WEBVTT

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Thank you. Please be seated All right, good afternoon.

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We're here on the three o 'clock docket. We have

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first -day matters set in the Hooters of America

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case, case number 25 -80078. I'll go ahead and

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take appearances. I'm going to start in the courtroom.

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This was noticed as a WebEx only hearing. Ms.

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O 'Neill was here all day in another matter and

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has asked for permission to... Walk over from

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the conference room where she was dealing with

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her other case to attend the first day. So I'll

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start with Miss O 'Neill Thank you honor Holly

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O 'Neill with the law firm of Foley and Lardner

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on behalf of the debtors and with me today Your

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honor is my colleague. Mr. Jones who's also probably

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worn out our welcome with the court today And

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also on Webex is our colleague Zach's on with

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Foley and Lardner Additionally, Your Honor, I'd

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like to introduce the court to our co -counsel

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with Ropes and Gray. There are quite a few folks

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today, and hopefully most will have an opportunity

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to present some motions for the court today.

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We've got Mr. Chris Dickerson, Mr. Ryan Dahl,

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Ramon Brown, Michael Wheat, Hiso Park, Alexis

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Ogurek, Maggie Toms, Regina Castilla, Lauren

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Knight, and Ben Wagner, all with the law firm

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of Robes and Gray. Additionally, Your Honor,

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with Accordion Partners, LLC, we have our proposed

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Chief Restructuring Officer, Mr. Keith Mabe,

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who is the Senior Managing Director with Accordion.

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We also have our proposed investment banker with

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Solic Capital Advisors, LLC, Mr. George Coutts

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and Nicholas. Pardon me, let me say that again.

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Kutsan Nicholas, who's a managing director with

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Solig. We also have various members of the management

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team of the debtors that are also joining us

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today. We appreciate the court's time. Thank

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you. All right. Welcome. All right. And for the

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rest of the appearances, I'm going to start by

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going down the electronic appearances that have

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been made. other than those that have already

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been announced, and I'll either go by party or

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firm. So why don't I start with the U .S. Trustee.

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Good afternoon, Your Honor. Asher Bulbic for

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the United States Trustee. All right. Province.

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Mr. Rosen, are you with us? All right, I'll go

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to drivetrain agency services, folks from Seward

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and Kissel. Yes, good afternoon, Your Honor.

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John Ashby of Seward and Kissel on behalf of

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the control party, drivetrain agency services.

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Good afternoon. All right, how about the folks

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at Cramer 11? You might be on mute. I don't hear

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anything yet from the Cramer 11 folks. All right,

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we'll come back to them. Hoot Al Restaurants.

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Good afternoon. Good afternoon. I'm Ken Butterfield.

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Ken Butterfield. Thank you. All right. Sorry.

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Somebody was talking over each other. So let

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me try again for Hoot Al Restaurants. Good afternoon,

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your honor Marcus help their Ben Butterfield

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for food owl restaurants All right, good afternoon

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And let me try again with somebody just speaking

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from the Kramer 11 firm I Know your honor this

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this is Ben Butterfield of Morrison and Worcester

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Representing good owl and pooters, Inc. They

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are the two members of the buyer All right, thank

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you. BPH Investments. Mr. Bednaz from BPH Investments

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All right, we'll go on Stanley Schwartz, Alabama

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LLC Yes, this is Lee Schwartz of Schwartz Ettinger.

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All right. MGDL properties. Ms. Prendergast,

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are you with us? Apologies, Your Honor. I think

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we were muted. All right. Thank you. Apologies,

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Your Honor. I think we were muted. Leigh Ann

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Prendergast on behalf of NGVL Properties with

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me is my colleague Dan McGuire of Pearson Ferdinand.

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Thank you. All right. Welcome. Bank of America.

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Good afternoon, your honor Kyle Hirsch the law

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firm of Ryan Cave Laten -Pasner representing

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Bank of America as depository institution Good

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afternoon. All right. How about the folks at

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Sidley? Good afternoon, your honor. Can you hear

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me your honor? Yes Juliana Hoffman from Sidley

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Austin on behalf of Salt Lake Master Fund LP

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as pre -petition lender and proposed dip lender

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today Also, on behalf of XYQ Cayman LTD or limited

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in its capacity as pre -petition or loan lender,

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and FFI Fund Limited, FYI Limited, and Oliphant

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Fund Limited as consenting level holders. And

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with me, Your Honor, is my colleague, Genevieve

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Weiner, and she is on video but was having some

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audio issues. She's also... dialed in by phone.

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All right, good afternoon. Good afternoon. All

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right, how about the White and Case folks? Good

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afternoon, Your Honor. Brian Pfeiffer from White

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and Case, joined with by my partner, Amanda Paracrist,

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and we are representing the ad hoc group of secured

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note holders in the case. All right, good afternoon.

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Good afternoon. Gray Reed. Good afternoon, Your

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Honor Lydia Webb of Gray Reed, also on behalf

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of the ad hoc group. All right, welcome. All

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right, I'm going down the list, the folks at

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Ballard Spar. Good afternoon, your honor Joel.

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Oh, sorry. Good afternoon, your honor Joel Newell

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with Valorant Spar appearing on behalf of Landlords

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Beltline and Grande LP Realty Income Corporation

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and Store Capital As Miss Highland just noted,

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she's also appearing telephonically All right,

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good afternoon All right, I'm going to go ahead

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and open it up. Have I missed any appearances

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on Webex? Good afternoon, Your Honor. Michael

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Reardon from Battelier Ramps on behalf of Bags

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of Living LLC. Good afternoon. Good afternoon,

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Your Honor. This is Duane Bresch of Clark Hill,

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representing Westchester Fire Insurance Company,

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Federal Insurance Company, the surety bond providers

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in this case. Good afternoon, Your Honor. Michelle

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Schryerow, and I'm here with my colleague, Will

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Doerward, and we represent Kimco Realty Corporation.

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Good afternoon, Your Honor. Good afternoon, Your

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Honor. Jeffrey Guttman here with Douglas Dinella,

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representing Palmer South Boulevard LLC. Good

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afternoon, Your Honor. Bruce Akerly of Akerly

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Law on behalf of Predator and PACA Trust Beneficiary,

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Benny Key's Pumping. Appearing with my colleague.

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To you, Your Honor. This is Nathan Coco from

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the law firm of Minslevin joined by my colleague,

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Keith Kohlmeier, and we represent Citibank N

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.A. as trustee and securities intermediary with

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respect to the pre petition secured notes in

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the aggregate amount of $350 million. Good afternoon,

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Your Honor. Vicki Driver here on behalf of a

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group of landlords, Four Corners Limited, Four

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Corners Limited Four, Four Corners Limited Nine,

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Four Corners Limited Fifteen, Four Corners Limited

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Sixteen, Wing Lord Limited, Drum Lord Limited,

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and the Audelia Group Partnership Limited. Good

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afternoon. Good afternoon, Your Honor. Go ahead.

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This is Sharon Knighton with the law firm of

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Linebarter, Gog and Blair and Sampson. I'm here

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representing several Avalor and property taxing

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entities in Texas. We are still researching our

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clients in this case, but so far I'm appearing

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on behalf of Bear County, Cameron County, Dallas

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County, Ector Tad, Fort Bend County, City of

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Frisco, Harris County Emergency Services District

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Number 11, Harris County Emergency Services District

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Number 28, City of Houston, Houston Community

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College System, Houston ISD. City of Humboldt,

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Irving ISD, Katy ISD, Lewisville ISD, Lone Star

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College System, Nueces County, City of Pasadena,

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San Marcos Consolidated Independent School District,

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City of Seabrook, and Tarrant County. Welcome.

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Good afternoon, Your Honor. This is Mark Stout

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with the Alphabet and I'm here representing Regents

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Facility Services. Afternoon. Good afternoon,

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Your Honor. This is Ashlyn Bernard, appearing

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on behalf of FTI Consulting. I am with Kramer

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Levin of Tallis and Frankel. I understand that

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you called us earlier. I apologize. I was having

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some technical difficulties. No worries. Thank

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you. Thank you. Good afternoon, Your Honor. Catherine

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Dunn from Chase -Brunberg and Friedman, representing

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MCL Properties LLC. Alright, welcome. Alright,

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last call for appearances. All right. Before

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I turn it over to the debtors, I'll just let

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everybody know I've signed a lot of Prohok Vichy

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orders. If you have filed an application on motion

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and I haven't signed the order yet, not to worry.

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Everybody's welcome. The orders will be signed

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either today or tomorrow. So with that, I'll

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turn it over to the debtors. Thank you, Your

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Honor. Again, Holly O 'Neill on behalf of the

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debtors. Your Honor, as the Court is aware, on

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March 31st, Hooters of America LLC filed, along

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with 15 of its affiliated entities, have filed

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bankruptcy. And we've got approximately, I'm

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sorry, we have 30 affiliated entities and we've

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got 15 first day pleadings to go through today.

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For the sake of simplicity, we'll go through

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the motions effectively one at a time. and all

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of the first day motions will be handled by our

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colleagues at Ropes and Gray. The donors have

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worked with our noticing agent, Kroll, to do

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our level best to get as much notice out as possible,

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recognizing this is a shortened notice period,

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but it is for first day motions, which are obviously

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critical to the operation of the business. In

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conjunction with QRL, the debtors served the

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voluntary petition, the first day motions, agendas

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and notice of hearing were served out yesterday

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on April 1st to the obviously United States trustee,

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the top 30 unsecured creditors, the secure creditors,

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as well as ad hoc group of note holders, et cetera,

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a myriad of folks in that the certificate of

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service for that for that notice is at docket

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number 72. Since filing the motions, the debtors

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have been in open and ongoing discussions with

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the DIP lender, the United States trustee's office,

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and other parties regarding the first day matters.

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The debtors believe that with the extensive service

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provided by the claims agent, the limited interim

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relief requested today is warranted and that

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the notice was adequate. and with all rights

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reserved for final relief, of course, and we

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believe that good and sufficient cause has been

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established to proceed today with the relief

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requested. Additionally, Your Honor, just for

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the record, we want to, Crowell, our noticing

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agent, has set up a website and that, so that

00:17:47.299 --> 00:17:51.460
parties can retrieve pleadings and other information

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related to the case. That website is at cases

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.ra .krull .com, backslash pooters, H -O -O -T

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-E -R -S. Obviously, pleadings can be downloaded

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from that site free of charge. Before moving

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to the agenda, and by the way, Your Honor, in

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fact, as we started the hearing, an updated amended

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agenda was filed at docket number 84. Before

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we start moving through the agenda and the first

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day motions, we'd like to get a little housekeeping

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out of the way in terms of presenting some of

00:18:32.440 --> 00:18:36.319
the declarations in support of the various motions

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that are set for today. We did file a witness

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and exhibit list. That's at docket number 45.

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Your Honor, exhibit one is the declaration of

00:18:48.599 --> 00:18:51.220
Keith Mabe, our chief restructuring officer of

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the debtors. in support of the debtors chapter

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11 petitions and first day motions. That is at

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docket number 19. Exhibit number 2 is another

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declaration of Mr. Mabe in support of the debtors

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emergency motion for interim and final orders

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authorizing the debtors to obtain post -petition

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financing and use cash collateral, granting liens,

00:19:14.869 --> 00:19:17.269
and providing claims in super priority administrative

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expense status, modifying the automatic stay,

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scheduling a final hearing and granting related

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relief. That declaration was at docket number

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17. The next declaration that was filed is the

00:19:31.339 --> 00:19:36.759
declaration of George Koutsan Nicholas in support

00:19:36.759 --> 00:19:39.319
of the debtor's emergency motion for interim

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and final orders authorizing the debtors to obtain

00:19:42.380 --> 00:19:45.559
post -petition financing. and use cash collateral,

00:19:45.880 --> 00:19:48.559
granting liens and providing claims with super

00:19:48.559 --> 00:19:51.599
priority administrative expense status, modifying

00:19:51.599 --> 00:19:54.240
the automatic stay, scheduling a final hearing,

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and granting related relief. And that declaration

00:19:57.740 --> 00:20:02.339
is at docket number 18. Additionally, we have

00:20:02.339 --> 00:20:05.259
the declaration of Mr. Benjamin Steele in support

00:20:05.259 --> 00:20:07.980
of the debtor's application for appointment of

00:20:07.980 --> 00:20:11.750
Kroll Restructuring Administration, LLC. as the

00:20:11.750 --> 00:20:14.589
debtor's claims noticing and solicitation agent.

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And I believe that is filed at docket number

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5 -2. The first day declaration as our first

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exhibit today contains a detailed description

00:20:27.789 --> 00:20:31.150
of the debtors, their operations, the nature

00:20:31.150 --> 00:20:34.430
of the current financial distress that the debtors

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find themselves in. the need to file these cases

00:20:37.380 --> 00:20:41.019
in the specific support for each of the first

00:20:41.019 --> 00:20:44.519
day motions. I will mention, Your Honor, Mr.

00:20:44.740 --> 00:20:46.859
Chris Dickerson of Ropes and Gray does have a

00:20:46.859 --> 00:20:50.599
presentation. I'll hand off to him shortly, but

00:20:50.599 --> 00:20:54.180
to give the Court a better overview of the cases,

00:20:54.599 --> 00:20:59.299
of the debtors in the cases. Your Honor, at this

00:20:59.299 --> 00:21:04.670
time we would ask, just as a... precursor in

00:21:04.670 --> 00:21:09.329
support of the various motions that those declarations

00:21:09.329 --> 00:21:13.329
be admitted into the record. All right, so my

00:21:13.329 --> 00:21:16.549
practice is to swear the declarants in. It won't

00:21:16.549 --> 00:21:20.630
take long. If Mr. Mabe is handy, I'll just start

00:21:20.630 --> 00:21:23.710
with him. Mr. Mabe, can you hear the court? I

00:21:23.710 --> 00:21:27.849
can, Your Honor. All right. All right, I see

00:21:27.849 --> 00:21:31.180
you. If you'll raise your right hand. You swear

00:21:31.180 --> 00:21:33.259
or affirm that the testimony you're about to

00:21:33.259 --> 00:21:36.200
give through your declaration or otherwise is

00:21:36.200 --> 00:21:38.940
the truth the whole truth and Nothing but the

00:21:38.940 --> 00:21:41.420
truth so help you God if so, please say I do

00:21:41.420 --> 00:21:44.980
I Do all right, and I've seen your declarations.

00:21:44.980 --> 00:21:48.839
Do you have anything to add or change about them?

00:21:51.420 --> 00:21:55.099
All right, and then any objections to the admission

00:21:55.099 --> 00:21:58.279
of exhibits one and two the declarations of mr.

00:21:58.420 --> 00:22:09.349
Mabe All right, those are admitted. And I'll

00:22:09.349 --> 00:22:13.150
switch to Mr. Koutse Nicholas. I hope I haven't

00:22:13.150 --> 00:22:17.849
butchered your name. You can hear me? Yes, I

00:22:17.849 --> 00:22:20.789
can, Your Honor. All right. If you can raise

00:22:20.789 --> 00:22:24.130
your right hand, I'll swear you in. Do you swear

00:22:24.130 --> 00:22:26.089
or affirm that the testimony that you're about

00:22:26.089 --> 00:22:28.630
to give through your declaration or otherwise

00:22:28.630 --> 00:22:30.869
is the truth, the whole truth, and nothing but

00:22:30.869 --> 00:22:33.650
the truth? So help you God. If so, please say

00:22:33.650 --> 00:22:38.369
I do. All right any changes or additions to your

00:22:38.369 --> 00:22:43.549
declaration All right, thank you all right any

00:22:43.549 --> 00:22:47.930
objections to admission of exhibit number three

00:22:47.930 --> 00:22:54.230
All right, so three is also admitted together

00:22:54.230 --> 00:22:57.210
with one and two and then mr. Steele are you

00:22:57.210 --> 00:23:01.750
with us? Yes, all right if you'll raise your

00:23:01.750 --> 00:23:05.160
right hand Do you swear or affirm that the testimony

00:23:05.160 --> 00:23:07.259
that you're about to give through your declaration

00:23:07.259 --> 00:23:10.759
or otherwise is the truth, the whole truth, and

00:23:10.759 --> 00:23:12.799
nothing but the truth, so help you God. If so,

00:23:12.920 --> 00:23:15.900
please say I do. I do. All right. Any changes

00:23:15.900 --> 00:23:19.019
or additions to your declaration? No, Your Honor.

00:23:19.380 --> 00:23:22.680
All right. Thank you. Anybody object to admitting

00:23:22.680 --> 00:23:30.640
exhibit number five? All right. Five is admitted.

00:23:32.329 --> 00:23:35.730
Thank you, Your Honor. The debtors otherwise

00:23:35.730 --> 00:23:38.150
filed a witness and exhibit list at docket number

00:23:38.150 --> 00:23:45.009
45. And those have a myriad of exhibits. Mr.

00:23:46.269 --> 00:23:48.609
Jones just showed me that an additional revised

00:23:48.609 --> 00:23:51.410
proposed interim dip order has been filed at

00:23:51.410 --> 00:23:56.329
docket number 83 -1 as well. We would move to

00:23:56.329 --> 00:24:01.319
have those exhibits admitted. for purposes of

00:24:01.319 --> 00:24:04.480
proceeding with the motions. They also are supported

00:24:04.480 --> 00:24:08.799
by the declarations. So that's exhibits 4 and

00:24:08.799 --> 00:24:14.660
then 6 through 18. We'll start with those. Any

00:24:14.660 --> 00:24:29.400
objections to 4 or 6 through 18? Those are admitted

00:24:29.400 --> 00:24:34.880
and the the red line Miss O 'Neill at 8 docket

00:24:34.880 --> 00:24:39.380
85. It appears to be docket 83 -1. I'm sorry

00:24:39.380 --> 00:24:52.940
And that is the revised proposed interim dip

00:24:52.940 --> 00:24:57.759
order and then 85 okay 85 is the red line That's

00:24:57.759 --> 00:25:05.700
correct. Okay. So we can just admit 83? You're

00:25:05.700 --> 00:25:10.519
offering the document of docket 83? Within docket

00:25:10.519 --> 00:25:13.539
number 83, Your Honor, is the, just so all parties,

00:25:13.819 --> 00:25:16.579
it's a lengthy document. So at docket number

00:25:16.579 --> 00:25:19.500
83, the revised proposed dip order, you can find

00:25:19.500 --> 00:25:28.200
the dip budget at page number 267 of 427. So

00:25:28.200 --> 00:25:30.559
there's a placeholder on the witness and exhibit

00:25:30.559 --> 00:25:32.180
list for the dead budget, and that's where it's

00:25:32.180 --> 00:25:37.380
located. All right. Any objections to admission

00:25:37.380 --> 00:25:42.539
of that document? All right. That's admitted

00:25:42.539 --> 00:25:45.559
as well. Thank you, Your Honor. And with that,

00:25:45.579 --> 00:25:49.079
I see Mr. Dickerson, and I will hand off to my

00:25:49.079 --> 00:25:51.220
co -counsel at Ropes and Rick Gray, Mr. Chris

00:25:51.220 --> 00:25:56.880
Dickerson. Thank you. All right. Thank you. Thank

00:25:56.880 --> 00:25:58.920
you, Your Honor. Chris Dickerson from Ropes and

00:25:58.920 --> 00:26:00.980
Gray on behalf of the debtors. Can you hear me

00:26:00.980 --> 00:26:04.539
okay? Yes, I can. Thank you. I'm getting a little

00:26:04.539 --> 00:26:07.200
bit of an echo. I think someone may not be muted,

00:26:07.240 --> 00:26:10.400
but I'll proceed if you can hear me okay. Yeah,

00:26:10.400 --> 00:26:12.839
I can hear you, and there's no... I don't hear

00:26:12.839 --> 00:26:19.339
any echoes on my end. Great. Thank you. As Ms.

00:26:19.759 --> 00:26:21.539
O 'Neill described... Your honor, I have a very

00:26:21.539 --> 00:26:23.380
short PowerPoint that will hopefully provide

00:26:23.380 --> 00:26:25.539
you and other interested parties some information

00:26:25.539 --> 00:26:27.960
about the company, how it got here, and where

00:26:27.960 --> 00:26:31.220
we hope that it will be going. We have filed

00:26:31.220 --> 00:26:35.240
this presentation as a demonstrative on the docket.

00:26:35.480 --> 00:26:39.559
It's docket number 74. All right. Thank you.

00:26:40.079 --> 00:26:43.480
If we could go to the next page. Is that me?

