''EB 1 4 2014 - re: The Auditors

IN THE DISTRICT COURT FOR TULSA COUNTY STATE OF OKLAHOMA

BETTINAM. WHYTE,

''EB 1 4 2014

As Trustee for the SemGroup Litigation Trust

Plaintiff, Case No. CJ-2010-04042 The Honorable Dana Kuehn

V.

PRICEWATERHOUSECOOPERS LLP, Defendant.

PRETRIAL CONFERENCE ORDER

1.

Appearances:

For Plaintiff

Oliver S. Howard, DBA #4403

David E. Keglovits, DBA #14259 Deborah C. Shallcross, DBA #8111 Amelia A. Fogleman, OBA #16221 Scott R. Rowland, DBA #11498 GableGotwals 1100 ONEOK Plaza 100 West Fifth Street

Tulsa, Oklahoma 74103-4217 and

Richard I. Werder, Jr., N.Y. No. 4161600 R. Brian Timmons, Cal. No. 155916

Terry L. Wit, Cal. No. 233473 David M. Grable, Cal. No. 237765 Quinn Emanuel Urquhart & Sullivan, LLP 865 South Figueroa Street, 10th Floor Los Angeles, CA 90017

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For Defendant

Mary Quinn Cooper, OBA #11966 Michael F. Smith, OBA #14815 McAfee & Taft

1717 South Boulder, Suite 900 Tulsa,OK74119

Patrick Ryan, OBA #7864 Ryan Whaley Coldiron Shandy PLLC 119 N. Robinson Avenue, Ste 900 Oklahoma City, OK 73102

Emily Nicklin Gabor Balassa Joshua Z. Rabinovitz Kirkland & Ellis LLP 300 North LaSalle Street

Chicago, IL 60654

2.

General Statement of Facts:

A.

Plaintiff Contends:' The defendant, PricewaterhouseCoopers ("PwC") is one of

the world's largest accounting firms. PwC served as the outside auditor for a company called SemGroup, based in Tulsa. SemGroup was formed in 2000 by a group of local businessmen with borrowed money. SemGroup was a mid-stream oil company - it boughtoil fromproducers, moved it, stored it, and sold it downstream to refiners. From 2000 to 2008, SemGroup grew rapidly, assisted by money it obtained from investors and its lenders. For each of these years, PwC reported that SemGroup's financial statements were free of any significant errors and gave SemGroup a "clean" audit opinion.

SemGroup's board of directors, as well as its investors and lenders, made decisions about

SemGroup based on these audited financial statements and expected PwC to independently verify the information reported in the financial statements and to ensure the financial statements were in conformity with Generally Accepted Accounting Principles ("GAAP"). Remarkably, in July 2008, just four months after PwC's last clean audit opinion - and during an oil boom SemGroup collapsed and filed for bankruptcy protection. After SemGroup filed for bankruptcy, PwC withdrew the audit opinion it had issued in March 2008, saying that it was no longer reliable.

' As a result ofinformation obtained in discovery over the last four years and the need topresent PlaintifTs case in a reasonableamount of time, Plaintiff provides this set of contentions superseding PlaintifFs 2010 Petition. Contrary to Defendant's objections, this condenses, rather than adds to, Plaintiffs claims and conforms the contentions to the evidence adduced during discovery.

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2

The plaintiff, Bettina Whyte, was appointed by the Bankruptcy Court to pursue claims held by the SemGroup Litigation Trust. All claims held by SemGroup and certain of its creditors and lenders who lost money when SemGroup collapsed, were specifically assigned to the Trust pursuant to the bankruptcy court's plan and confirmation order. The Trust contends that PwC failed to exercise due professional care in performing its role as an auditor for its client, SemGroup. PwC knew or should have known that that certain transactions were improperly reported in SemGroup's financial statements. PwC knew, for example, that SemGroup's CEO was using company money to fund over $300 million of his own personal fmancial losses and that this was not reported properly and completely in the financial statements. By March 2008, when PwC issued its audit report, PwC also knew or should have known about SemGroup's precarious financial condition. But rather than conduct any extended "going concern" procedures or issue any "going concern" warnings in its audit report, PwC gave SemGroup a clean bill of health, and SemGroup collapsed just four months later. The specific audit failures upon which Plaintiffs case will be based at trial are set forth in more detail in the Expert Report of Lynn Turner, Sections I. - V., and Sections VLB. - VI.E., portions of Section VLF, and

Section VLG. (incorporated herein by reference).^ SemGroup lost over $280 million over time as its funds were used to pay for the personal financial losses of its former CEO. SemGroup's losses could have been avoided if PwC had

done the job it was paid to do. Further, if not for PwC's audit failures, SemGroup's Management Committee and its lenders would have been made aware of SemGroup's precarious financial condition in March 2008, and would have taken steps to prevent SemGroup from suffering over $800 million in additional losses that occurred between March 31, 2008 (the date the 2007 audit report issued) and July 22,2008 (the date SemGroup filed for bankruptcy). Therefore, had PwC done its job as SemGroup's outside auditor, SemGroup would have avoided some $1.1 billion in losses.^

^ Inaneffort to streamline itscase. Plaintiff does notintend to rely onSection VI.H (beginning at page 154) of Mr. Turner's Expert Report at trial or on those portions of Section VI.F (beginning at page 102) that relate to violations of Sections 7.13(a), 7.13(c), or 7.03(f) of the Credit Agreement or Section 4.17 of the Bond Indenture. (Note that these designations refer to the sections as labeled in the body of the report, not the table of contents, where the sections are labeled differently).

