. All Net Avoidance Action Recoveries will be distributed to holders of class 4 allowed claims and to the Senior Lenders on account of their class 5 allowed claim on a pro rata basis based upon the remaining allowed amounts of their respective class 4 and class 5 allowed claims after taking into account the 10% distribution received by holders of class 4 allowed claims as described above. The Net Avoidance Action Recoveries will be disbursed by the Estate Representative to holders of class 4 and class 5 allowed claims once the pursuit of Avoidance Actions has been completed. The Estate Representative shall have the right at his discretion to make an interim distribution of Net Avoidance Action Recoveries to holders of class 4 and class 5 allowed claims if the Estate Representative concludes that the cost of doing so is reasonable compared to the amount of Net Avoidance Action Recoveries to be distributed. In accordance with the terms of the Asset Allocation Agreement, all of the Debtors General Litigation Recoveries will be distributed just to holders of class 4 allowed claims on a pro rata basis based upon the allowed amounts of their respective class 4 allowed claims. The Debtors do not believe

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that there will be any Debtors General Litigation Recoveries.

CLASS # 5

DESCRIPTION Class 5 consists of the deficiency claim of the Senior Lenders which is being separately classified in class 5 in accordance with the terms of the Asset Allocation Agreement. The Debtors believe that the class 5 claim of the Senior Lenders is in the amount of $7,675,801.66, after taking into account all of the post-petition payments the Debtors have made to the Senior Lenders.

IMPAIRED (Y/N) Impaired; allowed claim in this class is entitled to vote on this Plan.

TREATMENT As indicated above, the Remaining Net Estates Funds (which consists of the Net Estates Funds remaining after each holder of a class 4 allowed claim has received payment equal to 10% of the amount of their class 4 allowed claim) will be distributed to holders of class 4 allowed claims and to the Senior Lenders on account of their class 5 allowed claim on a pro rata basis based upon the remaining allowed amounts of their respective class 4 and class 5 allowed claims after taking into account the 10% distribution received by holders of class 4 allowed claims as described above. Since the Debtors estimate that there will be a total of approximately $13,087,870 of class 4 allowed claims, the Debtors estimate that there will be a total of approximately $11,779,083 of class 4 allowed claims after each holder of a class 4 allowed claim has received payment equal to 10% of the amount of their class 4 allowed claim. The Debtors therefore estimate that approximately 60.546% of the Remaining Net Estates Funds will be distributed to holders of class 4 allowed claims and that approximately 39.454% of the Remaining Net Estates Funds will be distributed to the Senior Lenders on account of their class 5 allowed claim. The Debtors estimate that Senior Lenders will receive a total of approximately $2,196,640

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RON BENDER (SBN 143364) TODD M. ARNOLD (SBN 221868) JOHN-PATRICK M. FRITZ (SBN 245240) LEVENE, NEALE, BENDER, YOO & BRILL L.L.P. 10250 Constellation Boulevard, Suite 1700 Los Angeles, California 90067 Telephone: (310) 229-1234; Facsimile: (310) 229-1244 Email: rb@LNBYB.com; tma@LNBYB.com; jpf@LNBYB.com Attorneys for Chapter 11 Debtors and Debtors in Possession

UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA (SANTA ANA DIVISION) In re: WESTCLIFF MEDICAL LABORATORIES, INC., Debtor. __________________________________ BIOLABS, INC., Debtor. __________________________________ Affects Both Debtors Affects WESTCLIFF MEDICAL LABORATORIES, INC. only Affects BIOLABS, INC. only Place: Courtroom 5B 411 West Fourth Street Santa Ana, CA 92701-4593 Lead Case No. 8:10-bk-16743-TA Jointly Administered with Case No. 8:10-bk16746-TA Chapter 11 Cases FIRST AMENDED DISCLOSURE STATEMENT DESCRIBING DEBTORS CHAPTER 11 LIQUIDATING PLAN OF REORGANIZATION Disclosure Statement Hearing: Date: November 30, 2011 Time: 10:00 a.m. Plan Confirmation Hearing: Date: [To Be Scheduled] Time: [To Be Scheduled]

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Desc

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

EXHIBIT 1

50 015

EXHIBIT "1"

Desc

Pet Date: 5/19/10 Claim Nos for Westcliff unless otherwise stated Scheduled Claim Schedule "D" Secured Schedule "E" Priority Schedule "F" Unsecured Unsecured Claim No. Proof of Claim Allowed Claim (Est.)

