MorrisAnderson & Associates Limited v. Redeye II LLC

• Court: District Court, D. Arizona
• Decided: December 3, 2020
• Docket: 2:20-cv-02219
• Status: Unknown

Opinion

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 IN THE MATTER OF: No: CV-20-02219-PHX-JAT 10 Swift Air, L.L.C. ORDER 11 Debtor. 12 13 MorrisAnderson & Associates Limited, 14 Plaintiff, 15 vs. 16 Redeye II LLC, et al., 17 18 Defendants.

19 Before the Court are the Report and Recommendation (the “Report and 20 Recommendation”), (Doc. 19-2 at 65–262),1 containing the proposed findings of fact and 21 conclusions of law of the United States Bankruptcy Court for the District of Arizona (the 22 “Bankruptcy Court”). Defendants Redeye II LLC, et al. (“Defendants”) object to specific 23 portions of the Report and Recommendation and filed Objections to the Report and 24 1 This case is related to the appeals in Swift Aircraft Management LLC v. MorrisAnderson 25 & Associates Limited, Case No. CV-20-00854-PHX-JAT, Transjet Incorporated v. MorrisAnderson & Associates Limited, Case No. CV-20-00849-PHX-JAT, and Redeye II, 26 LLC v. MorrisAnderson & Associates Limited, Case No. CV-20-00855-PHX-JAT (the “Redeye Appeal”) (together, the “Related Appeals”). The appellants in the Related Appeals 27 have briefed issues that cross all the Related Appeals and this case in the appellants’ Opening Brief in the Redeye Appeal as permitted by Fed. R. Bankr. P. 8014(e). Any 28 citation of Docs. 19, 19-1, 19-2, 19-3, 19-4, 19-5, 19-6, 19-7, or 19-8 will refer to the appellants’ Opening Brief and attachments in the Redeye Appeal. Case 2:20-cv-02219-JAT Document 8 Filed 12/03/20 Page 2 of 69

1 Recommendation. (Doc. 1 at 6–83). Plaintiff MorrisAnderson & Associates Limited 2 (“Plaintiff” or the “Trustee”) filed a Response. (Doc. 1 at 87–125). After reviewing the 3 filings and the record, the Court issues the following order. 2 4 I. BACKGROUND 5 The below is a brief summary of the background of this case. A more extensive 6 discussion of the background can be found in the Report and Recommendation, (Doc. 19- 7 2 at 75–116), and the appellants’ Opening Brief in the Redeye Appeal, (Doc. 19 at 10–14). 8 Prior to December 21, 2011, Swift Air, LLC (“Swift” or the “Debtor”) operated as 9 an aviation management company under a combined 14 CFR Part 121/135 Certificate 10 (“Part 121 Certificate” and “Part 135 Certificate”) issued by the Federal Aviation 11 Administration (“FAA”). (Doc. 19 at 10). Swift’s business involved managing aircraft 12 owned by other parties and booking charter contracts. (Id.). Swift maintained a Part 135 13 Certificate business which managed corporate/individual charter flights (the “Part 135 14 Business”), and Swift also maintained a Part 121 Certificate business which consisted of 15 flying large charter groups, in particular, professional sports teams (the “Part 121 16 Business”). (Id. at 11). Keeping the Part 121 Certificate operational required that certain 17 criteria be satisfied, such as having five specific positions filled by qualified employees 18 (the “Five Wise Men”).3 (Doc. 19-5 at 173–74). 19 Swift was a wholly owned subsidiary of Swift Aviation Group, Inc. (“SAG”). (Doc. 20 19-2 at 260). SAG also held all the equity interests in Swift Aviation Sales, Inc. (“Sales”), 21 Swift Aviation Management, LLC (“SAVM”), and Swift Aviation Services, LLC 22 (“Services”). (Id.). SAG was wholly owned by the Jerry and Vickie Moyes Family Trust 23 2 The Bankruptcy Court found that it only had the authority to issue a Report and Recommendation on all of Plaintiff’s breach of fiduciary duty claims and certain of 24 Plaintiff’s fraudulent transfer claims. (Doc. 19-2 at 75). The Bankruptcy Court determined that it had the authority to enter final judgment on Plaintiff’s preference claims, but this 25 Court determined in the Redeye Appeal that the Bankruptcy Court could only issue a report and recommendation on the preference claims against Redeye II, LLC, Jerry Moyes and 26 Vickie Moyes, and the Jerry and Vickie Moyes Family Trust. See Redeye II, LLC v. MorrisAnderson & Associates Limited, Case No. CV-20-00855-PHX-JAT, Part III.A (D. 27 Ariz. Dec. 1, 2020). This Order will apply only to those claims and defendants over which the Bankruptcy Court did not have the authority to enter final judgments. 28 3 The positions are Chief Pilot, Director of Operations, Chief Inspector, Director of Safety, and Director of Maintenance. (Doc. 19-5 at 174).

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1 (the “Moyes Trust”). (Id.). Jerry Moyes (“Moyes”) was the sole trustee of the Moyes Trust. 2 (Id.). The Moyes Trust also held all the equity interests in Transjet, Inc. (“Transjet”), 3 Transjet’s three subsidiaries (the “Transjet Subsidiaries”), Transpay, Inc. (“Transpay”), 4 and SME Steel Contractors, Inc. (“SME”). (Id.). Moyes also personally owned fifty percent 5 of Redeye II, LLC (“Redeye”). (Id.). Moyes served as Swift’s president, and Kevin 6 Burdette (“Burdette”) served as Swift’s vice-president. (Id. at 78). The companies owned 7 by Moyes and the Moyes Trust regularly did business with one another and through this 8 business incurred significant accounts receivable and accounts payable that were 9 outstanding on December 21, 2011. (Id. at 77–87). 10 In 2011, Swift’s balance sheet reflected liabilities greater than assets by more than 11 $3 million. (Id. at 88). In the latter half of 2011, Burdette met with two potential buyers for 12 Swift who ultimately did not purchase the company. (Id.). Then, in October 2011, Jeff 13 Conry (“Conry”), on behalf of Avondale Aviation II, LLC and Jordan Gunthorpe Holdings, 14 LLC (collectively, the “Buyers”), approached Burdette about purchasing Swift’s Part 121 15 Business (the “Transaction”). (Doc. 19 at 11). Notably, the Buyers told Burdette that they 16 only wanted to acquire the equity in Swift’s Part 121 Business and that they intended to 17 merge it with their recently acquired business, Direct Air, which needed a Part 121 18 Certificate. (Doc. 19-2 at 88–89). The Buyers also told Burdette that they planned to obtain 19 a $5 million investment in Swift after its acquisition. (Id. at 90). 20 The Transaction moved forward, terms were solidified, and the Buyers closed on 21 the purchase of the equity interest in Swift for a de minimis payment of $100 on December 22 21, 2011 (the “Transaction Date”). (Doc. 19 at 11–12). Swift’s Part 135 Business was not 23 included in the Transaction, so it was transferred into a newly created entity, Swift Aircraft 24 Management, LLC (“SAM”). (Id. at 12). As part of the Transaction, Swift transferred 25 certain assets and liabilities, including accounts receivable and accounts payable, 26 associated with the Part 135 Business to SAM and SAG pursuant to the Part 135 27 Assignment and Assumption Agreement and Guarantee (the “Assignment and Assumption 28 Agreement”). (Id. at 13). After the closing of the Transaction, Swift and the other Moyes

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1 owned companies executed an Inter-Company Settlement Agreement and Mutual Release 2 (the “Settlement Agreement”). (Id.). The Settlement Agreement released Swift from any 3 debts or obligations to the other Moyes owned companies and facilitated a transfer of assets 4 and liabilities between Swift and certain other Moyes owned companies (the “Transfers”). 5 (Id.). The Transfers included a receivable from SAVM (the “SAVM Receivable”) and a 6 receivable from Redeye (the “Redeye Receivable”). (Id.). 7 After the Transaction, the newly acquired Swift (“New Swift”) experienced 8 cashflow shortages. (Doc. 19-2 at 105). The $5 million investment that the Buyers planned 9 to obtain for New Swift never materialized, and New Swift never merged with Direct Air. 10 (Id. at 107). New Swift also entered into new post-Transaction contracts that exacerbated 11 its money problems. (Id.). These and other problems led New Swift to commence a Chapter 12 11 bankruptcy proceeding on June 27, 2012. (Id.). New Swift emerged from its Chapter 11 13 bankruptcy proceeding through a confirmed restructuring plan in October 2013 after 14 receiving approximately $6.3 million from Nimbos Holings, LLC (“Nimbos”) in exchange 15 for the equity interests in the reorganized New Swift. (Doc. 19 at 14). 16 On June 27, 2014, Plaintiff initiated the underlying adversary proceeding. (Id.). 17 Plaintiff’s Third Amended Complaint (the “Complaint”) (Doc. 19-2 at 2–27) asserted, 18 among other things, preference, fraudulent transfer, and breach of fiduciary duty claims 19 against Defendants. (Id.). The Bankruptcy Court held a trial after which the Bankruptcy 20 Court issued the Report and Recommendation. (Id. at 8, 14). During the trial, Defendants’ 21 expert, Grant Lyon (“Lyon”) testified as did Plaintiff’s expert, Michael Spindler 22 (“Spindler”). (See id. at 23–24). 23 Defendants filed Objections to the Report and Recommendation. (Doc. 1 at 6–83). 24 Plaintiff filed a Response in Support of the Report and Recommendation. (Doc. 1 at 87– 25 125). The Bankruptcy Court then transmitted the Report and Recommendation to the Court 26 for review. (Doc. 1). 27 II. LEGAL STANDARD 28 Matters referred to a bankruptcy court are classified as either “core” or “non-core”

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1 proceedings. 28 U.S.C. § 157(b). Core proceedings are those “arising under title 11, or 2 arising in a case under title 11,” and non-core proceedings are those that are “otherwise 3 related to a case under title 11.” In re Bellingham Ins. Agency, Inc., 702 F.3d 553, 558 (9th 4 Cir. 2012), aff’d sub nom. Exec. Benefits Ins. Agency v. Arkison, 573 U.S. 25 (2014). 5 Bankruptcy court judges may enter final orders on all core proceedings and may submit 6 proposed findings of fact and conclusions of law to the district court for entry of final orders 7 on all non-core proceedings. See 28 U.S.C. § 157(b)–(c). Bankruptcy courts may enter final 8 judgments in non-core proceedings “with the consent of all the parties to the proceeding.” 9 Id. § 157(c)(2). 10 Regarding proposed findings of fact and conclusions of law by a bankruptcy court, 11 “any final order of judgment shall be entered by the district judge after considering the 12 bankruptcy judge’s proposed findings and conclusions and after reviewing de novo those 13 matters to which any party has timely and specifically objected.” 28 U.S.C. § 157(c)(1). 14 The Court may “accept, reject or modify the proposed findings of fact or conclusions of 15 law, receive further evidence, or recommit the matter to the bankruptcy judge with 16 instruction.” Fed. R. Bankr. P. 9033(d). In conducting a de novo review, the Court must 17 consider a bankruptcy court’s findings and conclusions and afford them no presumption of 18 validity. 10 Collier on Bankruptcy ¶ 9033.09[3] (16th ed. Rev. 2020). 19 III. ANALYSIS 20 Defendants filed numerous objections to the proposed findings of fact and 21 conclusions of law submitted by the Bankruptcy Court. (Doc. 1 at 15–82). These objections 22 include objections to factual findings, objections to omissions of fact, objections to 23 conclusions of law, and objections to the Bankruptcy Court’s use of judicial notice. (See 24 id.). These objections are addressed below. 25 A. Objections to Factual Findings 26 After thoroughly reviewing the parties’ submissions, the record, and the proposed 27 findings of fact issued by the Bankruptcy Court, the Court finds that the Bankruptcy 28 Court’s proposed findings of fact should be adopted, save the finding that Moyes and

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1 Burdette were not officers of Swift. In making this determination, the Court overrules each 2 of the objections made by Defendants to the Bankruptcy Court’s proposed findings of fact, 3 save Defendants’ one successful objection. The Court will address each objection to the 4 factual findings in turn. 5 1. “. . . . Moyes needed to continue the 135 Business to service and 6 manage the corporate aircraft he and Honigfeld still used.” 7 Defendants object to the Bankruptcy Court’s finding that Moyes needed to continue 8 the Part 135 Business to service and manage the corporate aircraft used by Moyes and his 9 Redeye associate, Brad Honigfeld (“Honigfeld”), arguing that there is “no basis in the 10 evidentiary record for this statement.” (Doc. 1 at 16). The record shows that the corporate 11 aircraft used by Moyes and Honigfeld was managed by Swift’s Part 135 Business. (See 12 Doc. 19-3 at 1232 (noting that Swift “managed, operated, and chartered the Redeye Plane 13 under its Part 135 [Certificate]”)). Additionally, it is undisputed that Part 135 Certificates 14 cannot simply be transferred or purchased. (Id. at 1263). So, without the continuation of 15 Swift’s Part 135 Business, Moyes would be unable to service and manage the corporate 16 aircraft he used without either expending the significant funds and effort required to obtain 17 a new Part 135 Certificate or finding a new manager for the corporate aircraft he and 18 Honigfeld used. Faced with these unfavorable alternatives, Moyes needed to continue the 19 Part 135 Business to service and manage his corporate aircraft. Thus, the Bankruptcy 20 Court’s factual finding is supported by the record and the Court overrules this objection. 21 2. “If Moyes could just get rid of Swift’s 121 Business and have 22 someone else pay for the Transjet Planes he could solve two 23 important problems in one fell swoop.” 24 Defendants object to the Bankruptcy Court’s finding that the Transaction would 25 solve two problems for Moyes—the losses from the Part 121 Business and the personal 26 guarantee of leases for Transjet planes—in one fell swoop. (Doc. 1 at 16). Yet there is 27 significant evidence that both the Part 121 Business and Transjet leases presented problems 28 for Moyes that would be cured by the Transaction. Swift’s attorney, Gerald Ehrlich

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1 (“Ehrlich”), stated that “Swift Air has always had losses,” (Doc. 19-2 at 95 (citing Trial 2 Exhibit 066, November 29, 2011, Memorandum from Ehrlich to Burdette)), and Moyes’s 3 own testimony refers to the fact that the Part 121 Business would be “a very long-term 4 challenging project,” (Doc. 19-3 at 794). Further, Swift’s balance sheet showed liabilities 5 significantly in excess of assets leading up to the Transaction. (See Doc. 19-5 at 75). 6 Additionally, Moyes had guaranteed debts for Transjet planes that lease agreements with 7 Swift were helping to pay. (Doc. 19-2 at 96–97; see Doc. 19-3 at 434–35). 8 Losses, long-term challenges, liabilities that overshadow assets, and guaranteed 9 debts are all appropriately described as problems that the Transaction would help solve. 10 Even if Moyes was prepared to continue enduring these problems indefinitely and was not 11 seeking a solution when the Buyers approached Swift, the Bankruptcy Court’s factual 12 finding is supported by the record. Thus, the Court overrules this objection. 13 3. “SAG transferred the SAVM Receivable to Moyes.” 14 Defendants object to the Bankruptcy Court’s finding that SAG transferred the 15 SAVM Receivable to Moyes, arguing that this is not a fact in evidence. (Doc. 1 at 17). The 16 Bankruptcy Court, however, supports this factual finding by citing Trial Exhibit 243, Swift 17 Aviation Management Moyes Promissory Note Ledger. (See Doc. 19-2 at 98). This exhibit 18 shows that “[p]rior to the Transaction, pursuant to the SAVM Note, Moyes was owed 19 $14,778,275 by SAVM. On the Transaction Date, Moyes received the SAVM Receivable 20 and the amount Moyes was owed by SAVM on the SAVM Note increased to $19,294,419.” 21 (Id.). Additionally, the Joint Pretrial Statement supports the Bankruptcy Court’s finding by 22 showing that the amount of the SAVM receivable was added to a promissory note from 23 SAVM to Moyes. (Doc 19-3 at 1234). Thus, the Court overrules this objection. 24 4. In footnotes 150–152, the Court finds that the Transjet leases with 25 New Swift were essentially pass-through leases designed to 26 protect Moyes on his guarantees on the Transjet aircraft. 27 Defendants object to the Bankruptcy Court’s finding that the Transjet leases with 28 New Swift “were essentially pass-through leases designed to protect Moyes on his

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1 Guarantees on the Transjet Aircraft” because “[t]here was no evidence introduced by the 2 Trustee that the Transjet leases were ‘designed to protect Moyes on his guarantees.’” (Doc. 3 1 at 17). The Bankruptcy Court, however, noted that the monthly lease payments by New 4 Swift for the Transjet planes were exactly the same as the monthly loan obligations for 5 those planes, and that Moyes guaranteed the monthly loan obligations on those planes. (See 6 Doc. 19-2 at 103). Additionally, Burdette testified that the lease payments agreed to by 7 New Swift in no way reflected the market value of the leases but were instead the same 8 amount as the monthly payments owed by Transjet, and guaranteed by Moyes, on those 9 planes. (See Doc. 19-3 at 626–27). 10 The record supports the Bankruptcy Court’s finding that the Transjet leases were 11 essentially pass-through leases designed to satisfy Transjet’s obligations on the leased 12 aircraft. Because Moyes guaranteed these obligations, any satisfaction of Transjet’s 13 obligations would necessarily protect Moyes. Thus, the Court overrules this objection. 14 5. “New Swift’s plight was not aided by the heavy burden of its 15 Transjet 801 and 802 lease obligations which totaled in excess of 16 $234,000 per month, amounts which may have been well in excess 17 of the market prices to lease such planes.” 18 Defendants object to the Bankruptcy Court’s finding that New Swift’s Transjet lease 19 obligations may have been “well in excess of the market prices to lease such planes” 20 asserting that the leases were negotiated at arm’s length, and the evidence did not show 21 that the lease values were above market value. (Doc. 1 at 17–18). To begin, the Bankruptcy 22 Court stated that it was “not finding that the post-transaction lease rates on the Transjet 801 23 and 802 charged to New Swift were or were not above existing market rates.” (Doc. 19-2 24 at 106). Thus, the Bankruptcy Court did not make the finding that Defendants object to. 25 Even if the Bankruptcy Court made such a finding, Burdette testified that the lease 26 payments from new Swift on the Transjet planes were reduced from over $234,000 per 27 month to roughly $80,000 per month through the bankruptcy process. (Doc. 19-3 at 490– 28 91). Additionally, the lease payments were set at the amounts Transjet owed on the aircraft