^Plaintiffdisputes many ofPwC's factual contentions as being inconsistent with the evidence. Plaintiffalso objects to certain of PwC's legal contentions as being erroneous. For example, the Trust is not "stepping into the shoes" of SemGroup,nor is the Trust simply asserting claims on behalf of SemGroup. The Trust is not asserting SemGroup's claims. The Trust is asserting the Trust's claims. While the Trust is the assignee of SemGroup's claims (not its successor in interest), the Trust is also the assignee of the lenders' and certain creditors' claims. And while the Trust is only asserting damages suffered directly by SemGroup (and indirectly by its creditors), the beneficiaries of the Trust include SemGroup's lenders and creditors. Indeed, the Trust is governed by SemGroup's former creditors. These are the legal realities. These realities are reflected in the SemGroup bankruptcy plan and confirmation order, as to which PwC never objected, and which has preclusive, binding effect on PwC as a matter of law in Oklahoma. Further, PwC contends that SemGroup's former management is at least equally responsible for any harm claimed and "so the claim is barred by the doctrine of in pari delicto." This mischaracterizes the law governing auditor liability in Oklahoma and is fundamentally inconsistent with the Oklahoma Supreme Court's decision in Stroud v. Arthur Andersen & Co., 2001 OK 76,37 P.3d 783.

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3

B.

Defendant's Response to Plaintiffs Statement:

Pursuant to the Court's instruction at the pretrial conference, PwC understands that Plaintiff cannot expand its claims through its pretrial order statement. Accordingly, PwC objects to the parts of Plaintiff's statement that improperly extend beyond its claims, including: (A) Plaintiff states: "The plaintiff, Bettina Whyte, was appointed by the Bankruptcy Court to pursue claims held by the SemGroup Litigation Trust." This is misleading, at best. Plaintiffs trustee was not appointed by the bankruptcy court—^the bankruptcy court approved the appointment, but Plaintiffs trustee does not serve in any capacity on behalf ofthe court. (B) Plaintiff states: "All claims held by SemGroup and certain of its creditors and lenders who lost money when SemGroup collapsed, were specifically assigned to the Trust pursuant to the bankruptcy court's plan and confirmation order." But Plaintiff is pursuing in this case only the claims formerly held by SemGroup and therefore what other claims the trust owns or might have brought is irrelevant. Whatever claims Plaintiff owns, the only claims brought in this lawsuit were SemGroup's claims and any reference to creditors and lenders' rights and claims is irrelevant and prejudicial, as the Court has previously held. See Order on PwC Motion in Limine #2.

(C) Plaintiff states: "Further, if not for PwC's audit failures, SemGroup's Management Committee and its lenders would have been made aware of SemGroup's precarious financial condition in March 2008, and would have taken steps to prevent SemGroup from suffering over $800 million in additional losses that occurred between March 31, 2008 (the date the 2007 audit report issued) and July 22, 2008 (the date SemGroup filed for bankruptcy)." This statement incorrectly implies that SemGroup's lenders' claims or rights are at issue in this case. They are not. Plaintiff stands in SemGroup's shoes and only SemGroup's shoes, as the Court has previously explained. See 10/10/2012 Order at 2 (Plaintiff "stepped into the shoes of the debtor"). Consequently, any steps that the lenders would have or could have taken are irrelevant, and Plaintiffs attempt to include them is improper. C.

Defendant Contends:

PwC audited SemGroup's 2000 through 2007 annual financial statements. SemGroup prepared the annual financial statements, and retained PwC to audit them and provide an audit report. In each year, PwC issued an audit report opining that SemGroup's financial statements presented SemGroup's financial position fairly in all material respects in accordance with Generally Accepted Accounting Principles. Critically, however, PwC did not opine that SemGroup's financial statements showed the business was in good financial condition. Lideed, SemGroup's financial statements disclosed that SemGroup had massive liabilities from its derivatives trading—liabilities that the financial statements showed ballooning from $203

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million in 2005, to $678 million in 2006, to over $1.8 billion in 2007. The financial statements

also disclosed that SemGroup's long-term debt was soaring, from less than $1 billion in 2005, to $1.7 billion in 2006, to more than $2.5 billion in 2007. These soaring liabilities were due to the rismg price of oil, contrary to Plaintiffs misleading assertion an oil company should not go bankrupt doing an oil boom. Finally, the 2007 financial statements showed that there was a $323 million receivable fi-om a "related party" company, Westback—owned by Tom Kivisto, CEO of

SemGroup. The financial statements showed the amount of that receivable had increasedsharply over the prior two years, up from $19.8 million in 2005 and $136 million in 2006. This is what Plaintiff calls "a clean bill of health." Thus, while SemGroup's financial statements were fairly presented, that fair presentation did not paint a positive picture of SemGroup's fmancial health. The financial statements accurately reported the financial impact of business decisions made by SemGroup management. For instance, SemGroup management decided to enter into

related party transactions with many companies, including Westback, owned by SemGroup's CEO. SemGroup management decided to permit the Westback relationship to continue, even as the amount that Westback owed SemGroup grew by more than 1,500% between 2005 and 2007.

SemGroup management also decided not to demand repayment firom Westback or to charge Westback interest or fees. Rather, SemGroup management closely monitored Westback's debt and chose to stay the course. Consistent with its contractual obligations, PwC played no role in SemGroup's decisions about its agency relationship with Westback: Financial statement auditors are not hired to provide business advice or to evaluate the prudence of their clients' business decisions.

Similarly, SemGroup management designed and implemented SemGroup's derivatives trading program, monitored the financial risk presented by SemGroup's trades, and made adjustments to SemGroup trading positions and cash management as it saw fit given its view of those risks. SemGroup did not hire the PwC financial-statement auditors to assess the risks the derivatives trading presented or to provide advice as to how to manage that risk as oil prices reached unprecedented highs fi-om late 2007 through mid-2008. SemGroup management, not its financial statement auditors, was responsible for monitoring and evaluating those trading risks. Indeed, when third parties were interested in SemGroup's trading, they did not look to the Company's financial statements, but to independent experts and SemGroup's management for information.