NOTES

Doc 796 Filed 04/18/12 Entered 04/18/12 14:28:05 633 11/28/11 11/28/11 13:02:37 Main Document Main Document Page 94 of 179 Page 19 of 23

Palomares, Enrique C. PAMELA KUSHNER, MD Pantoja, Lisett Pantoja, Sandra Papazyan, Anania PARADISE SIGNS & GRAPHICS PARAKRAMA T CHANDRASOMA MD PARDEE, CYNTHIA $0.00 $0.00 $0.00 $0.00 $0.00 $600.00 $40.99 $0.00 $29.05 $40.52 $0.00 $0.00 $1,684,349.39 $32.00 $0.00 $12.20 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $54.65 $0.00 $0.00 $29,491.00 $0.00 $0.00 $5,629.93 $0.00 $0.00 $60.00 $0.00 $6.08 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $509.58 $36.96 $0.00 $0.00 $22.00 $0.00 $0.00 $0.00 $54.00 PARK PLACE INTERNATIONAL , INC PARKER, CONNIE PARKER, ELIZABETH Parra, Adrian Parra, Roberto C. Parthenon Mgmt Fee Qtrly Increase PATE, REBECCA Patel, Hirenkumar P. PATEL, SAILESH PATRICIA OAKES-HEARRELL PATRICIA URBANO PATRIOT HEATING & AIR, INC Patronas, Camille Patt, Robert James PAUL H.MEARDON PAUL HANSEN PAUL S. HANSEN PAUL W & JOLA J. OSTOYA PAUL W OSTOYA.M.D. INC PAULINE BUSH PAULSON, LENORA Pavia, David Payne, Cherie Leah PBM IT SOLUTIONS, INC PC CONNECTION SALES CORP. PCAM, LLC PCAP MANAGERS, LLC PDP MISSION VIEJO LLC PDP MISSION VIEJO LLC PEARCE, JUDY Pearson, Debra Denise PEEPLES, CAREY Pen, Eng Siv Pena, Julio Penner, Derick P. Pennington, Aubrey Edwin Peoples, Thommarrier Perales, Jesus Perales, Robert Michael Perales, Rosalie Perez, Amor A. Perez, Andres Perez, Breana Marie Perez, Emily Clorese Perez, Jaime Perez, Joseph Tenorio Perez, Reynaldo Michael PERKINELMER LIFE AND PERKINS, BARBARA Perkins, Jamie Marie Perry, Gina E. PERSINGER, BLYTHE PERSONNEL SYSTEMS ASSOCIATES PETER WEISS Petero, Iokapeta PETERSEN, TERRAN

$0.00

$0.00 $0.00 $0.00 $0.00

$0.00

$0.00 $600.00 $40.99

$0.00 $29.05 $40.52 $0.00 $0.00

$1,684,349.39 $32.00 $0.00

$12.20 $0.00 $0.00 $0.00 $0.00 $0.00

$0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $54.65 $0.00 $0.00

$29,491.00 $0.00 $0.00 $5,629.93

$0.00 $0.00 $60.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

$6.08

Case 8:10-bk-16743-TA

$509.58

$36.96 $0.00 $0.00

$22.00 $0.00 $0.00 $0.00

$54.00

Unsecured

Secured

Secured

Priority

Priority

Admin

Admin

Date Claim Filed

C/U/D

Name

Page 41

016

In re:

Case 8:10-bk-16743-TA

Doc 796

Main WESTCLIFF MEDICAL LABORATORIES, INC.,Document

Filed 04/18/12 Entered 04/18/12 14:28:05 CHAPTER 11 Page 20 of 23 CASE NUMBER 10-16743-TA
Debtor(s).