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1 at issue, not the market rate. See supra Section III.A.4. In fact, while the lease payments 2 were negotiated at arm’s length, the market price was specifically not considered in setting 3 the lease amounts. See id. Such a drastic payment reduction along with the evidence that 4 the market rate did not influence the payments supports a finding that the lease payments 5 may have been in excess of market prices. Thus, the Court overrules this objection. 6 6. “New Swift also had significant expenses associated with its lease 7 obligation to Transpay (employee leasing), Services (FBO 8 sublease) and its lease obligation to Yukon on the 737 DX.” 9 Defendants object to the Bankruptcy Court’s finding that New Swift had significant 10 expenses associated with its lease obligations to Transpay, Services, and Yukon, Inc., a 11 company that leased aircraft to Swift, because nothing shows that the expenses were 12 charged at unreasonable rates or were unnecessary. (Doc. 1 at 18). The Bankruptcy Court’s 13 finding, though, simply states a fact: certain expenses associated with Swift’s business 14 were significant. (See Doc. 19-2 at 106). Additionally, Nicholas Huska (“Huska”), Swift’s 15 Director of Accounting and Finance and New Swift’s CFO, testified that these significant 16 expenses contributed to New Swift losing nearly $2.3 million in the first half of 2012. (Id. 17 at 1150). Thus, the Court finds Defendants’ objection is without merit and overrules it. 18 7. “The Trustee’s questioning of Conry suggested that, until those 19 plane leases were reduced, the Debtor was required to pay 20 amounts far in excess of the market for such plane leases.” 21 Defendants object to the Bankruptcy Court’s finding that the cross-examination of 22 Conry suggested that, prior to their reduction, the lease payments made by Swift to Transjet 23 were “far in excess of the market for such plane leases” because questions by counsel do 24 not constitute evidence and the Bankruptcy Court failed to provide Conry’s actual 25 testimony. (Doc. 1 at 18–19). As noted supra, the Bankruptcy Court did not make a factual 26 finding that the leases in question were above market price. See supra Section III.A.5. 27 Additionally, the finding by the Bankruptcy Court was an accurate description of 28 the Trustee’s cross-examination of Conry, New Swift’s CEO in March 2012 who had years

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1 of experience in the aviation industry. (See Doc. 19-2 at 132). In that cross-examination, 2 when the Trustee asked Conry about the leases before bankruptcy, Conry believed that the 3 leases were only $40,000 each—the renegotiated price of the leases. (See Doc. 19-3 at 4 183). Even when shown documentary evidence that the lease payments were each 5 originally over $100,000, Conry still expressed reticence stating, “[y]eah, that’s what the 6 document says. I can’t dispute that and I’m trying to recall why I think it was—it was 7 $40,000. But that’s what this document says.” (Id. at 187). Thus, the Trustee’s questioning 8 suggested that, until they were reduced, the leases were in amounts that a person with years 9 in the aviation industry had a hard time affirming. This, combined with the fact that the 10 Bankruptcy Court was not making a factual finding regarding the leases but was simply 11 characterizing testimony, lead the Court to overrule this objection. 12 8. After noting that Mr. Huska testified that he agreed to transfer 13 his employment to New Swift because he thought it was a good 14 opportunity, the Court adds the following: “Of course, if Moyes 15 would otherwise shut down Swift, the opportunity with New Swift 16 was likely the only real prospect available to Huska within the 17 Swift aviation group.” 18 Defendants object to the Bankruptcy Court’s finding in a footnote that, “if Moyes 19 would otherwise shut down Swift, the opportunity with New Swift was likely the only real 20 prospect available to Huska within the Swift aviation group [sic],” arguing that there is no 21 evidence to support this finding, that New Swift was not affiliated with SAG, and that there 22 was no evidence that Huska lacked employment prospects generally. (See Doc. 1 at 19–20 23 (quoting Doc. 19-2 at 137 n.357)). To begin, the present objection seems immaterial to the 24 ultimate outcome of the instant claims. Defendants appear to take issue with the footnote 25 because it signifies that Huska may have joined New Swift due to a lack of options, rather 26 than New Swift’s viability. However, the Bankruptcy Court expressly stated that “[w]hen 27 the Transaction closed, Huska went to work with New Swift believing it was a good 28 opportunity for him.” (Doc. 19-2 at 137). Thus, this objection would have no material

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1 impact on the overall factual findings. 2 Further, there is evidence in the record to support this footnote. Huska worked for 3 Swift, and after the Transaction, Swift ceased to be a part of SAG. (See Id. at 161). Thus, 4 with Swift no longer being affiliated with SAG, Huska would likely not have an 5 opportunity with SAG after the Transaction. Additionally, while Huska stated in testimony 6 that he could have stayed with the seller—SAG—after the Transaction, Defendants cite no 7 evidence to support this contention. (See Docs. 1 at 19–20, 19-3 at 245). In fact, the record 8 shows that the SAG companies were suffering from what Burdette described as a “zombie 9 apocalypse financial collapse,” in which “[p]eople stopped flying airplanes.” (Doc. 19-2 at 10 1086). This evidence provides support for the inference that it is unlikely that the SAG 11 companies would be looking to take on new executives at such a challenging financial time. 12 Finally, while Defendants argue that New Swift was not affiliated with SAG after 13 the Transaction, Defendants also state that “[e]ven after the Transaction, Moyes’ 14 companies extended certain accommodations to New Swift. New Swift received 15 $342,809.09 in rent, fuel and grounds services from Services and deferral of the Transjet 16 leases payments in the amount of $216,154.00.” (Doc. 1 at 19 n.11). This shows that, while 17 New Swift was no longer a subsidiary of SAG, the record supports the finding that a job 18 with New Swift would likely keep Huska tied to Moyes and SAG. Thus, the Court 19 overrules this objection. 20 9. “Burdette saw Buyers’ [sic] intended to bring on Van Lier, a 21 knowledgeable aviation operator, the type of person Swift lacked. 22 This combined with Direct Air’s summertime business reflected a 23 business plan that could succeed where Swift was failing. Burdette 24 testified that he felt the sale to Buyers was in Swift’s best interest. 25 By ‘Swift’ [the Bankruptcy] Court took Burdette to mean the 26 Swift family of companies (Transpay, Transjet, Services, Swift, 27 etc.).” 28 Defendants object to the Bankruptcy Court’s statement that when Burdette testified

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1 that the Transaction was in Swift’s best interest, the Bankruptcy Court believed he meant 2 the Swift family of companies. (Doc. 1 at 20). Yet, the Bankruptcy Court did not 3 definitively find that Burdette was referring to the Swift family of companies in his 4 testimony, but merely expressed that the Bankruptcy Court believed Burdette was 5 referencing the Swift family of companies. (See Doc. 19-2 at 140). This is a reasonable 6 belief as both immediately before and after this specific statement by Burdette, Burdette’s 7 testimony centered on the Swift family of companies, rather than Swift alone. (See Doc. 8 19-3 at 462–64). Additionally, the Bankruptcy Court’s belief was reasonable in light of the 9 fact that Burdette was not only an officer of Swift, but also an officer of other companies 10 in the Swift family including SAVM, Trasjet, the Transjet Subsidiaries, Services, Sales, 11 SAM, SAG, and Transpay. (See Doc. 19-2 at 78–82). Because the Bankruptcy Court’s 12 belief was reasonable and did not amount to a factual finding, the Court overrules this 13 objection. 14 10. “Burdette acknowledged it was his responsibility to make sure 15 Fowler’s $5 million came into New Swift.” 16 Defendants object to the Bankruptcy Court’s finding that Burdette acknowledged 17 that it was his responsibility to make sure Fowler’s $5 million came into New Swift arguing 18 that “[t]his finding is demonstrably false and has no basis in the evidentiary record.” (Doc. 19 1 at 21–22). Yet, Burdette testified that, without the plan for a $5 million capital infusion, 20 he would not consider the Buyers to be serious purchasers for Swift, (Doc. 19-3 at 448), he 21 was the only person he knew of that did due diligence on behalf of Swift, (Id. at 542), that 22 Swift would “[a]bsolutely” care if Fowler’s $5 million came into New Swift, (Id. at 547), 23 that he “cared that the money showed up,” (Id. at 549), that “[Burdette’s] intent was to 24 insure, and [he] made sure that was represented throughout the process, that they were 25 going to get an infusion of $5 million, whatever vehicle they used to get it in,” (Id. at 551). 26 Taken together, these statements support the finding that Burdette knew New Swift needed 27 the $5 million and he was the person at Swift responsible for ensuring that money came in 28 as part of the Transaction. Thus, the Bankruptcy Court’s finding is supported by the record,

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1 and the Court overrules this objection. 2 11. “As to the cost of the 801 and 802 leases ($235,000 per month), 3 Burdette noted the Buyers needed these planes and were willing 4 to overpay for the privilege of using them.” 5 Defendants object to the Bankruptcy Court’s finding that the Buyers needed the 6 Transjet planes and were willing to overpay for them, arguing that “this finding also has 7 no basis in the evidentiary record.” (Doc. 1 at 21). Burdette testified, however, that the 8 Buyers needed the Transjet planes to carry out their business plan, that Transjet could have 9 taken its planes and leased them to somebody else, and that, without the Transjet planes, 10 the Buyers would have to go through the regulatory process with the FAA of adding new 11 planes to New Swift’s Part 121 Certificate. (Doc. 19-3 at 670–72). Thus, the record shows 12 that the Buyers needed the planes at issue and would likely be willing to overpay for them 13 to avoid the cost and delay of adding new planes to New Swift’s Part 121 Certificate. 14 Therefore, the Bankruptcy Court’s finding is supported by the record, and the Court 15 overrules this objection. 16 12. “Ehrlich was directed to SAG’s 2011 tax return where it noted a 17 $4,510,000 plane and that, ‘due to financial hardship and 18 insolvancy [sic], the taxpayer could not take delivery of the 19 aircraft . . . the taxpayer took a deduction on 12/21/2011 on Form 20 4797.’ Ehrlich confirmed that the ‘insolvancy’ reference was to 21 book value insolvency, not market value. Moreover, the pass- 22 through losses could not be promptly utilized by Moyes because 23 he already had significant passive losses . . . This exchange 24 highlights for the Court that, while Moyes was not in a position to 25 promptly shield income from the passive losses triggered by the 26 Transaction, Moyes nevertheless was able to recognize a 27 significant tax benefit at the time of the Transaction.” 28 Defendants object to the Bankruptcy Court’s finding that a $4,510,000 loss on a

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1 plane was related to the Transaction and the Bankruptcy Court’s discussion of “tax 2 benefits” related to Moyes. (Doc. 1 at 22). Defendants argue that there was “no evidence 3 whatsoever that the $4,510,000 loss on a plane was related in any way to Swift or the 4 Transaction,” and that the “Trustee never introduced any evidence regarding, and the 5 [Bankruptcy] Court made no definitive findings with respect to, any ‘tax benefits’ related 6 to Moyes.” (See id.). To begin, when testifying about the $4,510,000 loss, Ehrlich stated 7 that SAG’s 2011 tax return may have been related to other SAG affiliates, namely Sales, 8 and that the deduction in question was taken on the Transaction Date. (See Doc. 19-3 at 9 928–29). Thus, the record supports an inference that the $4,510,000 loss was related to 10 Swift and the Transaction. 11 In addition, Ehrlich testified that the tax benefits of the losses “would flow through 12 to Mr. Moyes.” (Id. at 930). The Bankruptcy Court also made specific findings about these 13 benefits and their flow to Moyes based on the record in Part VII(C)(7)(k) of its Report and 14 Recommendation. (See Doc. 19-2 at 223). Thus, the record supports the Bankruptcy 15 Court’s finding that Moyes could realize the tax benefits of the $4,510,000 loss. Because 16 the findings of the Bankruptcy Court were supported by the record, the Court overrules this 17 objection. 18 13. “On the Transaction Date one could make a case for the 19 proposition that Swift was on its ‘death bed’ but neither of the 20 parties have invited the Court to make this determination nor will 21 the Court sua sponte make such a finding.” 22 Defendants object to the Bankruptcy Court’s failure to make a finding that Swift 23 was on its “death bed” on the Transaction Date arguing that the Bankruptcy Court failed to 24 treat Swift as a going concern despite this finding. (Doc. 1 at 22–23). The Bankruptcy 25 Court, however, treated Swift as a going concern in its insolvency analysis. (See, e.g., Doc. 26 19-2 at 150); see also Redeye II, LLC v. MorrisAnderson & Associates Limited, Case No. 27 CV-20-00855-PHX-JAT, Part III.D.1 (D. Ariz. Dec. 1, 2020). Thus, this objection is 28 without merit and the Court overrules it.

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1 14. “Whether the SAVM Receivable was collectible on the 2 Transaction Date is irrelevant for the purposes of this Court’s 3 preference analysis. The SAVM Receivable was transferred to 4 SAG and then to Moyes. This transfer resulted in a pay down of 5 the Moyes Note. Moyes’ books also reflect that the SAVM Note to 6 Moyes was increased by the exact amount of the SAVM 7 Receivable. The value of the SAVM Receivable was recognized by 8 Moyes to be the full amount of the SAVM Receivable. If the 9 SAVM Note was ultimately uncollectible, the [Bankruptcy] Court 10 presumes (but does not affirmatively find) that Moyes wrote off 11 this bad debt for his tax purposes. What the [Bankruptcy] Court 12 does find is that Moyes enjoyed the full amount of the SAVM 13 Receivable when that asset was transferred to him.” 14 Defendants object to the Bankruptcy Court’s finding that the SAVM receivable was 15 collectable arguing that SAVM was out of business and could not have paid the SAVM 16 receivable on the Transaction Date, so its market value was $0, rather than its face value. 17 (Doc. 1 at 23–24). It is true that SAVM had no assets on their books and was not operating 18 at the time of the Transaction. (Doc. 19-3 at 389, 209) However, Swift never treated the 19 SAVM Receivable as uncollectable by writing it down in their books, and there was no 20 evidence of any effort made by Swift to collect this receivable. (Doc. 19-3 at 265–67). 21 Additionally, the representative for SAG, the parent of SAVM, testified that the 22 SAVM Receivable was a collectable asset because Moyes would “make it good.” 23 (Response Brief, Appendix Tab 9 at 137–38, Redeye II, LLC v. MorrisAnderson & 24 Associates Limited, Case No. CV-20-00855-PHX-JAT (D. Ariz. Dec. 1, 2020), ECF No. 25 25-10). Burdette similarly testified that Moyes “funded” certain of his companies to “help[] 26 them out” when they could not make payments that were due. (Doc. 19-3 at 409–10). 27 Moyes also testified that he and his companies “had to pay [their] payables,” (Doc. 19-2 at 28 1055), and that he would loan money to pay debts owed by, at least one of, his companies,

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1 (see id. at 1067). The record reflects that Moyes was no stranger to loaning money to his 2 companies so they could satisfy their payables. 3 Further, the record reflects that Moyes realized at least the full face value of the 4 SAVM Receivable. (See Doc. 19-3 at 1234 (“The amount of the SAVM Receivable was 5 added to the balance due under a promissory note from SAVM to Moyes.”); Doc. 19-5 at 6 2 (showing that after the transfer of the SAVM Receivable to Moyes, the Swift note payable 7 to Moyes was satisfied)). This evidence together supports the finding that the SAVM 8 Receivable was collectable, and the Court overrules this objection. 9 15. “On the Transaction Date, the balance on the Moyes Note totaled 10 $4,762,360. See FN 58. The Moyes Note was paid off as part of the 11 Transaction.” 12 Defendants object to the Bankruptcy Court’s finding that the Moyes promissory 13 note with Swift (the “Moyes Note”) was paid off as a part of the Transaction arguing that 14 it was not paid, but simply taken as a loss. (Doc. 1 at 24). Yet, the record shows that, as a 15 part of the Transaction, the SAVM Receivable was transferred to Moyes, see supra Section 16 III.A.14, at the same time the balance of the Moyes Note was set to $0, (see Doc. 19-5 at 17 2). Thus, the record supports the Bankruptcy Court’s finding that the SAVM Receivable 18 was used to pay off the Moyes Note, and the Court overrules this objection. 19 16. The Bankruptcy Court found that the Defendants did not act with 20 actual intent to hinder, delay, or defraud because they satisfied 21 their burden to establish a “legitimate supervening purpose.” 22 Defendants object to the Bankruptcy Court’s failure to find that the evidence 23 surrounding a finding of legitimate supervening purpose in the intentional fraudulent 24 transfer analysis did not also prove that there was no breach of fiduciary duty by the 25 Defendants. (Doc. 1 at 24–25). Defendants state that they “do not object to the 26 [Bankruptcy] Court’s ultimate legal conclusion that the Transaction served a ‘legitimate 27 supervening purpose.’” (Id. at 25). Instead, Defendants seem to object to the exclusion of 28 additional evidence surrounding this finding which Defendants assert would prove that

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1 they satisfied their fiduciary duties. (See id.). As discussed infra, the Court affirms the 2 Bankruptcy Court’s proposed conclusions of law relating to the fiduciary duty claims, see 3 infra Section III.C.2, so the Court overrules this objection. 4 17. “Given that the Arizona Supreme Court determined members 5 and managers of Swift owed common law fiduciaries duty [sic] to 6 Swift, the question is whether Moyes and Burdette owed fiduciary 7 duties to Swift up to an including the time of the Transaction. At 8 this Court’s July 2, 2019 hearing, their counsel conceded they 9 did.” 10 Defendants object to the Bankruptcy Court’s finding that In re Sky Harbor Hotel 11 Properties, LLC, 443 P.3d 21 (Ariz. 2019), determined members and managers of Swift 12 owed common law fiduciary duties to Swift and that Defendants conceded that Moyes and 13 Burdette owed fiduciary duties to Swift. (Doc. 1 at 26–27). Defendants argue that Swift’s 14 operating agreement (the “Operating Agreement”) eliminated these fiduciary duties for 15 Moyes and Burdette. (See id.). First, the In re Sky Harbor court held that “an LLC’s 16 managers or members, when acting as agents of the LLC, owe fiduciary duties to the 17 company,” and that “these duties may be lawfully limited by a valid operating agreement.” 18 In re Sky Harbor, 443 P.3d at 24. Because Swift was an LLC, managers or members of 19 Swift would necessarily owe Swift fiduciary duties. 20 Next, at the July 2, 2019 hearing, Defendants conceded that Moyes and Burdette 21 “admittedly, pursuant to the Arizona Supreme Court, [] had a fiduciary duty coming into 22 the transaction.” See Transcript of Hearing or Trial on 7/2/19, In re Swift Air, L.L.C., No. 23 14-AP-00534, at 21–22 (Bankr. D. Ariz. July 11, 2019), ECF No. 535.4 24 4 The full text of the hearing excerpt reads: THE COURT: So stepping back a little bit, the whole reason we’re talking 25 about 7.10 is because Moyes and Burdette are saying I am exonerated from what I did in this matter under 7.10. The company has no claims against me 26 under 7.10, because admittedly, pursuant to the Arizona Supreme Court, I had a fiduciary duty coming into the transaction, but I had the safety net of 27 knowing that as long as I acted in good faith, 7.10’s going to protect me, and there will be no such thing as a breach of fiduciary duty claim against me. 28 MR. SALERNO: As long as I did not commit intentional fraud. THE COURT: Right.