In this case. Plaintiff stands in the shoes of SemGroup. Yet it now seeks to blame PwC for decisions that SemGroup made. SemGroup was entitled to make its own business decisions, and did make its own business decisions—^without input firom PwC. SemGroup prepared its own financial statements, consistent wdth GAAP. PwC's only role was to audit those financial statements and express an opinion on them taken as a whole. The impact of SemGroup's business decisions on SemGroup's business was accurately reported in SemGroup's financial statements and properly audited by PwC. SemGroup cannot blame PwC now for its own operational decisions. For many years, SemGroup management's business strategy led to remarkable grow^th and great financial success. It is pure opportunism that because that strategy ultimately turned out badly, SemGroup seeks to abandon the parties' contractual responsibilities and to have PwC msure its losses. Moreover, Plaintiff may not recover because SemGroup and its management are at least equally responsible for any harm claimed and so the claim is barred by the doctrine of in pari delicto.

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Plaintiffs Contentions:

3.

A.

List All Theories of Recovery and the Applicable Statutes, Ordinances, and Common Law Rules Relied Upon.

Applicable Statutes, Ordinances, Or Common Law Rules

Theories of Recovery/Claims 1.

Negligence, Ordinary and Gross

Common Law

2.

Breach of Fiduciary Duty

Common Law^

B.

List Damages or Relief Sought.

RELIEF

AMOUNT

1.

Actual damages on Claims 1 and 2

Approximately$1.1 billion

2.

Punitive Damages

An amount in the discretion of the jury, but not to exceed the caps provided by 23 O.S. §9.1

Defendant's Contentions:

List All Theories of Defense and the Applicable Statutes, Ordinances, and Common Law Rules Relied Upon. Applicable Statutes, Ordinances, Theories of Defense 1. 2.

3.

Or Common Law Rules

Plaintiffs petition fails to state a claim 12 O.S. §2012 upon which relief can be granted. PwC generally and specifically denies the Common Law allegations of Plaintiff in this case. SemGroup's 2006 and 2007 financial Stroud V. Arthur Andersen & Co., 2001 statements complied with GAAP in all OK 76,37P.3d783 material respects.

4.

PwC's 2006 and 2007 audits complied Stroud V. Arthur Andersen c& Co., 2001 OK 76,37P.3d783 Contributory negligence: SemGroup's 23 O.S. §§ 12-14; Stroud v. Arthur conduct interfered with PwC's ability to Andersen & Co., 2001 OK 76,37 P.3d 783 perform its audit.

with GAAS. 5.

The Court granted summaryjudgment on Plaintiffs claim for breach of fiduciary duty, but it is included herein for purposes ofrecord preservation.

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6.

PwC was not the direct cause of any Stroud V. Arthur Andersen & Co., 2001 injuries or damages to SemGroup. OK 76, 37 P.3d 783; Graham v. Keuchel, 1993 OK 6,19, 847 P.2d 342, 348; OUJICiv. No. 9.6

7.

SemGroup's losses were caused by the Stroud V. Arthur Andersen & Co., 2001 actions, omissions and business decisions OK 76, 37 P.3d 783; Graham v. Keuchel,

of SemGroup's management.

1993 OK 6,1[ 9, 847 P.2d 342,348; OUJICiv.No. 9.6

8.

SemGroup management, private equity Stroud V. Arthur Andersen t& Co., 2001 investors, and lenders were informed OK 76, 37 P.3d 783; Graham v. Keuchel,

about SemGroup's agency relationship 1993 OK 6,19, 847 P.2d 342, 348; OUJIwith Westback and they did not terminate Civ. No. 9.6 the relationship or require SemGroup to collect the receivable Westback owed

SemGroup. 9.

SemGroup management, private equity Stroud V. Arthur Andersen & Co., 2001 investors, and lenders were informed that OK 76, 37 P.3d 783; Graham v. Keuchel, SemGroup engaged in extensive 1993 OK 6, K 9, 847 P.2d 342, 348; OUJIderivatives trading that exposed the Civ. No. 9.6 company to increasing risks, and they continued to permit SemGroup to engage in its trading program.

10.

Stroud V. Arthur Andersen & Co., 2001 SemGroup would have declared OK 16, 37 P.3d 783; Graham v. Keuchel, bankruptcy or changed its business model 1993 OK 6,1i 9, 847 P.2d 342, 348; OUJIagainst its own interests when the Civ.No. 9.6 Company was valued so highly before,

There is no reliable basis to conclude that

during, and after March 2008. 11.

SemGroup had actual or constructive Stroud V. Arthur Andersen & Co., 2001 knowledge of any alleged misstatements OK 76, 37 P.3d 783; Graham v. Keuchel, or omissions in PwC's 2006 and 2007 1993 OK 6, H9, 847 P.2d 342,348; OUJIaudit reports for SemGroup's financial Civ.No. 9.6 statements at the time they were issued.

12.

PwC was not engaged to provide business Stroud V. Arthur Andersen & Co., 2001 advice to SemGroup. OK 76, 37 P.3d 783; Graham v. Keuchel, 1993 OK 6, H9, 847 P.2d 342,348; OUJI-

13.

SemGroup's injuries and damages, if any, Stroud V. Arthur Andersen & Co., 2001 OK 76, 37 P.3d 783; Graham v. Keuchel, were caused by third parties. 1993 OK 6,1 9, 847 P.2d 342,348; OUJI-

14.

There were intervening causes of Graham v. Keuchel, 1993 OK 6, H 9, 847 SemGroup's injuries and alleged P.2d 342,348; OUJI-Civ. No. 9.8 damages. SemGroup's injuries and damages, if any, Atherton v. Devine, 1979 OK 132, 602 were not foreseeable. P.2d 634,636

Civ. No. 9.6

Civ.No. 9.6

15.

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Plaintiff may not recover because Centra, Inc. v. Chandler Ins. Co., Ltd., 229 SemGroup or its employees are at least F.3d 1162 (10th Cir. 2000); Camp v. equally responsible as PwC for the harm Camp, 1945 OK 234, 196 Okla. 199, 201, claimed by the Plaintiff, and SemGroup's 163 P.2d 970,972 clauns are therefore barred by the

16.

doctrine of in pari delicto. Plaintiff failed to prove any damages. OUJI-Civ.No. 9.1 The damages sought by Plaintiff are Manning v. Brannon, 1998 OK CIV APP consequential damages excluded by the 17, H 6, 956 P.2d 156, 158; Dollar Rent A Car Sys. v. P.R.P. Enterprises, Inc., 2006 parties' engagement letters.