Desc

[Jointly Admin. with Case No. 10-16746-TA]

NOTE: When using this form to indicate service of a proposed order, DO NOT list any person or entity in Category I. Proposed orders do not generate an NEF because only orders that have been entered are placed on the CM/ECF docket.

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: 10100 Santa Monica Blvd., 13th Floor, Los Angeles, CA 90067 A true and correct copy of the foregoing document described as REPLY TO OFFICIAL COMMITTEE OF UNSECURED CREDITORS OPPOSITION TO MOTION BY PARTHENON CAPITAL PARTNERS FOR ORDER: (1) DEEMING CLAIM ALLOWED, OR (2) GRANTING LEAVE TO FILE PROOF OF CLAIM 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 indicated below: I. TO BE SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (NEF) Pursuant to controlling General Order(s) and Local Bankruptcy Rule(s) (LBR), the foregoing document will be served by the court via NEF and hyperlink to the document. On April 18, 2012 I checked the CM/ECF docket for this bankruptcy case or adversary proceeding and determined that the following person(s) are on the Electronic Mail Notice List to receive NEF transmission at the email address(es) indicated below:

Service information continued on attached page II. SERVED BY U.S. MAIL OR OVERNIGHT MAIL(indicate method for each person or entity served): On April 18, 2012 I served the following person(s) and/or entity(ies) at the last known address(es) 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/or with an overnight mail service 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.
JUDGES COPY [Overnight Delivery] The Honorable Theodor C. Albert United States Bankruptcy Court - Central District of California 411 West Fourth Street, Suite 5085 Santa Ana, CA 92701

Service information continued on attached page III. SERVED BY PERSONAL DELIVERY, FACSIMILE TRANSMISSION OR EMAIL (indicate method for each person or entity served): Pursuant to F.R.Civ.P. 5 and/or controlling LBR, on I served the following person(s) and/or entity(ies) by personal delivery, 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 the judge will be completed no later than 24 hours after the document is filed.

Service information continued on attached page

I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct.

April 18, 2012

Date

Melisa DesJardien
Type Name

/s/ Melisa DesJardien

Signature

This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California. August 2010

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Case 8:10-bk-16743-TA

Doc 796

Main Document I. SERVED BY NEF 8:10-bk-16743-TA Notice will be electronically mailed to:
1. 2. 3. Raymond G Alvarado for Debtor Westcliff Medical Laboratories, Inc. ralvarado@alvaradosmith.com Todd M Arnold for Debtor BioLabs, Inc. tma@lnbyb.com Phillip Ashman for Cred Phadia US, Inc. mgolod@mcqueenashman.com, pashman@mcqueenashman.com;bkumamoto@mcqueenashman.com Richard L Barnett for Cred Mission Hospital Regional Medical Ctr dba Mission Hospital rick@barnettrubin.com, kelly@barnettrubin.com Ron Bender for Debtor BioLabs, Inc. rb@lnbyb.com Eric S Bershatski for Cred Claire Oakes ericbershatski@tilemlaw.com Ronald K Brown for Cred LGSM Laguna Hills, LLC rkbgwhw@aol.com Donald H Cram for Pltf Sunamerica Life Insurance Company dhc@severson.com Jennifer Witherell Crastz for Cred Beckman Coulter, Inc. jcrastz@hemar-rousso.com Ryan S Fife for Cred VWR International LLC ryan.fife@dbr.com, mary.avila@dbr.com;docket_la@dbr.com Carol J Fogleman for Cred City of Wildomar mfrost@bwslaw.com Anthony A Friedman for Debtor Westcliff Medical Laboratories, Inc. aaf@lnbyb.com John-patrick M Fritz for Debtor Westcliff Medical Laboratories, Inc. jpf@lnbrb.com Jeffrey K Garfinkle for Creds Committee bkgroup@buchalter.com, jgarfinkle@buchalter.com; jmealeyhatch@buchalter.com;docket@buchalter.com; svanderburgh@buchalter.com Fredric Glass for Cred Fair Harbor Capital, LLC fglass@fairharborcapital.com Nancy S Goldenberg for U.S. Trustee United States Trustee (SA) nancy.goldenberg@usdoj.gov Chad V Haes for Int Pty Courtesy NEF chaes@marshackhays.com D Edward Hays for Cred LaserCycle Imaging ehays@marshackhays.com, ecfmarshackhays@gmail.com Michael J Heyman for Cred Esoterix Genetic Laboratories, LLC michael.heyman@klgates.com Jacqueline L James for Debtor BioLabs, Inc. jlj@lnbyb.com Jeff D Kahane for Cred ACE American Insurance Company & ACE Property & Casualty Insurance Company jkahane@duanemorris.com Andy Kong for Cred Grifols USA LLC Kong.Andy@ArentFox.com