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1 Finally, the Bankruptcy Court correctly determined that the Operating Agreement 2 did not eliminate the fiduciary duties owed by Moyes and Burdette. See infra Section 3 III.C.1. Thus, the Bankruptcy Court’s finding is supported by the record, and the Court 4 overrules this objection. 5 18. The Bankruptcy Court found that Moyes and Burdette were not 6 “Officers” of Swift for purposes of the Operating Agreement. 7 Defendants object to the Bankruptcy Court’s finding that Moyes and Burdette were 8 not “Officers” of Swift for purposes of the Operating Agreement. (Doc. 1 at 27). The 9 Bankruptcy Court found that Moyes and Burdette were not “Officers” under the Operating 10 Agreement because the Operating Agreement contains both the terms “officer” and 11 “Officer” and the term “Officer” is “a capitalized word signifying it must have a particular 12 meaning within the context of the Operating Agreement.” (Doc. 19-2 at 206–07). The 13 Operating Agreement does not define the term “Officer,” so the Bankruptcy Court would 14 “not presume the word “Officer” provides Moyes and Burdette the protections of ¶ 7.10 15 [the Operating Agreement’s indemnity provision].” (Id. at 207). 16 The Operating Agreement uses both the term “officer” and “Officer” throughout its 17 text. See Statement of Facts in Support of Motion for Report and Recommendation, Exhibit 18 A, In re Swift Air, L.L.C., No. 14-AP-00534, at 6–18 (Bankr. D. Ariz. April 10, 2018), ECF 19 No. 271-2. Notably, ¶ 6.11 which establishes the officers of Swift and lays out their 20 responsibilities uses both “officer” and “Officer” seemingly interchangeably. See id. at 13. 21 Similarly, ¶ 7.10 also uses both “officer” and “Officer” seemingly interchangeably. See id. 22 at 15. 23 The Operating Agreement, by its terms, is governed by Arizona Law; and the parties 24 do not dispute that Arizona law controls. Id. at 17. Under Arizona law, “[w]hether a 25 contract is ambiguous is a question of law.” Hartford v. Indus. Comm’n of Arizona, 870 26 P.2d 1202, 1207 (Ariz. Ct. App. 1994). “Language is ambiguous when it can reasonably 27 be construed in more than one sense and such construction cannot be determined within 28 MR. SALERNO: That’s what it – then yes . . . .

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1 the four corners of the instrument.” Univ. Realty & Dev. Co. v. Omid-Gaf, Inc., 508 P.2d 2 747, 750 (Ariz. App. Ct. 1973). “Any ambiguity is subject to a factual determination 3 concerning the intent of the parties and is to be resolved conclusively by the trier of fact.” 4 Hartford, 870 P.2d at 1207. The language of the Operating Agreement is ambiguous as a 5 matter of law because whether the term “Officer” is a defined term separate from “officer” 6 can be construed in more than one sense when looking within the four corners of the 7 Operating Agreement. Thus, whether the term “officer” is different from the term “Officer” 8 in the Operating Agreement is a question of fact. 9 Here, the Court finds that the term “Officer” should not be considered a separate 10 defined term from “officer.” Both terms are used interchangeably at key parts of the 11 Operating Agreement, and the Operating Agreement does not define a separate “Officer” 12 term. Thus, the Court sustains this objection to the Bankruptcy Court’s proposed factual 13 findings. 14 19. “At trial, Burdette testified that Buyers were in a hurry to close 15 the Transaction but the Seller was not. The Court finds this 16 testimony not credible. Swift was crippled and needed to be sold 17 or quickly closed.” 18 Defendants object to the Bankruptcy Court’s finding that Burdette was not credible 19 in his testimony that Seller was not in a hurry to close the Transaction and that Swift was 20 crippled and needed to be sold quickly or closed arguing there is no affirmative evidence 21 to support such a finding. (Doc. 1 at 28). Yet, the record shows that, leading up to the 22 Transaction, Burdette and Moyes decided to enter into the Transaction or have Swift cease 23 operations. (Doc. 19-2 at 88 (citing Declaration of Kevin Burdette at 5, In re Swift Air, 24 L.L.C., No. 14-AP-00534 (Bankr. D. Ariz. Mar. 22, 2018), ECF No. 258-3)). Additionally, 25 Burdette testified that the SAG companies were suffering from what Burdette described as 26 a “zombie apocalypse financial collapse,” in which “[p]eople stopped flying airplanes.” 27 (Id. at 1086). Thus, the record supports the Bankruptcy Court’s finding that Burdette and 28 Moyes were eager to quickly close the Transaction and that Swift was crippled and needed

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1 to be sold or closed, so the Court overrules this objection. 2 20. “Why would [Defendants] not insist on the merger [of Direct Air 3 and Swift]? Presumably the Buyers balked at the merger and 4 neither Moyes nor Burdette saw fit to look out for Swift’s best 5 interests.” 6 Defendants object to the Bankruptcy Court’s findings that the Buyers may have 7 balked at the merger of Swift and Direct Air and that Moyes and Burdette were not looking 8 out for Swift’s best interest by failing to insist on the merger arguing that no evidence 9 supports such a finding and a merger with Direct Air may not have been beneficial for 10 Swift. (Doc. 1 at 28). The evidence does, however, suggest that the Direct Air merger was 11 initially intended to be a part of New Swift’s post-Transaction plans. Burdette testified that 12 part of the Buyers’ business plan involved Direct Air from the outset of the Transaction. 13 (See Doc. 19-3 at 544). Ehrlich also noted that he understood the merger with Direct Air 14 to be a requirement for the Transaction and that it would bring additional equity into Swift. 15 (See Doc. 19-2 at 93 (citing Trial Exhibit 066, November 29, 2011, Memorandum from 16 Ehrlich to Burdette)). Burdette’s testimony further highlighted the importance of the Direct 17 Air merger, even stating that Direct Air was the “piece of the puzzle that [Swift] needed,” 18 and that Direct Air “needed to be [Swift’s] next customer.” (Doc. 19-3 at 669). 19 Because the Direct Air merger was such an important piece of the Transaction for 20 Swift, and because the Direct Air merger was initially intended to be a part of New Swift’s 21 post-Transaction plans, the record supports the inference that the Buyers were the ultimate 22 reason the Direct Air merger did not occur. Thus, the Bankruptcy Court’s finding is 23 supported by the record and the Court overrules this objection. 24 21. “The $1,802,668 owed to Swift by the Transjet Subsidiaries could 25 also not be paid in cash just before the Transaction Date because 26 any money obtained by the Transjet Subsidiaries came from 27 Swift’s operations or in the form of loans from Moyes.” 28 Defendants object to the Bankruptcy Court’s finding that the Transjet Subsidiaries

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1 could not pay their payables and that the Transjet Subsidiaries obtained their money from 2 Swift’s operations or from loans by Moyes. (Doc. 1 at 28–29). Defendants argue that 3 Transjet performed all bookkeeping and handled payments for the Transjet Subsidiaries 4 and that the Transjet payables were customarily setoff against Transjet receivables. (See 5 id.). To begin, even if Transjet performed all the bookkeeping and handled payments for 6 the Transjet Subsidiaries, the payments owed to Swift stemmed from Swift’s management 7 agreements with the Transjet Subsidiaries (the “Management Agreements”), not any 8 agreement Transjet itself. (See Doc. 19-8 at 25–100). 9 Further, while Defendants argue that Transjet’s payables and receivables with Swift 10 were normally setoff against each other at the end of each month, the Management 11 Agreements specifically disallowed setoff and required payment be made in cash. (See, 12 e.g., id. at 33). This term was not waived or modified by any party, so Defendants’ 13 argument of setoff is unavailing. See Transjet Incorporated v. MorrisAnderson & 14 Associates Limited, Case No. CV-20-00849-PHX-JAT, Part III.B (D. Ariz. Dec. 1, 2020). 15 Thus, the Bankruptcy Court’s finding is supported by the record, and the Court overrules 16 this objection. 17 22. “In effect, Moyes’ business interests were served by the SAVM 18 Receivable because SAVM ran up debts with Swift but never had 19 to pay them. Were the SAVM Receivable not incurred, either 20 SAVM would have failed earlier or Moyes would likely have 21 needed to inject even more funding into SAVM.” 22 Defendants object to the Bankruptcy Court’s finding that Moyes’s business interests 23 were served by the SAVM receivable and that SAVM would have failed earlier or needed 24 a cash injection from Moyes if the SAVM receivable were not allowed to accrue. (Doc. 1 25 at 29–30). Defendants argue that Moyes’s and SAVM’s interests were separate and the 26 SAVM receivable was a wash for Swift because both SAVM and Swift had the same 27 parent, SAG. (See id.). SAVM was a separate entity from Moyes and had its own individual 28 interests. SAVM, however, was ultimately owned by the Moyes Trust, and Moyes had

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1 loaned at least $11 million to SAVM to help SAVM through difficulties. (See Doc. 19-3 at 2 206–07). So, the record shows that Moyes had a business interest in the success of SAVM. 3 Additionally, although SAVM and Swift shared SAG as a corporate parent, SAVM 4 and Swift were separate business entities. Debts owed by SAVM to Swift were not 5 automatically satisfied because of their common parent SAG. Because of this, the SAVM 6 Receivable owed to Swift benefited SAVM, and by extension Moyes, by allowing SAVM 7 to accrue debt without having to pay it during difficult financial times. Thus, the record 8 supports the Bankruptcy Court’s finding, and the Court overrules this objection. 9 23. “. . . it is also obvious to the Court that Moyes was served by 10 spinning Swift’s 135 Business off to SAM. Moyes needed a 135 11 certificate for use in his executive travel, especially through 12 Redeye.” 13 Defendants object to the Bankruptcy Court’s finding that Moyes was served by 14 spinning off the Part 135 Business because he needed the Part 135 Business for his 15 executive travel. As discussed supra, the record supports this finding by the Bankruptcy 16 Court and the Court overrules this objection. See supra Section III.A.1. 17 24. “The Transaction called for New Swift to lease both of those 18 planes, not based on known market price but rather, simply based 19 on the amount of Transjet’s monthly debt service.” 20 Defendants object to the Bankruptcy Court’s finding that the leases of Transjet’s 21 planes to Swift were not based on market price but the amount of Transjet’s monthly 22 payments for these planes. (Doc. 1 at 30–31). Yet, Burdette’s testimony supports exactly 23 the finding of the Bankruptcy Court on this issue. (See Doc. 19-3 at 626–27). Thus, the 24 Court overrules this objection. 25 25. The Bankruptcy Court found that Moyes was motivated to have 26 New Swift pay the lease debt he guaranteed with respect to the 27 Transjet planes. 28 Defendants object to the Bankruptcy Court’s finding that Moyes was motivated to

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1 have New Swift pay the lease debt Moyes guaranteed with respect to Transjet’s planes 2 arguing that there is no evidence that Moyes was so motivated and that the Buyers wanted 3 to make the lease payments. (Doc. 1 at 31). Regardless of whether the Buyers wanted to 4 make the lease payments in question, Moyes was certainly motivated to have the Transjet 5 leases paid because he personally guaranteed them. (See Doc. 19-3 at 631–32). As Swift 6 was the only source of revenue for the Transjet Subsidiaries, (See Doc. 19-2 at 218), Moyes 7 would be motivated to have New Swift continue providing revenue to the Transjet 8 Subsidiaries so that the lease payments could be made. Thus, the record supports the 9 Bankruptcy Court’s finding, and the Court overrules this objection. 10 26. “Moyes’ entity Transpay was benefited by this arrangement and, 11 at least emotionally, Moyes benefitted from knowing his people 12 would still have jobs after the Transaction closed. The alternative 13 to this sale was closing Swift and laying off many longtime 14 employees employed by the Moyes Entities.” 15 Defendants object to the Bankruptcy Court’s finding that Moyes benefitted, at least 16 emotionally, from the Transaction because Transpay’s employees would still have jobs and 17 that the alternative to the Transaction was closing Swift. (Doc. 1 at 31–32). Swift had no 18 employees of its own and leased employees from Transpay to operate its charter business. 19 (See Doc. 19-2 at 82). Transpay was wholly owned by Moyes who was also Transpay’s 20 president. (See id.). It is a reasonable inference to determine that Moyes, as Transpay’s 21 president, would benefit, at least emotionally, from Swift continuing to lease employees 22 from Transpay so that Transpay would not have to lay off any of these employees. 23 Further, the evidence shows that Swift’s liabilities were significantly in excess of 24 its assets. (See Doc. 19-5 at 75). Even if Swift’s financial downturn was due, in part, to the 25 2011 NBA strike, Swift’s fortunes had yet to change at the time of the Transaction. 26 Additionally, Moyes testified that he sold Swift based on Burdette’s recommendation and 27 did not even know the details of the Transaction. (Doc. 19-2 at 1066). So even if Moyes 28 could have supported Swift moving forward, he likely would not have done so due to

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1 Burdette’s recommendation. This coupled with the fact that Burdette stated that he and 2 Moyes decided to enter into the Transaction or have Swift cease operations shows that the 3 Bankruptcy Court’s finding is amply supported by the record. (Id. at 88 (citing Declaration 4 of Kevin Burdette at 5, In re Swift Air, L.L.C., No. 14-AP-00534 (Bankr. D. Ariz. Mar. 22, 5 2018), ECF No. 258-3)). Thus, the Court overrules this objection. 6 27. “This new lease arrangement held out the prospect that Services 7 could survive and that Moyes’ corporate jet travel needs could be 8 handled through the continued survival of Services. Absent the 9 Transaction Swift would shut down and Services’ operations 10 supporting Moyes’ private jet transportation would have been in 11 grave jeopardy.” 12 Defendants object to the Bankruptcy Court’s finding that New Swift’s lease 13 arrangement with Services would allow Services to survive and that Services supported 14 Moyes’s private jet transportation arguing that there “is no basis in the evidentiary record 15 . . . for this finding.” (Doc. 1 at 32). Yet, Burdette testified to the scope of Services’ 16 operations and the importance of Swift remaining a customer of Services’. (See Doc. 19-3 17 at 661). It is a reasonable inference to find that the loss of such an important customer 18 would jeopardize Services’ business. 19 Additionally, as noted supra, Moyes utilized the Part 135 Business to operate his 20 private aircraft. See supra Section III.A.1. Because Services provided facilities and services 21 for the Part 135 Business, any interruption of Services’ business would jeopardize Moyes’s 22 private travel as well. Thus, the Court overrules this objection. 23 28. “. . . the fact that Moyes and Burdette allowed Legacy to build up 24 such a large receivable over many years evidences their 25 domination of Swift as a manner designed to suit Moyes’ personal 26 interests, not the best interests of Swift.” 27 Defendants object to the Bankruptcy Court’s finding that Moyes and Burdette 28 allowing the Legacy Aircraft Partners, LLC (“Legacy”) receivable owed to Swift (the

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1 “Legacy Receivable”) to build up and then be transferred to Moyes evidences Moyes use 2 of Swift for his own interests. (Doc. 1 at 32). Defendants argue that there is no evidence of 3 who controlled Legacy, why the Legacy Receivable built up, or what the final disposition 4 of the receivable was. (See id.). Yet, the Bankruptcy Court found that Legacy was owned 5 and controlled by Moyes, and this is supported by Legacy’s public records. (See Doc. 19- 6 2 at 84); see also Defendants’ Objection to Trustee’s Motion for Leave to File Fourth 7 Amended Complaint, Exhibit A–E, In re Swift Air, L.L.C., No. 14-AP-00534, at 17 (Bankr. 8 D. Ariz. June 14, 2018), ECF No. 303-2 (Showing that Arizona Corporation Commission 9 records list Jerry Moyes as Manager of Legacy). 10 Additionally, Moyes testified that payables and receivables for Moyes owned 11 companies did not “get the attention” that accounts with unrelated companies got because 12 they “[were] just interrelated companies.” (Doc. 19-2 at 1054). So, it was a reasonable 13 inference based on the record for the Bankruptcy Court to find that the Legacy Receivable 14 was allowed to build up because Legacy was a Moyes owned company, rather than because 15 letting the Legacy Receivable build up was good for Swift. In fact, there is no evidence in 16 the record suggesting that it was beneficial to Swift to allow the Legacy Receivable to 17 significantly build up. 18 Finally, the record shows a transfer of the Legacy receivable from Swift to Moyes 19 in 2011 to reduce Swift’s financial obligation to Moyes. (See Doc. 19-8 at 318). Thus, the 20 Bankruptcy Court’s finding is supported by the record, and the Court overrules this 21 objection. 22 29. The Bankruptcy Court found that Moyes “possibly” had liability 23 on the Transportation Taxes as a control party. 24 Defendants object to the Bankruptcy Court’s finding that Moyes possibly had 25 liability on Swift’s unpaid transportation taxes (the “Transportation Taxes”) arguing that 26 “[t]here is no evidence on record related to whether Moyes had control party liability for 27 the Transportation Taxes.” (Doc. 1 at 32–33). However, the record establishes that Burdette 28 may have had liability for the Transportation Taxes as Swift’s vice-president, (See Doc.