00:26:45.779 --> 00:26:51.230
If I can do this. Your honor as indicated we

00:26:51.230 --> 00:26:53.869
are here on behalf of Hooters who's been in business

00:26:53.869 --> 00:26:58.869
since 1983 and operates a number of restaurants

00:26:58.869 --> 00:27:01.730
that provide world -class chicken wings beer

00:27:01.730 --> 00:27:14.369
and sports entertainment among other things As

00:27:14.369 --> 00:27:17.690
I said, founded in 1983, there are 151 company

00:27:17.690 --> 00:27:21.910
-owned stores, 154 franchises outside of the

00:27:21.910 --> 00:27:24.710
company, and then they have three franchises,

00:27:24.990 --> 00:27:27.890
or what are known as hoots, which are primarily

00:27:27.890 --> 00:27:30.809
to -go chicken wing restaurants that compete

00:27:30.809 --> 00:27:34.109
with Wing Stop and other similar ideas. Their

00:27:34.109 --> 00:27:35.829
headquarters is in Atlanta, Georgia, although

00:27:35.829 --> 00:27:38.549
we do have, amongst the debtors, there are three

00:27:38.549 --> 00:27:44.920
Texas entities. They have approximately 5 ,957

00:27:44.920 --> 00:27:49.339
employees, 101 ,945 of which are full -time,

00:27:49.420 --> 00:27:52.579
and then the remainder are part -time. As you

00:27:52.579 --> 00:27:56.240
can see there, the performance revenue for the

00:27:56.240 --> 00:28:00.740
debtors is $381 .5 million, with an EBITDA last

00:28:00.740 --> 00:28:12.430
year of $15 .3 million. Your Honor, the Primary

00:28:12.430 --> 00:28:14.970
reason we're here is the need to reconfigure

00:28:14.970 --> 00:28:19.789
the company to balance its to address its balance

00:28:19.789 --> 00:28:24.569
sheet and address the increased costs and As

00:28:24.569 --> 00:28:26.609
compared to its revenue so that it can continue

00:28:26.609 --> 00:28:30.980
to operate on a go -forward basis You can see

00:28:30.980 --> 00:28:33.900
the breakdown here on the slide of the revenue

00:28:33.900 --> 00:28:36.400
from each side. And as you will see that while

00:28:36.400 --> 00:28:38.640
it makes significant franchise and license agreement

00:28:38.640 --> 00:28:41.640
revenue, approximately 23 million, the majority

00:28:41.640 --> 00:28:44.319
of its revenue is through the operation of those

00:28:44.319 --> 00:28:54.599
154 company owned restaurants. Just a quick overview

00:28:54.599 --> 00:28:59.579
in the United States. You can see the red. I'm

00:28:59.579 --> 00:29:02.500
not sure what to call that symbol, but the red

00:29:02.500 --> 00:29:05.779
dots are where company -owned stores are located,

00:29:05.880 --> 00:29:08.940
and the orange ones are where the franchise -owned

00:29:08.940 --> 00:29:11.059
stores are located. So it really is a coast -to

00:29:11.059 --> 00:29:17.599
-coast operation. It's also a global operation.

00:29:18.480 --> 00:29:21.259
These are the locations of franchisees. They

00:29:21.259 --> 00:29:24.619
all are franchisees outside of the United States.

00:29:29.230 --> 00:29:31.410
Quickly, Your Honor, as I mentioned previously,

00:29:31.789 --> 00:29:34.410
these are the debtor entities, those 30 of them.

00:29:35.049 --> 00:29:40.089
The ones that are colored in orange are non -securitization

00:29:40.089 --> 00:29:42.750
entities, and which you'll find will be called

00:29:42.750 --> 00:29:46.490
the manager entities throughout these proceedings.

00:29:47.109 --> 00:29:49.910
And then the ones in blue are the securitization

00:29:49.910 --> 00:29:54.130
entities. This is an important aspect of the

00:29:54.130 --> 00:29:58.150
cases, Your Honor. Securitization is a whole

00:29:58.150 --> 00:30:02.509
company securitization and it pledges all of

00:30:02.509 --> 00:30:05.390
the debtor's assets essentially to the securitization.

00:30:06.369 --> 00:30:09.170
The manager entities simply provide management

00:30:09.170 --> 00:30:13.329
services to the restaurants and to the securitization

00:30:13.329 --> 00:30:16.869
itself while those restaurants are being operated.

00:30:17.869 --> 00:30:21.609
So the only collateral assets that are owned

00:30:21.609 --> 00:30:24.170
by the non -securitization entities, those manager

00:30:24.170 --> 00:30:28.099
entities, would be the right to payments from

00:30:28.099 --> 00:30:33.900
the services that they provide. Governor, this

00:30:33.900 --> 00:30:36.339
is a quick overview, which will be discussed

00:30:36.339 --> 00:30:38.220
in a little more detail as we go through some

00:30:38.220 --> 00:30:41.880
of the motions, specifically the DIP, that shows

00:30:41.880 --> 00:30:47.859
what the debt structure of the debtors are. You'll

00:30:47.859 --> 00:30:50.940
see there's a manager advance loan, another amendment

00:30:50.940 --> 00:30:54.640
loan, term loans. and then those indentures that

00:30:54.640 --> 00:30:58.519
have been described before, that number of 306

00:30:58.519 --> 00:31:01.519
does not include interest, so it's likely a little

00:31:01.519 --> 00:31:11.319
bit larger. As to how we got here, Your Honor,

00:31:11.539 --> 00:31:14.220
I described that briefly before, but here's a

00:31:14.220 --> 00:31:17.920
little more detail. Obviously, COVID was a very

00:31:17.920 --> 00:31:20.660
difficult event for all kinds of retail operations,

00:31:20.779 --> 00:31:26.440
especially dining. operations, and Hooters is

00:31:26.440 --> 00:31:29.759
no exception. In addition to that, given the

00:31:29.759 --> 00:31:32.740
current economic situation in the United States

00:31:32.740 --> 00:31:37.500
and abroad, the debtors were faced with rising

00:31:37.500 --> 00:31:42.700
labor costs, costs of food and other items. consumer

00:31:42.700 --> 00:31:45.279
demand for casual dining in general, because

00:31:45.279 --> 00:31:49.799
as the economy had softened, there was less free

00:31:49.799 --> 00:31:53.400
liquidity for families or others to go out to

00:31:53.400 --> 00:31:56.519
casual dining restaurants. In addition, I think

00:31:56.519 --> 00:31:58.839
as everyone is aware, and Your Honor is undoubtedly

00:31:58.839 --> 00:32:01.759
aware, the lease obligations that were entered

00:32:01.759 --> 00:32:05.599
into pre -COVID have now become a little bit

00:32:05.599 --> 00:32:10.779
out of market and difficult to maintain. In addition,

00:32:13.089 --> 00:32:16.990
The cost associated with the debt that was described

00:32:16.990 --> 00:32:19.589
on the previous slide has become a significant

00:32:19.589 --> 00:32:24.130
drain on the ability of the company, the company's

00:32:24.130 --> 00:32:26.630
liquidity position. As I said, approximately

00:32:26.630 --> 00:32:31.430
$376 million in funded debt. They have $19 million

00:32:31.430 --> 00:32:34.089
in debt service obligations coming due in 2025,

00:32:34.769 --> 00:32:37.309
including interest payments that were coming

00:32:37.309 --> 00:32:40.910
due here in May of $3 .9 million. In addition,

00:32:41.049 --> 00:32:43.950
there is another obligation that undoubtedly

00:32:43.950 --> 00:32:46.809
will be described in more detail as these cases

00:32:46.809 --> 00:32:49.970
proceed, which is a lags royalty obligation.

00:32:56.549 --> 00:32:59.640
As the company began to... recognize that it

00:32:59.640 --> 00:33:02.880
needed to restructure its balance sheet and if

00:33:02.880 --> 00:33:04.599
it wanted to be able to continue to operate on

00:33:04.599 --> 00:33:07.200
a go -forward basis it did take a number of steps

00:33:07.200 --> 00:33:10.440
to try to deal with that situation both outside

00:33:10.440 --> 00:33:12.799
of court and then ultimately will lead to the

00:33:12.799 --> 00:33:16.480
decision to restructure inside of a chapter 11

00:33:16.480 --> 00:33:22.279
proceeding. Highlighted on this slide are some

00:33:22.279 --> 00:33:24.740
improvements or excuse me operational improvements

00:33:24.740 --> 00:33:27.819
that were undertaken in the last year in 2024.

00:33:28.250 --> 00:33:31.009
primarily the closing of 48 underperforming stores.

00:33:31.609 --> 00:33:34.430
And then they entered into a new line of business

00:33:34.430 --> 00:33:37.369
in which they manufactured, supplied, and distributed

00:33:37.369 --> 00:33:40.210
Hooters branded frozen meals to grocery stores

00:33:40.210 --> 00:33:46.690
around the country. As the debtors realized that

00:33:46.690 --> 00:33:49.250
those... steps alone weren't going to be sufficient

00:33:49.250 --> 00:33:52.630
to address its balance sheet issues. It did engage

00:33:52.630 --> 00:33:55.690
other advisors, including my firm, Rips and Gray.

00:33:56.309 --> 00:34:00.910
Accordion, who you've heard is the proposed chief

00:34:00.910 --> 00:34:03.170
restructuring officer and financial advisor to

00:34:03.170 --> 00:34:05.630
the company. And then the proposed investment

00:34:05.630 --> 00:34:10.090
banker, Solik, was retained, engaged by the company

00:34:10.090 --> 00:34:14.579
in 2024. In addition to that, the board appointed

00:34:14.579 --> 00:34:19.199
an independent experienced fiduciary to the Board

00:34:19.199 --> 00:34:23.039
of Managers, Mr. Adam Paul. Mr. Paul is on the

00:34:23.039 --> 00:34:26.280
WebEx today. And they formed a special committee

00:34:26.280 --> 00:34:30.659
at the parent company on the Board of Managers

00:34:30.659 --> 00:34:33.420
in order to facilitate an independent review

00:34:33.420 --> 00:34:37.000
of the strategic alternatives that the companies

00:34:37.000 --> 00:34:41.039
were. and they delegated all authority regarding

00:34:41.039 --> 00:34:43.380
those transactions to that special committee.

00:34:43.639 --> 00:34:45.559
That special committee is a committee of one

00:34:45.559 --> 00:34:53.340
Mr. Paul. In conjunction with Mr. Paul and the

00:34:53.340 --> 00:34:56.320
advisors, the company then entered into discussions

00:34:56.320 --> 00:35:01.019
regarding its liquidity position and in an attempt

00:35:01.019 --> 00:35:03.880
to try to deal that on an out -of -court basis

00:35:03.880 --> 00:35:07.320
arranged to have Certain funds which are described

00:35:07.320 --> 00:35:09.719
here at the at the bottom released and provided

00:35:09.719 --> 00:35:15.139
to the company for liquidity purposes that totals

00:35:15.139 --> 00:35:18.739
approximately 15 million dollars that did provide

00:35:18.739 --> 00:35:21.500
some runway and allow the company to negotiate

00:35:21.500 --> 00:35:24.800
with other stakeholders to try to reach an out

00:35:24.800 --> 00:35:27.920
-of -court resolution, but as described previously

00:35:27.920 --> 00:35:33.000
that was only a Band -aid with respect to being

00:35:33.000 --> 00:35:37.179
able to get the issues addressed in a more holistic

00:35:37.179 --> 00:35:49.280
manner. As I said, the company and its advisors

00:35:49.280 --> 00:35:52.340
entered into discussions with various stakeholders

00:35:52.340 --> 00:35:57.239
and potential transaction parties. Solik leading

00:35:57.239 --> 00:36:00.420
that charge and they engaged with more than 95

00:36:00.420 --> 00:36:04.340
parties. 38 NDAs were executed. They had extensive

00:36:04.340 --> 00:36:08.019
diligence calls and explored the market in a

00:36:08.019 --> 00:36:13.079
very fulsome manner. In March of this year, they

00:36:13.079 --> 00:36:15.619
successfully drove a consensus among the pre

00:36:15.619 --> 00:36:18.480
-petition lenders, those term loan lenders, the

00:36:18.480 --> 00:36:21.780
ad hoc group of note holders, and a potential

00:36:21.780 --> 00:36:25.760
buyer. That buyer, as mentioned before, is two

00:36:25.760 --> 00:36:30.460
current franchisees, including a group that is

00:36:31.229 --> 00:36:36.150
made up of the original owners and founders of

00:36:36.150 --> 00:36:39.289
Hooters who have been involved in the business

00:36:39.289 --> 00:36:46.889
since 1983. The process led to what I would say

00:36:46.889 --> 00:36:49.869
is a somewhat remarkable success. The company

00:36:49.869 --> 00:36:52.690
is entering into Chapter 11 with a restructuring

00:36:52.690 --> 00:36:56.030
support agreement that has 100 % of the term

00:36:56.030 --> 00:37:00.260
loan lender's support. 100 % of the manager advance

00:37:00.260 --> 00:37:04.219
loan party's support, and holders of approximately

00:37:04.219 --> 00:37:09.460
94 % of the securitization note holders. The

00:37:09.460 --> 00:37:14.000
RSA has been filed. It's an exhibit to the DIP

00:37:14.000 --> 00:37:15.940
credit agreement, which was filed as part of

00:37:15.940 --> 00:37:18.719
the DIP order. So that is available for parties

00:37:18.719 --> 00:37:28.380
to review as well. That's how we got here your

00:37:28.380 --> 00:37:30.860
honor where we're trying to go is that we are

00:37:30.860 --> 00:37:33.340
we would like to emerge on a fairly rapid timeline

00:37:33.340 --> 00:37:36.940
And currently that's expected to be about three

00:37:36.940 --> 00:37:40.019
months as I said, we have the support of all

00:37:40.019 --> 00:37:43.579
of the debtors major constituencies and what

00:37:43.579 --> 00:37:47.119
that process will entail will be a plan process

00:37:47.119 --> 00:37:50.139
that will transition the company from company

00:37:50.139 --> 00:37:54.639
owned stores to purely franchise model they will

00:37:54.639 --> 00:37:58.670
in fact through the plan selling those 154 stores,

00:37:59.230 --> 00:38:02.449
well, hopefully all 154 stores, but a significant

00:38:02.449 --> 00:38:05.989
portion in excess of 100 of them are already

00:38:05.989 --> 00:38:09.010
contemplated to be transitioned and operated

00:38:09.010 --> 00:38:14.809
by franchisees as part of the new company. In

00:38:14.809 --> 00:38:18.690
order to allow that, the term loan, the pre -petition

00:38:18.690 --> 00:38:21.210
term loan lenders have agreed to provide a dip

00:38:21.210 --> 00:38:24.590
in the amount of $35 million of new money. A

00:38:24.590 --> 00:38:30.750
small portion of the previous expended or provided

00:38:30.750 --> 00:38:33.949
term loan, the amount of 5 million, is being

00:38:33.949 --> 00:38:37.630
rolled up under that facility. But that will

00:38:37.630 --> 00:38:39.889
be described in more detail when we present the

00:38:39.889 --> 00:38:45.530
dip motion. The RSA also includes customary planned

00:38:45.530 --> 00:38:48.389
support covenants and also a customary fiduciary

00:38:48.389 --> 00:38:50.320
out. To the extent that there are other parties

00:38:50.320 --> 00:38:52.679
there that we hadn't identified previously who

00:38:52.679 --> 00:38:55.539
would like to come participate in a process that's

00:38:55.539 --> 00:38:57.940
more value -maximizing for the debtors, we are

00:38:57.940 --> 00:39:03.059
more than willing to entertain that interest,

00:39:03.579 --> 00:39:06.079
and the other parties in interest here recognize

00:39:06.079 --> 00:39:08.380
that that fiduciary out is a very important part

00:39:08.380 --> 00:39:13.639
of this process. With more specificity, Your

00:39:13.639 --> 00:39:18.619
Honor, the RSA does include milestones. Here's

00:39:18.619 --> 00:39:21.559
a quick overview of them, but as you'll see that

00:39:21.559 --> 00:39:24.179
we're looking to try to have the plan effective

00:39:24.179 --> 00:39:28.019
by the end of June. That obviously puts a lot

00:39:28.019 --> 00:39:31.300
of pressure on us to make sure that we get our

00:39:31.300 --> 00:39:34.199
work done, and also it's obviously subject to

00:39:34.199 --> 00:39:36.699
the requirements of the bankruptcy code and the

00:39:36.699 --> 00:39:39.980
availability of the court in order to allow us

00:39:39.980 --> 00:39:44.780
to meet all these milestones. aspirational but

00:39:44.780 --> 00:39:46.920
we do intend to keep to them as much as we possibly

00:39:46.920 --> 00:39:50.760
can and we hope to not be in bankruptcy any longer

00:39:50.760 --> 00:39:53.219
than we have to because that's as everyone knows

00:39:53.219 --> 00:39:55.619
is a very expensive proposition and we would

00:39:55.619 --> 00:39:58.659
like to get the balance sheet fixed and get the

00:39:58.659 --> 00:40:03.059
Hooters restaurants back on into out of bankruptcy

00:40:03.059 --> 00:40:10.349
and operating as a successful enterprise. A little

00:40:10.349 --> 00:40:12.469
more detail on the dip financing, which again

00:40:12.469 --> 00:40:17.730
will be described in even more detail with the

00:40:17.730 --> 00:40:20.210
presentation of the dip motion. As I said, the

00:40:20.210 --> 00:40:22.349
pre -petition, the lender is a pre -petition

00:40:22.349 --> 00:40:25.269
manager advance lender. And I think I'll stop

00:40:25.269 --> 00:40:28.690
for just a second because I've been using a word

00:40:28.690 --> 00:40:31.489
and then a phrase that is very important to these

00:40:31.489 --> 00:40:33.769
cases, but I think sometimes needs a little bit

00:40:33.769 --> 00:40:38.130
of explanation. The first is manager. As I said,

00:40:38.289 --> 00:40:45.050
the... Non -securitization entities are in effect

00:40:45.050 --> 00:40:48.050
the manager of all the company -owned stores.

00:40:48.969 --> 00:40:54.730
They provide the contracts for the food. They

00:40:54.730 --> 00:40:56.989
make sure that the stores are stocked correctly.

00:40:57.070 --> 00:41:00.010
They make sure that employee wages and insurance

00:41:00.010 --> 00:41:02.889
and all the things that an overall manager of

00:41:02.889 --> 00:41:06.610
a restaurant operation would provide. And so

00:41:06.610 --> 00:41:11.900
that is... they receive a management fee for

00:41:11.900 --> 00:41:16.219
those services. As I said, as well, it does not,

00:41:16.800 --> 00:41:20.360
those entities do not have any other assets other

00:41:20.360 --> 00:41:25.539
than goodwill and their overall expertise. The

00:41:25.539 --> 00:41:28.800
other important phrase that I've been using is

00:41:28.800 --> 00:41:34.900
the manager advance. The pre -petition loans

00:41:34.900 --> 00:41:40.599
were conducted as manager advances. And a manager

00:41:40.599 --> 00:41:45.159
advance is a creature or a function of most securitizations

00:41:45.159 --> 00:41:49.000
that are dealing with businesses of this type.

00:41:51.019 --> 00:41:54.480
In short, a manager advancement as a safety measure,

00:41:55.119 --> 00:41:58.320
which is put in place in the securitization indenture

00:41:58.320 --> 00:42:01.980
to address any liquidity shortfalls that the

00:42:01.980 --> 00:42:06.019
securitization entities might have. The expectation

00:42:06.380 --> 00:42:09.539
originally is always that the amount of the management

00:42:09.539 --> 00:42:12.679
fee and other liquidity that the manager has

00:42:12.679 --> 00:42:16.940
has been provided by the securitization entities

00:42:16.940 --> 00:42:20.079
is sufficient to pay for those costs incurred

00:42:20.079 --> 00:42:23.239
by the securitization entities, but that is not

00:42:23.239 --> 00:42:31.079
always the case. In order to cover that shortfall,

00:42:31.340 --> 00:42:33.820
the manager will undertake what is called the

00:42:33.820 --> 00:42:37.099
manager advance and use its own funds to pay

00:42:37.099 --> 00:42:39.400
for the outstanding securitization expenses.