Filed 04/18/12 Entered 04/18/12 14:28:05 Page 21 of 23

Desc

4.

5. 6. 7. 8. 9. 10. 11. 12. 13. 14.

15. 16. 17. 18. 19. 20. 21.

23. Alan J Kornfeld on behalf of Creditor Parthenon Capital Partners akornfeld@pszjlaw.com, akornfeld@pszjlaw.com 24. Rodger M Landau for Cred Enterprise Rent-A-Car of LA, dba Enterprise Fleet Service rlandau@lgbfirm.com, gguidetti@lgbfirm.com; rmartinpatterson@lgbfirm.com 25. Matthew A Lesnick for Cred Descartes Systems [USA], LLC D matt@lesnickprince.com 26. Michael B Lubic for Cred Esoterix Genetic Laboratories, LLC michael.lubic@klgates.com 27. Frank F McGinn for Int Pty Courtesy NEF ffm@bostonbusinesslaw.com 28. Elissa Miller for Int Pty AFCO Acceptance Corporation emiller@sulmeyerlaw.com, asokolowski@sulmeyerlaw.com 29. Kerry A Moynihan for Int Pty Specialty Laboratories, Inc. kerry.moynihan@bryancave.com, raul.morales@bryancave.com;trish.penn@bryancave.com 30. Aram Ordubegian for Cred Roche Diagnostics Corporation ordubegian.aram@arentfox.com 31. Ernie Zachary Park for Cred The Irvine Company LLC ernie.park@bewleylaw.com 32. Richard Park for Def Federal Trade Commission Richard.Park@usdoj.gov 33. Justin E Rawlins for Int Pty Courtesy NEF jrawlins@winston.com, docketla@winston.com 34. Benjamin Seigel for Cred Committee Creds Committee bseigel@buchalter.com, IFS_filing@buchalter.com 35. David B Shemano for Cred Cambridge Healthcare Properties, Inc. dshemano@pwkllp.com 36. Lindsey L Smith for Pltf Biolabs, Inc. lls@lnbyb.com 37. Philip E Strok for Cred Hologic, Inc. pstrok@wgllp.com 38. United States Trustee (SA) ustpregion16.sa.ecf@usdoj.gov 39. Howard J Weg for Int Pty Courtesy NEF hweg@pwkllp.com 40. Sharon Z Weiss for Int Pty Specialty Laboratories, Inc. sharon.weiss@hro.com, raul.morales@hro.com 41. Joseph M Welch for Creds Committee jwelch@buchalter.com, jmealeyhatch@buchalter.com;docket@buchalter.com 42. Johnny White for Cred Google Inc. ecf@blakeleyllp.com;dmannion@blakeleyllp.com 43. Beth Ann R Young for Pltf Biolabs, Inc. bry@lnbyb.com

22.