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1 19-3 at 159–60, 589), so it is a reasonable inference to find that Moyes may have also had 2 liability for the Transportation Taxes as Swift’s president. Thus, the Court overrules this 3 objection. 4 30. “As it turns out, New Swift carried many of these unpaid debts 5 into its Chapter 11 Proceeding.” 6 Defendants object to the Bankruptcy Court’s finding that New Swift carried many 7 pre-transaction payable debts into its Chapter 11 proceeding arguing that “[t]he Trustee 8 never presented any evidence at trial that would allow the [Bankruptcy] Court to make a 9 determination as to the amount of Swift’s unsecured debts on the Petition Date that had 10 been unpaid since the time of the Transaction.” (Doc. 1 at 33). To be sure, the Trustee did 11 not trace the exact amount of pre-Transaction debt that Swift carried into its Chapter 11 12 proceeding, (see id. at 107), but the Bankruptcy Court did not purport to make such a 13 finding. Instead, the Bankruptcy Court found that New Swift did not have the cash on hand 14 to pay its pre-Transaction debts. (See Doc. 19-2 at 223). Because of this, the fact that Moyes 15 and Burdette did not require Swift’s pre-Transaction debts be paid as a part of the 16 Transaction caused financial strain for Swift which it endured into its Chapter 11 17 proceeding. (See Doc. 19-2 at 223). Such a finding is supported by the record, so the Court 18 overrules this objection. 19 31. “In the year prior to the Transaction, millions of dollars were paid 20 from SAVM to Moyes in reduction of SAVM’s liabilities to Moyes 21 or to creditors whose claims Moyes guaranteed. These transfers 22 rendered SAVM incapable of paying Swift on the SAVM 23 Receivable. As of the Transaction Date, the SAVM Receivable 24 was uncollectible and SAVM was defunct. By gutting SAVM of 25 its cash, Moyes and Burdette ensured that SAVM could not pay 26 its bills to Swift.” 27 Defendants object to the Bankruptcy Court’s finding that, prior to the Transaction, 28 Moyes was paid millions of dollars from SAVM which rendered SAVM incapable of

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1 paying Swift on the SAVM receivable on the Transaction Date. (Doc. 1 at 33–34). 2 Defendants argue that the evidence shows Moyes putting millions of dollars into SAVM 3 and that market forces, not Moyes, caused SAVM to not be able to pay Swift. (See id.). 4 The record, however, supports the Bankruptcy Court’s finding. 5 SAVM’s December 31, 2010, balance sheet shows cash in checking at 6 $10,718,557.30 and liabilities to Swift at $4,599,781.61. See Trustee’s Post-Trial Closing 7 Brief, Appendix App. No. 25, In re Swift Air, L.L.C., No. 14-AP-00534, at 17 (Bankr. D. 8 Ariz. Apr. 5, 2019), ECF No. 521-27. This balance sheet also shows that SAVM had 9 liabilities in excess of $31 million, including over $11 million owed to creditors 10 unaffiliated with Moyes. Id. Some of these debts to outside creditors were guaranteed by 11 Moyes. (Doc. 19-3 at 390). 12 SAVM’s March 31, 2011, balance sheet shows cash in checking at $296.65 and 13 liabilities to Swift at $4,516,400.44. See Trustee’s Post-Trial Closing Brief, Appendix App. 14 No. 25, In re Swift Air, L.L.C., No. 14-AP-00534, at 17 (Bankr. D. Ariz. Apr. 5, 2019), 15 ECF No. 521-27. This balance sheet also shows that SAVM had liabilities in excess of $20 16 million, including only $327,752.99 owed to creditors unaffiliated with Moyes. It is a 17 reasonable inference to find that the payment of debt to outside creditors, at least some of 18 which was guaranteed by Moyes, depleted SAVM’s cash stores and rendered it incapable 19 of paying Swift. 20 While the economic downturn in 2008 likely hurt SAVM’s business, the record 21 supports a finding that SAVM’s use of cash to pay outside creditors left SAVM incapable 22 of paying what it owed to Swift. As the president and vice-president of SAVM, Moyes and 23 Burdette were certainly involved with the decision to direct SAVM’s cash away from 24 Swift. Thus, the Court overrules this objection. 25 32. “Ehrlich knew the questions of Swift’s solvency was [sic] a cloud 26 hanging over the Transaction but did not obtain or even suggest 27 Swift obtain an expert’s opinion of Swift’s solvency . . .” 28 Defendants object to the Bankruptcy Court’s finding that Ehrlich knew the questions

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1 of Swift’s solvency hung over the Transaction but did not obtain or suggest Swift obtain 2 an expert’s opinion on Swift’s solvency. (Doc. 1 at 34). Defendants argue that there is no 3 basis for this finding in the record, a solvency opinion was not required for the Transaction, 4 and Ehrlich testified that he did not believe a breach of fiduciary duty was being committed 5 through the Transaction. (See id.). To begin, the parties do not dispute that Swift was 6 insolvent on a book value basis on the Transaction Date, (See Doc. 19-2 at 88), and the 7 record shows that Swift had “always had losses,” (id. at 93 (citing Trial Exhibit 066, 8 November 29, 2011, Memorandum from Ehrlich to Burdette)). Ehrlich also asserted that 9 Swift needed to ensure that the Buyers were adequately capitalized to be able to succeed 10 post-Transaction due to Swift’s precarious financial position. (See id. at 94). It is 11 reasonable to infer from this evidence that Ehrlich knew that Swift’s solvency was a 12 question hanging over the Transaction. 13 Further, there is no evidence that Ehrlich ever obtained or suggested Swift obtain 14 an expert’s opinion on Swift’s solvency. Thus, the Bankruptcy Court’s finding is supported 15 by the record, and the Court overrules this objection. 16 B. Objections to Omissions of Fact 17 In addition to contesting the Bankruptcy Court’s proposed findings of fact, 18 Defendants argue that the Bankruptcy Court disregarded evidence without explanation in 19 contravention of Ninth Circuit precedent. (Doc. 1 at 15). After considering the parties’ 20 submissions, the record evidence, and the proposed findings of fact by the Bankruptcy 21 Court, the Court finds that the additional factual findings proposed by Defendants are either 22 not relevant, not supported by the evidence, or were considered by the Bankruptcy Court 23 in making its proposed findings of fact. Thus, the Court overrules each of the objections 24 made by Defendants regarding factual omissions and will address each objection in turn. 25 1. Pre-Transaction Historic Financial Condition 26 Defendants assert that the Bankruptcy Court should have made a finding that Swift 27 had positive retained earnings for 2008–2010. (Id. at 35). The Bankruptcy Court made such 28 a finding when it discussed Swift’s financial statements before the Transaction. (See Doc.

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1 19-2 at 95–96). Thus, Defendants’ objection is without merit and the Court overrules it. 2 2. Viability of Part 121 Business 3 Defendants assert that the Bankruptcy Court should have made a finding that the 4 Part 121 Business was viable in 2009 and offset Swift’s losses from the Part 135 Business. 5 (Doc. 1 at 35). The Bankruptcy Court discussed Swift’s financial statements from 2007– 6 2011, and the viability of the Part 121 Business in 2009 is not relevant to the instant issues. 7 Thus, a finding as to the viability of Swift’s Part 121 Business in 2009 would not change 8 the ultimate analysis of the instant issues, and the Court overrules this objection. 9 3. Primary Cause of 2011 Adverse Operations 10 Defendants assert that the Bankruptcy Court should have made a finding that the 11 primary cause of Swift’s negative retained earnings in 2011 was the 2011 NBA strike. 12 (Doc. 1 at 35). The Bankruptcy Court found that the 2011 NBA strike impacted Swift’s 13 operations. (Doc. 19-2 at 88). Even after the 2011 NBA strike ended, though, records show 14 that New Swift continued losing money while holding NBA contracts. See Response Brief, 15 Appendix Tab 6 at 2–18, Redeye II, LLC v. MorrisAnderson & Associates Limited, Case 16 No. CV-20-00855-PHX-JAT (D. Ariz. Dec. 1, 2020), ECF No. 25-7. Additionally, New 17 Swift ultimately emerged from bankruptcy after “shedding numerous unfavorable 18 customer contracts.” (Doc. 19-2 at 177). Thus, the Bankruptcy Court’s findings regarding 19 Swift’s customer contracts and operations are well supported by the record, and the Court 20 overrules this objection. 21 4. No Affirmative Marketing of Swift 22 Defendants assert that the Bankruptcy Court should have made a finding that Swift 23 was not affirmatively marketed for sale. (Doc. 1 at 35). Such a finding would not change 24 the fact that Burdette and Moyes decided to either enter into the Transaction or have Swift 25 cease operations. (Doc. 19-2 at 88 (citing Declaration of Kevin Burdette at 5, In re Swift 26 Air, L.L.C., No. 14-AP-00534 (Bankr. D. Ariz. Mar. 22, 2018), ECF No. 258-3)). Whether 27 Moyes was marketing Swift or not, he ultimately decided to sell Swift’s Part 121 Business. 28 Thus, Defendants’ objection is without merit and the Court overrules it.

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1 5. Seller’s Timing 2 Defendants assert that the Bankruptcy Court should have made a finding that Moyes 3 was “in no hurry to do a sale.” (Doc. 1 at 35). Yet, the record shows that, leading up to the 4 Transaction, Burdette and Moyes decided to either enter into the Transaction or have Swift 5 cease operations. See supra Section III.B.4. Thus, the record does not support a finding 6 that Moyes was in no hurry to do a sale, and the Court overrules this objection. 7 6. Buyers’ Control of Timing 8 Defendants assert that the Bankruptcy Court should have made a finding that the 9 Buyers dictated the timing and closing of the Transaction. (Doc. 1 at 35). Regardless of 10 who dictated the timing of the Transaction, the Transaction’s timing fit Moyes’s needs 11 perfectly as he had decided to either enter into the Transaction or have Swift cease 12 operations. See supra Section III.B.4. Thus, such a finding would not change the ultimate 13 analysis of the instant issues, and the Court overrules this objection. 14 7. No Enrichment by Burdette 15 Defendants assert that the Bankruptcy Court should have made a finding that 16 Burdette was not enriched by the Transaction. (Doc. 1 at 36). The Bankruptcy Court made 17 a finding that Burdette “did not financially benefit” from any breaches of fiduciary duty 18 associated with the Transaction. Thus, this objection is without merit and the Court 19 overrules it. 20 8. Buyers’ Legal Counsel/Role 21 Defendants assert that the Bankruptcy Court should have made a finding that the 22 Buyers, through their counsel, provided Ehrlich with a proposed draft of the sale agreement 23 that governed the Transaction. (Doc. 1 at 36). It is not clear how such a finding would be 24 relevant to the instant issues as Defendants ultimately signed off on the terms of the 25 Transaction, so the Court overrules this objection as irrelevant. 26 9. Buyers’ Drafting of Operative Documents 27 Defendants assert that the Bankruptcy Court should have made a finding that the 28 agreements related to the Transaction were executed with the Buyers’ and Defendants’

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1 representatives on opposite sides. (Doc. 1 at 36). The Bankruptcy Court made findings that 2 the Transaction was made at arm’s length, (see Doc. 19-2 at 169–70), Ehrlich served as 3 council for Moyes and Swift in the Transaction, (see id. at 143–44), and the Buyers’ council 4 prepared drafts for and represented the Buyers in the Transaction, (See id. at 144). Thus, 5 such a finding would not add to the ultimate analysis of the instant issues, so the Court 6 overrules this objection. 7 10. New Swift Signed Releases 8 Defendants assert that the Bankruptcy Court should have made a finding that New 9 Swift’s representative signed the Assignment and Assumption Agreement. (Doc. 1 at 36). 10 The Bankruptcy Court made such a finding when describing the documents that were part 11 of the Transaction. (See Doc. 19-2 at 102). Thus, this objection is without merit and the 12 Court overrules it. 13 11. Resignation of Managing Member 14 Defendants assert that the Bankruptcy Court should have made a finding that, on 15 the Transaction Date, SAVM resigned as Manager of Swift and the Buyers took over full 16 control of Swift. (Doc. 1 at 36). The Bankruptcy Court found that the Buyers took 100% 17 ownership of Swift in the Transaction and that SAVM was “then defunct” at the time of 18 the Transaction. (See Doc. 19-2 at 97). The Bankruptcy Court also found that SAVM 19 resigned as Swift’s manager. (See id. at 104). Thus, this objection is without merit and the 20 Court overrules it. 21 12. Transfer of 135 Business Assets/Liabilities 22 Defendants assert that the Bankruptcy Court should have made a finding that Swift 23 transferred certain assets and liabilities associated with the Part 135 Business to SAVM 24 and SAG pursuant to the Assignment and Assumption Agreement. (Doc. 1 at 36). The 25 Bankruptcy Court found that the Assignment and Assumption Agreement was part of the 26 Transaction and that certain Swift assets and liabilities moved through SAG and SAVM in 27 connection with the Transaction. (See Doc. 19-2 at 97–98, 102). Thus, this objection is 28 without merit and the Court overrules it.

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1 13. New Swift Execution of Documents 2 Defendants assert that the Bankruptcy Court should have made a finding that the 3 Buyers agreed to the Assignment and Assumption Agreement and the Settlement 4 Agreement. (Doc. 1 at 36). The Bankruptcy Court made such a finding when describing 5 the documents associated with the Transaction. (See Doc. 19-2 at 101–02). Thus, this 6 objection is without merit and the Court overrules it. 7 14. No Money to Moyes/Burdette 8 Defendants assert that the Bankruptcy Court should have made a finding that neither 9 Burdette nor Moyes received any money or consideration personally from the Transaction, 10 and that neither individual received a salary from Swift, Services, SAVM, or Sales. (Doc. 11 1 at 36–37). The record, however, shows that Moyes realized, at least, the full value of the 12 SAVM receivable in connection with the Transaction. (See Doc. 19-3 at 1234 (“The 13 amount of the SAVM Receivable was added to the balance due under a promissory note 14 from SAVM to Moyes.”); Doc. 19-5 at 2 (showing that after the transfer of the SAVM 15 Receivable to Moyes, the Swift note payable to Moyes was satisfied)). Further, it is not 16 clear how a finding regarding the salaries of Moyes and Burdette would impact the analysis 17 of the instant issues. Thus, the Court overrules this objection. 18 15. Adequate Due Diligence by Burdette 19 Defendants assert that the Bankruptcy Court should have made a finding that 20 Burdette conducted adequate due diligence before the Transaction. (Doc. 1 at 37). Yet, 21 Burdette testified that the due diligence he conducted was simply having conversations 22 with the Buyers and reviewing only a “basic business model,” which at the time of his 23 testimony Burdette could not even recall. (See Doc. 19-3 at 542–43). Burdette testified that 24 he did not review any documents, outside of the basic business model, he did no due 25 diligence regarding Direct Air, and he was unsure whether a necessary investment in Swift 26 would come in as equity or a loan around the Transaction Date. (See id. at 542–45, 549– 27 50). Thus, the record does not support a finding that Burdette did adequate due diligence 28 before the Transaction, and the Court overrules this objection.

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1 16. Desire to See Swift Survive 2 Defendants assert that the Bankruptcy Court should have made a finding that 3 Burdette and Moyes had a desire for Swift to survive beyond the Transaction. (Doc. 1 at 4 37). It is not clear how a finding of this subjective desire would be relevant to the analysis 5 of the instant issues which concern Moyes’s and Burdette’s objective actions. Thus, the 6 Court overrules this objection. 7 17. Burdette’s Belief Regarding Buyers’ Ability to Perform 8 Defendants assert that the Bankruptcy Court should have made a finding that 9 Burdette believed that the Buyers had the ability to perform their promises heading into the 10 Transaction. (Doc. 1 at 37). Burdette, however, did not take steps to learn about the Buyers’ 11 ability to perform like reviewing documents, researching Direct Air, or knowing the 12 particulars of how New Swift would obtain a promised $5 million investment. See supra 13 Section III.B.15. Because the record shows that Burdette conducted little due diligence, the 14 belief Burdette formed based on that minimal due diligence is not relevant to the analysis 15 of the instant issues, and the Court overrules this objection. 16 18. Buyers Only Wanted the 121 Business 17 Defendants assert that the Bankruptcy Court should have made a finding that the 18 Buyers only wanted to purchase Swift’s Part 121 Business. (Doc. 1 at 37). The Bankruptcy 19 Court made such a finding in its discussion of the lead up to the Transaction. (See Doc. 19- 20 2 at 88–89). Thus, Defendants’ objection is without merit and is overruled. 21 19. Buyers’ Representations 22 Defendants assert that the Bankruptcy Court should have made a finding that the 23 Buyers represented that they had adequate capital to implement their post-Transaction plan 24 for New Swift. (Doc. 1 at 38). The Bankruptcy Court made such a finding when discussing 25 the letter of intent that Buyers sent to Burdette regarding the Transaction. (See Doc. 19-2 26 at 90). Thus, this objection is without merit and the Court overrules it. 27 20. Information About/Role of Spiral 28 Defendants assert that the Bankruptcy Court should have made a finding that Spiral

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1 was “supposed to be an entity that was going to invest capital into the Transaction,” and 2 that Fowler represented that he had $5 million to invest into Swift. (Doc. 1 at 38). The 3 Bankruptcy Court made a finding that Spiral was a planned investor of $5 million for Swift 4 and that Burdette felt Fowler could make such an investment after meeting with him. (See 5 Doc. 19-2 at 90). Thus, this objection is without merit and the Court overrules it. 6 21. Spiral Unknown Legal Difficulties 7 Defendants assert that the Bankruptcy Court should have made a finding that Spiral 8 was placed into receivership around the time of the Transaction. (Doc. 1 at 38). The 9 Bankruptcy Court found that, just prior to the Transaction, Spiral was “in no position to 10 invest or loan $5 million to New Swift” because of Spiral’s legal troubles. (Doc. 19-2 at 11 105). The Bankruptcy Court also included the “Spiral Receivership” in its list of defined 12 terms, noting that Spiral entered receivership around the time of the Transaction. (See id. 13 at 248). Thus, this objection is without merit and the Court overrules it. 14 22. Lack of Knowledge by Burdette 15 Defendants assert that the Bankruptcy Court should have made a finding that 16 Burdette had no knowledge about the Spiral receivership. (Doc. 1 at 38). The Bankruptcy 17 Court never made a finding that Burdette knew about Spiral’s receivership, and it is unclear 18 how such a finding would be relevant to the analysis of the instant issues because 19 Burdette’s lack of knowledge could have been due to a number of factors, including 20 performing inadequate due diligence. Thus, this objection is without merit and the Court 21 overrules it. 22 23. Causes of Swift Chapter 11 Filing 23 Defendants assert that the Bankruptcy Court should have made a finding that New 24 Swift’s Chapter 11 filing was caused by the failure of Spiral to invest $5 million in New 25 Swift and the “Direct Air shutdown,” arguing that both events were out of Moyes’s and 26 Burdette’s control. (Doc. 1 at 38). Yet, Moyes and Burdette could have required that the 27 $5 million investment and the merger with Direct Air be guaranteed as conditions of the 28 Transaction but did not. See supra Section III.A.10, III.A.20. Additionally, the record

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1 supports a finding that Swift was insolvent at the Transaction Date, so a finding that the 2 cause of New Swift’s Chapter 11 filing was simply the lack of investment or merger with 3 Direct Air is not supported. See Redeye II, LLC v. MorrisAnderson & Associates Limited, 4 Case No. CV-20-00855-PHX-JAT, Part III.D.1 (D. Ariz. Dec. 1, 2020). Thus, the Court 5 overrules this objection. 6 24. Burdette’s Motivations to Have Swift Survive 7 Defendants assert that the Bankruptcy Court should have made a finding that 8 Burdette had a personal interest in Swift’s survival because of the Swift employees whom 9 he cared for, and that “[Burdette] considered his biggest priority and responsibility in life 10 to be the human capital that he had the honor of bringing in to run Swift.” (Doc. 1 at 38 11 (citing Doc. 19-3 at 662)). Yet, in the passage cited by Defendants, Burdette seems to state 12 that Mr. Moyes’s wellbeing was also a major priority. (See Doc. 19-3 at 662 (“And my 13 biggest priority and responsibility to life [sic] is besides Mr. Moyes, is the human capital 14 that I get to -- I get the honor of bringing in to run these companies.”)). Thus, regardless of 15 any stated desire to see Swift survive, the record supports the Bankruptcy Court’s finding 16 that Burdette had a strong motivation to help Moyes, and this objection is overruled. 17 25. Moyes Continued Financial Support of Swift Post-Transaction 18 Defendants assert that the Bankruptcy Court should have made a finding that Moyes 19 assisted Transjet with payments on planes leased to New Swift so those planes would not 20 be repossessed. (Doc. 1 at 38). While Moyes helped New Swift make payments on the 21 Transjet planes, (See Doc. 19-3 at 408–10), Moyes had guaranteed payments on Transjet 22 planes that leases with New Swift were helping to pay, (See Doc. 19-2 at 103). Because 23 the reasoning for Moyes making the Transjet payments is unknown, and because the 24 payments at issue were made after the Transaction when Moyes no longer had a fiduciary 25 duty, a factual finding as to the mere existence of the payments is not relevant to the 26 analysis of the instant issues. Thus, the Court overrules this objection. 27 26. Legacy Partners 28 Defendants assert that the Bankruptcy Court should have made a finding that