00:42:41.300 --> 00:42:44.300
The indenture then allows for repayment of those

00:42:44.300 --> 00:42:47.219
advances to be placed at the top of the payment

00:42:47.219 --> 00:42:51.440
waterfall, the use of the funds that are received

00:42:51.440 --> 00:42:55.019
by the manager on behalf of both the company

00:42:55.019 --> 00:42:58.260
-owned stores and the franchise fees. and in

00:42:58.260 --> 00:43:01.719
effect primes all other amounts until those advances

00:43:01.719 --> 00:43:05.480
are repaid. This structure in the waterfall that

00:43:05.480 --> 00:43:08.440
existed pre -petition will continue during the

00:43:08.440 --> 00:43:10.079
bankruptcy proceedings, and as you will hear

00:43:10.079 --> 00:43:12.039
shortly when the dip motion is presented, is

00:43:12.039 --> 00:43:13.920
the basis upon which the dip credit agreement

00:43:13.920 --> 00:43:17.579
is founded. In other words, the dip is being

00:43:17.579 --> 00:43:19.900
treated as a manager advance and will move to

00:43:19.900 --> 00:43:25.420
the top of the waterfall per the indenture as

00:43:25.420 --> 00:43:28.030
a permitted current. pre -petition by the indenture,

00:43:28.150 --> 00:43:33.150
and we'll keep that structure in place. Back

00:43:33.150 --> 00:43:35.389
to the dip financing, Your Honor. I'll leave

00:43:35.389 --> 00:43:38.650
most of this to my colleague, Mr. Brown, who

00:43:38.650 --> 00:43:41.250
will be presenting the dip later, but I just

00:43:41.250 --> 00:43:44.550
want to emphasize the last note there is that

00:43:44.550 --> 00:43:46.789
without the dip facility, the company will not

00:43:46.789 --> 00:43:48.610
possess sufficient liquidity to administer these

00:43:48.610 --> 00:43:51.409
Chapter 11 cases and would be forced to likely

00:43:51.409 --> 00:43:57.769
convert to Chapter 7 without that relief. Lastly,

00:43:57.869 --> 00:44:00.550
Your Honor, I know we spent a fair amount of

00:44:00.550 --> 00:44:03.269
time at the beginning of the case to identify

00:44:03.269 --> 00:44:05.590
the various parties. I thought I would do that

00:44:05.590 --> 00:44:08.989
quickly just so that you can understand who's

00:44:08.989 --> 00:44:11.409
talking at what time and who they represent,

00:44:11.570 --> 00:44:15.929
as there are a number of parties, as you already

00:44:15.929 --> 00:44:19.050
saw when we went through appearances. The company

00:44:19.050 --> 00:44:22.510
management team, the CEO is Mr. Sal Melli, the

00:44:22.510 --> 00:44:26.719
CFO is Mr. Ms. campaign, and as mentioned previously,

00:44:27.099 --> 00:44:29.340
the CRO and our first data client is Mr. Mabe,

00:44:29.440 --> 00:44:32.340
Mr. Keith Mabe. Debtors, professionals, my firm,

00:44:32.480 --> 00:44:36.139
Ropes and Gray, our co -counsel, Folane Lardner.

00:44:36.559 --> 00:44:40.059
Accordion is the financial advisor. Kroll is

00:44:40.059 --> 00:44:43.320
the proposed claims and noticing agent. Solik

00:44:43.320 --> 00:44:46.380
is the investment banker, proposed investment

00:44:46.380 --> 00:44:49.420
banker, and C Street Advisory is our PR firm.

00:44:50.480 --> 00:44:52.400
The independent manager is the securitization

00:44:52.400 --> 00:44:57.889
debtors. Those entities that were not part of

00:44:57.889 --> 00:45:00.929
the manager is the law firm of Goldberg Cone.

00:45:03.429 --> 00:45:06.269
The pre -petition term lender, the manager advance

00:45:06.269 --> 00:45:08.789
lender, and the dip lender is represented by

00:45:08.789 --> 00:45:11.789
Sidley and Hula Hanloki as their financial advisor.

00:45:13.090 --> 00:45:17.150
The 94 % of the security certification note holders

00:45:17.150 --> 00:45:19.969
is represented by White and Case and M3 Partners

00:45:19.969 --> 00:45:22.710
as their financial advisor. The securitization

00:45:22.710 --> 00:45:26.539
control party is Seward and Kissel, and the buyer

00:45:26.539 --> 00:45:29.280
group is represented by Morrison and Forster.

00:45:30.320 --> 00:45:32.760
Omitted here inadvertently was the trustee under

00:45:32.760 --> 00:45:35.500
the notes, and that's Citibank, and they are

00:45:35.500 --> 00:45:38.480
represented by Minsleven. With that, Your Honor,

00:45:38.579 --> 00:45:41.039
I'll stop talking for a bit and see if there

00:45:41.039 --> 00:45:43.460
are any questions that I can answer, and then

00:45:43.460 --> 00:45:46.360
if not, we will move to the agenda and start

00:45:46.360 --> 00:45:49.699
going through the motions. All right, no questions

00:45:49.699 --> 00:45:52.590
at this time. PowerPoint was very helpful, and

00:45:52.590 --> 00:45:54.730
I also appreciate that you filed it on the docket

00:45:54.730 --> 00:46:00.570
so Everybody else can see it. So thank you You're

00:46:00.570 --> 00:46:02.769
welcome matter with that. I think I will see

00:46:02.769 --> 00:46:07.190
the podium to my colleague. Mr. Wagner I'll note

00:46:07.190 --> 00:46:09.409
that as mentioned previously we do have a number

00:46:09.409 --> 00:46:12.989
of different and gray lawyers presenting today.

00:46:13.090 --> 00:46:16.130
And I would just like to let the court know that

00:46:16.130 --> 00:46:17.809
some of them are presenting for the first time

00:46:17.809 --> 00:46:20.750
in court. So it's a momentous day for them, and

00:46:20.750 --> 00:46:23.269
I look forward to their presentations. Thank

00:46:23.269 --> 00:46:25.530
you, Your Honor. And I will now turn it over

00:46:25.530 --> 00:46:33.110
to Mr. Wagner. Just a quick note. I was in court

00:46:33.110 --> 00:46:35.929
most of the day, but I did see the red lines

00:46:35.929 --> 00:46:38.090
that were filed. It's very helpful. I got through

00:46:38.090 --> 00:46:40.670
all of the red lines. Except the dip red line.

00:46:40.849 --> 00:46:42.630
I think I refreshed and saw it when I was sitting

00:46:42.630 --> 00:46:45.210
up on the bench So I will go through that of

00:46:45.210 --> 00:46:46.989
course when we get to the dip motion, but otherwise

00:46:46.989 --> 00:46:50.269
I've seen I Think I'm up to speed on everything

00:46:50.269 --> 00:46:53.389
on the docket other than the dip dipwater red

00:46:53.389 --> 00:47:19.809
line I think Can you hear your now I can hear

00:47:19.809 --> 00:47:21.769
I think you had actually only been muted so I

00:47:21.769 --> 00:47:25.750
can hear you know Okay, I'm sorry. I was simply

00:47:25.750 --> 00:47:28.230
thanking you and your chambers for working with

00:47:28.230 --> 00:47:31.329
us to to have the hearing today and also the

00:47:31.329 --> 00:47:33.969
office of the US trustee Who we've been working

00:47:33.969 --> 00:47:35.789
with to try to resolve any issues that they might

00:47:35.789 --> 00:47:37.989
have that I think we've made very productive

00:47:40.469 --> 00:47:42.230
steps with them, and I don't think we have too

00:47:42.230 --> 00:47:44.550
many open items, if any. And then lastly, I would

00:47:44.550 --> 00:47:46.289
like to thank all the other parties. We've been

00:47:46.289 --> 00:47:49.389
working very hard over the last few months, especially

00:47:49.389 --> 00:47:52.590
over the last week, to try to get these cases

00:47:52.590 --> 00:47:54.909
to a place where we could file, and so I deeply

00:47:54.909 --> 00:47:57.150
appreciate all of the hard work from all the

00:47:57.150 --> 00:47:58.769
parties. So thank you, Your Honor, and I hope

00:47:58.769 --> 00:48:04.070
that our, that congeniality continues with us

00:48:04.070 --> 00:48:06.309
as we work through the cases. So thank you. All

00:48:06.309 --> 00:48:08.309
right, now over to Mr. Wagner. All right, thank

00:48:08.309 --> 00:48:16.869
you. Good afternoon, Your Honor. For the record,

00:48:17.070 --> 00:48:18.949
Ben Waggoner from Ropes and Gray on behalf of

00:48:18.949 --> 00:48:21.489
the debtors. Your Honor, if it's all right with

00:48:21.489 --> 00:48:24.250
you, we would like to present the motions in

00:48:24.250 --> 00:48:26.110
a slightly different order than what is on the

00:48:26.110 --> 00:48:30.769
revised agenda. That's fine. Thank you, Your

00:48:30.769 --> 00:48:33.550
Honor. Your Honor, the first item that I'll be

00:48:33.550 --> 00:48:36.030
covering is agenda item number one. This is the

00:48:36.030 --> 00:48:38.269
debtor's motion for joint administration. File

00:48:38.269 --> 00:48:41.320
the docket number two. As the court is aware,

00:48:41.579 --> 00:48:44.340
Bankruptcy Rule 1015B provides that if a joint

00:48:44.340 --> 00:48:46.619
petition of two or more or two or more petitions

00:48:46.619 --> 00:48:49.559
are pending in the same court by or against a

00:48:49.559 --> 00:48:51.280
debtor and an affiliate, the court may order

00:48:51.280 --> 00:48:53.940
a joint administration of the estates. Your Honor,

00:48:53.940 --> 00:48:56.400
that is what we have here. All 30 of the debtors

00:48:56.400 --> 00:48:59.219
in these cases are affiliates, and joint administration

00:48:59.219 --> 00:49:01.739
will provide a significant administrative convenience

00:49:01.739 --> 00:49:04.139
without harming the substantive rights of any

00:49:04.139 --> 00:49:06.679
parties in interest. We've provided a copy of

00:49:06.679 --> 00:49:08.480
the motion and the proposed order to the United

00:49:08.480 --> 00:49:12.000
States Trustee. and received no comments. Accordingly,

00:49:12.079 --> 00:49:13.860
we respectfully request that the proposed form

00:49:13.860 --> 00:49:16.159
of order at docket number two be entered by the

00:49:16.159 --> 00:49:21.940
court. All right. Any comments, questions, or

00:49:21.940 --> 00:49:24.800
concerns about the joint administration motion?

00:49:25.059 --> 00:49:32.139
Mr. Bublick? Thank you, Your Honor. Nothing to

00:49:32.139 --> 00:49:36.929
add to the newest trustee. All right, the proposed,

00:49:37.050 --> 00:49:40.349
by the way, my normal practice for first days,

00:49:40.590 --> 00:49:42.849
since I've reviewed all the proposed orders,

00:49:43.949 --> 00:49:46.090
is to just adopt the findings and conclusions

00:49:46.090 --> 00:49:49.510
that are in the orders rather than do my own

00:49:49.510 --> 00:49:52.989
mini -ruling for each matter. So if I approve

00:49:52.989 --> 00:49:55.010
it, I'm adopting the findings and conclusions.

00:49:55.690 --> 00:49:59.090
The only, I guess, potential ask on this one,

00:49:59.250 --> 00:50:01.050
because I did share this with the clerk's office

00:50:01.050 --> 00:50:04.920
as well, Paragraph 9 asks that the court put

00:50:04.920 --> 00:50:08.159
a docket entry that refers to the joint administration.

00:50:09.840 --> 00:50:12.099
The only request on that one potentially is to

00:50:12.099 --> 00:50:14.340
just shorten it up rather than list them all

00:50:14.340 --> 00:50:17.760
out individually. Maybe just refer to the first

00:50:17.760 --> 00:50:20.420
debtor at all. It would just shorten up that

00:50:20.420 --> 00:50:24.820
docket entry, but that's not a huge issue. Otherwise,

00:50:24.900 --> 00:50:28.199
I didn't have any comments or concerns about...

00:50:28.199 --> 00:50:35.900
the joint administration motion. So Mr. Bublick.

00:50:41.800 --> 00:50:44.679
Your Honor, we will submit a revised form of

00:50:44.679 --> 00:50:49.159
order incorporating that change. All right. I

00:50:49.159 --> 00:50:51.400
think Mr. Bublick is good to go. Is that right?

00:50:51.900 --> 00:50:55.039
Yes, Your Honor. Oh, sorry. Can you hear me,

00:50:55.039 --> 00:50:58.579
Your Honor? Yes, I can now. Yes, U .S. Trustee

00:50:58.579 --> 00:51:00.340
is fine with that. Thank you, Your Honor. All

00:51:00.340 --> 00:51:04.699
right, so that motion is granted. Thank you,

00:51:04.739 --> 00:51:06.840
Your Honor. The next item on the agenda that

00:51:06.840 --> 00:51:09.019
I'll be covering is agenda item number five.

00:51:09.400 --> 00:51:11.719
This is the debtor's creditor matrix motion filed

00:51:11.719 --> 00:51:14.860
at docket number six, and the revised order is

00:51:14.860 --> 00:51:18.900
filed at docket number 76. By this motion, the

00:51:18.900 --> 00:51:20.860
debtors are seeking entry of an order authorizing

00:51:20.860 --> 00:51:23.280
the debtors to file a consolidated creditor matrix

00:51:23.280 --> 00:51:25.780
in lieu of submitting a separate mailing matrix

00:51:25.780 --> 00:51:29.119
for each debtor, file the consolidated top 30

00:51:29.119 --> 00:51:31.659
creditors list in lieu of submitting a separate

00:51:31.659 --> 00:51:34.760
list for each debtor, serve certain parties an

00:51:34.760 --> 00:51:37.099
interest by email except when a party to be served

00:51:37.099 --> 00:51:39.539
by both has a mailing address, the debtor's books

00:51:39.539 --> 00:51:44.280
and records and files or has designated a mailing

00:51:44.280 --> 00:51:47.190
address. and is requested hard copy U .S. First

00:51:47.190 --> 00:51:50.849
Class mail service, redact certain personally

00:51:50.849 --> 00:51:53.250
identifiable information including the home addresses

00:51:53.250 --> 00:51:55.369
and email addresses of the debtors current former

00:51:55.369 --> 00:51:58.110
employees and creditors who are individual persons

00:51:58.110 --> 00:52:00.710
from the consolidated creditor matrix, the consolidated

00:52:00.710 --> 00:52:03.630
top 30 list, the debtor schedules and statements,

00:52:03.909 --> 00:52:05.650
and affidavits of service filed with the court

00:52:05.650 --> 00:52:08.429
in these Chapter 11 cases. The debtors are also

00:52:08.429 --> 00:52:10.369
requesting the court approve the form and manner

00:52:10.369 --> 00:52:13.010
of notifying creditors in these Chapter 11 cases.

00:52:13.309 --> 00:52:15.929
and also approve the bar date for filing proofs

00:52:15.929 --> 00:52:18.769
of claim. The debtors proposed bar dates include

00:52:18.769 --> 00:52:21.289
the general claims bar date for filing proofs

00:52:21.289 --> 00:52:24.889
of claim for pre -petition claims at June 15,

00:52:25.469 --> 00:52:27.929
2025, which should be 76 days after the petition

00:52:27.929 --> 00:52:30.769
date, the governmental bar date at September

00:52:30.769 --> 00:52:35.690
29, 2025, 182 days after the petition date, and

00:52:35.690 --> 00:52:39.579
the rejection bar date. by which proofs of claim

00:52:39.579 --> 00:52:41.739
arising from the rejection of executive contracts

00:52:41.739 --> 00:52:44.340
or unexpired leases must be filed at the later

00:52:44.340 --> 00:52:47.139
of the general claims bar date, at the governmental

00:52:47.139 --> 00:52:49.980
bar date as applicable, any date this court may

00:52:49.980 --> 00:52:52.340
fix in a rejection order, or if no date is set

00:52:52.340 --> 00:52:55.079
in such order, 35 days after the date of entry

00:52:55.079 --> 00:52:58.460
of such order. Your Honor, the motion and proposed

00:52:58.460 --> 00:53:00.099
form of order have been shared with the United

00:53:00.099 --> 00:53:02.150
States Trustee. At the request of the United

00:53:02.150 --> 00:53:04.150
States trustee, the unredacted version of the

00:53:04.150 --> 00:53:06.329
matrix will include a header with language putting

00:53:06.329 --> 00:53:09.570
the party in interest on notice of this court's

00:53:09.570 --> 00:53:11.909
order and the redacted nature of the publicly

00:53:11.909 --> 00:53:14.750
filed order. We've also made minor changes with

00:53:14.750 --> 00:53:17.070
respect to the noticing procedures after conferring

00:53:17.070 --> 00:53:19.710
with our proposed claims agent. We submitted

00:53:19.710 --> 00:53:23.050
revised form of order at docket number 76. But

00:53:23.050 --> 00:53:25.309
we further submitting a revised form of order

00:53:25.309 --> 00:53:27.289
reflecting the change that the general claims

00:53:27.289 --> 00:53:31.349
are date from May 15th, 2025 to June 15th, 2025.

00:53:32.690 --> 00:53:34.730
Unless your honor has questions, respectfully

00:53:34.730 --> 00:53:37.889
request that the revised form of order will be

00:53:37.889 --> 00:53:39.929
submitting reflecting these changes entered by

00:53:39.929 --> 00:53:44.030
the court. So June 15th falls on a Sunday. Do

00:53:44.030 --> 00:53:48.170
you want to? Your Honor, may I confer with counsel

00:53:48.170 --> 00:53:54.650
real quick? Yeah. Your honor we proposed June

00:53:54.650 --> 00:53:59.570
16 2025. All right, I think June 16th makes sense

00:53:59.570 --> 00:54:02.110
Thank you your honor, we will make that change

00:54:02.110 --> 00:54:06.510
in the revised proposed order And then for the

00:54:06.510 --> 00:54:07.889
governmental bar date, I didn't I didn't check

00:54:07.889 --> 00:54:10.170
that one just make sure it doesn't fall on a

00:54:10.170 --> 00:54:14.230
weekend Anybody else have any comments questions

00:54:14.230 --> 00:54:23.909
or concerns about this motion? Mr. Bublick, are

00:54:23.909 --> 00:54:26.550
you good? Yes, thank you, Your Honor. The USRC

00:54:26.550 --> 00:54:28.289
appreciates that Dentor's Council worked with

00:54:28.289 --> 00:54:37.789
us to reach an agreeable bar dates. All right.

00:54:37.829 --> 00:54:40.050
Well, thank you. Other than that date change,

00:54:40.210 --> 00:54:42.269
I didn't have any other harpoon items, so that

00:54:42.269 --> 00:54:48.090
motion is approved. Thank you, Your Honor. The

00:54:48.090 --> 00:54:50.130
final item on the agenda that I will be covering

00:54:50.130 --> 00:54:52.880
is agenda item number eight. This is the debtor's

00:54:52.880 --> 00:54:55.739
taxes motion filed at docket number 9, and the

00:54:55.739 --> 00:54:59.900
revised order is filed at docket number 79. By

00:54:59.900 --> 00:55:01.800
this motion, the debtors are seeking entry of

00:55:01.800 --> 00:55:03.780
an order authorizing the debtors to remit and

00:55:03.780 --> 00:55:07.500
pay certain taxes and fees accrued prior to the

00:55:07.500 --> 00:55:09.960
petition date that are payable or will become

00:55:09.960 --> 00:55:11.659
payable during the pendency of these Chapter

00:55:11.659 --> 00:55:14.289
11 cases. including any penalties and interest

00:55:14.289 --> 00:55:16.889
thereon to various federal, state, county, and

00:55:16.889 --> 00:55:19.530
city taxing and licensing authorities, and to

00:55:19.530 --> 00:55:21.590
remit and pay any audit amounts that may become

00:55:21.590 --> 00:55:24.650
payable in the ordinary course of business. Your

00:55:24.650 --> 00:55:27.070
Honor, the debtors proposed order submitted as

00:55:27.070 --> 00:55:29.650
an exhibit to the taxes motion emitted language

00:55:29.650 --> 00:55:32.769
requesting authority to pay taxes and fees accrued

00:55:32.769 --> 00:55:35.269
prior to the petition date that quote are payable

00:55:35.269 --> 00:55:38.110
as of the petition date. The debtors have submitted

00:55:38.110 --> 00:55:40.909
a revised form of order including language requesting

00:55:40.909 --> 00:55:45.090
the authority. to pay taxes and fees that are

00:55:45.090 --> 00:55:48.349
payable as of the petition date, in addition

00:55:48.349 --> 00:55:50.369
to the authority to pay those pre -petition taxes

00:55:50.369 --> 00:55:52.469
and fees that will become payable during the

00:55:52.469 --> 00:55:56.989
pendency of these cases. As of the petition date,

00:55:57.110 --> 00:55:59.269
the debtors had a portion of their property taxes

00:55:59.269 --> 00:56:01.710
due, which they'd been unable to pay due to liquidity

00:56:01.710 --> 00:56:04.610
issues. This is the reason for the proposed language

00:56:04.610 --> 00:56:07.610
addition. Your Honor, the motion and the proposed

00:56:07.610 --> 00:56:09.309
form of order have been shared with United States

00:56:09.309 --> 00:56:14.429
Trustee, and we receive no comments. As of the

00:56:14.429 --> 00:56:16.610
petition date, the debtors are in the process

00:56:16.610 --> 00:56:20.110
of disputing a completed audit with respect to

00:56:20.110 --> 00:56:22.110
their sales and use taxes with the state of Florida.