RSN (SERVED BY NEF): CounseltoCreditorsCommittee BenjaminSeigel/JeffreyGarfinkle BuchalterNemer 1000WilshireBoulevard,Suite1500 LosAngeles,California900172457 CounseltoCreditorGoogle ScottE.Blakeley/JohnnyWhite Blakeley&Blakeley 2ParkPlaza,Suite400 Irvine,CA92614 USTFrankCadigan/ NancyGoldenberg/TerryBiers OfficeoftheU.S.Trustee 411WestFourthSt.,Suite9041 SantaAna,CA92701 CounselforACE JeffKahane DuaneMorrisLLP 865S.FigueroaStreet,Suite3100 LosAngeles,CA900175450 CounselforLGSMLagunaHills,LLC RonaldK.Brown,Jr. LawOfficesofRonaldK.Brown,Jr. 901DoveStreet,Suite120 NewportBeach,CA92660 CREDITORSCOMMITTEE SPECIALTYLABORATORIES Attn:SharonZ.Weiss HolesRoberts&OwenLLP 800W.OlympicBlvd.,4thFloor LosAngeles,CA900151367

This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California. August 2010

F 9013-3.1.PROOF.SERVICE

Case 8:10-bk-16743-TA
II. SERVED BY U.S. MAIL: CREDITORS COMMITTEE: DIASORININC, Attn:NealDomeyer 1951NorthwesternAvenue P.O.Box285 Stillwater,MN55082 QIAGEN Attn:JonathanS.Isaac 1201ClopperRoad Gaithersburg,MD20878

Doc 796 Filed 04/18/12 Entered 04/18/12 14:28:05 Main Document Page 22 of 23

Desc

GENZYMECORPORATION Attn:D.RossMartin Ropes&GrayLLP OneInternationalPlace Boston,MA02110 ROCHEDIAGNOSTICSCORPORATION Attn:WayneMathias/JudyL.Wagner 9115HagueRoad,Bldg.H Indianapolis,IN46250

SIEMENSHEALTHCARE DIAGNOSTICS Attn:YesimBrisbane P.O.Box6101,MS802 Newark,DE197146101 IRVINECORPORATECENTER,LLC Attn:JimSavory 252ClaytonStreet Denver,CO80206

RSN: DebtorsWestcliffMedicalLaboratories,Inc. BioLabs,Inc. c/oFTIConsulting 633WestFifthStreet,16thFloor LosAngeles,CA90071 StevenA.Oldham,Sr.StaffAtty StateofCA,Dept.ofHealthCareServices OfficeofLegalServicesMS0010 P.O.Box997413 Sacramento,CA958997413 CityandCountyofSanFrancisco Treasurer/TaxCollectorLegalSection AttnRobertL.Fletcher,Jr. P.O.Box7426 SanFrancisco,CA941207426 SECURED CREDITORS: BankofAmerica,N.A. AsSuccessorbyMergertoLaSalleBankN 135SouthLaSalleStreet Chicago,IL60603 BectonDickinson&Co. Attn:Officer/Director/LegalDept. 1BectonDrive FranklinLakes,NJ07417 BMTLeasing,Inc. Attn:Officer/Director/LegalDept. P.O.Box692 BrynMawr,PA19010 CounselforHealthNet,Inc. PillsburyWinthropShawPittmanLLP Attn:MarkD.Houle,Esq. 650TownCenterDrive,Suite700 CostaMesa,CA926267122 RitaA.Woodard, TreasurerTaxCollector 221S.MooneyBlvd.,Room104E Visalia,CA932914593 Los Angeles County Treasurer and Tax Collector P.O.Box54110 LosAngeles,CA900540110