17. 18.

WL 1266515, at *21 (N.D. Okla. May 8, 2006); Penncro Assoc., Inc. v. Sprint Spectrum. L.P., 499 F.3d 1151,1156 (10th Cir. 2007); 2006-2007 SemGroup-PwC Engagement Letters 19.

SemGroup

failed

to

appropriately OUJI-Civ.No. 5.4

20.

The damages sought by Plaintiff were Manning v. Brannon, 1998 OK CIV APP caused by knowing misrepresentations by 17, H 6, 956 P.2d 156, 158; 2006-2007 SemGroup management, and are thus SemGroup-PwC Engagement Letters

mitigate damages.

barred by the parties' engagement letters. Plaintiff did not assert a claim for PwC's

21.

audit

of SemGroup's 2005

statements

until

after

the

12 O.S. § 95(A)(3)

financial statute

of

limitations period expired.

Defenses Relating to Punitive Damages

22.

State

Farm

Mut.

Auto.

Ins.

Co.

v.

Campbell, 538 U.S. 408 (2003), Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424 (2001), and BMW ofN. Am. V. Gore, 517 U.S. 559 (1996); 23 O.S. §9.1

5.

Defendant's Claims for Relief: Not Applicable

6.

Miscellaneous:

A.

Jury Trial Requested?

Yes

B.

Is Additional Discovery Requested? Plaintiffs position: No

Defendant's position; During the course of discovery, the Court denied a number of motions to compel the production of additional information filed by PwC. Those rulings aside, PwC does not request additional discovery.

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7.

C.

Trial briefs (if filed): Not required at this time.

D.

Other Matters:

i.

Each party shall give the other party a copy of the final deposition video to be played 48 hours before it intends to play it.

ii.

Each party shall provide the other party any demonstrative exhibits it intends to use in a direct examination of a witness by 7:30 p.m. the night before the witness testifies.

iii.

By 9:30 a.m. each day, the parties shall disclose the identities and sequence of expected trial witnesses for the two successive trial days. Thus, for example, by 9:30 a.m. on a Monday, a party would identify its witnesses for Tuesday and Wednesday, and their sequence. Disclosures for Monday witnesses would be made the preceding Thursday morning, and disclosures for Tuesday witnesses would be made the preceding Saturday morning.

iv.

Objections shall be removed from deposition videos before they are played at trial.

Plaintiffs Exhibits:

Plaintiff's Exhibit List and any objections thereto will be filed

separatelyon a date to be determined and are incorporated herein by reference. 8.

Defendant's Exhibits: Defendant's Exhibit List and any objections thereto will be filed

separately on a date to be determined and are incorporated hereinby reference. 9. Plaintiffs Witnesses: See Exhibit A, which contains a listing of the witnesses Plaintiff intends to call, along with addresses for those witnesses and the substance of the anticipated testimony. 10. Defendant's Witnesses: See Exhibit B, which contains a listing of the witnesses Defendant intends to call, along with addresses for those witnesses and the substance of the anticipated testimony.

11. Requested Jury Instructions Due By: The parties' agreed instructions, competing submissions, and objections were filed January 29,2014. 12.

Estimated Trial Time:

Plaintiffs estimate: 15 days.

Defendant's estimate: Based on Plaintiffs current witness list and deposition designations, PwC estimates a trial of at least 20 to 23 days, not including time for voir dire, opening statements, closing arguments, and charging of the jury.

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13.

Stipulations: None.

14.

Settlement: Both parties have engaged in some settlement discussions via court-ordered mediation, but such efforts have thus far been unsuccessful in resolving the dispute.

15. JURY TRIAL DATE SET FOR: August 11,2014 ^

Dated this if;;|day ofFebruary, 2014. GE OK THE DJSTRICT COURT APPROVED AS TO FORM:

Oliver S. Howard, OBA #4403 David E. Keglovits, OBA #14259

Mary Quinn Cooper, OBA^#11966

Deborah C. Shallcross, OBA pill

McAfee & Taft

Amelia A. Fogleman, OBA #16221 Scott R. Rowland, OBA #11498

1717 South Boulder, Suite 900 Tulsa, OK 74119

GableGotwals 1100 ONEOK Plaza 100 West Fifth Street

Tulsa, Oklahoma 74103-4217

Michael F. Smith, OBA #14815

Patrick Ryan, OBA #7864 Ryan Whaley Coldiron Shandy PLLC 119 N. Robinson Avenue, Ste 900 Oklahoma City, OK 73102

Richard I. Werder, Jr., N.Y. No. 4161600

R. Brian Timmons, ck. No. 155916

Emily Nicklin

Terry L. Wit, Cal. No. 233473

Gabor Balassa

David M. Grable, Cal. No. 237765

Quinn Emanuel Urquhart & Sullivan,

Joshua Z. Rabinovitz Kirkland& Ellis LLP

LLP

300 North LaSalle Street

865 South Figueroa Street, 10th Floor Los Angeles, CA 90017

Chicago, IL 60654

Attorneys for Defendant Attorneys for Plaintiff

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Exhibit A Plaintiffs Witness List Name

Address

Substance of Anticipated Testimony

Akin Adekunle*

c/oKirkland& Ellis LLP 300 North LaSalle

This witness was previously deposed and will provide testimony regarding PwC's work for SemGroup, his role as the senior PWC associate working on SemGroup, and PwC's audit policies and

Chicago, IL 60654

procedures. Jonathan Bound*

c/o Lista Cannon, Esq. Norton Rose Fulbright LLP 3 More London Riverside, London, SEl 2AQ, United Kingdom

Paul Carpenter

c/o Quinn Emanuel Urquhart &

This witness was previously deposed and will provide testimony regarding PwC's work for SemGroup, his interactions with PwC's Tulsa personnel regarding SemGroup and its derivative transactions, and PwC's audit policies and procedures.

Sullivan, LLP

865 S. Figueroa Street, 10th Floor

This witness was previously deposed and will provide expert testimony on the damages sought by PlaintifT.