00:56:23.650 --> 00:56:25.650
The debtors maintain an audit reserve in the

00:56:25.650 --> 00:56:28.730
current amount of that audit, but it is subject

00:56:28.730 --> 00:56:32.050
to possible reduction. The debtors have also

00:56:32.050 --> 00:56:33.889
received notice of a potential audit with respect

00:56:33.889 --> 00:56:35.730
to their sales and use taxes with the state of

00:56:35.730 --> 00:56:38.750
Texas from the period of April 1st, 2021 to December

00:56:38.750 --> 00:56:42.269
31st, 2024, but no date for the audit's initiation

00:56:42.269 --> 00:56:45.210
has been declared. The debtors seek to pay any

00:56:45.210 --> 00:56:47.710
audit amounts on a final basis as they may arise

00:56:47.710 --> 00:56:51.889
in the ordinary course Unless your honor has

00:56:51.889 --> 00:56:53.949
any questions we respectfully request that the

00:56:53.949 --> 00:56:56.809
revised form of order at docket number 79 be

00:56:56.809 --> 00:57:00.610
entered by the court All right, let me start

00:57:00.610 --> 00:57:03.469
with no, I'll start with us. Let me start with

00:57:03.469 --> 00:57:05.909
mr. Bublick. Mr. Bublick any concerns about this

00:57:05.909 --> 00:57:08.670
one? No concerns from the interest to your honor.

00:57:08.769 --> 00:57:13.019
Thank you. All right Any other party have any

00:57:13.019 --> 00:57:16.099
comments or concerns about this motion? Yes,

00:57:16.280 --> 00:57:19.739
Judge. Jeffrey Gutman on behalf of Palmer South.

00:57:20.579 --> 00:57:25.400
We're a landlord of one facility that's being

00:57:25.400 --> 00:57:32.659
operated by the Hooters better. I have not seen

00:57:32.659 --> 00:57:35.920
this disorder and we are owed real estate taxes

00:57:35.920 --> 00:57:38.900
and it's not clear to us whether our debt is

00:57:38.900 --> 00:57:41.320
covered by this order or not. They didn't share

00:57:41.320 --> 00:57:43.940
this order with us, and I think it should be

00:57:43.940 --> 00:57:46.039
shared with us so we can review and comment.

00:57:47.320 --> 00:57:49.619
So it was filed on the dock. It admittedly was

00:57:49.619 --> 00:57:53.219
filed today, but there's a proposed form of order

00:57:53.219 --> 00:57:57.719
that was attached to the original motion that

00:57:57.719 --> 00:58:00.400
was filed. Do you have ECF access by chance?

00:58:02.320 --> 00:58:06.300
Not handy, Judge. Okay. Maybe counsel could address

00:58:06.300 --> 00:58:09.699
how he's dealing with landlord property tax issues.

00:58:22.299 --> 00:58:27.980
Mr. Janell, Your Honor, we are... Your Honor,

00:58:28.099 --> 00:58:29.699
may I confer with the Council for a second? Sure.

00:59:03.949 --> 00:59:07.090
Your Honor, this motion is not seeking to reimburse

00:59:07.090 --> 00:59:09.690
landlords for property tax obligations or other

00:59:09.690 --> 00:59:12.789
tax obligations. This motion is simply seeking

00:59:12.789 --> 00:59:15.230
authority to pay taxing authorities directly.

00:59:15.570 --> 00:59:19.170
We'll be working with landlords with respect

00:59:19.170 --> 00:59:21.909
to any assumption, an assignment, and or rejection

00:59:21.909 --> 00:59:25.809
of real property leases to handle contractual

00:59:25.809 --> 00:59:28.190
issues with respect to reimbursement of property

00:59:28.190 --> 00:59:34.340
taxes. All right, that makes sense to me, Mr.

00:59:34.480 --> 00:59:38.900
Dinella. I don't think your client's prejudiced

00:59:38.900 --> 00:59:43.420
by the entry of this order. I agree, Judge. And

00:59:43.420 --> 00:59:47.460
then... We'll deal with it at a later time on

00:59:47.460 --> 00:59:52.539
our issue. All right, very good. Anybody else

00:59:52.539 --> 01:00:03.699
have any concerns about this motion? All right.

01:00:03.739 --> 01:00:08.400
Well, that one's granted as well. Thank you,

01:00:08.460 --> 01:00:11.420
Your Honor. I will now see the podium to my colleague,

01:00:11.539 --> 01:00:25.780
Ms. Knight. All right. Thank you. Good afternoon,

01:00:25.800 --> 01:00:28.179
Your Honor. Lauren Knight of Robson Garrett on

01:00:28.179 --> 01:00:32.119
behalf of the debtors. The first matter I will

01:00:32.119 --> 01:00:34.679
be presenting is agenda item number four, that

01:00:34.679 --> 01:00:37.300
is at docket number five, the debtor's application

01:00:37.300 --> 01:00:39.699
to retain Kroll as claims and noticing agent.

01:00:40.539 --> 01:00:42.780
I'll note that we filed a revised form of order

01:00:42.780 --> 01:00:46.719
at docket number 77. Additional support for the

01:00:46.719 --> 01:00:48.980
application is set forth in the declaration of

01:00:48.980 --> 01:00:51.559
Benjamin Steele, a managing director at Kroll,

01:00:51.719 --> 01:00:54.159
which is attached as exhibit B to the application.

01:00:54.880 --> 01:00:57.460
Mr. Steele is on the Webex and available to testify

01:00:57.460 --> 01:00:59.860
if you or any of their party has any questions.

01:01:01.739 --> 01:01:07.739
Your Honor, pursuant to 28 U .S .C. Section 156C,

01:01:08.079 --> 01:01:10.260
the debtors seek authority to retain and employ

01:01:10.260 --> 01:01:13.639
Kroll Restructuring Administration, LLC, as claims

01:01:13.639 --> 01:01:15.920
noticing and solicitation agent in these Chapter

01:01:15.920 --> 01:01:19.139
11 cases. Your Honor, the debtors chose Kroll

01:01:19.139 --> 01:01:21.440
as their proposed claims and noticing agent based

01:01:21.440 --> 01:01:24.159
on Kroll's capabilities, experience handling

01:01:24.159 --> 01:01:27.280
cases of this size and complexity, its acceptable

01:01:27.280 --> 01:01:32.619
pricing terms, and its disinterestedness. Thousands

01:01:32.619 --> 01:01:34.679
of likely claimants and entities to be noticed

01:01:34.679 --> 01:01:37.599
in these cases. It would be administratively

01:01:37.599 --> 01:01:39.840
burdensome to perform the services that Kohl

01:01:39.840 --> 01:01:43.199
has proposed to provide absent Kohl's retention.

01:01:44.480 --> 01:01:46.400
Your Honor, we are also seeking authorization

01:01:46.400 --> 01:01:49.860
to replenish Kohl's $75 ,000 retainer, which

01:01:49.860 --> 01:01:52.380
was applied to all pre -petition invoices to

01:01:52.380 --> 01:01:54.500
hold the retainer under the engagement agreement

01:01:54.500 --> 01:01:57.179
as a security for the payment of fees and expenses.

01:02:00.599 --> 01:02:02.679
Your honor, we previewed the application with

01:02:02.679 --> 01:02:05.039
the US trustee and resolved all of their open

01:02:05.039 --> 01:02:08.260
issues Unless your honor has any other questions.

01:02:08.360 --> 01:02:10.840
We respectfully request that you enter the revised

01:02:10.840 --> 01:02:15.980
form of order at docket number 77 All right,

01:02:16.059 --> 01:02:18.579
thank you I did not have any questions for mr.

01:02:18.880 --> 01:02:22.599
Steele after reading his declaration and I don't

01:02:22.599 --> 01:02:26.219
have any concerns about the application The red

01:02:26.219 --> 01:02:28.920
line looks good to me. So let me ask mr. Public

01:02:30.349 --> 01:02:33.869
U .S. Trustees, good to go on this one? Yes,

01:02:33.929 --> 01:02:36.510
Your Honor. No concerns with this any longer.

01:02:36.769 --> 01:02:38.690
Thank you, Your Honor. All right. Anybody else

01:02:38.690 --> 01:02:41.710
have any comments or concerns about the Kroll

01:02:41.710 --> 01:02:52.570
retention application? All right. That one's

01:02:52.570 --> 01:02:57.480
approved. Thank you, Your Honor. The next and

01:02:57.480 --> 01:02:59.559
final matter that I will be presenting on is

01:02:59.559 --> 01:03:02.000
agenda number, item number seven, that is at

01:03:02.000 --> 01:03:04.440
docket number eight, the debtor's insurance motion.

01:03:06.039 --> 01:03:08.119
By this motion, the debtor seek authority but

01:03:08.119 --> 01:03:11.019
not direction to maintain their existing insurance

01:03:11.019 --> 01:03:13.900
policies and pay all obligations arising there

01:03:13.900 --> 01:03:17.079
under or in connection therewith, to renew, supplement,

01:03:17.260 --> 01:03:20.139
modify, or purchase insurance coverage, and to

01:03:20.139 --> 01:03:22.159
continue to honor their obligations under the

01:03:22.159 --> 01:03:25.699
surety bond program. The coverage provided for

01:03:25.699 --> 01:03:28.059
under the insurance policies is essential to

01:03:28.059 --> 01:03:29.940
preserving the value of the debtor's assets,

01:03:30.079 --> 01:03:33.360
and in many instances, required by various regulations,

01:03:33.639 --> 01:03:36.500
laws, and the United States' trustees' operating

01:03:36.500 --> 01:03:39.840
guidelines. Your Honor, as an overview, the debtors

01:03:39.840 --> 01:03:42.920
maintain 26 insurance policies that provide coverage

01:03:42.920 --> 01:03:46.599
for, among other things, property, general liability,

01:03:47.000 --> 01:03:50.340
workers' compensation, excess liability, directors

01:03:50.340 --> 01:03:52.659
and officers' liability, and crime protection.

01:03:53.079 --> 01:03:55.400
And Your Honor, Exhibit B to the order includes

01:03:55.400 --> 01:03:59.380
a summary of all of the policies. In sum, the

01:03:59.380 --> 01:04:01.480
total amount of annual premiums on account of

01:04:01.480 --> 01:04:04.260
those policies is approximately $6 .2 million.

01:04:05.280 --> 01:04:07.519
Most of these premiums are financed pursuant

01:04:07.519 --> 01:04:10.239
to premium financing agreements. The aggregate

01:04:10.239 --> 01:04:12.579
amount of remaining monthly payments under the

01:04:12.579 --> 01:04:15.199
premium financing agreements is approximately

01:04:15.199 --> 01:04:19.480
2 .1 million. Finally, Your Honor, the debtors

01:04:19.480 --> 01:04:22.980
maintain 114 surety bonds with an average base

01:04:22.980 --> 01:04:26.579
amount of $9 ,000. Pursuant to the surety bond

01:04:26.579 --> 01:04:29.179
program, the debtors remit payments when the

01:04:29.179 --> 01:04:31.659
bonds are issued or renewed on an annual basis.

01:04:32.639 --> 01:04:35.719
The surety premiums total approximately $18 ,000

01:04:35.719 --> 01:04:39.219
per year. Currently, the debtors are not aware

01:04:39.219 --> 01:04:41.260
of any outstanding amounts owed on account of

01:04:41.260 --> 01:04:43.539
the surety bonds, but seek relief to pay any

01:04:43.539 --> 01:04:47.050
should they arise. To continue their business

01:04:47.050 --> 01:04:49.550
operations post -petition, the debtors must maintain

01:04:49.550 --> 01:04:51.849
their surety bonds to provide financial assurance

01:04:51.849 --> 01:04:54.369
to the various agencies that regulate the debtors'

01:04:54.449 --> 01:04:57.250
operations. As such, the debtors seek authority

01:04:57.250 --> 01:04:59.570
to pay surety bond premiums as they come due

01:04:59.570 --> 01:05:03.989
and renew as needed in the ordinary course. Pending

01:05:03.989 --> 01:05:06.150
any questions from Your Honor, the U .S. Trustee,

01:05:06.510 --> 01:05:09.469
or any other parties in interest, I would request

01:05:09.469 --> 01:05:14.019
entry of the order. All right. Thank you. Why

01:05:14.019 --> 01:05:16.860
don't I start with Mr. Bublick again. Any concerns

01:05:16.860 --> 01:05:19.900
about this one? No concerns from you, Your Honor.

01:05:20.079 --> 01:05:25.400
Thank you. All right. Any other party? Good afternoon,

01:05:25.460 --> 01:05:29.000
Your Honor. This is Dwayne Brescia for the surety

01:05:29.000 --> 01:05:31.539
companies, Westchester Fire Insurance Company

01:05:31.539 --> 01:05:34.920
and Federal Insurance Company. Easier just to

01:05:34.920 --> 01:05:38.280
call them the chub surety group. No objections

01:05:38.280 --> 01:05:40.860
to the entry of the order. I just have been retained

01:05:40.860 --> 01:05:44.880
this morning on this matter. I'm not able to

01:05:44.880 --> 01:05:47.519
confirm or deny many of the allegations in the

01:05:47.519 --> 01:05:49.500
motion are stated today. I have no reason to

01:05:49.500 --> 01:05:52.320
oppose them. I just reserve our rights to clarify

01:05:52.320 --> 01:05:54.519
the record if needed at a later date. Otherwise,

01:05:54.639 --> 01:05:58.940
no objections to the order. All right, thank

01:05:58.940 --> 01:06:14.170
you. All right, any other party? All right, that

01:06:14.170 --> 01:06:18.510
motion is also granted. Thank you, Your Honor.

01:06:18.849 --> 01:06:21.210
I will now see the podium to my colleague, Maggie

01:06:21.210 --> 01:06:35.230
Toms. All right, thank you. Good afternoon, Your

01:06:35.230 --> 01:06:37.989
Honor. Maggie Toms of Ropes and Gray on behalf

01:06:37.989 --> 01:06:41.380
of the debtors. I'll be presenting three motions.

01:06:41.679 --> 01:06:44.280
The first will be the sofa extension motion,

01:06:44.800 --> 01:06:48.340
filed at docket number seven, listed on the agenda

01:06:48.340 --> 01:06:53.420
as number six. By this motion, the debtors are

01:06:53.420 --> 01:06:55.880
seeking entry of an order extending the time

01:06:55.880 --> 01:07:00.659
to file sofas by 30 days for a total of 44 days.

01:07:02.239 --> 01:07:04.860
These are complex cases, Your Honor, comprising

01:07:04.860 --> 01:07:08.059
of 30 debtors. And as explained in the motion,

01:07:08.219 --> 01:07:11.539
the debtors operate a global chain of restaurants.

01:07:12.780 --> 01:07:14.780
Due to the nature of the debtor's businesses,

01:07:15.739 --> 01:07:18.780
they routinely engage with a considerable number

01:07:18.780 --> 01:07:22.420
of suppliers across the country. As such, the

01:07:22.420 --> 01:07:25.519
debtors anticipate that it may require 44 days

01:07:25.519 --> 01:07:29.679
to complete the sofas. For the reasons set forth

01:07:29.679 --> 01:07:32.739
in the motion and in the absence of any questions

01:07:32.739 --> 01:07:36.469
from the court, we respectfully ask entry of

01:07:36.469 --> 01:07:40.989
the order at docket number seven. All right.

01:07:40.989 --> 01:07:43.610
I'll start with Mr. Bublick. Any concerns about

01:07:43.610 --> 01:07:48.289
this one? No concerns, Your Honor. Thank you.

01:07:48.889 --> 01:08:01.730
All right. Any other party? All right. I don't

01:08:01.730 --> 01:08:03.289
have any heartburn with this one either. I've

01:08:03.289 --> 01:08:05.469
looked at the order and that one's also granted.

01:08:06.960 --> 01:08:10.480
Thank you, Your Honor. Next, I'll be presenting

01:08:10.480 --> 01:08:13.460
the utility motion filed at Docket Number 10

01:08:13.460 --> 01:08:38.140
listed on the agenda as Number 9. and authorizing

01:08:38.140 --> 01:08:41.380
but not directing payment of undisputed invoices

01:08:41.380 --> 01:08:44.319
for utility services, including the debtor's

01:08:44.319 --> 01:08:47.840
utility consolidator in accordance with pre -petition

01:08:47.840 --> 01:08:51.880
practice. The debtors obtain electric natural

01:08:51.880 --> 01:08:56.000
gas sewage among other similar utility services

01:08:56.000 --> 01:08:59.439
from a number of utility providers. Without these

01:08:59.439 --> 01:09:02.479
services, the debtor's operations will be severely

01:09:02.479 --> 01:09:06.239
disrupted. and it would undermine these reorganization

01:09:06.239 --> 01:09:12.439
efforts. The debtors intend to satisfy post -petition

01:09:12.439 --> 01:09:15.939
obligations owed to utility providers with cash

01:09:15.939 --> 01:09:19.520
on hand, cash generated from the ordinary course

01:09:19.520 --> 01:09:22.420
of business, and cash available to the debtors

01:09:22.420 --> 01:09:27.060
under the DIP facility. But in addition, the

01:09:27.060 --> 01:09:30.439
debtors are proposing additional adequate assurance

01:09:30.439 --> 01:09:34.460
of payment and the debtors propose to deposit

01:09:34.460 --> 01:09:39.359
approximately $419 ,000 into a segregated account

01:09:39.359 --> 01:09:44.520
for the benefit of the utility providers. In

01:09:44.520 --> 01:09:48.039
addition, the debtors seek approval of the adequate

01:09:48.039 --> 01:09:52.439
assurance procedures. If a utility provider believes

01:09:52.439 --> 01:09:57.060
additional adequate assurance is required, they

01:09:57.060 --> 01:10:00.500
must serve a written request on the notice parties.

01:10:01.020 --> 01:10:04.979
If this request is not served, the utility provider

01:10:04.979 --> 01:10:07.579
shall be deemed to have received satisfactory

01:10:07.579 --> 01:10:11.319
adequate assurance and are forbidden from altering

01:10:11.319 --> 01:10:15.420
or discontinuing the utility services. Unless

01:10:15.420 --> 01:10:17.800
Your Honor has any questions, we respectfully

01:10:17.800 --> 01:10:20.239
request that the proposed form of order at Dock

01:10:20.239 --> 01:10:25.000
Number 10 be entered by the court. All right.

01:10:25.020 --> 01:10:27.939
I don't have any questions on this one. Any party

01:10:27.939 --> 01:10:46.079
have any comments, questions, or concerns? All

01:10:46.079 --> 01:10:49.000
right that motion is granted. Thank you your

01:10:49.000 --> 01:10:52.920
honor. The final motion that I'll be presenting

01:10:52.920 --> 01:10:56.880
is the wages motion filed at docket number 11

01:10:56.880 --> 01:11:01.640
listed on the agenda as number 10. By this motion

01:11:01.640 --> 01:11:03.859
the debtors are requesting the authority but

01:11:03.859 --> 01:11:06.979
not direction to pay pre -petition workforce

01:11:06.979 --> 01:11:10.579
obligations and to continue to honor their compensation

01:11:10.579 --> 01:11:14.279
and benefits programs and to pay related expenses.

01:11:15.119 --> 01:11:19.220
The debtor's workforce consists of about 6 ,000

01:11:19.220 --> 01:11:22.800
employees, about 2 ,000 of which are full time.