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1 Burdette had no position or authority within Legacy. (Doc. 1 at 38). When discussing 2 Legacy, the Bankruptcy Court made no findings linking Burdette to Legacy, other than the 3 fact that Swift built up a large receivable with Legacy. (See Doc. 19-2 at 84, 105, 118, 123– 4 25, 158, 219, 232). Making an additional finding that Burdette had no position within 5 Legacy would not assist in the analysis of the instant issues. Thus, because the Bankruptcy 6 Court made no finding linking Burdette to Legacy, the Court overrules this objection. 7 27. Advice of Counsel 8 Defendants assert that the Bankruptcy Court should have made a finding that 9 Burdette got advice from counsel while negotiating with the Buyers regarding the 10 Transaction, and that Burdette kept this advice “in mind” while negotiating the 11 Transaction. (Doc. 1 at 39). The Bankruptcy Court found that Ehrlich advised Burdette in 12 connection with the Transaction. (See Doc. 19-2 at 90). The record also shows, and the 13 Bankruptcy Court found, that Burdette disregarded many points of advice from Ehrlich 14 because “[i]n [Ehrlich’s] world, right, A, the sky would always falling [sic] every day . . . .” 15 (Doc. 19-3 at 444). Thus, this objection is without merit and the Court overrules it. 16 28. Buyers’ Control of Payments 17 Defendants assert that the Bankruptcy Court should have made a finding that it was 18 the Buyer’s decision to pay Swift’s pre-Transaction liabilities “in due course and not to 19 pay them off at close.” (Doc. 1 at 39). The Bankruptcy Court found that “[r]ather than insist 20 that Buyers fully pay all Swift’s outstanding 121 Payables, Moyes and Burdette agreed to 21 let Buyers try to seek discounted payments from these Swift creditors.” (Doc. 19-2 at 223). 22 The Bankruptcy Court did not find that Moyes and Burdette required or even suggested 23 this payment plan but merely agreed to it. Thus, this objection is without merit and the 24 Court overrules it. 25 29. Customary Cash Management 26 Defendants assert that the Bankruptcy Court should have made a finding that “[i]t 27 would be fairly customary for buyers to retain capital instead of expending all of their cash 28 to pay the unsecured debt of an acquisition target.” (Doc. 1 at 39). The only evidence

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1 Defendants cite to support this argument is Ehrlich’s testimony to this point based on his 2 “experience in other transactional deals.” (See Doc. 19-3 at 841–42). In making this 3 statement, Ehrlich does not discuss exactly what other deals informed his opinion, how this 4 deal was similar to those other deals, the nature of the Transaction itself, the industry 5 standard for deals the size of the Transaction, or the capital that the Buyers entered the 6 Transaction with. (See id.). Thus, the record does not support that Defendants’ suggested 7 finding be made, and the Court overrules this objection. 8 30. Survival of New Swift 9 Defendants assert that the Bankruptcy Court should have made a finding that it was 10 beneficial for all parties to have New Swift succeed because it would become a tenant of 11 Services and a lessee of the Transjet planes. (Doc. 1 at 39). Yet, the Bankruptcy Court 12 notes throughout its findings the benefits that the parties would receive for New Swift to 13 continue operating. See, e.g., supra Sections III.A.2, III.A.6, III.A.27. Thus, this objection 14 is without merit and the Court overrules it. 15 31. Absence of Claims of Lack of Information by Buyers 16 Defendants assert that the Bankruptcy Court should have made a finding that the 17 Buyers never expressed concerns that they were not receiving enough financial information 18 and that they agreed to all of Swift’s pre-Transaction liabilities. (Doc. 1 at 40). In the Report 19 and Recommendation, the Bankruptcy Court noted that the Buyers were aware of Swift’s 20 pre-Transaction liabilities. See supra Section III.B.28. There is also nothing in the Report 21 and Recommendation that suggests the Buyers had concerns that they were not receiving 22 enough financial information. If anything, the report suggests that Burdette and Moyes did 23 not perform their own due diligence to receive adequate information from the Buyers. See 24 supra Sections III.A.10, III.B.15. Thus, this objection is without merit and the Court 25 overrules it. 26 32. New Swift Interests Protected 27 Defendants assert that the Bankruptcy Court should have made a finding that both 28 Swift and the counterparties to the Transaction were represented by counsel who were

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1 “looking out for the interests, and advocating, on behalf of” the involved parties. (Doc. 1 2 at 40). Yet, the Bankruptcy Court clearly found that all parties were represented by counsel 3 who looked after the interests of the parties. (See Doc. 19-2 90–92). Thus, this objection is 4 without merit and the Court overrules it. 5 32. Buyers Requested Transjet Leases 6 Defendants assert that the Bankruptcy Court should have made a finding that the 7 Buyers asked to become lessees of the Transjet Subsidiaries and that Buyers negotiated the 8 obligations assumed in the Transaction. (Doc. 1 at 40). When discussing the leases between 9 New Swift and the Transjet Subsidiaries, the Bankruptcy Court made no findings that the 10 leases were forced upon the Buyers, and the Bankruptcy Court clearly found that these 11 leases were a part of the Transaction. (See Doc. 19-2 at 103). Thus, this objection is without 12 merit and the Court overrules it. 13 34. Ordinary Course Re: Transjet Receivables/Payables 14 Defendants assert that the Bankruptcy Court should have made a finding that the 15 payables and receivables between Transjet and Swift were normally setoff against each 16 other at the end of every month. (Doc. 1 at 40). The Bankruptcy Court, however, correctly 17 found that this factual finding was not relevant to the issues before it because the 18 agreements between Swift and Transjet expressly disallowed such setoff, and there was no 19 modification of said agreements. (See Doc. 19-2 at 185–86); see also supra Section 20 III.A.21. Thus, this objection is without merit and the Court overrules it. 21 35. Collection of Related Party Payables 22 Defendants assert that the Bankruptcy Court should have made a finding that the 23 Moyes affiliated entities were “not aggressive in trying to collect monies owed from 24 Swift,” and that “Swift had no other third party service providers on its books at the time 25 of the Transaction or prior thereto that was ever owed more than $5 million.” (Doc. 1 at 26 40). It is not clear how such a finding would be relevant to the analysis of the instant issues, 27 and such a finding would most likely show that Moyes affiliated entities treated each other 28 differently than third parties because of their loyalty to Moyes. Thus, the Court overrules

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1 this objection. 2 36. Moyes’s Roles in Transaction 3 Defendants assert that the Bankruptcy Court should have made a finding that Moyes 4 did not negotiate directly with the Buyers or set any of the terms in the Transaction. (Doc. 5 1 at 40). The Bankruptcy Court made such a finding throughout its Report and 6 Recommendation when describing the Transaction and noted that Moyes “knew little about 7 Swift’s financial affairs and almost nothing involving the Transaction.” (Doc. 19-2 at 126; 8 see, e.g., Doc. 19-2 at 87–92 (noting that Burdette primarily spoke with the Buyers and that 9 Ehrlich’s primary points of contact were Burdette and other Swift employees rather than 10 Moyes)). Thus, this objection is without merit and the Court overrules it. 11 37. No Hurry to Sell 12 Defendants assert that the Bankruptcy Court should have made a finding that Moyes 13 was in no hurry to sell Swift and that he was financially prepared to continue the Part 121 14 Business. (Doc. 1 at 41). The record, however, does not support this finding as evidence 15 shows that Moyes and Burdette had decided to either sell Swift or cease its operations due 16 to Swift’s financial situation. See supra Section III.A.19. Thus, this objection is without 17 merit and the Court overrules it. 18 38. Moyes’s Willingness to Continue Financing of Swift Even If No 19 Transaction Occurred 20 Defendants assert that the Bankruptcy Court should have made a finding that Moyes 21 was able to financially support Swift through its financial challenges and was prepared to 22 do so. (Doc. 1 at 41). Such a finding, however, goes against the record evidence that shows 23 Moyes and Burdette had decided to either sell Swift or cease its operations. See supra 24 Section III.A.19. Thus, this objection is without merit and the Court overrules it. 25 39. Moyes’s Desire for Survival of Swift 26 Defendants assert that the Bankruptcy Court should have made a finding that Moyes 27 wanted Swift to survive after the Transaction because he was “proud of the Swift name, 28 and they [sic] had a lot of key employees that were going with the sale of the Swift Part

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1 121 Business.” (Doc. 1 at 41). It is not clear how such a finding of Moyes’s subjective 2 desire to see Swift survive would be relevant to the analysis of the instant issues. Whether 3 Moyes wanted Swift to survive the Transaction, the record shows that Moyes undertook 4 several actions that were not in Swift’s best interests. Thus, this objection is without merit 5 and the Court overrules it. 6 40. Moyes’ Payment of Transjet Debt So Swift Could Continue Use 7 of Transjet Aircraft Leased to Swift 8 Defendants assert that the Bankruptcy Court should have made a finding that Moyes 9 made payments on Swift’s leases with Transjet so that the Transjet planes would not be 10 foreclosed on. (Doc. 1 at 41). While Moyes helped New Swift make payments on the 11 Transjet planes, Moyes had guaranteed payments on Transjet planes that leases with New 12 Swift were helping to pay. See supra Section III.B.25. With Moyes’s reasoning for making 13 the Transjet payments being unknown, and the payments being made after the Transaction 14 when Moyes no longer had a fiduciary duty, a factual finding as to the mere existence of 15 the payments is not relevant to the analysis of the instant issues. Thus, the Court overrules 16 this objection. 17 41. Expert Testimony of Fiduciary Duties 18 Defendants assert the Bankruptcy Court should have made a finding that 19 Defendants’ trial expert Lyon gave an opinion that Moyes and Burdette did not violate any 20 fiduciary duty, acted in good faith, and reasonably did not “interject [themselves] into the 21 financing discussions with the Buyer’s financing source.” (Doc. 1 at 41–42). The 22 Bankruptcy Court’s findings include a discussion of Lyon’s report in which the Bankruptcy 23 Court acknowledges that “[t]he Lyon Report opines on all the Trustee’s causes of action 24 and concludes the Complaint must fail on . . . the Plaintiff’s breach of fiduciary [sic] 25 claims.” (Doc. 19-2 at 163). The Report and Recommendation goes on to discuss Lyon’s 26 conclusions regarding the fiduciary duty claims in more detail, (See id. at 165), and Lyon’s 27 testimony regarding the fiduciary duty claims, (See id. at 168–69). Thus, the Court 28 overrules this objection.

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1 C. Objections to Conclusions of Law 2 After thoroughly reviewing the parties’ submissions and the proposed conclusions 3 of law by the Bankruptcy Court de novo, the Court finds that the Bankruptcy Court’s 4 proposed conclusions of law should be adopted in their entirety. In making this 5 determination, the Court further overrules each of the objections made by Defendants to 6 the Bankruptcy Court’s proposed conclusions of law. The Court will address each objection 7 in turn. 8 1. Conclusions Regarding Swift’s Operating Agreement’s Limiting 9 Fiduciary Duties Owed by Moyes and Burdette 10 Defendants argue that the Bankruptcy Court incorrectly concluded that the 11 Operating Agreement did not limit fiduciary duties owed by Moyes and Burdette arguing 12 that Moyes and Burdette were “Officers” under the Operating Agreement and that the 13 Report and Recommendation incorrectly interprets the limitation of fiduciary duties 14 imposed by the Operating Agreement. (Doc. 1 at 42–47). As discussed supra, the 15 Bankruptcy Court erred when it found that Moyes and Burdette were not “Officers” of 16 Swift. See supra Section III.A.18. However, the Bankruptcy Court correctly concluded 17 that, even if Moyes and Burdette qualified as “Officers,” the Operating agreement did not 18 eliminate their fiduciary duties. (See Doc. 19-2 at 207–209). 19 a. The Operating Agreement 20 Defendants’ argument that the Operating Agreement eliminated their fiduciary 21 duties centers on ¶ 7.10 of the Operating Agreement. (See Doc. 1 at 43–44). ¶ 7.10 reads: 22 7.10 Company Indemnity of Manager, Officers and Member. The doing of 23 any act or the failure to do any act by the Manager, any Officer or a Member which shall not constitute fraud or intentional, wrongful misconduct in 24 pursuance of the authority granted, the effect of which may cause or result in 25 loss or damage to the Company, if done in good faith, shall not subject the Manager, any officer or any Member to any liability; and in such event, the 26 Company will indemnify and hold harmless the Manager, any Officer or any 27 Member from any claim, loss, expense, liability, action or damage resulting from or relating to any such act or omission, including without limitation 28 reasonable fees and expenses of attorneys engaged by them in defense of

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1 such act or omission and other reasonable costs and expenses of litigation 2 and appeal.

3 Statement of Facts in Support of Motion for Report and Recommendation, Exhibit A, In 4 re Swift Air, L.L.C., No. 14-AP-00534, at 15 (Bankr. D. Ariz. April 10, 2018), ECF No. 5 271-2. Defendants assert that, under ¶ 7.10, the “Operating Agreement limits liability for 6 officers as long as their acts were (1) not fraud, (2) not “intentional, wrongful misconduct”, 7 and (3) not done in other than “good faith,” and that Defendants satisfied these 8 requirements. (Doc. 1 at 44). The Bankruptcy Court agreed with Defendants that “neither 9 Moyes nor Burdette perpetrated actual fraud against Swift or engaged in intentional, willful 10 misconduct while acting as officers of Swift.” (Doc. 19-2 at 208–09). However, the 11 Bankruptcy Court concluded that Defendants had not “sustain[ed] their burden of 12 demonstrating they acted in good faith in discharging their duties as Swift’s President and 13 Vice-President.” (Id. at 209). 14 Nowhere in the Operating Agreement is the term “good faith” defined. Defendants 15 argue that the good faith requirement in the Operating Agreement is simply a requirement 16 that the actions of an officer “not constitute a bad faith violation of the implied contractual 17 covenant of good faith and fair dealing.” (Doc. 1 at 45–46 (internal quotations omitted)). 18 Under such a reading, Defendants argue, to expose Defendants to liability despite ¶ 7.10, 19 “the Trustee must prove that the Defendants acted in ‘bad faith.’” (Id. at 46). The 20 Bankruptcy Court found that the good faith requirement in ¶ 7.10 was not “simply a 21 recitation of the requirement that the Operating Agreement implicitly contain a covenant 22 of good faith and fair dealing. Rather, if a Member, Manager or Officer of Swift is to be 23 afforded the protection of ¶ 7.10, the actions or inactions of that Member, Manager or 24 Officer must both be ‘done in good faith’ and ‘not constitute fraud or intentional, willful 25 misconduct.’” (Doc. 19-2 at 208). Under such a reading, the Bankruptcy Court found, 26 Defendants have the burden of demonstrating that they acted in good faith to receive the 27 protection of ¶ 7.10. (Id. at 209). 28 The Operating Agreement, by its terms, is governed by Arizona Law; and the parties

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1 do not dispute that Arizona law controls. See supra Section III.A.18. Under Arizona law, 2 “[w]hether a contract is ambiguous is a question of law.” Hartford, 870 P.2d at 1207. 3 “Language is ambiguous when it can reasonably be construed in more than one sense and 4 such construction cannot be determined within the four corners of the instrument.” Univ. 5 Realty, 508 P.2d at 750. “Any ambiguity is subject to a factual determination concerning 6 the intent of the parties and is to be resolved conclusively by the trier of fact.” Hartford, 7 870 P.2d at 1207. The Court acts as the trier of fact in this de novo review of the Bankruptcy 8 Court’s proposed findings of fact and conclusions of law. See, e.g., Cleary v. Knapp Shoes, 9 Inc., 924 F. Supp. 309, 318 (D. Mass. 1996) (noting that a district court acts as the trier of 10 fact in a de novo review of proposed findings of fact); see also In re U.S. Currency in 11 Amount of $26,980.00, 18 P.3d 85, 89 (Ariz. Ct. App. 2000) (noting that a court acts as the 12 trier of fact in a non-jury trial). The language of the Operating Agreement is ambiguous as 13 a matter of law because the “good faith” requirement is not defined and can be construed 14 in more than one sense when looking within the four corners of the Operating Agreement. 15 Thus, the meaning of the good faith requirement is a question of fact for the Court to decide. 16 b. The Meaning of the Good Faith Requirement 17 Defendants quote the Delaware Limited Liability Act to note that operating 18 agreements “may not limit or eliminate liability for any act or omission that constitutes a 19 bad faith violation of the implied contractual covenant of good faith and fair dealing.” 20 (Doc. 1 at 45 (quote DEL. CODE ANN. § 18-1101 (e))). Defendants then use this statutory 21 language to argue that a common shorthand has developed for operating agreements and 22 the “if done in good faith” portion of the Operating Agreement is simply shorthand 23 “intended to capture the statutory requirement that the limitation not constitute bad faith.” 24 (Id. at 46 (emphasis in original)). However, Defendants cite no case directly making this 25 “shorthand” argument, and nowhere in the Delaware Limited Liability Act does it suggest 26 that such a shorthand exists. 27 Defendants cite Banas v. Volcano Corp., 47 F. Supp. 3d 941 (N.D. Cal. 2014), to 28 support their “shorthand” argument. Banas dealt with a claim that a defendant had violated

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1 a contractual provision that required the defendant to “act in good faith and [] use 2 commercially reasonable efforts.” Banas, 47 F. Supp. 3d at 946. The Banas court found 3 that to make a claim that the contractual provision had been violated, the plaintiffs would 4 need to prove that the defendant failed to act in good faith. Id. at 948. The Banas court’s 5 holding, however, is not determinative in the instant case where the good faith term in 6 question is not required under the Operating Agreement but is connected to a 7 limitation/waiver of fiduciary duties within the Operating Agreement. 8 “Arizona law implies a covenant of good faith and fair dealing in every contract.” 9 Wells Fargo Bank v. Arizona Laborers, Teamsters & Cement Masons Local No. 395 10 Pension Tr. Fund, 38 P.3d 12, 28 (Ariz. 2002), as corrected (Apr. 9, 2002). This includes 11 operating agreements for limited liability companies, and no operating agreement can 12 eliminate the covenant of good faith and fair dealing. See In re Sky Harbor, 443 P.3d at 24. 13 Thus, if the good faith requirement in ¶ 7.10 of the Operating Agreement merely required 14 that the covenant of good faith and fair dealing be upheld, the words of the good faith 15 requirement would be rendered surplusage as the covenant of good faith and fair dealing 16 would necessarily run through every provision of the Operating Agreement. Yet, under 17 Arizona law, when interpreting a contract, a court “must give meaning to all the words and 18 clauses used by the parties . . .” Equitable Life & Cas. Ins. Co. v. Rutledge, 454 P.2d 869, 19 871 (Ariz. Ct. App. 1969); see Weatherguard Roofing Co. v. D.R. Ward Const. Co., 152 20 P.3d 1227, 1233 (Ariz. Ct. App. 2007) (holding that courts must attempt to reconcile and 21 give meaning to all terms in a contract); see also Scholten v. Blackhawk Partners, P.2d 22 393, 396 (Ariz. Ct. App. 1995) (“[a] contract should be construed to give effect to all its 23 provisions and to prevent any of the provisions from being rendered meaningless.”). Thus, 24 the Court will not interpret the good faith requirement of ¶ 7.10 of the Operating Agreement 25 to simply echo the covenant of good faith and fair dealing contained in all contracts.5 26 Because the good faith requirement is laid out in explicit terms in ¶ 7.10 of the 27 5 The Court is not suggesting that an agreement cannot contain surplus terms or a reference to the covenant of good faith and fair dealing. Where a contract term is ambiguous, 28 however, the Court will attempt to construe it in a way that gives it meaning. Because the good faith term here is ambiguous, the Court declines to construe it as mere surplus.