Los Angeles, CA 90017 David S.

c/o Kirkland& Ellis LLP

Colwell

300 North LaSalle

Chicago, IL 60654

This witness was previously deposed and will provide testimony regarding PwC's work for SemGroup, his role as the managing partner working on SemGroup, and PwC's audit policies and procedures.

Chuck Cotter*

c/o Frederic Dorwart, Esq. Old City Hall 124 E. Fourth Street

Tulsa,OK 74103

This witness was previously deposed and will provide testimony regarding SemGroup's credit facility and Bank of Oklahoma's lending relationship with SemGroup.

Kari Eaton*

c/o KirklandiS: Ellis LLP 300 North LaSalle

Chicago, IL 60654

This witness was previously deposed and will provide testimony regarding PwC's work for SemGroup, her work on the SemGroup audits, and PwC's audit policies and procedures.

Mickey Euliss

1241 East 29th Place

Tulsa,OK74114

This witness was previously deposed and will provide testimony regarding SemGroup, including its formation, management, operations, transactions, financial condition, and bankruptcy, his role as the corporate controller of

' Witnesses noted with an asterisk will be presented through videotaped deposition testimony pursuant to 12 O.S. § 3232(A)(3)(b).

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SemGroup, PwC's work for SemGroup, and his interactions with PwC. Martin Fiscus*

c/oKirkland& Ellis LLP 300 North LaSalle

Chicago, IL 60654

This witness was previously deposed and will provide testimony regarding PwC's work for SemGroup, his role as a PwC partner working on SemGroup, and PwC's audit policies and procedures.

Alice Helmke

c/o R. Richard Love III, Esq. Conner & Winters 4000 One Williams Center

Tulsa, OK 74172

This witness was previously deposed and will provide testimony regarding SemGroup, including its formation, management, operations, transactions, fmancial condition, and bankruptcy, her role as the fmancial reporting manager at SemGroup, PwC's work for SemGroup, and her interactions with PwC.

Scott Jones

c/o Quinn Emanuel Urquhart & Sullivan, LLP 865 S. Figueroa Street, 10th Floor

This witness was previously deposed and will provide expert testimony regarding the derivatives transactions at SemGroup.

Los Angeles, CA 90017 Robert

c/o Kirkland& Ellis LLP

LeMaster

300 North LaSalle

Chicago, IL 60654

This witness was previously deposed and will provide testimony regarding PwC's work for SemGroup, his role on the SemGroup audits, and PwC's audit policies and procedures.

Kathy Lewallen

c/o Paula J. Quillin, Esq. Feldman Franden Woodard Farris

Quillin & Goodnight Williams Center Tower Two

2 West 2nd Street, Ste. 900 Tulsa, OK 74103

This witness was previously deposed and will provide testimony regarding SemGroup, including its formation, management, operations, transactions, fmancial condition, and bankruptcy, her role as controller of SemCrude, PwC's

work for SemGroup, and her interactions with PwC.

Ben McCoy*

c/o Kirkland & Ellis LLP 300 North LaSalle

Chicago, IL 60654

This witness was previously deposed and will provide testimony regarding PwC's work for SemGroup, his role on the SemGroup audits, and PwC's audit policies and procedures.

John Norton


Chicago, IL 60654

Sharon Pens

c/o Ted Sherwood, Esq. Sherwoord Law Firm Bank of America Center

{1218691;}04036.23000/S646105.8

This witness was previously deposed and will provide testimony regarding PwC's work for SemGroup, his role on the SemGroup audits, including as senior associate and manager, and PwC's audit policies and procedures. This witness was previously deposed and will provide testimony regarding SemGroup, including its formation.

15 West 6th Street, Ste. 2112 TuIsa,OK74119

management, operations, transactions, financial condition, and bankruptcy, her role as the assistant to Thomas Kivisto,

the history of Westback and Eaglvring and the transactions between the two, and her role in those transactions, . Alisa Perkins


Tulsa, OK 74172

This witness was previously deposed and will provide testimony regarding SemGroup, including its formation, management, operations, transactions, financial condition, and bankruptcy, her role as Assistant Treasurer at SemGroup, and PwC's work for SemGroup.

Greg Price

c/o Ben Catterlin, Esq. Catterlin Defense Firm 1152 East 61st Street

Tulsa, OK 74136

This witness was previously deposed and will provide testimony regarding SemGroup, including its formation, management, operations, transactions, financial condition, and bankruptcy, his role as a part-time accountant for Thomas Kivisto, Westback, and Eaglwing, his interactions with SemGroup personnel, Westback's finances, and Westback's transactions with Eaglwing.

Terry Ronan*


Tulsa, OK 74172

This witness was previously deposed and will provide testimony regarding SemGroup, including its formation, management, operations, transactions, financial condition, and bankruptcy, as well as PwC's work for SemGroup based on his role at SemGroup both before and

after the bankruptcy. He also will provide testimony regarding SemGroup's credit facility and the banks' lending relationship with SemGroup based on his role at Baric of America prior to joining SemGroup. Robert Rosene

c/o James W. Rusher, Esq.

Albright Rusher & Hardcastle 2600 Bank of America Center 15 W. 6th Street

Tulsa, OK 74119

This witness was previously deposed and will providetestimonyregarding his investment in SemGroup, his role in helping the formation of SemGroup, his knowledge of the management, operations, and bankruptcy of SemGroup,his review of the financial statements audited by PwC, and PwC's work for SemGroup.

Sandra

c/o William C. Meyers, Esq.

(1218691;)04036.23000/s646l0s.g

This witness was previously deposed and

Sanders*

Suite 3300

will provide testimony regarding SemGroup's credit facility and Bank of Montreal's lending relationship with

Chicago, IL 60603

SemGroup.


This witness was previously deposed and will provide testimony regarding PwC's work for SemGroup, his role as a partner on those audits, and PwC's audit policies

Goldberg Kohn Ltd. 55 East Monroe

George Schulz*

Chicago, IL 60654

and procedures. Mark Allen Smith*


Chicago, IL 60654

This witness was previously deposed and will provide testimony regarding PwC's work for SemGroup, his role on the SemGroup audits and interactions with others at PwC, his expertise in derivative transactions and risk management, PwC's analysis of SemGroup's derivatives trading activity, and PwC's audit policies and procedures.