01:11:23.319 --> 01:11:27.579
Of those employees, 559 are salaried and the

01:11:27.579 --> 01:11:32.420
rest are paid hourly. In addition, the debtors

01:11:32.420 --> 01:11:36.260
utilize eight independent contractors to provide

01:11:36.260 --> 01:11:39.840
marketing, IT, and learning and development functions

01:11:39.840 --> 01:11:44.609
for various projects. The debtors are requesting

01:11:44.609 --> 01:11:49.189
approximately $4 .04 million of relief on account

01:11:49.189 --> 01:11:51.810
of the debtor's compensation and benefits programs

01:11:51.810 --> 01:11:55.189
and prepetition workforce obligations. Although

01:11:55.189 --> 01:11:57.930
the debtors believe all compensation and benefits

01:11:57.930 --> 01:12:00.310
programs are vital to the debtor's businesses,

01:12:01.109 --> 01:12:03.489
pursuant to the order, the debtors are only seeking

01:12:03.489 --> 01:12:06.369
authority to the extent that they believe it

01:12:06.369 --> 01:12:08.770
necessary to prevent immediate and irreparable

01:12:08.770 --> 01:12:13.229
harm. Importantly, the debtors are not requesting

01:12:13.229 --> 01:12:16.470
relief to pay any amounts on account of compensation

01:12:16.470 --> 01:12:19.430
and obligations that are in excess of the statutory

01:12:19.430 --> 01:12:24.029
cap set forth as Section 507A4 of the Bankruptcy

01:12:24.029 --> 01:12:27.109
Code, except for amounts paid pursuant to the

01:12:27.109 --> 01:12:31.449
EEOC proceedings. Your Honor, the employees provide

01:12:31.449 --> 01:12:34.869
the debtors with services necessary to conduct

01:12:34.869 --> 01:12:37.770
the debtor's businesses. And the debtors believe

01:12:37.770 --> 01:12:40.710
that absent the payment of pre -petition compensation

01:12:40.710 --> 01:12:44.210
obligations, the debtors may experience employee

01:12:44.210 --> 01:12:48.090
turnover and instability at this critical time.

01:12:48.890 --> 01:12:52.310
For the reason set, excuse me, additionally the

01:12:52.310 --> 01:12:56.409
debtors have worked with the USP and have agreed

01:12:56.409 --> 01:13:00.109
to kick the expense reimbursement for senior

01:13:00.109 --> 01:13:04.130
level management to the second day. For the reason

01:13:04.130 --> 01:13:07.069
set forth in the motion, And in the absence of

01:13:07.069 --> 01:13:09.430
any additional questions, Your Honor, we respectfully

01:13:09.430 --> 01:13:12.729
ask entry of the revised form of order, which

01:13:12.729 --> 01:13:16.670
we will be filing, which will include the expense

01:13:16.670 --> 01:13:20.789
reimbursement language. All right. Mr. Bublick,

01:13:20.909 --> 01:13:23.770
anything else on that one? Well, the associate

01:13:23.770 --> 01:13:26.829
appreciates that are working with us to resolve

01:13:26.829 --> 01:13:30.670
our concerns. We also had some concerns regarding

01:13:30.670 --> 01:13:33.510
the independent contractors. So to the extent

01:13:34.359 --> 01:13:36.960
that better is able to, we would like to hear

01:13:36.960 --> 01:13:40.520
evidence that the independent contractors they

01:13:40.520 --> 01:13:46.680
do seek to be paid do qualify under 507A4B. Thank

01:13:46.680 --> 01:13:59.800
you, Your Honor. Is this evidence to be supplied?

01:14:01.520 --> 01:14:03.420
After the hearing, are you looking for that now,

01:14:03.500 --> 01:14:07.859
Mr. Bubley? Your Honor, we were awaiting a list

01:14:07.859 --> 01:14:09.479
of the independent contractors, and they did

01:14:09.479 --> 01:14:12.739
seem to get paid, and we have not received that

01:14:12.739 --> 01:14:16.739
yet. So to the extent that we're able to put

01:14:16.739 --> 01:14:20.619
on that evidence now or commit to providing that

01:14:20.619 --> 01:14:24.600
later, the U .S. trustee would appreciate that

01:14:24.600 --> 01:14:27.520
to resolve its concern as to these independent

01:14:27.520 --> 01:14:33.420
contractors that are sought to be paid. I'm fine

01:14:33.420 --> 01:14:36.859
either way if the debtors want to commit to providing

01:14:36.859 --> 01:14:39.340
that information to the U .S. trustee after the

01:14:39.340 --> 01:14:42.539
hearing. I don't have any problems with that.

01:14:45.760 --> 01:14:50.359
Yes, we'll do that, Your Honor. All right. So

01:14:50.359 --> 01:14:57.300
I guess that one will be granted with the first

01:14:57.300 --> 01:15:00.520
modification, which I understand is coming in

01:15:00.520 --> 01:15:04.409
a red line. I'll let you work on Mr. Bulwick

01:15:04.409 --> 01:15:07.329
after the hearing. I'll just assume that if the

01:15:07.329 --> 01:15:11.930
order's uploaded, all remaining issues have been

01:15:11.930 --> 01:15:15.869
resolved. But with those caveats, that motion's

01:15:15.869 --> 01:15:19.890
approved. Thank you, Your Honor. I'll now cede

01:15:19.890 --> 01:15:22.689
the podium to Mr. Park. All right, thank you.

01:15:39.050 --> 01:15:41.590
Good afternoon, Your Honor. For the record, He's

01:15:41.590 --> 01:15:44.449
a part from Robson Gray on behalf of the debtors.

01:15:44.930 --> 01:15:47.050
The motion that I'll be presenting today is the

01:15:47.050 --> 01:15:49.810
debtors cash management motion. This is audit

01:15:49.810 --> 01:15:52.989
document number 12. It's agenda item number 11

01:15:52.989 --> 01:15:56.710
on today's agenda list. All right, thank you.

01:15:56.850 --> 01:15:59.449
Your Honor, through this motion, the debtors

01:15:59.449 --> 01:16:02.350
are seeking to one, continue the debtors cash

01:16:02.350 --> 01:16:05.550
management system, to honor any pre and post

01:16:05.550 --> 01:16:09.449
obligations on account of bank fees. three to

01:16:09.449 --> 01:16:12.149
maintain existing business forms, and four to

01:16:12.149 --> 01:16:15.409
continue the debtors cash management system in

01:16:15.409 --> 01:16:18.670
the ordinary course. The debtors maintain a total

01:16:18.670 --> 01:16:21.489
of 27 bank accounts. Those are maintained at

01:16:21.489 --> 01:16:25.529
US Bank and Bank of America. Both of those institutions

01:16:25.529 --> 01:16:29.350
are approved by the US trustee as depositories,

01:16:29.810 --> 01:16:32.810
and all of the debtors' bank accounts are FDIC

01:16:32.810 --> 01:16:37.550
insured. In order to assist the court's understanding

01:16:37.550 --> 01:16:40.350
of the debtor's cash management system, I think

01:16:40.350 --> 01:16:43.149
that's to view the cash management system in

01:16:43.149 --> 01:16:45.789
two different categories. The first category

01:16:45.789 --> 01:16:48.409
is what we call the non -securitization entities,

01:16:49.229 --> 01:16:51.909
and as Mr. Dickerson alluded to earlier, these

01:16:51.909 --> 01:16:54.989
are the manager entities that are involved or

01:16:54.989 --> 01:16:57.989
associated with the corporate activities of the

01:16:57.989 --> 01:17:02.170
company. The main... The operating account at

01:17:02.170 --> 01:17:05.289
this entity is the main corporate account. This

01:17:05.289 --> 01:17:09.090
is maintained at Hooters of America LLC, bank

01:17:09.090 --> 01:17:14.350
account number ending in 0215 at US Bank. And

01:17:14.350 --> 01:17:16.470
this account is the main operating account where

01:17:16.470 --> 01:17:18.869
it makes any disbursements on account of corporate

01:17:18.869 --> 01:17:21.050
activities and collections to the extent that

01:17:21.050 --> 01:17:25.069
there are any. Importantly, in the ordinary course

01:17:25.069 --> 01:17:30.319
of business, Your Honor, The tutors of America

01:17:30.319 --> 01:17:33.779
LLC as the manager of the securitization entities

01:17:33.779 --> 01:17:36.800
make certain advancements to the securitization

01:17:36.800 --> 01:17:39.619
entities in cases where there are insufficient

01:17:39.619 --> 01:17:41.680
funds to operate the securitization entities.

01:17:42.840 --> 01:17:45.680
And once the funds are made, the right to reimbursement

01:17:45.680 --> 01:17:48.180
of these entities sit at the top of the waterfall

01:17:48.180 --> 01:17:51.859
for repayment of the securitization entities

01:17:51.859 --> 01:17:57.640
under the indenture. The other half of the debtor's

01:17:57.640 --> 01:17:59.619
cash management system are the securitization

01:17:59.619 --> 01:18:02.539
entities. These entities are involved with the

01:18:02.539 --> 01:18:05.640
debtor's operations of the restaurants and also

01:18:05.640 --> 01:18:08.520
the franchise activities. With regards to the

01:18:08.520 --> 01:18:10.260
franchise activities, the debtors collect certain

01:18:10.260 --> 01:18:14.420
fees in the form of franchise fees and royalty

01:18:14.420 --> 01:18:17.020
fees under the franchise agreements that debtors

01:18:17.020 --> 01:18:26.300
have with certain franchisees. Once the proceeds

01:18:26.300 --> 01:18:29.640
come in on account of these restaurant activities

01:18:29.640 --> 01:18:32.500
and the franchise activities, they are funneled

01:18:32.500 --> 01:18:34.779
into what we would call the main collection account

01:18:34.779 --> 01:18:37.760
in the motion. And this is where all the proceeds

01:18:37.760 --> 01:18:39.619
from the restaurant activities and the franchise

01:18:39.619 --> 01:18:42.260
activities are gathered after accounting for

01:18:42.260 --> 01:18:44.539
any of the disbursements that need to be made.

01:18:45.119 --> 01:18:47.840
Once it hits that account, it's then transferred

01:18:47.840 --> 01:18:51.380
to a bank account maintained by the US Inventor

01:18:51.380 --> 01:18:54.560
Trustee. and the trustee for the purpose of making

01:18:54.560 --> 01:18:57.640
the payments under the waterfall that we described.

01:18:59.720 --> 01:19:01.779
Your honor, the debtors believe that the ability

01:19:01.779 --> 01:19:04.319
to continue the debtors' cash management system

01:19:04.319 --> 01:19:07.520
is imperative for purposes of operating in the

01:19:07.520 --> 01:19:10.000
ordinary course of business. The failure to do

01:19:10.000 --> 01:19:12.880
so will tremendously impair the debtors' business

01:19:12.880 --> 01:19:16.140
in the ordinary course. The debtors believe that

01:19:16.140 --> 01:19:19.720
we have circulated copies of the motion beforehand

01:19:19.720 --> 01:19:23.909
with the U .S. trustee. I believe that we have

01:19:23.909 --> 01:19:26.090
resolved all of the comments, but we have not

01:19:26.090 --> 01:19:28.409
have had the chance to upload a revised order.

01:19:28.949 --> 01:19:33.470
So subject to your review, Your Honor, that there

01:19:33.470 --> 01:19:35.850
is a respectfully request that the order be entered

01:19:35.850 --> 01:19:41.750
by this court. All right, thank you. We're gonna

01:19:41.750 --> 01:19:48.029
mute that person first. And then we'll go to

01:19:48.029 --> 01:19:51.100
Mr. Public. Mr. Public, any other? Thoughts or

01:19:51.100 --> 01:19:54.220
comments on this one? No, Your Honor. The U .S.

01:19:54.220 --> 01:19:56.119
Trustee, again, appreciates that are working

01:19:56.119 --> 01:20:01.439
with us on a form of order that would be accepted

01:20:01.439 --> 01:20:05.020
to the U .S. Trustee and appreciates the resolution

01:20:05.020 --> 01:20:06.819
that we reached on that. Thank you, Your Honor.

01:20:08.020 --> 01:20:11.600
All right. Any other party? Good afternoon, Your

01:20:11.600 --> 01:20:14.720
Honor. Kyle Hirsch for Brian Cave, Leighton Pasner,

01:20:14.779 --> 01:20:18.300
representing Bank of America. We have not had

01:20:18.300 --> 01:20:20.880
a chance to confer with debtors council. There

01:20:20.880 --> 01:20:23.960
is a modest revision that we would be requesting

01:20:23.960 --> 01:20:26.880
of debtors council. So to the extent there is

01:20:26.880 --> 01:20:29.800
a proposed order that is being amended for uploading,

01:20:30.340 --> 01:20:32.800
I think we can get that addressed. I don't expect

01:20:32.800 --> 01:20:35.899
it to be controversial. It relates to authorization

01:20:35.899 --> 01:20:39.699
for the bank to charge back to accounts for returned

01:20:39.699 --> 01:20:42.840
items. That's an important provision for the

01:20:42.840 --> 01:20:45.220
bank to include in its cash management provisions.

01:20:45.630 --> 01:20:48.250
But I do expect that to be a non -controversial

01:20:48.250 --> 01:20:53.250
discussion with Betters Council. And with that

01:20:53.250 --> 01:20:55.529
additional revision, we don't have objections

01:20:55.529 --> 01:21:00.949
to the proposed order. All right. That sounds

01:21:00.949 --> 01:21:03.729
like something that should be able to get worked

01:21:03.729 --> 01:21:06.329
out in fairly short order after the hearing,

01:21:06.569 --> 01:21:10.850
before the order's uploaded. Yep, you're right.

01:21:10.909 --> 01:21:15.140
I will agree, Warren. Thank you. We'll come forward

01:21:15.140 --> 01:21:16.819
with Mr. Hirsch and make sure it's addressed

01:21:16.819 --> 01:21:18.920
in the order. All right. All right. Thank you.

01:21:19.039 --> 01:21:29.199
Any other parties? All right. Well, that motion's

01:21:29.199 --> 01:21:31.079
granted with the understanding that that little

01:21:31.079 --> 01:21:34.140
tweak will be made before the order's uploaded.

01:21:34.600 --> 01:21:36.979
Otherwise, everything else looks good to go.

01:21:36.979 --> 01:21:41.180
So that motion's granted. Thank you. Now I yield

01:21:41.180 --> 01:21:44.020
the floor to my colleague, Ms. Regina Casillo.

01:21:44.220 --> 01:21:54.659
All right, thank you. Good afternoon, Your Honor.

01:21:55.020 --> 01:21:56.819
For the record, Regina Castillo from Ropes and

01:21:56.819 --> 01:21:59.359
Gray on behalf of the debtors. I will be presenting

01:21:59.359 --> 01:22:02.000
the next two matters. The first matter I'll be

01:22:02.000 --> 01:22:04.300
presenting is agenda number 12. This is the debtors

01:22:04.300 --> 01:22:06.100
critical vendor motion filed at docket number

01:22:06.100 --> 01:22:09.800
13. By this motion, the debtors are seeking entry

01:22:09.800 --> 01:22:12.000
of an order authorizing the debtors to pay certain

01:22:12.000 --> 01:22:14.239
pre -petition claims of vendors whose goods and

01:22:14.239 --> 01:22:15.939
services are essential to the debtors continued

01:22:15.939 --> 01:22:18.739
operations, claimants whose claims are entitled

01:22:18.739 --> 01:22:21.300
to administrative expense priority under section

01:22:21.300 --> 01:22:24.520
503 B9 of the bankruptcy code, and claims that

01:22:24.520 --> 01:22:26.659
give rise to statutory constructive trust under

01:22:26.659 --> 01:22:30.140
PACA and PASA. In this order, the debtors are

01:22:30.140 --> 01:22:32.720
seeking this relief on an interim basis up to

01:22:32.720 --> 01:22:37.000
an amount of approximately $4 .7 million. Your

01:22:37.000 --> 01:22:38.420
Honor, the debtors, along with their advisors,

01:22:38.579 --> 01:22:40.020
have engaged in a thorough review of the books

01:22:40.020 --> 01:22:42.279
and records and reviewed diligently to identify

01:22:42.279 --> 01:22:44.100
the vendors out of the debtor's entire vendor

01:22:44.100 --> 01:22:46.640
population that are truly critical to their operations

01:22:46.640 --> 01:22:49.260
and without whose goods and services the debtor's

01:22:49.260 --> 01:22:51.079
estates would be significantly and irreparably

01:22:51.079 --> 01:22:54.840
harmed. We worked with the United States trustee

01:22:54.840 --> 01:22:56.659
in advance of filing to address any questions

01:22:56.659 --> 01:22:58.859
and concerns and believe that the proposed interim

01:22:58.859 --> 01:23:00.680
order attached to the motion and submitted in

01:23:00.680 --> 01:23:02.340
advance of the hearing is acceptable to United

01:23:02.340 --> 01:23:05.560
States trustee. Unless your honor has any questions,

01:23:05.680 --> 01:23:07.619
we respectfully request that the proposed form

01:23:07.619 --> 01:23:09.520
of order at docket number 13 be entered by the

01:23:09.520 --> 01:23:16.500
court. All right. I'll start again with Mr. Bubly.

01:23:17.699 --> 01:23:20.840
No concerns, Your Honor. Thank you. All right.

01:23:20.960 --> 01:23:24.140
Thank you. Any other party? Your Honor, this

01:23:24.140 --> 01:23:27.939
is. We're secretly on behalf of, as I stated

01:23:27.939 --> 01:23:33.039
earlier, Benny Keith Company, a significant creditor

01:23:33.039 --> 01:23:37.180
in this action out of Fort Worth, Texas. My client

01:23:37.180 --> 01:23:40.239
is a food service provider to Hooters restaurants.

01:23:40.640 --> 01:23:46.439
in the Texas and outlying areas. My only concern,

01:23:46.439 --> 01:23:48.899
I don't necessarily object to the critical vendor,

01:23:49.260 --> 01:23:51.899
but I wanted to comment that we are working with

01:23:51.899 --> 01:23:55.579
the debtors to try to resolve our status as a

01:23:55.579 --> 01:23:59.619
critical vendor. We are owed over $2 million

01:23:59.619 --> 01:24:05.060
for pre -petition debts from the restaurants

01:24:05.060 --> 01:24:08.939
that we service or supply. In addition to that,

01:24:08.939 --> 01:24:12.069
we are a preferred creditor under the Parish

01:24:12.069 --> 01:24:15.149
Bliger Cultural Commodities Act, trust provisions,

01:24:15.689 --> 01:24:19.229
which give us priority over all creditors, secured,

01:24:19.449 --> 01:24:22.510
unsecured, or otherwise, in connection with the

01:24:22.510 --> 01:24:25.210
debtor's bankruptcy case. Again, I emphasize

01:24:25.210 --> 01:24:27.810
that we are working very closely with the debtors

01:24:27.810 --> 01:24:30.789
to resolve our status in the bankruptcy case.

01:24:31.189 --> 01:24:34.189
But I wanted to make at least some statement

01:24:34.189 --> 01:24:37.350
that we reserve our rights with respect to the

01:24:37.350 --> 01:24:41.029
treatment of our claim. under the critical vendor

01:24:41.029 --> 01:24:44.390
motion and also more particularly under the debtor

01:24:44.390 --> 01:24:48.970
in possession motion, which is going to be heard

01:24:48.970 --> 01:24:52.189
in a minute. We are, like I said, we are owed

01:24:52.189 --> 01:24:54.350
quite a significant amount of money. The motion

01:24:54.350 --> 01:24:57.369
currently before the court does not identify

01:24:57.369 --> 01:25:01.470
any creditors per se. We have been advised that

01:25:01.470 --> 01:25:03.750
we are deemed by the debtor to be a critical

01:25:03.750 --> 01:25:07.329
creditor. However, we have not had a resolution

01:25:07.329 --> 01:25:11.039
and I'm concerned only that with our claim at

01:25:11.039 --> 01:25:14.880
$2 .2 million on pre -petition debt and other

01:25:14.880 --> 01:25:18.300
creditors that they may consider critical vendors,

01:25:18.399 --> 01:25:21.640
that the amount that is being set aside for treatment

01:25:21.640 --> 01:25:25.720
of critical vendors is adequately sufficient

01:25:25.720 --> 01:25:31.000
to maintain the goal that the debtors seek to

01:25:31.000 --> 01:25:33.640
achieve by this motion. That's all I would have

01:25:33.640 --> 01:25:39.020
at this time. Thank you. Entry of the order won't

01:25:39.020 --> 01:25:41.680
prejudice your client's rights to continue to

01:25:41.680 --> 01:25:43.760
work with the debtor to try to convince them

01:25:43.760 --> 01:25:48.420
that they're critical. So I understand the comment.