RobertBrill,OfCounsel GrantCallison,VP CambridgeHealthcareProperties,Inc. 1717MainStreet,59thFloor Dallas,TX75201 CounselforACE RonOliner DuaneMorrisLLP OneMarketPlaza,SpearTower,#2200 SanFrancisco,CA941051127

AttyforHologic,Inc.&ThirdWaveTech JonathanBraverman Baker,Braverman&BarbadoroP.C. 50BraintreeHillOfficePark,Suite108 Braintree,MA021848734

CapitalSourceFinanceLLC GregoryBrowne,ManagingPartner 4445WillardAvenue,TwelfthFloor ChevyChase,MD20815

CiscoSystemsCapitalCorp. Attn:Officer/Director/LegalDept. 170W.TasmanDrive,MSSJ133 SanJose,CA95134

CYTYCLimitedPartnership Attn:Officer/Director/LegalDept. 250CampusDrive Marlborough,MA01752

GEBusinessFinancialServ.,Inc.& GECapitalBusinessFin.Serv.,Inc Attn:Officer/Director/LegalDept. 2BethesdaMetroCtr.,Suite600 Bethesda,MD20814

JulesandAssociates,Inc. Attn:Officer/Director/LegalDept. 515S.FigueroaSt.,Suite1950 LosAngeles,CA90071

LeasingAssoc.ofBarrington,Inc. Attn:Officer/Director/LegalDept. 33W.HigginsRoad,Suite1030 SouthBarrington,IL60010

This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California. August 2010

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Case 8:10-bk-16743-TA
M&IMarshall&IlsleyBank Attn:Officer/Director/LegalDept. 770N.WaterStreet Milwaukee,WI53202

Doc 796 Filed 04/18/12 Entered 04/18/12 14:28:05 Main Document Page 23 of 23
Norlease,Inc. Attn:Officer/Director/LegalDept. 50SouthLaSalleStreet Chicago,IL60675

Desc

OlympusAmerica,Inc. Attn:Officer/Director/LegalDept. 3500CorporateParkway CenterValley,PA18034

PhadiaUSInc. Attn:Officer/Director/LegalDept. 4169CommercialAve. Portage,MI49002

PitneyBowesCreditCorp.& PitneyBowesGlobalFin.Serv.,Inc Attn:Officer/Director/LegalDept. 27WaterviewDrive Shelton,CT06484 CounseltoGEBusinessFinancialSvcs,Inc. RandyRogers Winston&StrawnLLP 101CaliforniaStreet SanFrancisco,CA941115802

SandelmanFinance20061,Ltd. c/oBillBrown SandelmanPartnersLP 500ParkAvenue,3rdFl. NewYork,NY10022 MerrillLynchCapital& MerrillLynchBus.Fin.Serv. Attn:Officer/Director/LegalDept. 500W.MonroeStreet,FL10 Chicago,IL606613688

TCFEquipmentFinance,Inc. Attn:Officer/Director/LegalDept. 11100WayzataBlvd.,Suite801 Minnetonka,MN55305

SUPPLEMENTAL SERVICE: CounselforSPECIALTYLABORATORIES,INC. BrettFallon MorrisJamesLLP 500DelawareAve.,Suite1500 Wilmington,DE198011494 MANSONRESOURCES Attn:ShannonBoston,OfficeMgr. andTaelorTruong,Controller 959SouthCoastDrive,Suite300 CostaMesa,CA92626 GRIFOLS Attn:JavierChagoyen 2410LillyvaleAvenue LosAngeles,CA90032 McKESSONTECHNOLOGIESINC. Attn:MichaelS.Jones, CollectionsEastRegion 5995WindwardParkway,ATHQ1700 Alpharetta,GA30005

CounselforPHADIAUSINC RobertB.Boros,Esq,/JimPalmere,Esq. Kreiss,Enderie,Hudgins&Boros,P.C. POBox4010 Kalamazoo,MI490034010

This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California. August 2010

F 9013-3.1.PROOF.SERVICE