Alex Stallings

c/o Michael Youtt, Esq. King & Spalding LLP 1100 Louisiana Suite 4000

Houston, TX 77002

This witness was previously deposed and will provide testimony regarding SemGroup, including its formation, management, operations, transactions, fmancial condition, and bankruptcy, his role as the Chief Accounting Officer at SemGroup, PwC's work for SemGroup, and his interactions with PwC.

Lynn Turner

c/o Quinn Emanuel Urquhart & Sullivan, LLP

865 S. Figueroa Street, 10th Floor Los Angeles, CA 90017

This witness was previously deposed and will provide expert testimony regarding the applicable GAAS and GAAP standards, PwC's work for SemGroup, and PwC's failures in performing its work for SemGroup.

Robert Valbona*

c/o Mary Warren, Esq. Willkie Farr & Gallagher LLP 787 Seventh Avenue

New York, NY 10019

This witness was previously deposed and will provide testimony regarding SemGroup's credit facility and Bank of America's lending relationship with SemGroup.

Jeff Wallace*

Suite 1515

This witness was previously deposed and will provide testimony regarding Ritchie Capital Management, its investment in SemGroup, his role on SemGroup's

Oakbrook Terrace, IL 60181

board of directors, PwC's work for

c/o Highview Capital Management 18 West 140 Butterfield Road

SemGroup, and the Westback transactions.

Greg Wallace

c/o Orrin L. Harrison III, Esq. Akin Gump Strauss Hauer & Feld

{I2I869I;)04036.2300(VS646I05.S

This witness was previously deposed and will provide testimony regarding

LLP

1700 Pacific Avenue Suite 4100

Dallas. TX 75201

SemGroup, including its formation, management, operations, transactions, financial condition, and bankruptcy, his role as Chief Financial Officer of

SemGroup, PwC's work for SemGroup, and the Westback transactions.

Andrew Ward*

c/o Cliff Thau, Esq. or Ari Berman, Esq. Vinson & Elkins 666 Fifth Avenue

New York, NY 10103

This witness was previously deposed and will provide testimony regarding Riverstone Holdings, its investment in SemGroup, his role on SemGroup's board of directors, PwC's work for SemGroup, and the Westback transactions.

Bettina Whyte

865 S. Figueroa Street, 10th Floor

This witness was previously deposed and will provide testimony regarding the SemGroup bankruptcy and the resulting

Los Angeles, CA 90017

SemGroup Litigation Trust.

c/o Quinn Emanuel Urquhart & Sullivan, LLP

{1218691 ;}(M036.23000/S646105.8

Exhibits

PwC's Witness List Witness

-

Akin Adekune (live)

Anticipated T^timony

Adekunle was a seniorassociate on PwC's audits of SemGroup's 2006 and 2007 financial statements. Adekunle is expected to testify regarding the work he performed to plan and execute the SemGroup audits in accordance with GAAS, including work concerning SemGroup's derivatives trading activity. Adekunle is also expected to testify regarding his supervision of morejunior auditors on the audit team.

Terry Blain (live)

Blain was the lending officer at Bank of Oklahoma with responsibility for monitoring SemGroupduring the entire length of the relationship between SemGroup and Bank of Oklahoma. Blain is expected to testify about his monitoring of SemGroup. He is also expected to testify about his knowledge of Westback, and that the related party footnote in SemGroup's financial statements provided sufficient information to put him on notice of the transactions conducted on behalf of Westback.

Jeffrey Bloomquist (deposition)

Bloomquist was the Bank ofAmerica officer responsible for "syndicating" {i.e., facilitating other banks' participation in) SemGroup's credit facility fi-om 2003 to 2008. Bloomquist is expected to testify about Bank of America's understanding of SemGroup's trading strategy. Bloomquist will also authenticate certain key Bank of America documents. He is expected to testify that the negative assurance letters provided by PwC relate only to the financial covenants specified in the letter, and that he is unaware of anyone fi-om Bank of America requesting further information fi-om PwC.

Jonathan Bound

(deposition)

Bound was an auditor at PricewaterhouseCoopers UK who conducted a statutory (UK law) audit of certain of SemGroup's UK subsidiaries for the year ended 2007. Bound is expected to testify that the work he did on derivatives was limited to the statutory audit, and was not part of the US finn's audit of SemGroup.

Witness

^ticipated Testimony

James Bowen (deposition)

Bowen is a derivatives trading and risk management expert who was retained by Bank of America in 2003,2004,2005, and 2007 to evaluate SemGroup's derivatives trading and risk management practices. He is expected to testify about specific issues Bank of America asked him to investigate, risks he identified and reported, and his investigations, analyses, and conclusions. Bowen will also testify that he concluded SemGroup's derivatives trading and risk management practices were satisfactory in 2007 and that SemGroup was in compliance with its internal risk management policy.

Michael Brochetti (live)

Brochetti initially worked for one of SemGroup's lenders, Bank of America. Brochetti is expected to testify regarding Bank of America's involvement in SemGroup beginning in 2003. He may also testify about what bankers understood regarding Westback, the banks' retention of consultants to oversee and monitor the

SemGroup account, and how the bank group interpreted findings and conclusions made by their own consultants. In late 2005, Brochetti left Bank of America and became Senior Vice President,

Finance at SemGroup. He is expected to testify about his work with lenders while he was at SemGroup, including his work to provide responses to lenders' due diligence requests. Brochetti may also testify about SemGroup's liquidity and financial condition fi-om late 2007 through June 2008, including the specific liquidity and risk management information that was provided to lenders during that time period.

James Coen (deposition)

Coen was SemGroup's primary crude oil derivatives trader from 2004 until after SemGroup's bankruptcy. He is expected to testify about SemGroup's derivatives trading strategies, objectives, and the risk limits imposed by SemGroup's lenders. Coen is also expected to testify about the disclosure of SemGroup's trading activity in the audited financial statements.