01:25:50.920 --> 01:25:56.020
So thank you for that. Any other parties? Your

01:25:56.020 --> 01:25:59.020
Honor, Mark Stout here on behalf of Regents Facility

01:25:59.020 --> 01:26:05.029
Services, Inc. Your Honor. Shortly before the

01:26:05.029 --> 01:26:07.229
hearing today, I had an opportunity to call debtors

01:26:07.229 --> 01:26:10.329
council and to their credit, I sent them an email

01:26:10.329 --> 01:26:12.710
just a couple hours before the hearing and they

01:26:12.710 --> 01:26:16.409
immediately responded. My understanding is that

01:26:16.409 --> 01:26:19.850
my client will be listed and a revised order

01:26:19.850 --> 01:26:22.470
that they are submitting to the court listening

01:26:22.470 --> 01:26:26.670
to counselors presentation. It's unclear to me

01:26:26.670 --> 01:26:29.159
if the order that is previously been presented

01:26:29.159 --> 01:26:31.760
to the court is the one that they intend to upload

01:26:31.760 --> 01:26:33.760
or if there's going to be a revised one. But

01:26:33.760 --> 01:26:35.939
my understanding is that my client is in the

01:26:35.939 --> 01:26:41.560
revised order for $321 ,206 on a claim amount

01:26:41.560 --> 01:26:47.640
of $726 ,000. I reserve all rights to object

01:26:47.640 --> 01:26:50.619
to the treatment, I have not had an adequate

01:26:50.619 --> 01:26:52.880
time to dig through it with my client, but I

01:26:52.880 --> 01:26:55.100
did want to make sure that my understanding that

01:26:55.100 --> 01:26:57.119
we were going to be listed as a critical vendor

01:26:57.119 --> 01:26:59.279
is correct and that the court was aware of that.

01:26:59.600 --> 01:27:03.659
Thank you. All right. Well, I guess I'll hear

01:27:03.659 --> 01:27:05.199
from the debtors on whether the agreement was

01:27:05.199 --> 01:27:07.500
to list you or whether they just consider you

01:27:07.500 --> 01:27:11.239
critical. It doesn't really matter to me, however.

01:27:14.149 --> 01:27:16.710
However, the debtors would like to confirm that

01:27:16.710 --> 01:27:18.630
Mr. Stout's clients are critical vendors. However,

01:27:18.670 --> 01:27:22.250
we will not be submitting a revised order. All

01:27:22.250 --> 01:27:30.090
right, very good. Your Honor, will the debtor

01:27:30.090 --> 01:27:33.829
confirm that my client Betty Keith's company

01:27:33.829 --> 01:27:38.109
is a critical vendor and will be treated respectfully

01:27:38.109 --> 01:27:43.340
under the court's order? Your honor the debtors

01:27:43.340 --> 01:27:52.140
confirm Thank you All right Well that motion

01:27:52.140 --> 01:27:56.720
Is also granted no matter what standard applies

01:27:56.720 --> 01:27:59.020
whether it's co -server or some other standard

01:27:59.020 --> 01:28:01.100
I think the debtors have satisfied it with with

01:28:01.100 --> 01:28:03.840
the evidence and the Declaration so that motion

01:28:03.840 --> 01:28:08.920
is granted Thank you your honor the next item

01:28:08.920 --> 01:28:10.779
on the agenda that I'll be covering is agenda

01:28:10.779 --> 01:28:13.460
number 13 This is the debtor's customer program's

01:28:13.460 --> 01:28:16.779
motion filed to docket number 14. By this motion,

01:28:16.899 --> 01:28:18.899
the debtors are seeking entry of an order authorizing

01:28:18.899 --> 01:28:20.760
the debtors to maintain and administer their

01:28:20.760 --> 01:28:22.819
existing customer programs and to honor their

01:28:22.819 --> 01:28:26.520
pre -petition obligations related thereto. Your

01:28:26.520 --> 01:28:27.960
Honor, the continuance of these customer programs

01:28:27.960 --> 01:28:30.380
is critical to the debtor's business. In particular,

01:28:30.439 --> 01:28:31.939
it's essential that the debtors maintain their

01:28:31.939 --> 01:28:34.260
valuable customer relationships, goodwill, and

01:28:34.260 --> 01:28:36.399
continue maximizing the debtor's reputation and

01:28:36.399 --> 01:28:39.500
customer satisfaction. The debtors run a variety

01:28:39.500 --> 01:28:41.619
of customer programs and rewards that are designed

01:28:41.619 --> 01:28:43.800
to drive brand excitement, attract customers,

01:28:44.020 --> 01:28:45.680
and maintain positive customer relationships

01:28:45.680 --> 01:28:48.720
at each of its restaurants. This includes certain

01:28:48.720 --> 01:28:50.619
promotions and a loyalty program maintained by

01:28:50.619 --> 01:28:53.239
the debtors. The loyalty program is structured

01:28:53.239 --> 01:28:55.720
as a tiered membership system where guests accrue

01:28:55.720 --> 01:28:57.899
points with each visit for amounts spent at the

01:28:57.899 --> 01:29:00.520
debtor's restaurants. Additionally, the debtors

01:29:00.520 --> 01:29:02.560
provide rewards for non -purchasing activities

01:29:02.560 --> 01:29:04.939
such as birthdays, holidays, or other qualifying

01:29:04.939 --> 01:29:06.800
events for participants of the loyalty program.

01:29:07.789 --> 01:29:09.949
There are no pre -petition amounts due under

01:29:09.949 --> 01:29:12.250
the debtor's loyalty program beyond the non -purchasing

01:29:12.250 --> 01:29:14.489
rewards, but the debtors request authority to

01:29:14.489 --> 01:29:17.949
continue honoring these promotions. Additionally,

01:29:18.069 --> 01:29:19.670
the debtors seek authority to continue its gift

01:29:19.670 --> 01:29:22.210
card programs, which is administered by a third

01:29:22.210 --> 01:29:25.149
party, Stored Value Solutions. The third party

01:29:25.149 --> 01:29:26.909
administrator is paid a monthly processing fee

01:29:26.909 --> 01:29:30.890
of $3 ,200. As of the petition day, there are

01:29:30.890 --> 01:29:33.470
approximately $10 .6 million in gift cards outstanding.

01:29:33.840 --> 01:29:35.640
However, in the three months prior to the petition

01:29:35.640 --> 01:29:38.619
date, approximately $670 ,000 were redeemed pursuant

01:29:38.619 --> 01:29:41.300
to the program. The debtors seek authorization

01:29:41.300 --> 01:29:44.220
to honor any accrued obligations, including obligations

01:29:44.220 --> 01:29:46.439
incurred on account of the processing fee, and

01:29:46.439 --> 01:29:48.220
to continue to honor all customer obligations

01:29:48.220 --> 01:29:50.300
on a post -petition basis consistent with past

01:29:50.300 --> 01:29:53.640
practices. Finally, the debtors seek authority

01:29:53.640 --> 01:29:55.640
to continue its partnership with its third -party

01:29:55.640 --> 01:29:58.539
delivery services and first -party delivery providers

01:29:58.539 --> 01:30:01.319
who facilitate direct ordering and delivery services.

01:30:02.000 --> 01:30:04.060
The third party delivery partnerships collect

01:30:04.060 --> 01:30:06.359
payments from customers and remit payments to

01:30:06.359 --> 01:30:08.800
debtors net of commissions and fees, where the

01:30:08.800 --> 01:30:10.619
first party delivery providers collect monthly

01:30:10.619 --> 01:30:12.899
fees as well as a transaction fee of approximately

01:30:12.899 --> 01:30:16.600
$49 ,000 a month. As of the petition date, the

01:30:16.600 --> 01:30:18.439
debtors do not owe any outstanding obligations

01:30:18.439 --> 01:30:20.619
under the delivery partnerships, but seek authority

01:30:20.619 --> 01:30:22.359
to continue the partnerships and the ordinary

01:30:22.359 --> 01:30:25.720
course on a post -petition basis. Your Honor,

01:30:25.819 --> 01:30:27.399
maintaining these critical relationships will

01:30:27.399 --> 01:30:29.260
benefit all the debtors, creditors, and stakeholders.

01:30:29.600 --> 01:30:31.500
And the debtors believe that the damages from

01:30:31.500 --> 01:30:33.199
disregarding these obligations under the customer

01:30:33.199 --> 01:30:35.579
programs would far exceed the costs associated

01:30:35.579 --> 01:30:37.600
with honoring them, as canceling any of these

01:30:37.600 --> 01:30:39.659
programs would result in brand damage, loss of

01:30:39.659 --> 01:30:41.600
goodwill, as well as loss of returning customers.

01:30:42.699 --> 01:30:44.579
Unless Your Honor has any questions, we respectfully

01:30:44.579 --> 01:30:46.880
request that the proposed form of order at docket

01:30:46.880 --> 01:30:51.460
number 14 be entered by the court. All right.

01:30:51.600 --> 01:30:55.359
Mr. Public, any concerns on this one? No concerns

01:30:55.359 --> 01:30:57.340
with this motion. Thank you, Your Honor. All

01:30:57.340 --> 01:31:11.420
right. Any other party? All right. The order

01:31:11.420 --> 01:31:13.920
on this one looked fine to me, so just as with

01:31:13.920 --> 01:31:16.319
the others, I'll adopt it, and that motion is

01:31:16.319 --> 01:31:19.819
granted. Thank you, Your Honor. With that, I'll

01:31:19.819 --> 01:31:21.680
say the podium to my colleague, Ms. O 'Court.

01:31:22.199 --> 01:31:36.880
All right. Thank you. Good morning, Your Honor.

01:31:37.000 --> 01:31:39.079
For the record, Alexis Ogorek from Ropes and

01:31:39.079 --> 01:31:43.640
Gray. I'll be presenting two motions, the first

01:31:43.640 --> 01:31:45.399
of which is the debtors lease rejection motion,

01:31:45.460 --> 01:31:47.739
which is found at docket number 15 and agenda

01:31:47.739 --> 01:31:51.859
number 14 on the proposed revised agenda. We

01:31:51.859 --> 01:31:54.100
have spoken with certain council to the landlords

01:31:54.100 --> 01:31:57.060
and we are continuing to work with those landlords

01:31:57.060 --> 01:32:00.670
on a revised form of revised proposed form of

01:32:00.670 --> 01:32:03.869
order, pardon me, and we will upload that order

01:32:03.869 --> 01:32:07.630
after this hearing when it's agreed to. In terms

01:32:07.630 --> 01:32:09.789
of the relief, the debtors are requesting authorization

01:32:09.789 --> 01:32:12.949
to reject certain non -residential real property

01:32:12.949 --> 01:32:15.350
leases and abandon certain personal property

01:32:15.350 --> 01:32:18.250
at such lease locations. The debtors have ceased

01:32:18.250 --> 01:32:21.270
operations at 36 of its restaurant locations

01:32:21.270 --> 01:32:23.729
prior to the petition date. The debtors have

01:32:23.729 --> 01:32:25.590
either surrendered possession of the premises

01:32:25.590 --> 01:32:27.930
and provided notice to the landlords, or the

01:32:27.930 --> 01:32:29.810
debtors have been locked out by the landlords.

01:32:30.590 --> 01:32:32.609
The debtors are requesting the rejection of leases

01:32:32.609 --> 01:32:35.550
as of the petition date, as well as abandoning

01:32:35.550 --> 01:32:42.750
personal property assets therein. The debtors

01:32:42.750 --> 01:32:46.869
do not believe there is valuable property remaining

01:32:46.869 --> 01:32:50.069
at the locations that they have surrendered to

01:32:50.069 --> 01:32:52.659
the landlords. And the debtors are requesting

01:32:52.659 --> 01:32:55.039
relief effective as of the petition date to minimize

01:32:55.039 --> 01:32:57.600
post -petition administrative expenses. We've

01:32:57.600 --> 01:32:59.720
provided a copy of the motion to counsel to the

01:32:59.720 --> 01:33:02.899
U .S. trustee. And accordingly, if there are

01:33:02.899 --> 01:33:05.020
no questions, we respectfully request that this

01:33:05.020 --> 01:33:07.340
court enter the lease rejection order, which,

01:33:07.479 --> 01:33:09.680
again, there will be a revised proposed form

01:33:09.680 --> 01:33:14.699
of after. All right. So when I read this one,

01:33:14.880 --> 01:33:16.760
I think last night, the original certificate

01:33:16.760 --> 01:33:19.359
of service just said that it was served on the

01:33:19.359 --> 01:33:23.140
court's pacer system, but at some point, I think

01:33:23.140 --> 01:33:26.159
over lunch I saw there's a revised affidavit

01:33:26.159 --> 01:33:29.079
of service and it looks, I didn't have time to

01:33:29.079 --> 01:33:32.840
go through and look at the details, but it looked

01:33:32.840 --> 01:33:38.640
I think towards the end, was it I and J, you

01:33:38.640 --> 01:33:43.500
were able to get service on the affected counterparties

01:33:43.500 --> 01:33:46.739
either by email or overnight service, is that

01:33:46.739 --> 01:33:51.310
right? Your Honor, I believe that's correct.

01:33:51.949 --> 01:33:55.350
Were there any counterparties that you didn't

01:33:55.350 --> 01:33:57.909
have good that you didn't have addresses for

01:33:57.909 --> 01:34:00.329
for overnight service whether it was like a post

01:34:00.329 --> 01:34:06.630
office for a post office box or nothing stuck

01:34:06.630 --> 01:34:10.970
out so Your Honor, I do not believe so but I

01:34:10.970 --> 01:34:16.260
can confirm all right, so Well, I'll just trust

01:34:16.260 --> 01:34:20.220
that the service is good. If there was a problem

01:34:20.220 --> 01:34:24.319
serving anybody, you can follow up after the

01:34:24.319 --> 01:34:30.600
hearing. So let me start and ask, are there any

01:34:30.600 --> 01:34:32.279
parties have any questions or concerns about

01:34:32.279 --> 01:34:37.460
this motion? This is Joel Newell with Ballard's

01:34:37.460 --> 01:34:39.979
Bar. There were a couple of questions related

01:34:39.979 --> 01:34:43.800
to this, and I will echo Council's comment. that

01:34:43.800 --> 01:34:47.159
we have had some dialogue with council as to

01:34:47.159 --> 01:34:49.460
some perspective language to be included in the

01:34:49.460 --> 01:34:52.859
order. The first being, since this is a first

01:34:52.859 --> 01:34:56.760
day motion, one of the concerns is why this needs

01:34:56.760 --> 01:34:59.060
to be done on such an expedited basis, given

01:34:59.060 --> 01:35:02.979
the non -protonc relief as to these properties

01:35:02.979 --> 01:35:05.939
that it wouldn't incur any additional administrative

01:35:05.939 --> 01:35:10.579
costs. The second being, as council noted, these

01:35:10.579 --> 01:35:14.000
36 properties one of particular interest to our

01:35:14.000 --> 01:35:18.760
client has left the essentially the restaurant

01:35:18.760 --> 01:35:21.960
equipment and everything there and getting clarifying

01:35:21.960 --> 01:35:25.859
language in the proposed order that the landlord

01:35:25.859 --> 01:35:28.720
can dispose of that property once the orders

01:35:28.720 --> 01:35:33.880
entered similar to what we may see in a later

01:35:33.880 --> 01:35:38.239
motion on the rejection procedure that is not

01:35:38.239 --> 01:35:41.300
necessarily compounded, but expanded upon from

01:35:41.300 --> 01:35:43.779
the standpoint of some of that property on site

01:35:43.779 --> 01:35:46.479
on these closed businesses, maybe third party,

01:35:46.939 --> 01:35:50.720
and the difficulty of then the landlord being

01:35:50.720 --> 01:35:54.199
in the position of having to determine whose

01:35:54.199 --> 01:35:56.579
property that is. We did get a list of the third

01:35:56.579 --> 01:36:00.319
party holders of that property and trying to

01:36:00.319 --> 01:36:03.560
work with the debtor on. coordinating that, but

01:36:03.560 --> 01:36:05.939
some of those concerns are still outstanding

01:36:05.939 --> 01:36:08.119
in relation to the respective motion and the

01:36:08.119 --> 01:36:10.420
immediate relief asked by the debtors today.

01:36:13.520 --> 01:36:16.520
So tell me you've floated some proposed language

01:36:16.520 --> 01:36:20.520
or not. Have you had a chance to do that? Yes,

01:36:20.539 --> 01:36:23.520
I apologize, Your Honor. Yes, to clarify or reaffirm,

01:36:23.659 --> 01:36:25.880
yes, we have sent some proposed language to Debtors

01:36:25.880 --> 01:36:29.380
Council. to be considered. The comment that I

01:36:29.380 --> 01:36:31.359
believe we received in response was that they

01:36:31.359 --> 01:36:34.819
needed to confer with the secured lender or lender

01:36:34.819 --> 01:36:41.020
in general on those proposed changes. And we

01:36:41.020 --> 01:36:42.920
at this point don't have affirmation whether

01:36:42.920 --> 01:36:46.539
that's been accepted or not. But we'll continue

01:36:46.539 --> 01:36:49.460
to work with debtors council and whomever on

01:36:49.460 --> 01:36:52.060
continue to discuss that proposed order itself.

01:36:55.400 --> 01:36:58.279
All right, so from the debtor's perspective,

01:37:03.560 --> 01:37:05.359
I don't know if you can give me an update if

01:37:05.359 --> 01:37:08.539
you've had a chance to confer with the, I guess

01:37:08.539 --> 01:37:11.939
the lenders that would, the concern I guess would

01:37:11.939 --> 01:37:13.619
be the lenders that have a lien in the stuff

01:37:13.619 --> 01:37:16.500
that the landlords are proposing to go dispose

01:37:16.500 --> 01:37:23.600
of. Apologies for that. I'm not sure if I was

01:37:23.600 --> 01:37:26.939
on mute there or not. We are continuing to work

01:37:26.939 --> 01:37:29.720
with the landlord's council to continue working

01:37:29.720 --> 01:37:34.319
on a revised form of order. In terms of the specific

01:37:34.319 --> 01:37:39.800
comments by council that was just raised, actually,

01:37:39.899 --> 01:37:41.479
I'm sorry. May I have a moment to confer with

01:37:41.479 --> 01:38:45.899
my colleagues? Sure. Thank you. Your honor, can

01:38:45.899 --> 01:38:49.779
you hear me? Yes, I can. Sorry. Thank you so

01:38:49.779 --> 01:38:52.880
much for that. So we have notified the third

01:38:52.880 --> 01:38:55.180
parties who have interest in the property that

01:38:55.180 --> 01:38:57.539
is left behind at the locations, and we are not

01:38:57.539 --> 01:38:59.439
directing one way or the other what the landlords

01:38:59.439 --> 01:39:02.619
should or should not do with that. We have provided

01:39:02.619 --> 01:39:04.260
the contact information, and we will continue

01:39:04.260 --> 01:39:06.840
to provide it if any more is needed so that the

01:39:06.840 --> 01:39:09.359
landlords and those third parties can continue

01:39:09.359 --> 01:39:12.270
working that out amongst themselves. As for the

01:39:12.270 --> 01:39:14.310
specific comments by this landlord that were

01:39:14.310 --> 01:39:16.189
raised and to which we responded that we were

01:39:16.189 --> 01:39:18.710
working with our secure lenders, we are still

01:39:18.710 --> 01:39:20.710
working with our secure lenders on that. Obviously,

01:39:20.710 --> 01:39:22.550
there are multiple parties of interest in this

01:39:22.550 --> 01:39:25.189
case. So I cannot confirm those specific comments

01:39:25.189 --> 01:39:27.609
at this time, but we will continue dialogue with

01:39:27.609 --> 01:39:29.390
the landlord council and with the other parties

01:39:29.390 --> 01:39:32.970
in interest. All right. So just as a heads up,

01:39:33.109 --> 01:39:35.750
because this has come up in other cases, giving

01:39:35.750 --> 01:39:38.130
a little bit of a preview for the next motion

01:39:38.130 --> 01:39:42.479
with the abandonment procedures. I've never quite

01:39:42.479 --> 01:39:46.399
gotten comfortable with the concept that the

01:39:46.399 --> 01:39:51.199
language, and again, we're not calling that motion

01:39:51.199 --> 01:39:54.859
yet, but that the abandonment would be free and

01:39:54.859 --> 01:39:58.220
clear of liens, claims, and encumbrances, abandon

01:39:58.220 --> 01:40:00.180
to the landlord, free and clear of liens, claims,

01:40:00.300 --> 01:40:05.819
and encumbrances. I haven't quite gotten comfortable

01:40:05.819 --> 01:40:11.100
with language like that. Is that what? the proposed

01:40:11.100 --> 01:40:14.960
language that's being discussed for the current

01:40:14.960 --> 01:40:17.760
rejection motion? Is that the type of language

01:40:17.760 --> 01:40:20.119
that you're looking for for your landlord client?

