IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re: FASTSHIP, INC., et. al,

Chapter 11

Case No. 12-10968 (BLS)

Debtors.

Hearing Date: June 28, 2012, at 10:00 AM Objections Due: June 25, 2012, at 4:00PM

OBJECTION BY THE UNITED STATES TO THE DEBTORS' JOINT LIQUIDATING PLAN PURSUANT TO CHAPTER 11 OF THE BANKRUPTCY CODE
The United States, by and through the undersigned attorneys, in support of its objection to the Joint Liquidating Amended Plan ofFastShip, Inc., and its Subsidiaries Pursuant to Chapter 11 of the United States Bankruptcy Code [Docket No. 95] ("Plan"), avers as follows: 1. On March 20, 2012, the debtors filed voluntary bankruptcy petitions seeking relief

under Chapter 11 of the Bankruptcy Code. 2. During the course of their bankruptcy, the debtors have repeatedly stated that the primary purpose of the Plan is to pursue alleged patent infringement claims against the United States Department ofNavy ("Navy"). The definition of"IP Litigation" set forth in Article I, section 41 of the Plan encompasses not just Navy but the U.S. Government. IP Litigation means the litigation to be pursued by FastShip, LLC, against the U.S. Government and perhaps others arising from the alleged infringement by the U.S. Government on the patents ofTGC, which IP Litigation when transferred to FastShip, LLC will include a transfer as well of any defenses to any counterclaims which may be asserted by the government as well as any patents integral in

the prosecution of the IP Litigation. Through the vehicle of the Plan, the debtors are intending to transfer the IP Litigation into a Liquidating Trust in order to litigate against the federal government. 3. The United States objects to the Plan and the supporting Plan documents because they contain certain provisions which are contrary to law and should not be approved by this Court. 28 U.S.C.A. Section I334(b) provides that district courts have original but not exclusive jurisdiction over all civil proceedings arising under title II, or arising in or related to cases under title II. Moreover, 28 U.S.C.A. Section 1498(a) confers exclusive jurisdiction on the United States Court of Federal Claims over any patent infringement claims against the United States. The debtors would have this Court impermissibly retain exclusive jurisdiction over proposed future patent infringement litigation against the United States. Article XII, section 2 of the Plan provides for the retention of exclusive jurisdiction by the Bankruptcy Court to the greatest extent permitted by applicable law: to determine any and all motions, adversary proceedings, applications, and contested or litigated matters that may be pending on the Effective Date or that, pursuant to the Plan, may be instituted by the Liquidating Trustee or the Liquidating Trust after the Effective Date; provided, however, that the Liquidating Trustee and the Liquidating Trust shall reserve the right to commence collection actions, actions to recover receivables, and other similar actions in all appropriate jurisdictions. Article IV, section E(l)(d) ofthe Plan provides: The Confirmation Order shall state that without the permission of the Bankruptcy Court, no judicial, administrative, arbitration or other action or proceeding shall be commenced against FastShip, LLC in any forum other than the Bankruptcy Court.

Section 6.3 of the Amended Funding Agreement to Plan Supplement for Joint Liquidating Amended Plan ofFastShip, Inc., and its Subsidiaries Pursuant to Chapter 11 of the United States Bankruptcy Code ("Funding Agreement") (DE 118) provides: 6.3 FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANYOTHER PLAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE BANKRUPTCY COURT. THE PARTIES HERETO HEREBY EXPRESSLY AND IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE BANKRUPTCY COURT FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. THE PARTIES HERETO FUTHER IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF DELAWARE. THE PARTIES HERETO HEREBY EXPRESSLY AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BYLAW, ANY OBJECTION WHICH SUCH PARTY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. 4. The United States objects to Article XI, section Q ofthe Plan and section 6.6 of the Supplement to the extent the debtors are attempting to prospectively establish which laws will be applicable in future litigation against the United States. 5. The United States objects to Article XI, section F of the Plan to the extent the debtors seek prospective rulings on such issues as the applicability of privileges from the Bankruptcy Court, especially in the absence of a determination of the appropriate governing law. 6. The United States objects to Article II(A)(a) of the Plan to the extent the Plan purports to set an administrative claims bar date for taxes described in 11 U.S.C. Section 503(b)(l)(B) and (C) in violation of Section 503(b)(l)(D) ofthe Bankruptcy Code. 7. The United States objects to Article XI, section E of the Plan to the extent that it provides for the destruction of books and records in a way that is inconsistent with Federal Rules

of Civil Procedure and the Federal Rules ofEvidence. 8. The debtors filed their Funding Agreement and Plan Supplement for Joint Liquidating Amended Plan (DE 117) on June 21, 2012, two business days before the confirmation objection deadline. To date, the debtors have failed to file the proposed Confirmation Order referenced in the Plan. The United States reserves its rights to supplement and amend this objection upon further review of these documents.

WHEREFORE, United States respectfully requests that the Court deny confirmation of
the Plan and grant such other and further relief as the Court deems necessary and just.

CHARLES M. OBERLY, III United States Attorney

By: Is/ Ellen W Slights Ellen W. Slights Assistant United States Attorney Delaware State Bar No. 2782 1007 Orange Street, Suite 700 P.O. Box 2046 Wilmington, DE 19899-2046 Dated: June 25, 2012

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re: FASTSHIP, INC., et. al,

Chapter 11

Case No. 12-10968 (BLS)

Debtors.

Hearing Date: June 28,2012, at 10:00 AM Objections Due: June 25, 2012, at 4:00PM

AFFIDAVIT OF SERVICE I, Marie Steel, an employee in the Office of the United States Attorney for the District of Delaware, hereby attest under penalty of perjury that on June 25, 2012, a copy of the OBJECTION BY THE UNITED STATES TO THE DEBTORS' JOINT LIQUIDATING PLAN PURSUANT TO CHAPTER 11 OF THE BANKRUPTCY CODE was served, as indicated, upon: Raymond H. Lemisch, Esq. Jennifer E. Smith, Esq. BENESCH, FRIEDLANDER, COPLAN & ARONOFF LLP 222 Delaware Avenue, Suite 801 Wilmington, DE 19801 via facsimile (302) 442-7012 Office ofthe United States Trustee 844 King Street Suite 2207 Wilmington, DE 19801 via facsimile (302) 573-6497

Is/ Marie Steel

Marie Steel