Witness -

Anticipated Testimony •

v

David Colwell (live)

Colwell was the concurring partner on the SemGroup audits from 2000-2004, and the lead engagement partner on the SemGroup audits from 2005-2007. His expected testimony will concern the engagement letters and applicable audit standards that governed the relationship between PwC and SemGroup, and PwC's understanding of SemGroup's business, growth, and management structure. Colwell will also address the significance of the audit report under the audit standards, and the withdrawal of the 2007 audit report. Colwell may also address the overall audit process, including PwC's audit of related parties and derivatives, including the auditors' consideration of monitoring by SemGroup's lenders, and PwC's going concern consideration

Keith Considine (live/ deposition)

Considine is a partner in PwC's energy consulting practice. He is expected to testify about a special consulting engagement related to SemGroup's derivatives trading that SemGroup's management retained PwC's energy consultants to perform in July 2008.

Mike Cooke (live)

As a partner at Tulsa-based law firm. Hall Estill, Cooke served as SemGroup's defacto general counsel from the company's inception until it filed for bankruptcy. He was also an equity investor in SemGroup. He is expected to testify about his firm's monitoring of SemGroup's compliance with its credit agreement, Tom Kivisto's employment agreement, and the agency agreement Hall Estill drafted, which formalized the relationship between SemGroup and Westback.

Brent Cooper (live)

Cooper was SemGroup's corporate controller at the company's founding, and in approximately 2003, became the corporate Treasurer until July 2008. He is expected to testify regarding SemGroup's relationship with banks, the development of SemGroup's Risk Management policy, his work with bank representatives to establish specific risk and trading related procedures, and credit facility amendments. Cooper may also testify to the various procedures and activities and SemGroup implemented to monitor liquidity, commodity price, and other risks and communications with lenders re same. Cooper may also testify about his work with consultants retained by the banks to monitor SemGroup's activities.

Witness

Anticipated Testimony

Chuck Cotter (deposition)

Cotter was the Chief Credit Officer for Bank of Oklahoma. Cotter

is expected to testify about Bank of Oklahoma's knowledge in late 2007 and early 2008 regarding SemGroup trading and Bank of

Oklahoma's efforts to mitigate the bank's risk to SemGroup's trading strategy. He is also expectedto testify that the trading disclosure in the footnotes to SemGroup's financial statements can be interpreted to refer to speculative trading. Dennis Famularo

(deposition)

Famularo was a senior examiner for Evergreen Collateral Consulting, wliich was hired by Bank of America to conduct

annual examinationsof SemGroup's collateral and reporting practices. Famularo is expected to testify about his communications with Bank of America and SemGroup regarding Westback and SemGroup's hedging practices. Martin Fiscus (live)

Fiscus served as PwC's concurring partner on the 2005-2007 audits of SemGroup's annual fmancial statements. Fiscus is expected to testify concerning PwC's audit work on related party transactions, derivatives, and fmancial ratio debt covenant testing and the standards that PwC used in conducting that work, including GAAS. Fiscus will also address Plaintiffs claims regarding whether PwC should have issued a "going concern" opinion in its 2007 audit report.

Kevin Foxx (live)

Foxx served as SemGroup's Chief Operating Officer from 20002008. Foxx is expected to testify regarding SemGroup's history and purpose, the GSTrUE process, and the role of market volatility in SemGroup's liquidity crisis. Foxx is expected to testify regarding the Management Committee's duties, that Westback was not a secret at SemGroup, and that the Management Committee was fully aware of the relationship.

Alice Helmke (live)

Helmke was the Financial Reporting Manager for SemGroup from April 2005 through July 2008. Helmke is expected to testify regarding the work she did to prepare SemGroup's financial statements, including drafting the related party disclosure regarding Westback, in accordance with GAAP.

Witness

Anticipated Testimony .

John Kermath (deposition)

Kermath served as Ritchie Capital's President from 2007 until after SemGroup's bankruptcy. He served as Ritchie Capital's corporate representative at his deposition. He is expected to testify about Ritchie Capital's understanding of SemGroup's trading operations, Ritchie Capital's non-reliance on PwC or the audited financial statements for information about SemGroup's trading activity, and SemGroup's bankruptcy.

Christen Lacey (deposition)

Lacey was the Bank of America credit officer responsible for SemGroup in 2007 and 2008. She is expected to testify about Bank of America's monitoring of SemGroup in 2007 and 2008, including the bank's engagement of risk management consultant James Bowen and Evergreen Collateral Consulting, the bank's questions to SemGroup management about SemGroup's activity, and the bank's facilitation of other banks' monitoring efforts in its role as administrative agent of SemGroup's credit facility. She is also expected to testify about the negative assurance letters that PvvC provided to Bank of America.

Jennifer Lark (live)

Lark was an auditor on the 2005 though 2007 audits of SemGroup's annual financial statements. Lark is expected to testify concerning PwC's audit testing on SemGroup's accounts receivables and financial ratio debt covenants.

Kenneth Lehn, Ph.D. (live)

Professor Lehn is PwC's causation and damages expert. He will

provideopinions regarding Plaintiffs claims and allegations concerningSemGroup's damages assuming, as Plaintiff argues, that SemGroup's financial statements should have disclosed additional information regarding SemGroup's derivatives trading and its relationship with Westback. Professor Lehn's opinions also respond to the opinions of Plaintiffs experts. Mark Lietzke (live)

Lietzke was the Corporate Controller for SemGroup from July 2007 through July 2008, and then the Chief Accounting Officer for SemGroupwhile the company was in bankruptcy. Lietzke is expected to testify regarding the work he and his financial

reportingstaff performed to prepare SemGroup's financial statements, including drafting and approvingfootnote disclosures, in accordance with GAAP. He is also expected to testify

regarding PwC's performance of its audit duties.