01:40:21.539 --> 01:40:23.479
Right, Your Honor. Are you referring to the rejection

01:40:23.479 --> 01:40:25.920
motion that we're discussing now or the rejection

01:40:25.920 --> 01:40:30.340
procedures motion? Well, I'm asking if the type

01:40:30.340 --> 01:40:32.539
of language that this particular landlord is

01:40:32.539 --> 01:40:36.039
asking for to resolve his concerns about this

01:40:36.039 --> 01:40:39.250
motion Is he asking for that type of language,

01:40:39.369 --> 01:40:41.029
the type of language that's in the procedures

01:40:41.029 --> 01:40:45.329
for abandonment? Because I'm, is that what you're

01:40:45.329 --> 01:40:47.590
asking for, to be able to go get it free and

01:40:47.590 --> 01:40:49.510
clear of liens, claims, and encumbrances? Or

01:40:49.510 --> 01:40:53.909
is it just that the stays lifted free to exercise

01:40:53.909 --> 01:40:56.270
whatever rights and remedies you might have?

01:40:56.329 --> 01:40:58.510
I think from my perspective, that's the type

01:40:58.510 --> 01:41:00.949
of language that I would be comfortable with.

01:41:06.299 --> 01:41:09.920
Thank you, counsel. Yes, to answer the court's

01:41:09.920 --> 01:41:12.579
question, the language that we would be proposing

01:41:12.579 --> 01:41:16.359
or have proposed would include that the property

01:41:16.359 --> 01:41:19.359
that is abandoned by the debtor is free and clear

01:41:19.359 --> 01:41:23.939
of those interests of the creditors to otherwise

01:41:23.939 --> 01:41:27.600
dispose of as provided and the abandonment of

01:41:27.600 --> 01:41:32.260
the property in those rejected leases. So you'll

01:41:32.260 --> 01:41:33.920
have to help, you'll have to convince me that

01:41:33.920 --> 01:41:36.560
that's appropriate because I've In prior cases,

01:41:36.560 --> 01:41:39.340
I haven't approved language like that because

01:41:39.340 --> 01:41:46.579
the Why would the abandonment be free and clear

01:41:46.579 --> 01:41:50.260
of liens claims and encumbrances I know that

01:41:50.260 --> 01:41:55.300
that would be helpful to the landlord but Wouldn't

01:41:55.300 --> 01:41:57.760
it be sufficient if the landlord is just free

01:41:57.760 --> 01:42:01.100
to exercise whatever rights and remedies it may

01:42:01.100 --> 01:42:07.319
have under applicable law to dispose of Whatever's

01:42:07.319 --> 01:42:11.020
left Well in similar cases this language has

01:42:11.020 --> 01:42:13.859
been utilized in part of the issue is the cost

01:42:13.859 --> 01:42:18.159
of the storage of trying to Then determine whose

01:42:18.159 --> 01:42:23.979
property it is or the lien holder rights And

01:42:23.979 --> 01:42:30.380
The the language provides that and maybe it's

01:42:30.380 --> 01:42:32.659
a clarification to my private comment I apologize

01:42:32.659 --> 01:42:36.470
your honor that There's no free and clear language,

01:42:36.550 --> 01:42:39.369
but the language that the property will be abandoned

01:42:39.369 --> 01:42:43.149
in consultation with the lenders. So the landlords

01:42:43.149 --> 01:42:46.329
need further clarity that the lenders have been

01:42:46.329 --> 01:42:49.689
consulted and are waiving their liens. And I

01:42:49.689 --> 01:42:51.289
think that addresses the court's issue because

01:42:51.289 --> 01:42:53.550
it wouldn't be so much as the court's determining

01:42:53.550 --> 01:42:56.409
that the landlord can dispose of it free and

01:42:56.409 --> 01:42:58.170
clear is that they're waiving their liens as

01:42:58.170 --> 01:43:01.050
to that. So I think it would be at that point

01:43:01.050 --> 01:43:06.420
a mutual. per se release of the lien for that

01:43:06.420 --> 01:43:08.239
once the order is entered for then the landlord

01:43:08.239 --> 01:43:10.300
to dispose of the property that's abandoned by

01:43:10.300 --> 01:43:14.159
the debtor. So that's why I believe the secondary

01:43:14.159 --> 01:43:16.140
comment that council raised that they're still

01:43:16.140 --> 01:43:19.000
conferring with lenders comes into play with

01:43:19.000 --> 01:43:22.960
regards to language in the proposed order. So

01:43:22.960 --> 01:43:25.319
I wouldn't have any problem if the lenders who

01:43:25.319 --> 01:43:28.000
are represented here agree to language that say

01:43:28.000 --> 01:43:33.279
once it's abandoned they're or releasing their

01:43:33.279 --> 01:43:36.960
liens so that you can do with it what you want

01:43:36.960 --> 01:43:40.359
without having to worry about those lenders that

01:43:40.359 --> 01:43:44.380
are expressly releasing their whatever interest

01:43:44.380 --> 01:43:47.119
they might have in the equipment. If that's what

01:43:47.119 --> 01:43:48.539
you're talking about, I don't have a problem

01:43:48.539 --> 01:43:52.079
with that. I guess I'll just have to rely on

01:43:52.079 --> 01:43:55.000
the debtors to let me know if the order's uploaded,

01:43:55.399 --> 01:43:58.359
who all has blessed that language in the order.

01:44:02.389 --> 01:44:05.750
I apologize for any confusion I may have created

01:44:05.750 --> 01:44:08.729
with my prior comments, but I believe at the

01:44:08.729 --> 01:44:11.789
end of the day, with conference with the lenders,

01:44:11.810 --> 01:44:15.189
it will be a waiver and inclusive in the order

01:44:15.189 --> 01:44:19.949
itself. So we'll work with debtors council post

01:44:19.949 --> 01:44:23.970
hearing to address that. All right. Does that

01:44:23.970 --> 01:44:26.909
work for the debtors to try and wrap up that

01:44:26.909 --> 01:44:29.369
particular concern with language that's agreed

01:44:29.369 --> 01:44:34.060
to by the debtors? this this landlord and whichever

01:44:34.060 --> 01:44:36.899
lenders want to expressly release their liens?

01:44:37.800 --> 01:44:41.520
Yes your honor that works for us. All right any

01:44:41.520 --> 01:44:44.880
other any other parties? Yes your honor Cheryl

01:44:44.880 --> 01:44:47.659
Knighton on behalf of several uh ad valorem property

01:44:47.659 --> 01:44:51.329
taxing entities in Texas. Going back to the comments

01:44:51.329 --> 01:44:53.409
that were just discussed about abandonment free

01:44:53.409 --> 01:44:57.029
and clear of liens, under pursuant to Texas law,

01:44:57.250 --> 01:45:00.050
the liens held by the Avalon taxing entities

01:45:00.050 --> 01:45:02.630
are the senior liens on any tangible personal

01:45:02.630 --> 01:45:05.369
property. So they would object to any abandonment

01:45:05.369 --> 01:45:10.130
free and clear of liens at this juncture. All

01:45:10.130 --> 01:45:11.930
right. So it sounds like for this particular

01:45:11.930 --> 01:45:14.069
motion, I don't think anybody's trying to get

01:45:14.069 --> 01:45:20.659
that language in there. But so I understand your

01:45:20.659 --> 01:45:23.500
concern so if the debtors want to try to resolve

01:45:23.500 --> 01:45:28.960
the issues for these landlords After the hearing

01:45:28.960 --> 01:45:30.739
I don't have any problem with that I will grant

01:45:30.739 --> 01:45:34.279
the motion and allow the debtors the opportunity

01:45:34.279 --> 01:45:37.439
to tweak the order to resolve the concerns of

01:45:37.439 --> 01:45:40.899
particular lenders about particular liens, but

01:45:40.899 --> 01:45:44.039
I'm not anticipating that this order will be

01:45:44.039 --> 01:45:46.460
uploaded with just general language that says

01:45:46.460 --> 01:45:49.560
that the abandonments Free and clear. I think

01:45:49.560 --> 01:45:51.979
that would address miss Knighton's concerns,

01:45:51.979 --> 01:45:59.319
correct? Yes, your honor that would address the

01:45:59.319 --> 01:46:01.800
teching up or ease concerns. All right. All right.

01:46:01.800 --> 01:46:04.699
Does that work for the debtors also then? Yes,

01:46:04.720 --> 01:46:07.399
your honor. That works for us All right. Very

01:46:07.399 --> 01:46:10.359
good. Well that that motion is granted then and

01:46:10.359 --> 01:46:13.560
I'll Keep an eye out for some some form of agreed

01:46:13.560 --> 01:46:18.670
order Thank you, your honor The next motion I'd

01:46:18.670 --> 01:46:21.850
like to present, as you previewed, is the rejection

01:46:21.850 --> 01:46:25.630
procedures motion. And similarly, we continue

01:46:25.630 --> 01:46:28.369
to speak and work with landlords to address their

01:46:28.369 --> 01:46:32.130
concerns. And we'll upload a revised proposed

01:46:32.130 --> 01:46:34.229
form of order after this hearing. Apologies,

01:46:34.369 --> 01:46:38.550
I keep having trouble saying that. As in the

01:46:38.550 --> 01:46:40.430
previous discussion, the debtors seek entry of

01:46:40.430 --> 01:46:42.850
an order authorizing and approving procedures

01:46:42.850 --> 01:46:45.529
to reject certain executory contracts and non

01:46:45.529 --> 01:46:48.590
-residential real property leases. And while

01:46:48.590 --> 01:46:50.710
the debtors have also requested authority to

01:46:50.710 --> 01:46:52.689
reject certain leases effective as a petition

01:46:52.689 --> 01:46:55.890
date, this one creates procedures for future

01:46:55.890 --> 01:46:58.850
rejections of contracts and leases. The proposed

01:46:58.850 --> 01:47:00.810
procedure is required that the debtors file a

01:47:00.810 --> 01:47:03.829
rejection notice, which sets requirements regarding

01:47:03.829 --> 01:47:06.750
abandonment of personal property, objection procedures,

01:47:07.090 --> 01:47:09.569
deadlines for filing claims, unresolved objections,

01:47:09.729 --> 01:47:12.909
and treatment of security deposits. We have provided

01:47:12.909 --> 01:47:15.250
a copy of this motion with counsel to the U .S.

01:47:15.590 --> 01:47:18.810
trustee. And if there are no questions, we respectfully

01:47:18.810 --> 01:47:21.689
request that this court enter the rejection procedures

01:47:21.689 --> 01:47:26.090
order, which we will upload after this hearing.

01:47:28.300 --> 01:47:32.199
All right, so what my concern about the abandonment

01:47:32.199 --> 01:47:35.000
language what do the debtors propose to do with

01:47:35.000 --> 01:47:39.640
that? So that's the it's the it's the language

01:47:39.640 --> 01:47:42.680
in the order that says after the debtors specify

01:47:42.680 --> 01:47:46.039
That they're going to abandon it absent a timely

01:47:46.039 --> 01:47:48.720
objection. It's abandoned free and clear to the

01:47:48.720 --> 01:47:54.779
landlord Your honor we are comfortable removing

01:47:54.779 --> 01:47:58.579
that language All right, so I'm fine with the

01:47:58.579 --> 01:48:02.119
abandonment and to the extent that the if any

01:48:02.119 --> 01:48:04.500
particular lender wants to agree to procedures

01:48:04.500 --> 01:48:06.260
where they're releasing their particular liens,

01:48:06.260 --> 01:48:09.979
that's great, but With that change, I don't have

01:48:09.979 --> 01:48:12.699
any other concerns about that motion Does any

01:48:12.699 --> 01:48:16.020
party have any comments or concerns about the

01:48:16.020 --> 01:48:23.800
motion of docket 16? Judge if I may be maybe

01:48:23.800 --> 01:48:27.630
heard just on this one Council has said she's

01:48:27.630 --> 01:48:30.609
going to be submitting a revised order. I don't

01:48:30.609 --> 01:48:32.850
know what the changes are anticipated in the

01:48:32.850 --> 01:48:35.810
revised order. I'd like her to address that.

01:48:43.909 --> 01:48:46.989
Sorry, I don't know if I'm off mute yet. Alright,

01:48:47.210 --> 01:48:49.590
now I can hear you. Go ahead. Thank you, Your

01:48:49.590 --> 01:48:53.220
Honor. We can share the revised the revised proposed

01:48:53.220 --> 01:48:57.039
form of order with such counsel We have not decided

01:48:57.039 --> 01:48:58.760
on all the changes yet, so I can't walk through

01:48:58.760 --> 01:49:02.180
them at the moment, but Happy to share it. I

01:49:02.180 --> 01:49:04.380
mean, how could we approve an order without even

01:49:04.380 --> 01:49:06.920
knowing it's not even been shared with anyone

01:49:06.920 --> 01:49:12.779
So I understand she's gonna propose any proposed

01:49:12.779 --> 01:49:17.090
order will be sent to you I guess from my perspective,

01:49:17.329 --> 01:49:19.850
as long as the abandonment language is tweaked,

01:49:19.930 --> 01:49:22.789
I don't have a problem with the order. Tell me

01:49:22.789 --> 01:49:25.550
what your particular concern is with this order.

01:49:26.630 --> 01:49:29.550
Well, just as an example, if she changes the

01:49:29.550 --> 01:49:33.810
amount of time, I mean, on behalf of Mr. Donella,

01:49:34.670 --> 01:49:37.489
the sooner we know whether or not this scooter's

01:49:37.489 --> 01:49:40.949
location is going to be sold or taken over or

01:49:40.949 --> 01:49:43.430
operated, it's important to us to know where

01:49:43.430 --> 01:49:47.000
we stand. If, for example, they're changing the

01:49:47.000 --> 01:49:50.140
time of their rejection, that affects us dramatically.

01:49:53.539 --> 01:49:55.420
When you say the time of the objection, do you

01:49:55.420 --> 01:49:58.340
mean the time you have to respond to a proposed

01:49:58.340 --> 01:50:02.039
notice? Either way. The time that they're going

01:50:02.039 --> 01:50:03.920
to give the notice or the time for us to respond

01:50:03.920 --> 01:50:06.739
to it. So I don't think this sets a deadline

01:50:06.739 --> 01:50:09.000
for them to give you a notice. I don't recall

01:50:09.000 --> 01:50:12.119
seeing that. Is that in the order somewhere that

01:50:12.119 --> 01:50:19.300
I missed? It just generally provides that the

01:50:19.300 --> 01:50:21.260
debtors and they have a lot on their plate at

01:50:21.260 --> 01:50:24.880
the appropriate time They decide which proposed

01:50:24.880 --> 01:50:28.840
leases they want to reject After and there's

01:50:28.840 --> 01:50:31.659
no deadline for that after that decision is made

01:50:31.659 --> 01:50:36.380
They would then serve the the proposed rejection

01:50:36.380 --> 01:50:38.880
notice on the affected counterparty which would

01:50:38.880 --> 01:50:43.399
include your client at that time your client

01:50:43.399 --> 01:50:47.079
would then have the opportunity to There's an

01:50:47.079 --> 01:50:53.779
objection period. The objection period is 14

01:50:53.779 --> 01:50:56.140
days, Your Honor. 14, all right, thank you. So

01:50:56.140 --> 01:51:00.260
14 days. So I don't think you're prejudiced by

01:51:00.260 --> 01:51:02.960
the entry of this order and the types of changes

01:51:02.960 --> 01:51:04.739
that I think that the debtors are talking about

01:51:04.739 --> 01:51:09.920
making are non -material changes, not something

01:51:09.920 --> 01:51:12.560
that would wildly change the proposed procedure.

01:51:13.319 --> 01:51:17.060
And that would give your client the opportunity

01:51:17.060 --> 01:51:19.720
to look at the proposed rejection. And if you

01:51:19.720 --> 01:51:21.800
have an objection, you'll have 14 days to file

01:51:21.800 --> 01:51:26.779
it. So I think the proposed order fully preserves

01:51:26.779 --> 01:51:29.180
your client's rights. It's not doing anything

01:51:29.180 --> 01:51:35.359
now other than setting a process in motion for

01:51:35.359 --> 01:51:39.359
the debtors to then file notices as and when

01:51:39.359 --> 01:51:46.439
they see fit. All right. Thank you, Judge. Your

01:51:46.439 --> 01:51:48.979
Honor, Vicki Driver on behalf of a litany of

01:51:48.979 --> 01:51:51.979
landlords, I won't repeat. I just would like

01:51:51.979 --> 01:51:54.079
to see a copy of the order before it's uploaded.

01:51:54.220 --> 01:51:55.920
I don't think we'll have any issues with it at

01:51:55.920 --> 01:51:58.560
all, but would just like to see the final copy.

01:52:00.439 --> 01:52:02.560
All right. I think that's a fair request. I don't

01:52:02.560 --> 01:52:04.180
think the debtors will have any problems with

01:52:04.180 --> 01:52:08.170
that. And I don't have my official entry of appearance

01:52:08.170 --> 01:52:10.149
on file. I just spoke with the clients this afternoon.

01:52:10.649 --> 01:52:14.210
But I will get my contact information over to

01:52:14.210 --> 01:52:16.130
counsel for the debtor today so that they know

01:52:16.130 --> 01:52:17.909
who they're talking to and who they're talking

01:52:17.909 --> 01:52:20.149
on behalf of. All right. Thank you. Thank you,

01:52:20.189 --> 01:52:22.869
Ms. Strieber. All right. Any other parties have

01:52:22.869 --> 01:52:33.779
any concerns about this motion? All right. Well,

01:52:33.819 --> 01:52:36.699
it's granted other than with the one tweak on

01:52:36.699 --> 01:52:38.600
the abandonment language that I raised. Otherwise,

01:52:38.819 --> 01:52:43.880
I think you're good to go. So thank you. Thank

01:52:43.880 --> 01:52:45.939
you, Your Honor. I will now be seating the podium

01:52:45.939 --> 01:52:48.399
to my colleague, Mr. Brown. All right. Thank

01:52:48.399 --> 01:53:11.000
you. Good afternoon, Your Honor. Ramon Brown,

01:53:11.119 --> 01:53:13.899
ropes and gray on behalf of the debtors. Good

01:53:13.899 --> 01:53:17.039
afternoon. I'll be presenting, I'll be presenting

01:53:17.039 --> 01:53:19.199
the debtor's dip motion filed at docket number

01:53:19.199 --> 01:53:25.760
four, agenda item number three. As noted previously,

01:53:26.279 --> 01:53:29.100
the revised form of order was recently filed

01:53:29.100 --> 01:53:32.100
just before the hearing at docket number 83 with

01:53:32.100 --> 01:53:38.369
the red line filed at docket number 85. Also,

01:53:38.470 --> 01:53:42.229
as previously noted, in support of the dip motion,

01:53:42.409 --> 01:53:44.829
the debtors filed the declaration of Mr. Keith

01:53:44.829 --> 01:53:49.949
Maeve at docket number 17, the debtor CRO, and

01:53:49.949 --> 01:53:54.649
the declaration of George Coutson Nicholas of

01:53:54.649 --> 01:53:57.529
Solic, the debtor's investment banker. That's

01:53:57.529 --> 01:54:01.920
filed at docket number 18. Your honor by this

01:54:01.920 --> 01:54:05.039
motion the debtors are seeking approval of what

01:54:05.039 --> 01:54:07.819
is a 40 million dollar dip facility provided

01:54:07.819 --> 01:54:12.640
by the debtors pre -petition lender This facility

01:54:12.640 --> 01:54:15.939
includes 35 million dollars of new money in a

01:54:15.939 --> 01:54:18.119
roll -up of five million dollars with the pre

01:54:18.119 --> 01:54:21.239
-petition manager advance credit agreement claims

01:54:21.239 --> 01:54:26.020
As noted by my colleague. Mr. Dickerson These

01:54:26.020 --> 01:54:28.659
funds these the funds will be provided to the

01:54:28.659 --> 01:54:32.989
debtors for the purpose of funding manager advances,

01:54:33.909 --> 01:54:37.149
solely for the purpose of benefiting the securitization

01:54:37.149 --> 01:54:39.949
claims, which are the securitization entities,

01:54:40.090 --> 01:54:42.890
which are the restaurant and franchise operations.