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1 Operating Agreement, the Court agrees with the Bankruptcy Court that ¶ 7.10 of the 2 Operating Agreement required that Defendants prove they acted in good faith to claim the 3 protections offered by ¶ 7.10. Because Defendants did not meet this burden, see infra 4 Section III.C.2., the Operating Agreement did not limit fiduciary duties owed by 5 Defendants and this objection is overruled. 6 2. Conclusions Regarding Analysis of Fiduciary Duty Claims 7 Defendants argue that the Bankruptcy Court’s conclusions regarding the analysis of 8 the Trustee’s fiduciary duty claims were in error because the Bankruptcy Court failed “in 9 each instance to identify a specific duty, articulate the applicable standard of compliance 10 and identify an act breaching that standard . . .” (Doc. 1 at 48). The Court, however, finds 11 that each of the Bankruptcy Court’s conclusions is well reasoned and supported by the 12 record evidence. 13 The parties do not dispute that Arizona law controls the fiduciary duty claims. (See, 14 e.g., Doc. 1 at 49). Under Arizona law, a party asserting a claim for breach of fiduciary 15 duty must prove, “the existence of a duty owed, a breach of that duty, and damages causally 16 related to such breach.” Surowiec v. Capital Title Agency, Inc., 790 F. Supp. 2d 997, 1004 17 (D. Ariz. 2011) (citing Smethers v. Campion, 108 P.3d 946, 949 (Ariz. Ct. App. 2005)). As 18 discussed supra, Moyes and Burdette owed common law fiduciary duties to Swift. See 19 supra Section III.A.17. 20 A fiduciary owes “a duty of loyalty, a duty of good faith, and a duty of care.” In re 21 Sky Harbor, 443 P.3d at 23; see also Gemstar Ltd. v. Ernst & Young, 917 P.2d 222, 233 22 (Ariz. 1996) (a fiduciary owes a duty of “utmost loyalty, good faith and disclosure”); 23 DeSantis v. Dixon, 236 P.2d 38, 41 (Ariz. 1951) (fiduciary duty imposes “the obligation of 24 the utmost good faith”). “The duty of care refers to the responsibility to exercise the care 25 that a reasonably prudent person in a similar position would exercise under similar 26 circumstances.” Shoen v. Shoen, 804 P.2d 787, 794 (Ariz. Ct. App. 1990). Further, “[t]he 27 duty of care is evaluated according to the ‘business judgment rule,’ which precludes 28 judicial inquiry into actions taken by a director in good faith and in the exercise of honest

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1 judgment in the legitimate and lawful furtherance of a corporate purpose.” Id. “The 2 director’s second duty, that of loyalty, springs from the prohibition against self-dealing that 3 is inherent in a director’s fiduciary relationship with the corporation and its shareholders.” 4 Id. “Once there is a prima facie showing that a director is personally interested in a 5 corporate transaction . . . the burden shifts to the director to show that the decision with 6 respect to a particular transaction is fair and serves the best interests of the corporation and 7 the shareholders.” Id. 8 The record shows that Moyes and Burdette were personally interested in the 9 Transaction. Moyes had personal guarantees that the Transaction helped pay, see supra 10 Sections III.A.4, III.A.25, Moyes used the Part 135 Business for his personal travel and 11 had an interest in the Part 135 Business continuing, see supra Section III.A.1, and Moyes 12 was able to capture the value of certain receivables through the Transaction, see supra 13 Sections III.A.14, III.A.15. Similarly, Burdette had a strong personal interest in protecting 14 and aiding Moyes which the Transaction undoubtably promoted. See supra Section 15 III.B.24. Thus, the burden of proof was on Moyes and Burdette to show that the Transaction 16 was fair and served the best interests of Swift. See Shoen, 804 P.2d at 794. The Bankruptcy 17 Court made fourteen findings upon which it concluded that Moyes and Burdette did not 18 meet this burden and violated their fiduciary duties. The Court agrees with these findings 19 and conclusions and will address them in turn: 20 a. Moyes and Burdette Disregarded Advice of Counsel 21 Ehrlich acted as Swift’s counsel in the Transaction. (See Doc. 19-2 at 90–92). 22 Ehrlich gave Moyes and Burdette advice on key points of the Transaction including that 23 Swift be merged with Direct Air to bring additional equity into Swift and that Swift ensure 24 Buyers were adequately capitalized at the Transaction Date. (See id. at 93–94 (citing Trial 25 Exhibit 066, November 29, 2011, Memorandum from Ehrlich to Burdette)). Burdette 26 himself noted the vital importance to New Swift of both the Direct Air merger and the $5 27 million cash infusion to ensure adequate capitalization. See supra Sections III.A.10, 28 III.A.20. Yet, neither Moyes nor Burdette followed Ehrlich’s advice and required that the

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1 Direct Air merger be a part of the Transaction or that the $5 million come into Swift. 2 Instead, Moyes and Burdette finalized the Transaction which assisted Moyes in paying his 3 personal guarantees, see supra Sections III.A.4, III.A.25, allowed Moyes to continue using 4 the Part 135 Business for his personal travel, see supra Section III.A.1, and let Moyes 5 capture the value of certain receivables, see supra Sections III.A.14, III.A.15. Similarly, 6 the Transaction allowed Burdette to advance his personal interest in protecting and aiding 7 Moyes. See supra Section III.B.24. 8 Such actions show that Moyes and Burdette did not act in good faith or out of loyalty 9 to Swift, but instead promoted their own interests. While Defendants argue that the 10 Bankruptcy Court did not identify what specific fiduciary duties were breached by the 11 instant facts, the Bankruptcy Court found that Moyes’s and Burdette’s actions constituted 12 a violation of the duties of “‘utmost good faith’ or of ‘loyalty.’” (Doc. 19-2 at 215). Thus, 13 the Bankruptcy Court’s conclusions here are well supported by the record and the law.6 14 b. Moyes Captured the Value of the 135 Related Party 15 Receivables 16 Through the Transaction, Moyes was able to capture the value of certain Swift 17 receivables. See supra Sections III.A.14, III.A.15, III.B.14. Defendants argue that this fact 18 does not show a breach of fiduciary duty because, through the Transaction, Swift was able 19 to eliminate payables owed to Moyes affiliates that were worth more than the receivables. 20 (See Doc. 1 at 52–53). Yet, the record shows that Moyes’s capturing of the receivables was 21 for his own benefit and not Swift’s. 22 Under the leadership of Moyes and Burdette, Swift allowed significant receivables 23 to build up from companies that had no way to pay these receivables on the Transaction 24 Date. See, e.g., supra Sections III.A.21, III.A.28. Defendants argue that this was in Swift’s 25 best interest because Swift’s payables were also allowed to accrue without payment. 26 Defendants cite no evidence, however, showing that allowing million-dollar accounts 27 payable and receivable to build up with companies that have no way to satisfy their debts 28 6 Defendants also argued the issue of damages in this objection. The damages argument will be addressed infra at Section III.C.4.

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1 is in the best interest of a company. Such a practice was in Moyes’s best interest because 2 it allowed his companies to continue transacting business with each other regardless of 3 ability to pay down debts. 4 Additionally, while the Swift payables extinguished by the Transaction were for a 5 greater amount than the Swift receivables at issue, Swift was already insolvent by the time 6 of the Transaction, possibly due in part to the practice of not collecting on debts owed from 7 Moyes affiliates. See Redeye II, LLC v. MorrisAnderson & Associates Limited, Case No. 8 CV-20-00855-PHX-JAT, Part III.D.1 (D. Ariz. Dec. 1, 2020). Thus, simply extinguishing 9 accounts payable and receivable with Moyes affiliates through the Transaction was not in 10 Swift’s best interests as it did nothing to help with Swift’s cash crunch, but it was in 11 Moyes’s best interests to get as much value as possible out of Swift’s accounts. 12 Thus, the Court agrees with the Bankruptcy Court’s conclusion that Moyes violated 13 his fiduciary duty of loyalty when he captured the value of Swift’s receivables. 14 c. SAM Retained the 135 Business 15 The Transaction called for the Part 135 Business to be retained by SAM, and for the 16 Swift company name and domain name to revert to a Moyes owned business after SAM 17 obtained its own Part 135 Certificate. (See Doc. 19-2 at 217). While the record shows that 18 the Buyers only wanted Swift’s Part 121 Business, the record also shows that the retention 19 of the Part 135 Business was not done to promote Swift’s interests, but instead to promote 20 Moyes’s. Moyes utilized the Part 135 Business to operate his own private aircraft. See 21 supra Section III.A.1. Thus, the Transaction’s allowance for the survival of the Part 135 22 Business regardless of Swift’s survival was certainly in Moyes’s interest. 23 Additionally, the fact that Swift’s name and domain name would revert to Moyes 24 was also in Moyes’s interest, not Swift’s. Defendants assert in the Redeye Appeal that 25 Swift’s “goodwill,” which would include its company and domain name, had value. (See 26 Doc. 19 at 16, 31). So, stripping Swift of these elements of goodwill and transferring them 27 to a Moyes affiliate would strip Swift of whatever value the Swift name had and deliver it 28 to Moyes. Thus, the fact that Swift’s name and domain name would revert to Moyes

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1 provides yet another example of Moyes being loyal to his own interests over Swift’s. While 2 Defendants may contend that Swift received other value for this loss of goodwill, 3 Defendants present no evidence to support such a claim. 4 Thus, the Court agrees with the Bankruptcy Court’s conclusion that Moyes violated 5 his fiduciary duty of loyalty when he ensured that SAM would retain the Part 135 Business 6 and that New Swift would have to surrender the Swift company name and domain name. 7 d. Moyes Was Motivated to Have New Swift Pay the Debt He 8 Guaranteed on the Transjet Planes 9 As discussed supra, Moyes was motivated to have New Swift pay the debt he 10 guaranteed on the Transjet planes. See supra Section III.A.25. The lease rates on these 11 planes for New Swift were not set at any market rate but were set at the amount of the 12 monthly payments guaranteed by Moyes on these planes. See supra Section III.A.4. The 13 record shows that these rates may have been in excess of market rates. See supra Sections 14 III.A.5, III.A.7. Regardless of what the market rate for these leases at the time of the 15 Transaction was, the fact that the payment amounts guaranteed by Moyes were used to set 16 the lease payments, rather than the market rate, shows a loyalty to Moyes’s interests over 17 Swift’s. Thus, the Court agrees with the Bankruptcy Court’s conclusion that Moyes and 18 Burdette violated their fiduciary duties of loyalty in agreeing to the lease rates for the 19 Transjet planes. 20 e. Moyes Benefitted by New Swift Assuming $1.2 Million 21 Payable to Transjet 22 The Transaction involved New Swift assuming a $1.2 million payable to Transjet 23 that was not on Swift’s books before the Transaction. (See Docs. 19-2 at 218, 19-3 at 864– 24 66, 963–37). Taking on such a debt was certainly not beneficial to New Swift as New Swift 25 was already cash strapped. However, New Swift assuming this debt was beneficial to 26 Moyes who still owned Transjet and had guaranteed some of Transjet’s debts. While 27 Defendants argue that the debt at issue was simply part of an arm’s-length transaction, the 28 Transjet payable was not included in the documents leading up to the Transaction, (See

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1 Doc. 19-3 at 864–66), and the Buyers were “surprised” that they had to assume this 2 additional liability, (See id. at 936–37). Thus, the Court agrees with the Bankruptcy 3 Court’s conclusion that Moyes and Burdette violated their fiduciary duties of loyalty by 4 saddling New Swift with this Transjet payable. 5 f. Moyes Was Motivated to Keep Business Flowing to 6 Services and Transpay 7 Moyes was motivated to keep Business flowing to Services and Transpay, and the 8 Transaction benefitted Moyes in this regard. See supra Sections III.A.26, III.A.27. While 9 this is not, on its own, evidence that Moyes and Burdette violated their fiduciary duties, 10 when combined with other record evidence it shows that Moyes and Burdette were not 11 acting out of loyalty to Swift when engaging in the Transaction, but out of loyalty to 12 Moyes’s interests. Thus, the Court agrees with the Bankruptcy Court’s determination that 13 these findings add to the conclusion that Moyes and Burdette violated their fiduciary duties. 14 g. Moyes Benefited from the Legacy Transaction 15 As discussed supra, Moyes benefitted from the Legacy transaction. See supra 16 Section III.A.28. Both the transfer of the Legacy receivable owed to Swift and Swift’s 17 allowance for the Legacy receivable to build up to nearly $4 million benefited Moyes as 18 Swift did not require Legacy to satisfy its outstanding debts, and when the debt was 19 satisfied it was used to reduce a debt owed by Swift to Moyes. See id. Thus, the Court 20 agrees with the Bankruptcy Court’s conclusion that Moyes and Burdette violated their 21 fiduciary duties of loyalty by allowing the Legacy receivable to build up and then using it 22 to satisfy debt owed to Moyes by Swift. 23 h. Moyes and Burdette Gained Indemnities from the 24 Transaction 25 It is undisputed that Moyes and Burdette gained indemnities from the Transaction. 26 (See Doc. 19-2 at 220–22). These indemnities shielded Moyes and Burdette from claims to 27 which they may have been exposed had Swift been shut down rather than sold. (See id. at 28 222). The Bankruptcy Court acknowledged that these types of indemnification agreements

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1 are “commonplace in business sales.” (Id.). On their own, such indemnities do not lead to 2 a conclusion that any fiduciary duty has been breached. However, when combined with the 3 rest of the record in the instant case, they show yet another personal benefit received by 4 Moyes and Burdette as a result of the Transaction. Thus, the Court agrees with the 5 Bankruptcy Court’s determination that these findings add to the conclusion that Moyes and 6 Burdette violated their fiduciary duties. 7 i. Moyes and Burdette Sought to Reduce Their Exposure on 8 the Transportation Taxes 9 In the initial discussions surrounding the Transaction, the Buyers were expected to 10 pay off Swift’s transportation taxes at closing. (See Doc. 19-3 at 840). Having the 11 transportation taxes paid at closing would have been a significant help to a cash-strapped 12 Swift. Moyes and Burdette, however, did not ultimately require the Buyers to pay off 13 Swift’s outstanding transportation taxes as a part of the Transaction because “the [Buyers] 14 wanted to negotiate when [they] would pay the [transportation] tax liability.” (See id.). 15 While not requiring the transportation taxes to be paid at closing may have helped assure 16 that the Transaction went forward which benefitted Moyes and Burdette, it left New Swift 17 with more liabilities that it did not have the money to pay off. Moyes and Burdette’s failure 18 to require the Buyers to pay Swift’s Transportation Taxes as a part of the Transaction is 19 yet another example of how Moyes and Burdette placed their own interests ahead of 20 Swift’s. Thus, the Court agrees with the Bankruptcy Court’s determination that these 21 findings add to the conclusion that Moyes and Burdette violated their fiduciary duties. 22 j. Moyes and Burdette Cut Swift’s 121 Payable Creditors 23 Adrift 24 Moyes and Burdette did not require that the Buyers pay off Swift’s pre-transaction 25 payables as a part of the Transaction. See supra Section III.A.30. While this placed Swift’s 26 creditors in an unfortunate position, it also hampered Swift by keeping heavy demands on 27 its already limited cash. This is yet another example of how Moyes and Burdette were not 28 acting in Swift’s best interests through the Transaction. Thus, the Court agrees with the

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1 Bankruptcy Court’s determination that these findings add to the conclusion that Moyes and 2 Burdette violated their fiduciary duties. 3 k. Moyes Enjoyed Tax Benefits from the Transaction 4 As discussed supra, Moyes enjoyed tax benefits from the Transaction. See supra 5 Section III.A.12. While these tax benefits are not, on their own, evidence that Moyes 6 violated a fiduciary duty, when combined with other record evidence they show that Moyes 7 was not acting out of loyalty to Swift when engaging in the Transaction, but out of loyalty 8 to his own interests. Thus, the Court agrees with the Bankruptcy Court’s determination that 9 these findings add to the conclusion that Moyes violated his fiduciary duties. 10 l. SAVM’s Cash Was Drained by Moyes 11 As discussed supra, Moyes received millions of dollars in payments from SAVM 12 that left SAVM without cash to pay certain payables owed to Swift. See supra Section 13 III.A.31. It is undisputed that Moyes and Burdette were the president and vice-president of 14 SAVM, and thus had control over SAVM’s operations. (See Doc. 19-2 at 78). By making 15 these payments and favoring Moyes and other creditors over Swift, Moyes and Burdette 16 supported Moyes’s interests over Swift’s. Thus, the Court agrees with the Bankruptcy 17 Court’s conclusion that Moyes and Burdette violated their fiduciary duties of loyalty by 18 draining SAVM of cash to satisfy debts owed to and guaranteed by Moyes. 19 m. Moyes’s Personal Interests Were Served by Ehrlich 20 It is uncontested that Ehrlich was both Swift’s and Moyes’s lawyer. (See Doc. 19-2 21 at 90). As president and vice-president of Swift, and as the individuals in charge of Swift’s 22 operations and decision making, Moyes and Burdette were responsible for selecting 23 Ehrlich as Swift’s counsel. Additionally, as discussed supra, Ehrlich knew that Swift’s 24 insolvency was a cloud hanging over the Transaction, and there is no evidence that Ehrlich 25 obtained, or suggested Swift obtain, an expert’s opinion on Swift’s solvency prior to the 26 Transaction. See supra Section III.A.32. 27 These findings show that Ehrlich knew that Swift may have been insolvent at the 28 Transaction Date but did nothing to confirm Swift’s solvency prior to approving the