Witness

Anticipated Testimpny

Kathy Lewallen (live)

Lewallen served as Controller of SemGroup's SemCrude business unit from 2003-2008. Lewallen is expected to testiJfy regarding the accounting roles and responsibilities at Eaglwing and Westback. Lewallen is also expected to testify regarding various accounting documents, the implementation of the 2006 Management Letter, and information regarding segregation of accounts. Lewallen is also expected to provide testimony regarding SemGroup's monitoring of the Westback receivable.

Robert Mackay, Ph.D. (live)

Dr. Mackay is PwC's derivatives trading expert. He will provide opinions regarding the derivatives trading activity at SemGroup and related issues, and offer opinions in response to Plaintiffs experts.

Steve McEachem (live)

McEachem is PwC's auditing and accounting expert. McEachem is expected to testify conceming his opinion that PwC's audits of SemGroup's 2006, and 2007 financial statements complied with GAAS, the bases for that opinion, and his responses to Plaintiffs criticisms of PwC's audits.

John Norton (live)

Norton was an associate, senior associate, and then manager on PwC's SemGroup audit engagements from 2002 through 2008. Norton is expected to testify conceming the work he performed to plan and execute the audits in compliance with GAAS, including work conceming SemGroup's related party transactions and derivatives trading activity, and PwC's assessment of SemGroup's ability to continue as a going concem. Norton is also expected to testify regarding his supervision of more junior auditors on the audit team.

Mia Oven (live)

Oven was SemGroup's primary trader of non-crude oil derivatives from 2004 until after SemGroup's bankruptcy. She is expected to testify about SemGroup's derivatives trading strategies, objectives, risk management, and the disclosure of SemGroup's trading activity in the audited financial statements.

Witness


.

{

Sharon Pens (live)

Pens worked for SemGroup's EaglwingTrading subsidiary and for Westback from 2000 through SemGroup's bankruptcy. Pens is expected to testify regarding Westback and EaglwingTrading, and specifically the recording of authorized transactions and record keeping for those companies. Pens is also expectedto testify regarding her interactions with Kathy Lewallen, and that Westback was not audited by PwC.

Greg Price (live)

Price worked in accounting for SemGroup's Eaglwing Trading subsidiary and for Westback. Price is expected to testify regarding accounting roles and responsibilities at Eaglwing and Westback.

Thane Ritchie (deposition)

Ritchie served as a member of SemGroup's Management Committee from 2006 until after SemGroup's bankruptcy. He is also the founder and former Chief Executive OfBcer of Ritchie

Capital. He is expected to testify about SemGroup's Management Committee, its monitoring of SemGroup's derivatives trading activity, Westback relationship, and financial condition, and his understanding of those issues. He also is expected to testify that he never read or relied on SemGroup's financial statements. Terry Ronan (deposition)

Terry Ronan was the lending officer at Bank of America who was responsible for the SemGroup account until he left the bank in August 2006. In March 2008, Ronan became Senior Vice President, Finance at SemGroup. Ronan is expected to testify about Bank of America's monitoring of SemGroup until 2006; questions posed by potential lenders about SemGroup's trading activity; and the bank's conduct in an instance of speculative trading by a different bank client. He is also expected to testify about SemGroup's July 2008 liquidity crisis, including his communications with Bank of America that led to the bank's declaration of default.

Witness


Sandra Sanders

Sanders served as Bank of Montreal's Credit Concurrence officer

(deposition)

from mid-2005 to mid-2007. Sanders will testify regarding informationavailable to the banks for monitoring the SemGroup loan, including commercial finance reports, mark-to-market and position reports addressing trading, risk management reports, loan compliance certificates signed by SemGroup management, and audited and unaudited financial statements. She will testify about representations made by SemGroupmanagementregarding the nature of the company's trading program. Sanders will also testify that it was appropriate for PwC to confirm the method of calculating adjusted EBITDA under the Credit Agreement with Bank of America.

George Schultz (live)

Schulz was the engagement partner on PwC's audits of SemGroup's 2000 through 2004 financial statements. Schulz is expectedto testify concerningthe genesis of the SemGroup engagement and PwC's relationship with SemGroup.

Mark Allan Smith (live/ deposition)

Smith is a partner in PwC's energy consulting practice. He is expected to testify about a special consulting engagement related to SemGroup's derivatives trading that SemGroup's management retained PwC's energy consultants to perform in July 2008.

Alex Stallings (live)

Stallings will testify about his work as SemGroup's Chief Accounting Officer. He will testify about the work the SemGroup's accounting department performed, including preparation of the financial statements, management's

responsibility for the financial statements, and the relationship between SemGroup's accounting department and the PwC auditors. Stallings will also testify that SemGroup's audited financial statements complied with GAAP. Stallings may also testify regarding PwC's performance of its audit responsibilities. Jeff Wallace (deposition)

Wallace served as a member of SemGroup's Management Conunittee from 2004 to 2005. He is expected to testify about Ritchie Capital's investment in SemGroup and the due diligence it performed prior to investing in SemGroup. He is also expected to testify about his understanding of SemGroup's trading activity and relationship with Westback.

Witness


Andrew Ward (deposition)

Andrew Ward was a Riverstone designee on SemGroup's management committee during 2007 and 2008. Ward's expected testimony will concern his role on SemGroup's Management Committee,his understanding that Tom Kivisto was responsible for devising, implementing, and overseeing SemGroup's trading strategy, and his reliance on SemGroup's lenders and other members of SemGroup's Management Committee for the monitoring of SemGroup's trading activities and risk management policy compliance. His expected testimony will also address his receipt and review of various financial and other reporting by SemGroup management, his failure to ask questions about SemGroup's numerous related party transactions, as disclosed in

tlie financial statement footnotes and lack of concern regarding the size of the Westback receivable. Finally, Ward's anticipated testimony will concern his understanding that PwC reported to Greg Wallace and Alex Stallings, in lieu of establishing an audit committee.

Bettina Whyte (live)

Whyte is expected to testify about the creation of the SemGroup Litigation Trust, and that its purpose is to pursue SemGroup's claims against third parties. Whyte is also expected to testify about her motivation to bring claims and the information on which

she relied before filing this action against PwC.