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1 Transaction. The Court agrees with the Bankruptcy Court’s determination that Ehrlich 2 allowed the Transaction to proceed with such significant questions hanging over Swift to 3 benefit Moyes’s interests rather than Swift’s. Thus, the Court agrees with the Bankruptcy 4 Court’s determination that these findings add to the conclusion that Moyes and Burdette 5 violated their fiduciary duties by allowing Swift to retain counsel that would support 6 Moyes’s interests over Swift’s. 7 n. The Existence of Badges of Fraud Further Support a 8 Finding of Breach of Fiduciary Duty 9 The Bankruptcy Court found, and Defendants do not dispute, that Defendants 10 undertook actions related to the Transfer that bore certain “badges of fraud.” (See Docs. 11 19-2 at 225, 1 at 62–63). Such actions that support claims of fraud similarly support claims 12 of breach of fiduciary duty. See Dawson v. Withycombe, 163 P.3d 1034, 1057 (Ariz. Ct. 13 App. 2007) (noting that constructive fraud involves a breach of a fiduciary duty coupled 14 with detrimental reliance); Green v. Lisa Frank, Inc., 211 P.3d 16, 34 (Ariz. Ct. App. 2009) 15 (same). Thus, the Court agrees with the Bankruptcy Court’s conclusion that Defendants’ 16 actions that support claims of fraud add to the conclusion that Moyes and Burdette violated 17 their fiduciary duties. 18 o. Conclusions Regarding Fiduciary Duty Claims Analysis 19 The Bankruptcy Court undertook a lengthy analysis of the Trustee’s claims for 20 breach of fiduciary duty. The Bankruptcy Court correctly concluded that, under Arizona 21 law, a party asserting a claim for breach of fiduciary duty must prove, “the existence of a 22 duty owed, a breach of that duty, and damages causally related to such breach.” Surowiec, 23 790 F. Supp. 2d at 1004. The Bankruptcy Court also correctly concluded that Moyes and 24 Burdette owed common law fiduciary duties to Swift. See supra Section III.A.17. The 25 Bankruptcy Court further correctly concluded that Moyes and Burdette breached their 26 fiduciary duties of good faith and loyalty in various ways connected to the Transaction. 27 These breaches caused damages for Swift. See infra Section III.C.4. Thus, the Court finds 28 that the Bankruptcy Courts proposed conclusions of law regarding the analysis of the

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1 Trustee’s fiduciary duty claims are sound and overrules Defendants’ objection. 2 3. Conclusions Regarding Burden of Proof 3 The Bankruptcy Court concluded that “Moyes and Burdette bear the burden of 4 proving they, as fiduciaries of Swift, discharged [their] duty exercising the utmost good 5 faith and that at all times they acted with loyalty to Swift.” (Doc. 19-2 at 210). Defendants 6 assert that this conclusion was incorrect noting that the Bankruptcy court did “not cite any 7 authority for the proposition that Defendants bear the burden of proving they discharged 8 any fiduciary duties they might have owed in good faith and with loyalty.” (Doc. 1 at 63). 9 Defendants additionally argue that Arizona law supports their argument that the burden 10 here lies with Plaintiff, not Defendants, (id.), and that “the common law areas of both an 11 officer’s fiduciary duty and the burden shifting pursuant to the business judgment rule has 12 [sic] been completely replaced by statute,” (id. at 65 (citing Wichansky v. Zowine, No. CV- 13 13-01208-PHX-DGC, 2016 WL 11002479, at *2 (D. Ariz. Apr. 19, 2016))). 14 To begin, the Bankruptcy Court cited Gemstar to support its position on burden 15 shifting. (See Doc. 19-2 at 209). When discussing the jury instructions given in the 16 underlying case, the Gemstar court did not find any error in the jury instruction stating, 17 “[d]efendants have the burden of proving full compliance with all of their fiduciary duties. 18 If the defendants failed to prove this full compliance, then the fiduciary relationship has 19 been breached.” Gemstar, 917 P.2d at 233. Of course, the present case did not involve a 20 jury trial, so the jury instruction for Gemstar is not definitive in the Court’s analysis. 21 Arizona law, however, supports the Bankruptcy Court’s conclusion. It is true that 22 under Arizona law, a plaintiff asserting a claim for breach of fiduciary duty must prove, 23 “the existence of a duty owed, a breach of that duty, and damages causally related to such 24 breach.” Surowiec, 790 F. Supp. 2d at 1004. Nevertheless, when analyzing the fiduciary 25 duty of loyalty, “[o]nce there is a prima facie showing that a director is personally interested 26 in a corporate transaction, the business judgment rule does not apply, and the burden shifts 27 to the director to show that the decision with respect to a particular transaction is fair and 28 serves the best interests of the corporation and the shareholders.” Shoen, 804 P.2d at 794;

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1 see also Kadish v. Phx.-Scotts. Sports Co., 466 P.2d 794, 797 (Ariz. App. Ct. 1970) (“. . . 2 where the acts of an officer or director smack of self-dealing . . . the officer or director has 3 the burden of proving the fairness of the transaction to the corporation to which they owe 4 a fiduciary duty.”). Here, Moyes and Burdette engaged in the Transaction which 5 “smack[ed] of self-dealing” in that it promoted their own personal interest while leaving 6 Swift in a precarious position. See Kadish, 466 P.2d at 797 (finding that business 7 transactions smacked of self-dealing when the defendant corporate director caused the 8 plaintiff corporation to engage in transactions with another corporation owned by the 9 defendant, and these transactions promoted the defendant’s personal interests). Thus, under 10 Arizona law, the burden of proving that the Transaction was fair and served the best 11 interests of Swift shifted to Moyes and Burdette. 12 Finally, Defendants argue that Shoen’s burden shifting is no longer good law 13 because of a recent decision in the District of Arizona, Wichansky. (See Doc. 1 at 65). In 14 Wichansky, the court “concluded that the fiduciary duties of directors and officers are 15 defined by [A.R.S. § 10-830] in Arizona,” and that “[n]o Arizona case holds that the 16 common law of director and officer duties survives these statutes, and commentators 17 suggest it does not.” Wichansky, 2016 WL 11002479, at *2. The Court notes first that an 18 unpublished opinion by a court in the District of Arizona is persuasive, not binding, 19 authority in this Court. See Camreta v. Greene, 563 U.S. 692, 709 (2011) (“A decision of 20 a federal district court judge is not binding precedent in either a different judicial district, 21 the same judicial district, or even upon the same judge in a different case.”). 22 The Court next notes that nothing in A.R.S. § 10-830 states an intent for the statute 23 to act as the only source of fiduciary duties in Arizona, or an intent to limit Shoen’s holding. 24 See A.R.S. § 10-830. Further, in a nonbinding unpublished opinion, the Arizona Court of 25 Appeals found that “[n]othing in [A.R.S. § 10-830] shows an intent to eviscerate, limit, or 26 even address the reasoning and holding of Shoen. Shoen remains good law, and as such the 27 trial court is presumed to know it and apply it in rendering a decision.” Singh v. Malhotra, 28 No. 1 CA-CV 17-0033, 2018 WL 1004282, at *8 (Ariz. Ct. App. Feb. 22, 2018). While

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1 Singh is not binding precedent in Arizona, it provides support for the contention that 2 Shoen’s burden shifting is still good law and applies in the instant case. 3 Finally, the Court notes that In re Sky Harbor seems to undercut the reasoning in 4 Wichansky, at least as it applies to a limited liability company, like Swift. In In re Sky 5 Harbor, the Arizona Supreme Court found that “a member owes common law fiduciary 6 duties to the LLC if the member acts as an agent of the LLC.” In re Sky Harbor, 443 P.3d 7 at 24 (emphasis added). Thus, Arizona law recognizes that agents owe common law, not 8 simply statutory, duties to limited liability companies like Swift. Because of this, Shoen’s 9 holding related to the common law fiduciary duty of loyalty is still good law, and the 10 Bankruptcy Court was correct to apply it in the instant case. 11 Thus, the Court agrees with the Bankruptcy Court’s conclusion that the burden to 12 prove compliance with their fiduciary duties had shifted to Moyes and Burdette, and the 13 Court overrules this objection. 14 4. Conclusions Regarding Damages 15 The Bankruptcy Court concluded that the damages associated with Moyes’s and 16 Burdette’s breaches of fiduciary duties were $12,136,669, which was the amount of the 17 Part 135 Business related party receivables transferred by Swift in the Transaction. (Doc. 18 19-2 at 232). To arrive at this conclusion, the Bankruptcy Court looked to sources including 19 the Restatement (Second) of Torts which states, “[o]ne standing in a fiduciary relation with 20 another is subject to liability to the other for harm resulting from a breach of duty imposed 21 by the relation.” (Id. at 200–01 (quoting Restatement (Second) Of Torts § 874 (1979))). 22 The Bankruptcy Court also quoted the Revised Arizona Jury Instructions (Civil) 5th 23 (“RAJI”) which say that if a defendant is found guilty of a breach of fiduciary duty, the 24 jury must decide the amount of money that will “reasonably and fairly compensate [the 25 plaintiff] for any of the following elements of damage proved by the evidence to have 26 resulted from [defendant]’s breach of this duty: 1. Loss of money or other property; . . . 3. 27 Money or property that is unjust for [defendant] to keep; . . .” (Id. at 202 (quoting RAJI, 28 Commercial Torts 3 Fiduciary Duty (Measure of Damages)).

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1 Under Arizona law, “[o]nce the right to damages is established, uncertainty as to the 2 amount of damages does not preclude recovery.” Lewis v. N.J. Riebe Enterprises, Inc., 825 3 P.2d 5, 18 (Ariz. 1992). Nevertheless, there must still be “a reasonable basis in the evidence 4 for the trier of fact to fix compensation when a dollar loss is claimed.” Short v. Riley, 724 5 P.2d 1252, 1255 (Ariz. Ct. App. 1986). The Bankruptcy Court noted, and the Court agrees, 6 that “no Arizona cases explain with particularity how the trier of fact is to measure damages 7 for ‘loss of . . . property’ or ‘property that is unjust for [the defendant] to keep.’” (Doc. 19- 8 2 at 202 (quoting RAJI, Commercial Torts 3 Fiduciary Duty (Measure of Damages)) 9 (alteration in original)). Because the exact amount of damages caused by Moyes’s and 10 Burdette’s breaches of fiduciary duties cannot easily be measured, the Bankruptcy Court 11 concluded that $12,136,669 was appropriate based on the record. (See id. at 232). This was 12 the value of the Part 135 Business related party receivables transferred by Swift in the 13 Transaction. (See id.). 14 Defendants argue that this damage amount was inappropriate because the Report 15 and Recommendation did not “find that Swift suffered a loss or that the Defendants 16 received property that was unjust to keep” because the Bankruptcy Court “already 17 determined that Swift received ‘reasonably equivalent value’ in the Transaction.” (Doc. 1 18 at 68 (quoting Doc. 19-2 at 199)). The portion of the Report and Recommendation cited by 19 Defendants to support this claim is the portion noting that the Trustee “did not carry his 20 burden of proving Swift received less than reasonably equivalent value in return for the 21 transfer of the [Part] 135 Business and the 135 Related Party Receivables.” (Doc. 19-2 at 22 199). It is worth noting that the Trustee not carrying his burden of proving Swift received 23 less than reasonably equivalent value is not the same as finding that Swift received 24 reasonably equivalent value. Additionally, this portion of the Report and Recommendation 25 notes that “Swift transferred receivables totaling $12,136,669 but received from the 26 transferees debt relief in the aggregate of $12,997,903. In other words, Swift received more 27 value than it transferred away.” (Id.). 28 Notably, the Bankruptcy Court explicitly found that Swift suffered a loss in the form

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1 of damages due to the Transaction. When noting that the damages owed by Moyes’s were 2 the value of the Part 135 Business related party receivables, the Report and 3 Recommendation stated that “New Swift and Debtor sustained damages in a like amount.” 4 (Id. at 232). The damages suffered by New Swift were the loss of the right to payment on 5 the transferred receivables. While the transferred receivables were setoff against certain of 6 Swift’s payables, extinguishing debts through setoff is not the same as a cash payment on 7 that debt. See Blount v. Windley, 95 U.S. 173, 179 (1877) (“The idea of set-off is not the 8 same as payment.”); see also United States v. Horschel, 205 F.2d 646, 648 (9th Cir. 1953) 9 (noting that paying with a promissory note and warehouse credit is not the same as paying 10 in cash). Swift was cash strapped and needed money to operate. Rather than collect on the 11 outstanding related party receivables—which had inappropriately built up over time—so 12 this necessary cash could be obtained, Moyes and Burdette caused the receivables to be 13 inappropriately setoff against certain payables. This damaged Swift while ensuring Moyes 14 received as much value from the Transaction as possible. 15 The Bankruptcy Court also found that Moyes was enriched by the Transaction in 16 the amount of the receivables transferred by Swift, $12,136,669. (Doc. 19-2 at 232). 17 Defendants argue that, even if Moyes was unfairly enriched by the Transaction, there is no 18 evidence that Burdette received any money from the Transaction, so there are no damages 19 that can be attributed to Burdette. (Doc. 1 at 68–69). As stated above, however, the damage 20 award against Moyes and Burdette on the breach of fiduciary duty claims does not lie solely 21 in unjust enrichment, but also stems from the direct damage done to Swift. Thus, Burdette 22 is also liable to Swift for the damages directly caused by his breaches of fiduciary duty. 23 Thus, the Bankruptcy Court was correct to conclude that Moyes’s and Burdette’s 24 breaches of fiduciary duties damaged Swift and that Swift was owed $12,136,669 in 25 compensatory damages from Moyes and Burdette due to these breaches, and the Court 26 overrules this objection. 27 5. Conclusions Regarding Transjet Setoff 28 Defendants argue that the inclusion of the $1,802,669 receivable owed to Swift by

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1 Transjet (the “Transjet Receivable”) in the damages for breach of fiduciary duty is 2 improper because the Report and Recommendation “provides no justification for why the 3 Transjet setoff now constitutes a breach of fiduciary duty (or at least provides a measure 4 of damages thereunder).” (See Doc. 1 at 69–70). Yet, the Bankruptcy Court analyzed the 5 Transaction in detail and found that Moyes and Burdette violated their fiduciary duties by 6 agreeing to it on Swift’s behalf, and the Court agrees with this analysis. See supra Section 7 III.C.2. 8 Additionally, the Court finds that the setoff effectuated by Defendants of the 9 Transjet Receivable was inappropriate under Swift’s agreements with the Transjet 10 Subsidiaries. See Transjet Incorporated v. MorrisAnderson & Associates Limited, Case 11 No. CV-20-00849-PHX-JAT, Section III.B (D. Ariz. Dec. 1, 2020). Thus, the Court agrees 12 with the Bankruptcy Court’s conclusion that, like the other related party receivables 13 transferred or setoff by Swift in the Transaction, allowing for the setoff of the Transjet 14 Receivable was a breach of Moyes’s and Burdette’s fiduciary duties and damaged Swift. 15 See supra Sections III.C.2–4. Accordingly, the Court overrules this objection. 16 6. Conclusions Regarding Creditor Claims 17 Defendants assert that the Bankruptcy Court improperly considered creditor claims 18 in determining the damages owed by Moyes and Burdette to Swift. (Doc. 1 at 70–71). In 19 making this argument, Defendants quote the portion of the Report and Recommendation’s 20 breach of fiduciary duty claim analysis which notes: 21 Swift was relieved of millions of dollars of debt owed to Moyes and his 22 entities, but in doing so Moyes and his entities captured millions of dollars in value that would have either been lost had Swift shut down or value which 23 rightly should have been shared with other Swift creditors who were not in a 24 position to make sure they were satisfied ahead of or on par with Moyes and Swift’s Affiliates. 25 26 (Id. (quoting Doc. 19-2 at 217)). This quote, however, is simply a statement included in 27 one of fourteen different findings made by the Bankruptcy Court when analyzing the 28 fiduciary duty claims. It does not define, or even authoritatively speak to, damage

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1 calculation. It simply reinforces a fact that runs throughout the entirety of the fiduciary 2 duty analysis: Moyes used the Transaction to advance his own interests over anyone else’s. 3 Additionally, as discussed supra, the creditor claims are not the source of the 4 damage calculation made by the Bankruptcy Court, but the actual injuries suffered by Swift 5 as a result of the Transaction are. See supra Section III.C.4. Thus, the Court agrees with 6 the Bankruptcy Court’s conclusions regarding damages and overrules this objection. 7 7. Conclusions Regarding the Settlement Agreement 8 Defendants object to the Bankruptcy Court’s conclusion that the Settlement 9 Agreement did not release Moyes and Burdette from any breach of fiduciary duty claims 10 asserting that the language of the Settlement Agreement clearly releases all Defendants 11 from such claims. (Doc. 1 at 71–74). The pertinent sections of the Settlement Agreement 12 are Sections 2 and 4 which read: 13 14 Section 2. Settlement Terms. The Parties hereby agree that any and all amounts, accounts receivables, debts and obligations, whatsoever, owed and 15 unpaid by Swift to any Seller Party and any and all amounts, accounts receivables, debts and obligations, whatsoever, owed and unpaid by any 16 Seller Party to Swift, in both cases prior to and until, but not after, the 17 Closing, be and they hereby are fully settled and released, provided, however, that Seller may request that Swift, in lieu of releasing amounts due by a Seller 18 Party to Swift, assign such amount to Seller or Management. 19 Notwithstanding the foregoing, nothing contained herein shall serve to discharge any amounts owed by Swift to (a) Transport Risk for insurance 20 premiums pertaining to the Part 121 Business, (b) Transpay, Inc. in 21 connection with its existing oral employee leasing agreement with Swift with respect to employees working in the Part 121 Business, or (c) any Transjet 22 Account Payable being assumed by Swift pursuant to the terms of the 23 Purchase Agreement. Also notwithstanding the foregoing, nothing contained herein shall release any Seller Party that is party to the Purchase Agreement 24 or any other agreement entered into pursuant to the Purchase Agreement 25 including, but not limited to the Part 135 Business Transition Services Agreement, the Transpay Employee Leasing Agreement, and the Part 135 26 Assignment and Assumption Agreement and Guarantee (collectively, the 27 “Other Agreements”) from any indemnity or other obligation of such party pursuant to the Purchase Agreement or any such Other Agreement. The 28 Seller Parties represent, warrant and covenant that there are no other

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1 Affiliates of the Seller Parties to whom any amount, account receivable, debt 2 or other obligation is owed by Swift at the time of the Closing, and the Seller, SAS, Sales and Management, jointly and severally, will indemnify Swift 3 against any Losses for any such claim from an Affiliate of the Seller Parties who is not a Party to this Agreement. Notwithstanding the foregoing, Seller 4 may request that Swift, in lieu of releasing any amount due by a Seller Party 5 to Swift with respect to the Part 135 Business, assign such amount to Seller or to Swift Aircraft Management, L.L.C. . . . 6 7 Section 4. Mutual Release. Subject to terms set forth in Section 2, the Swift on the one side and Seller Parties on the other side, and their respective 8 members, managers, stockholders, directors, officers, partners, employees 9 and agents, hereby mutually release one another from any and all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, 10 bonds, bills, covenants, contracts, controversies, agreements, promises, 11 damages, judgments, executions, duties, obligations, indemnities, claims and demands whatsoever, in law or equity which the Parties and their respective 12 directors, officers, partners, employees and agents shall or may have, for, 13 upon or by reason of the amounts, accounts receivables, debts and obligations described in Section 2, from the beginning of the world to the Closing. 14 15 (Doc. 19-5 at 19, 20). The Bankruptcy Court found that the release language of Section 4 16 was subject to Section 2 and applicable only to the “amounts, accounts receivables, debts 17 and obligations” detailed in Section 2. (See Doc. 19-2 at 205). The Court agrees with the 18 Bankruptcy Court’s reading of the Settlement Agreement. 19 By its terms, the Settlement Agreement is governed by New York law and the 20 parties do not dispute this. (See Doc. 19-5 at 21). Under New York law, “[c]onstruction of 21 an unambiguous contract is a matter of law, and the intention of the parties may be gathered 22 from the four corners of the instrument and should be enforced according to its terms.” 23 Beal Sav. Bank v. Sommer, 865 N.E.2d 1210, 1213 (N.Y. Ct. App. 2007). “A contract is 24 ambiguous if the language used lacks a definite and precise meaning, and there is a 25 reasonable basis for a difference of opinion.” Williams v. Vill. of Endicott, 936 N.Y.S.2d 26 759, 761 (N.Y. App. Div. 2012) “Further, a contract should be ‘read as a whole, and every 27 part will be interpreted with reference to the whole; and if possible it will be so interpreted 28 as to give effect to its general purpose.’” Beal Sav. Bank, 865 N.E.2d at 1213–14 (quoting

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1 Westmoreland Coal Co. v. Entech, Inc., 794 N.E.2d 667, 670 (N.Y. Ct. App. 2003)). 2 The Settlement Agreement is not ambiguous. The language of Section 4 clearly 3 limits its terms to causes arising “for, upon or by reason of the amounts, accounts 4 receivables, debts and obligations described in Section 2.” (Doc. 19-5 at 20). Section 2 5 describes the amounts, accounts receivables, debts and obligations as “any and all amounts, 6 accounts receivables, debts and obligations, whatsoever, owed and unpaid . . . prior to and 7 until, but not after, the [Transaction Date].” (Id. at 19). Moyes’s and Burdette’s fiduciary 8 duties were owed to Swift by virtue of their positions at Swift, see supra Section III.A.17, 9 not because of any amounts, accounts receivables, debts and obligations owed and unpaid 10 by Swift. It is clear from the four corners of the Settlement Agreement that Section 2 11 unambiguously fails to include fiduciary duties in the settlement terms, so Section 4 cannot 12 release Moyes and Burdette of their fiduciary duties because it is explicitly limited to the 13 claims arising from Section 2. 14 When reading the Settlement Agreement as a whole, it did not release Moyes and 15 Burdette from breach of fiduciary duty claims related to the Transaction. Thus, the Court 16 agrees with the conclusions reached by the Bankruptcy Court regarding the Settlement 17 Agreement and overrules this objection.7 18 8. Conclusions Regarding In Pari Delicto Defense 19 Defendants object to the Bankruptcy Court’s rejection of Defendants’ in pari delicto 20 defense arguing that “the Transaction was the result of good-faith arm’s length 21 negotiations” between the Buyers and the sellers of Swift, so if the Transaction was 22 inequitable then both parties were at equal fault. (Doc. 1 at 74–75). While the Court does 23 not contest Defendants’ assertion that the Buyers and the sellers of Swift were at arm’s 24 length, such a finding does not render the Bankruptcy Court’s conclusion faulty. 25 “‘The doctrine of in pari delicto dictates that when a participant in illegal, 26 fraudulent, or inequitable conduct seeks to recover from another participant in that conduct, 27 7 Because the language of the Settlement Agreement unambiguously fails to release Moyes and Burdette from any breach of fiduciary duty claims, the Court need not address the 28 Bankruptcy Court’s conclusions made in the alternative on this issue and the Defendants’ arguments regarding those conclusions.

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1 the parties are deemed in pari delicto, and the law will aid neither, but rather, will leave 2 them where it finds them.’” In re Bill Johnson’s Restaurants, Inc., 255 F. Supp. 3d 927, 3 934 (D. Ariz. 2017) (quoting Smith ex rel. Estates of Bos. Chicken, Inc. v. Arthur Andersen 4 L.L.P., 175 F. Supp. 2d 1180, 1198 (D. Ariz. 2001)). The Ninth Circuit has endorsed the 5 use of in pari delicto to defend against civil claims. See Kardoh v. United States, 572 F.3d 6 697, 700 (9th Cir. 2009) (applying defense of in pari delicto to resolve a civil issue). 7 “Application of in pari delicto is governed by state law.” In re Tarczynski, No. ADV 14- 8 01149-BB, 2015 WL 728410, at *11 (B.A.P. 9th Cir. Feb. 19, 2015). Under Arizona law, 9 the defense of in pari delicto applies only “when the parties to the wrongful act are equally 10 at fault. It need not apply when one party’s wrong is slight compared to the other.” Brand 11 v. Elledge, 360 P.2d 213, 216 (Ariz. 1961). This means that “where the parties are not equal 12 in guilt (in pari delicto) but where one of them, although participating in the wrong, is less 13 guilty than the other, the party more at fault cannot employ the doctrine of pari delicto to 14 shield his deliberate invasion of the rights of the former.” Id. at 217. 15 Here, the Bankruptcy Court correctly rejected Defendants’ in pari delicto defense 16 because Defendants and Swift were not equal in guilt. Moyes and Burdette used their power 17 as officers of Swift to enter into the Transaction for their own benefit. See supra Section 18 III.C.2. Swift was merely a vehicle used by Moyes and Burdette to effectuate the 19 Transaction and bears no responsibility for entering into the Transaction against its own 20 interest. See In re Bill Johnson’s Restaurants, 255 F. Supp. 3d at 934 (holding that, where 21 agents of a corporation are acting in a manner adverse to the interests of the corporation, 22 the “adverse interest exception” applies, with the result that the actions of the agents are 23 not imputed to the corporation); see also In re Mortg. Fund ‘08 LLC, 527 B.R. 351, 368 24 (N.D. Cal. 2015) (applying adverse interest exception to a limited liability company); In re 25 1031 Tax Grp., LLC, 420 B.R. 178, 207 (Bankr. S.D.N.Y. 2009) (same). 26 Further, Defendants’ argument that the Transaction was the result of arm’s length 27 negotiations so both the Buyers and the sellers of Swift bear the same responsibility is 28 inapplicable to this in pari delicto analysis. The breach of fiduciary duty claims are claims

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1 by the Trustee, acting for Swift, against Moyes and Burdette. The Buyer’s actions leading 2 up to the sale are not at issue. To be sure, the Buyers ultimately gained control of Swift via 3 the Transaction, but the Buyers and Swift were wholly separate actors while Moyes and 4 Burdette were breaching their fiduciary duties owed to Swift. 5 Finally, Defendants’ assert that the in pari delicto defense should apply because 6 “Swift received a net benefit from the Transaction.” (Doc. 1 at 75 (citing Doc. 19-2 at 7 199)). As discussed supra, while the amount of Swift’s debt relieved by the Transaction 8 was greater than the amount in accounts receivable transferred by Swift in the Transaction, 9 Swift still suffered damages while Moyes and Burdette received only benefit. See supra 10 Sections III.C.2, III.C.4. Thus, compared to Moyes and Burdette, Swift did not receive a 11 net benefit such that the in pari delicto defense should apply. 12 Accordingly, the Court agrees with the Bankruptcy Court’s proposed conclusions 13 of law on this point, and this objection is overruled. 14 D. Objections to the Bankruptcy Court’s Use of Judicial Notice 15 Defendants’ final objections assert that the Bankruptcy Court erred in taking judicial 16 notice of certain facts. (Doc. 1 at 76–82). Defendants contend the improperly noticed facts 17 include facts related to Saipan Air Inc. (“Saipan Air”) and “common practice” in 18 transactions like the one at issue. (Id.). The Court will address the legal standard for its 19 review and each objection in turn. 20 1. Legal Standard 21 Federal Rule of Evidence 201, made applicable to bankruptcy proceedings by 22 Federal Rule of Bankruptcy Procedure 9017, provides in relevant part, “[a] judicially 23 noticed fact must be one not subject to reasonable dispute in that it is either (1) generally 24 known within the territorial jurisdiction of the trial court or (2) capable of accurate and 25 ready determination by resort to sources whose accuracy cannot reasonably be questioned.” 26 Fed. R. Evid. 201(b). A court may also take judicial notice of its own documents or 27 documents filed before other courts. See Kranich v. Girardi, 720 F. App’x 870, 871 (9th 28 Cir. 2018) (taking judicial notice of documents filed before another court); Reyn’s Pasta

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1 Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006) (same); Burbank- 2 Glendale-Pasadena Airport Auth. v. City of Burbank, 136 F.3d 1360, 1364 (9th Cir. 1998) 3 (same). When a court takes judicial notice of another court’s records, “it may do so not for 4 the truth of the facts recited therein, but for the existence of the [record], which is not 5 subject to reasonable dispute over its authenticity.” Lee v. City of Los Angeles, 250 F.3d 6 668, 690 (9th Cir. 2001). The decision to take judicial notice is reviewed for an abuse of 7 discretion. Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 998 (9th Cir. 2018), cert. 8 denied sub nom. Hagan v. Khoja, 139 S. Ct. 2615 (2019). Even if a court errs in taking 9 judicial notice of certain facts, such error can be harmless and provide no grounds to reject 10 or modify a bankruptcy court’s proposed findings of fact and conclusions of law. See In re 11 Manesh, 774 F. App’x 413, 414 (9th Cir. 2019) (noting that Fed. R. Bankr. P. 9005 12 incorporates Fed. R. Civ. P. 61’s harmless error rule into bankruptcy proceedings); In re 13 Schumacher, 617 F. App’x 773, 774 (9th Cir. 2015) (same). 14 2. Matters Related to Saipan Air 15 Defendants argue that the Bankruptcy Court improperly took judicial notice of facts 16 related to Saipan Air, primarily taking issue with the notice of a declaration from Saipan 17 Air representative Adam Ferguson attached to a proof of claim filed by Saipan Air in the 18 Swift administrative bankruptcy case docket (the “Ferguson Declaration”). (See Doc. 1 at 19 77–79). Defendants assert that the Bankruptcy Court taking judicial notice of the Saipan 20 Air facts was improper for five reasons: (1) there was no need for the Bankruptcy Court to 21 take judicial notice of additional Saipan Air facts, (2) no party asked the Bankruptcy Court 22 to take judicial notice of these facts, (3) the allegations in the Ferguson Declaration are 23 disputed and Defendants had no opportunity to contest them, (4) Adam Ferguson did not 24 appear at trial for cross-examination, so his testimony via declaration is in violation of the 25 Local Rules for the United States Bankruptcy Court for the District of Arizona and against 26 due process, and (5) the Ferguson Declaration is hearsay. 27 Regarding Defendants’ first two points, the “need” for a court to take judicial notice 28 is not a standard by which the propriety of taking judicial notice is judged, nor does any

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1 similar standard exist in Federal Rule of Evidence 201 or Federal Rule of Bankruptcy 2 Procedure 9017. Additionally, a court “may take judicial notice on its own,” and “may take 3 judicial notice at any stage of the proceeding.” Fed. R. Evid. 201(c)(1), (d). Therefore, a 4 party does not have to ask a court to take judicial notice of certain facts for a court to do 5 so. 6 Regarding Defendants’ final three points, each of these points seems to take issue 7 with the truth of the information within the Ferguson Declaration. The Bankruptcy Court, 8 however, when referring to the Ferguson Declaration, noted that the “[Bankruptcy] Court 9 makes no finding as to the veracity of any of the allegations set forth in this declaration.” 10 (Doc. 19-2 at 112 n.219). Thus, the truth of the information within the Ferguson 11 Declaration is not relevant to the Bankruptcy Court’s ultimate findings and conclusions, as 12 the Bankruptcy Court did not rely on the truth of the information when making its proposed 13 findings of fact and conclusions of law. The Bankruptcy Court merely took notice of the 14 existence of the Ferguson Declaration, rather than the truth of the facts therein. 15 To be sure, the Bankruptcy Court discussed the information within the Ferguson 16 Declaration when it stated, “the [Bankruptcy] Court does wonder why Burdette would be 17 involved in New Swift post-Transaction,” as such a claim is contained within the Ferguson 18 Declaration. This statement, however, is far from a finding of fact as to the veracity of the 19 information within the Ferguson Declaration. 20 Even if the Ferguson Declaration was the subject of improper judicial notice, any 21 error was harmless as the information within it does not bear on the proposed findings of 22 fact or conclusions of law of the Bankruptcy Court, and there is ample evidence in the 23 record to support the findings and conclusions in the Report and Recommendation. See In 24 re Manesh, 774 F. App’x at 414; In re Schumacher, 617 F. App’x at 774. Thus, the 25 Bankruptcy Court did not improperly take judicial notice of facts related to Saipan Air, and 26 even if it did, such improper notice was harmless. 27 3. “Common Practice” in Transactions 28 Defendants argue that the Bankruptcy Court improperly took judicial notice of facts

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1 related to common practice in business transactions like the Transaction, primarily taking 2 issue with the notice of an article by J.B. Heaton (the “Heaton Article”). (See Doc. 1 at 79– 3 82). Defendants argue that the Bankruptcy Court citing the Heaton Article at notes 409 and 4 633 inserted “a new (and undisclosed) ‘expert’ witness after the close of evidence.” (Id. at 5 81). The Bankruptcy Court, however, did not go so far. 6 When referencing the Heaton Article, note 409 states, in relevant part, that “[t]he 7 [Bankruptcy] Court is not finding that a solvency opinion should have been obtained by 8 Defendants in advance of the closing of the Transaction. However, the [Bankruptcy] Court 9 does note that neither the Defendants nor the Buyers required a pre-Transaction solvency 10 opinion concerning Swift.” (Doc. 19-2 at 150 n.409). The Bankruptcy Court did not use 11 the Heaton Article to make an adverse factual finding regarding Defendants’ actions, but 12 simply noted that solvency opinions are not uncommon for certain transactions. The same 13 note cites the American Institute of Certified Public Accountants (AICPA) Standards 14 Regarding Valuation—which Defendants requested the Bankruptcy Court take judicial 15 notice of—to similarly support the point that business valuations, which include solvency 16 opinions, are not uncommon in certain transactions, like acquisitions. (Doc. 19-2 at 150 17 n.409). Thus, the Bankruptcy Court did not improperly use the Heaton Article to make any 18 findings at note 409. Even if the Heaton Article was improperly cited, any error was 19 harmless as the AICPA Standards Regarding Valuation provide similar information. 20 When citing the Heaton Article, note 633 states, in relevant part, that “[t]he 21 [Bankruptcy] Court does not find the Defendants’ failure to obtain a solvency opinion as 22 dispositive as to the question of solvency, but mentions the common practice of obtaining 23 such opinions to further highlight another failure of Defendants to protect the interest of 24 Swift in the lead up to the Transaction.” (Id. at 224 n.633). Again, the Bankruptcy Court 25 clearly did not use the Heaton Article to make an adverse factual finding, but simply to 26 note the common practice of obtaining a solvency opinion in certain transactions. Thus, 27 the Bankruptcy Court did not improperly use the Heaton Article to make any findings at 28 note 633. Even if the Heaton Article was improperly cited, any error was harmless as

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1 similar information is contained in the AICPA Standards Regarding Valuation. 2 Defendants further argue that the Heaton Article is not applicable to the instant case 3 and that it does not support the proposition that obtaining solvency reports is common 4 practice in acquisitions. (See Doc. 1 at 80). Yet, as discussed above, the Bankruptcy Court 5 did not use the Heaton Article to arrive at any factual findings, and the points made by the 6 Bankruptcy Court are supported by the record. Thus, Defendants’ arguments here do not 7 show an abuse of discretion by the Bankruptcy Court. 8 Defendants’ also had an opportunity to be heard by the Bankruptcy court regarding 9 the above acts of judicial notice. Defendants submitted their concerns regarding judicial 10 notice to the Bankruptcy Court, (see Doc. 19-7 at 475–81), and had an opportunity to be 11 heard by the Bankruptcy Court on these objections, see Transcript of Hearing or Trial on 12 12/3/2019, In re Swift Air, L.L.C., No. 14-AP-00534 (Bankr. D. Ariz. Dec. 12, 2019), ECF 13 No. 549. It is clear from the transcript of the hearing before the Bankruptcy Court and from 14 the Report and Recommendation that the Bankruptcy Court considered and rejected 15 Defendants’ objections. 16 Because the Bankruptcy Court did not take improper judicial notice of certain facts, 17 and even if it did, any error from such improper notice was harmless, the Bankruptcy Court 18 did not abuse its discretion and the Court overrules this objection. 19 IV. CONCLUSION 20 Based on the foregoing, 21 IT IS ORDERED that Defendants’ objection to the Bankruptcy Court’s proposed 22 finding of fact that Moyes and Burdette were not “Officers” of Swift for purposes of the 23 Operating Agreement, see supra Section III.A.18, is SUSTAINED. 24 IT IS FURTHER ORDERED that all of Defendants’ other objections to the 25 Bankruptcy Court’s proposed findings of fact and conclusions of law are OVERRULED. 26 IT IS FURTHER ORDERED ADOPTING the Bankruptcy Court’s proposed 27 findings of fact and conclusions of law in their entirety, save the proposed finding of fact 28 that Moyes and Burdette were not “Officers” of Swift for purposes of the Operating

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1 Agreement. 2 IT IS FURTHER ORDERED: 3 Granting judgment in favor of Plaintiff jointly and severally against Jerry Moyes 4 and Kevin Burdette in the amount of $12,136,669.00 plus interest at the rate of 0.17% per 5 annuum from the date of this order. These damages are awarded on an “alternative” basis 6 meaning that any payment towards the preference damages associated with the Related 7 Appeals would result in a corresponding decrease in damages awarded on account of 8 Moyes’s and Burdette’s breaches of fiduciary duties. 9 Granting judgment in favor of Defendants, except Transjet, Inc. and Swift Aircraft 10 Management, LLC on Counts One and Count Two of the Complaint. 11 Pursuant to Federal Rule of Bankruptcy Procedure 8024(a), the Clerk of the Court 12 shall enter judgment accordingly. 13 14 Dated this 1st day of December, 2020.

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