01:54:46.550 --> 01:54:50.989
Of the $35 million of new money requested, $5

01:54:50.989 --> 01:54:54.229
million will be made available in the interim

01:54:54.229 --> 01:54:57.470
period with the ability to request an additional

01:54:57.850 --> 01:55:02.310
up to $1 million each week through entry of the

01:55:02.310 --> 01:55:08.329
final order. As Your Honor would expect, the

01:55:08.329 --> 01:55:11.970
DIP is requesting super priority priming liens

01:55:11.970 --> 01:55:15.850
subject to generally the carve out and any permitted

01:55:15.850 --> 01:55:20.109
liens. During the first four weeks of these cases,

01:55:20.369 --> 01:55:24.869
the debtors expect and as referenced in the or

01:55:24.869 --> 01:55:28.949
as noted in the budget. filed with the interim

01:55:28.949 --> 01:55:33.029
order. The debtors anticipate spending just under

01:55:33.029 --> 01:55:37.229
$10 million in the first four weeks with a significant

01:55:37.229 --> 01:55:40.510
portion of these amounts going on account of

01:55:40.510 --> 01:55:45.449
vendor claims. Much of which, with respect to

01:55:45.449 --> 01:55:47.590
certain of the critical vendors mentioned just

01:55:47.590 --> 01:55:52.529
earlier. Your Honor, without access to these

01:55:52.529 --> 01:55:55.550
funds under the debt facility, the debtors would

01:55:55.550 --> 01:55:57.890
not have sufficient liquidity to pay their ordinary

01:55:57.890 --> 01:56:00.890
course operating expenses, nor would they be

01:56:00.890 --> 01:56:02.569
able to fund the administrative costs of these

01:56:02.569 --> 01:56:06.529
estates. Obtaining dip financing at the outset

01:56:06.529 --> 01:56:09.890
of these cases is critical and necessary to maintaining

01:56:09.890 --> 01:56:11.810
the debtor's operations as a growing concern.

01:56:13.949 --> 01:56:17.409
As described in Mr. Koutanikoulis' declaration,

01:56:17.760 --> 01:56:19.819
The debtors undertook a pre -petition marketing

01:56:19.819 --> 01:56:23.340
process seeking to obtain proposals for, among

01:56:23.340 --> 01:56:27.000
other things, post -petition financing. At the

01:56:27.000 --> 01:56:29.640
conclusion of that marketing process, the debtors,

01:56:30.079 --> 01:56:33.960
the proposed DIP facility was the only viable

01:56:33.960 --> 01:56:36.819
post -petition financing option available to

01:56:36.819 --> 01:56:41.939
the debtors. I would also note, Your Honor, one

01:56:41.939 --> 01:56:46.199
clarification and with respect to the declaration.

01:56:46.829 --> 01:56:51.550
and is reflected in the revised papers that with

01:56:51.550 --> 01:56:54.590
respect to the dip facility, there are no fees

01:56:54.590 --> 01:57:00.090
contemplated as negotiated between the parties.

01:57:03.090 --> 01:57:05.229
I would like to emphasize, Your Honor, that the

01:57:05.229 --> 01:57:07.989
dip facility is a key aspect of the overall restructuring

01:57:07.989 --> 01:57:11.789
contemplated in the RSA that was recently filed

01:57:11.789 --> 01:57:17.760
this morning in connection with the... Interim

01:57:17.760 --> 01:57:22.340
order, I do not have the doctorate number, but

01:57:22.340 --> 01:57:27.960
it should be just after the revised form of order

01:57:27.960 --> 01:57:34.020
filed at Dr. 85. All right. The debtors, Your

01:57:34.020 --> 01:57:36.800
Honor, require access to the facility immediately

01:57:36.800 --> 01:57:40.420
to avoid irreparable harm and to continue operating

01:57:40.420 --> 01:57:42.920
in the ordinary course, as contemplated in these

01:57:42.920 --> 01:57:46.180
cases. For these reasons, Your Honor, the debtors

01:57:46.180 --> 01:57:48.180
submit that Approval of the dip facility is in

01:57:48.180 --> 01:57:51.340
the best interest of the estates. Finally, Your

01:57:51.340 --> 01:57:54.159
Honor, we worked with a number of parties, including

01:57:54.159 --> 01:57:58.460
the USD, to try to resolve a number of issues

01:57:58.460 --> 01:58:01.800
leading up to the hearing. We were able to resolve

01:58:01.800 --> 01:58:04.539
a significant amount of the issues as reflected

01:58:04.539 --> 01:58:07.659
in the revised form of order, though we continue

01:58:07.659 --> 01:58:11.479
to discuss with parties additional comments.

01:58:11.500 --> 01:58:14.000
So we expect that at the conclusion of this hearing,

01:58:14.000 --> 01:58:16.199
we'll still... be resolved in issues and will

01:58:16.199 --> 01:58:20.479
file a refund of order post hearing. Your Honor,

01:58:20.500 --> 01:58:22.600
with that, Your Honor, I'm happy to address any

01:58:22.600 --> 01:58:25.220
questions or if helpful, walk through the revised

01:58:25.220 --> 01:58:31.500
form of order. Why don't we go through the revised

01:58:31.500 --> 01:58:33.680
order and then I'll open it up for any comments

01:58:33.680 --> 01:58:37.539
after that. All right, Your Honor, thank you.

01:58:37.659 --> 01:58:40.159
This is the one red line that I didn't quite

01:58:40.159 --> 01:58:44.020
have time to get through, so I'll... start looking

01:58:44.020 --> 01:58:49.239
at it in real time here? Your Honor, I'll note

01:58:49.239 --> 01:58:55.800
that most of these changes here I would describe

01:58:55.800 --> 01:58:59.340
as non -substantive. If helpful, and just given

01:58:59.340 --> 01:59:04.399
the size of this dipwater, I can flag what I

01:59:04.399 --> 01:59:07.079
think are the highlights or more substantive

01:59:07.079 --> 01:59:12.909
changes here. Yeah, that'd be perfect. Thank

01:59:12.909 --> 01:59:17.210
you, Your Honor. First, I would note on page

01:59:17.210 --> 01:59:24.449
10 of the red line, and this is paragraph F,

01:59:26.590 --> 01:59:32.630
Romanate IB. Your Honor, I just want to note

01:59:32.630 --> 01:59:36.430
the change here is just correcting the pre -petition

01:59:36.430 --> 01:59:46.380
terminal amount. All right, I see it. Your Honor,

01:59:46.520 --> 01:59:52.920
the next change I would flag is on page 14 of

01:59:52.920 --> 01:59:59.579
the red line, subparagraph C. I just want to

01:59:59.579 --> 02:00:01.760
note that the parties agreed to move this language

02:00:01.760 --> 02:00:05.859
regarding certain pre -petition reporting that

02:00:05.859 --> 02:00:20.689
was included. All right, I got it. The next one

02:00:20.689 --> 02:00:23.670
I would notice on page 32 of the red line, it's

02:00:23.670 --> 02:00:37.109
paragraph 2... 2B, Romanet 4. Your Honor, this

02:00:37.109 --> 02:00:39.689
is just authorization for the debtors to make

02:00:39.689 --> 02:00:42.430
certain payments to secure parties on account

02:00:42.430 --> 02:00:47.369
of any fees, indemnification, or expense reimbursements

02:00:47.369 --> 02:00:52.689
to the... No voter parties. All right, I got

02:00:52.689 --> 02:01:01.989
it. Your Honor, the next one I would flag is

02:01:01.989 --> 02:01:09.630
page 47 of the red line. It's paragraph 11A.

02:01:13.029 --> 02:01:15.090
At the top of the page, Your Honor, I'll just

02:01:15.090 --> 02:01:20.659
flag that the... Professional fee carve out is

02:01:20.659 --> 02:01:36.199
no longer subject to the budget All right Your

02:01:36.199 --> 02:01:41.399
honor the next change is on page 74 of the red

02:01:41.399 --> 02:01:48.640
line That will be paragraph 26 A, at the bottom

02:01:48.640 --> 02:01:54.199
of that paragraph. Your honor, this change is

02:01:54.199 --> 02:01:56.479
just authorization for relevant third parties

02:01:56.479 --> 02:02:01.140
to enter into account control agreements. And

02:02:01.140 --> 02:02:06.260
I'm sure other parties can speak in more detail

02:02:06.260 --> 02:02:10.319
about this, but generally, your honor, this is

02:02:10.319 --> 02:02:16.859
providing for a city bank and I believe the pre

02:02:16.859 --> 02:02:21.819
-petition or the dip agent to enter into account

02:02:21.819 --> 02:02:23.659
agreements, account control agreements with each

02:02:23.659 --> 02:02:28.140
other. For the record, you're on the city bank

02:02:28.140 --> 02:02:31.479
would be the securitization, Trustee. All right,

02:02:31.500 --> 02:02:36.479
thank you. Then the final, I would say material

02:02:36.479 --> 02:02:40.859
change I would like to note is paragraph 58 of

02:02:40.859 --> 02:02:45.069
the interim order. This is our reservation of

02:02:45.069 --> 02:02:49.050
rights for LAGS equipment LLC that we received

02:02:49.050 --> 02:02:53.210
early this morning with respect to any rights

02:02:53.210 --> 02:02:55.949
they would have with respect to the LAGS royalty

02:02:55.949 --> 02:03:04.510
obligations. I'd say the balance of the changes

02:03:04.510 --> 02:03:11.000
are I'd say mostly related to DIP lender and

02:03:11.000 --> 02:03:13.380
note holder, the ad hoc group consent rights

02:03:13.380 --> 02:03:16.399
and other clarifying changes. And with that,

02:03:16.399 --> 02:03:18.180
I'd open it up to any questions from your honor

02:03:18.180 --> 02:03:22.720
or comments from other council. All right. Well,

02:03:22.720 --> 02:03:27.000
thanks for walking through the order, the material

02:03:27.000 --> 02:03:30.439
provisions for changes. So let me open it up.

02:03:30.500 --> 02:03:32.859
Why don't I start with, I did see the reservation

02:03:32.859 --> 02:03:35.529
of rights was filed by. City banks, why don't

02:03:35.529 --> 02:03:43.609
I start with city bank? Thank you, your honor.

02:03:43.630 --> 02:03:46.890
This is Nathan Coco from Mince Levin on behalf

02:03:46.890 --> 02:03:49.930
of city bank, which is the trustee for the pre

02:03:49.930 --> 02:03:53.229
petition secured notes. Um, as we noted in our

02:03:53.229 --> 02:03:56.130
reservation of rights, your honor, um, the pre

02:03:56.130 --> 02:03:58.430
petition, those trustee has not been involved

02:03:58.430 --> 02:04:01.609
in negotiations among the debtors, the dip lenders

02:04:01.609 --> 02:04:04.229
and other stakeholders. regarding the terms and

02:04:04.229 --> 02:04:06.390
conditions of this dip financing and cash collateral

02:04:06.390 --> 02:04:09.489
arrangement. Nor have we had discussions over

02:04:09.489 --> 02:04:12.770
the last couple days with the debtors regarding

02:04:12.770 --> 02:04:15.550
their proposed use of the trustee's cash collateral.

02:04:16.109 --> 02:04:18.689
And I understand that this case, as is often

02:04:18.689 --> 02:04:21.770
the case, was filed perhaps under exigent circumstances.

02:04:22.449 --> 02:04:25.170
But we have undertaken to quickly analyze the

02:04:25.170 --> 02:04:28.329
dip motion and the proposed form of order, including

02:04:28.329 --> 02:04:30.869
some of the revisions and red lines that have

02:04:30.869 --> 02:04:34.270
come across the transom. There are other materials

02:04:34.270 --> 02:04:36.050
in connection with the dip that we haven't yet

02:04:36.050 --> 02:04:39.229
had an opportunity to review, including the credit

02:04:39.229 --> 02:04:44.170
agreement. And although the trustee is not objecting

02:04:44.170 --> 02:04:46.390
to the interim relief that's being sought by

02:04:46.390 --> 02:04:49.090
the debtors today, we filed our reservation rights

02:04:49.090 --> 02:04:50.930
to make clear to the court and to other parties

02:04:50.930 --> 02:04:53.970
in interest that the trustee is not in a position

02:04:53.970 --> 02:04:58.109
at this stage to consent to final relief being

02:04:58.109 --> 02:05:00.949
sought under the dip motion. particularly with

02:05:00.949 --> 02:05:03.789
respect to the priming of the trustee's liens.

02:05:04.470 --> 02:05:06.890
And because of that, the trustee expressly reserves

02:05:06.890 --> 02:05:09.029
its rights, claims and objections for purposes

02:05:09.029 --> 02:05:11.829
of the final hearing to the extent that it has

02:05:11.829 --> 02:05:15.229
objections. All this having been said, we hope

02:05:15.229 --> 02:05:17.630
to continue to engage with other stakeholders

02:05:17.630 --> 02:05:20.649
in the case, most particularly the debtors on

02:05:20.649 --> 02:05:23.770
any issues we may have as we continue our review.

02:05:24.079 --> 02:05:27.279
We understand that this is important motion mission

02:05:27.279 --> 02:05:30.640
critical to the debtors But we want to make the

02:05:30.640 --> 02:05:32.239
court aware that we have not yet had an opportunity

02:05:32.239 --> 02:05:34.800
to fully review all the materials and we have

02:05:34.800 --> 02:05:37.319
not had Meaningful discussions at this point

02:05:37.319 --> 02:05:39.180
with with the debtors and other key stakeholders.

02:05:39.180 --> 02:05:42.880
So we are reserving our rights All right. All

02:05:42.880 --> 02:05:44.659
right. Thank you. I understand your comments.

02:05:44.659 --> 02:05:48.920
I appreciate the heads up Any other party right

02:05:48.920 --> 02:05:53.159
there yes, hi your honor I'm Brian Brian Pfeiffer

02:05:53.159 --> 02:05:56.960
from Whitencase. And we represent the ad hoc

02:05:56.960 --> 02:06:00.119
group of securitization note holders. And I think

02:06:00.119 --> 02:06:01.699
it just give you a little bit of background.

02:06:02.819 --> 02:06:07.680
So Citibank is our trustee. And I'll get to it

02:06:07.680 --> 02:06:09.840
in a moment. But we intend to work with them

02:06:09.840 --> 02:06:12.300
between the interim and the final to address

02:06:12.300 --> 02:06:15.340
any concerns. But just from our perspective,

02:06:15.399 --> 02:06:18.579
from the bond holder perspective, let me start

02:06:18.579 --> 02:06:22.539
by saying our ad hoc group. We have seven institutional

02:06:22.539 --> 02:06:27.579
investors who own 72 % of the Class A notes and

02:06:27.579 --> 02:06:30.340
100 % all of the Class B notes. And just for

02:06:30.340 --> 02:06:34.439
reference, there's 266 million of Class A notes

02:06:34.439 --> 02:06:37.380
and there's plus some interest and 40 million

02:06:37.380 --> 02:06:41.060
plus interest of the Class B notes. Together

02:06:41.060 --> 02:06:44.319
with some note holders that are affiliated with

02:06:44.319 --> 02:06:47.199
the DIP lender and that are also party to the

02:06:47.199 --> 02:06:52.289
RSA. the collective note holders that are supporting

02:06:52.289 --> 02:06:58.090
this agreement, the RSA and the DIP are well

02:06:58.090 --> 02:07:01.029
over 94%. I think we're about 94 % according

02:07:01.029 --> 02:07:06.170
to Mr. Dickerson's speech earlier today. And

02:07:06.170 --> 02:07:10.039
so, you know, there is a... a large amount of

02:07:10.039 --> 02:07:12.060
the bonds that city represents that are covered

02:07:12.060 --> 02:07:16.300
here. We fully appreciate their perspective and

02:07:16.300 --> 02:07:19.859
appreciate their reservation of rights. You know,

02:07:19.880 --> 02:07:22.159
I think as everyone, you know, the last month

02:07:22.159 --> 02:07:25.960
or so has been a sprint for everybody. We are

02:07:25.960 --> 02:07:29.079
happy that we're at this place with a RSA, with

02:07:29.079 --> 02:07:31.340
the BIA group, with the DIP lender and with the

02:07:31.340 --> 02:07:34.000
note holders. And we know that there's a lot

02:07:34.000 --> 02:07:36.380
of work to still be, that needs to be done, but.

02:07:36.520 --> 02:07:40.279
I think that serious progress has been made.

02:07:41.100 --> 02:07:43.199
And I guess the point that I would make is given

02:07:43.199 --> 02:07:47.279
this level of note holder support, we do look

02:07:47.279 --> 02:07:49.840
forward to working with Citibank and the way

02:07:49.840 --> 02:07:51.800
that these securitizations, they do add some

02:07:51.800 --> 02:07:55.000
complexity. There's a control party that is represented

02:07:55.000 --> 02:07:58.020
by Mr. Ashmead who's on the line for drivetrain.

02:07:58.439 --> 02:08:00.539
We'll work with both Citibank and drivetrain

02:08:00.539 --> 02:08:02.800
to make sure that any and all of their concerns.

02:08:03.340 --> 02:08:06.439
on this score are addressed. And I'm sure the

02:08:06.439 --> 02:08:08.460
debtor and other parties in it just will as well.

02:08:08.479 --> 02:08:11.399
But I think given that we are their chief constituency,

02:08:11.479 --> 02:08:14.220
I just wanted to raise that that's how we see

02:08:14.220 --> 02:08:18.479
this unfolding. And we appreciate that the reservation

02:08:18.479 --> 02:08:20.000
of rights and that we're really just talking

02:08:20.000 --> 02:08:22.159
about the final. And our hope is that we'll be

02:08:22.159 --> 02:08:24.239
able to come back to you between now and the

02:08:24.239 --> 02:08:26.699
final and have resolved any of their concerns.

02:08:27.899 --> 02:08:31.819
All right. Right. I appreciate that. Your Honor,

02:08:32.380 --> 02:08:37.760
If I may, John asked me to have Seward and Kissel

02:08:37.760 --> 02:08:42.020
counsel to drivetrain agency services, the control

02:08:42.020 --> 02:08:46.279
party under the securitization. Given that the

02:08:46.279 --> 02:08:49.020
holders have a strong super majority of the notes.

02:08:49.500 --> 02:08:53.680
As stated by Mr. Dickerson earlier today, approximately

02:08:53.680 --> 02:08:57.720
94 % of the outstanding amounts are party to

02:08:57.720 --> 02:09:00.100
the restructuring support agreement and support

02:09:00.100 --> 02:09:05.520
this filing and this dip motion. We believe that

02:09:05.520 --> 02:09:08.960
this juncture, and they believe that the restructuring

02:09:08.960 --> 02:09:11.180
transaction set out in the restructuring support

02:09:11.180 --> 02:09:14.880
agreement will lead to the maximization of the

02:09:14.880 --> 02:09:17.859
recovery on the notes. And for those reasons,

02:09:17.960 --> 02:09:21.359
the control party is not objecting to the interim

02:09:21.359 --> 02:09:24.199
relief sought today, and we look forward to working

02:09:24.199 --> 02:09:28.380
with Mr. Pfeiffer and his constituency and Citibank

02:09:28.380 --> 02:09:31.140
and the debtors to do whatever's necessary to

02:09:31.140 --> 02:09:36.199
be done by the time of the final year. All right.

02:09:36.380 --> 02:09:38.880
All right. Thank you. Good afternoon, Your Honor.

02:09:39.100 --> 02:09:42.079
Bruce Akerly, again on behalf of Benny Keith

02:09:42.079 --> 02:09:45.779
Company out of Fort Worth. As I mentioned earlier,

02:09:45.899 --> 02:09:51.239
We have over $300 ,000 in perishable agricultural

02:09:51.239 --> 02:09:55.680
commodities that trust claims. These claims prime

02:09:55.680 --> 02:10:00.819
all claims against the debtor, including secured,

02:10:01.020 --> 02:10:04.460
unsecured, and otherwise. And while we're working

02:10:04.460 --> 02:10:07.279
with the debtor to make sure that our claims

02:10:07.279 --> 02:10:10.000
are properly treated, and we're having a conference

02:10:10.000 --> 02:10:13.140
again on Friday to discuss the matters with respect

02:10:13.140 --> 02:10:15.880
to critical vendor status and payment of pre

02:10:15.880 --> 02:10:19.300
-petitioned debts with will completely resolve

02:10:19.300 --> 02:10:21.779
all the issues. I want to make sure that the

02:10:21.779 --> 02:10:24.279
instant order is going to be interim in nature

02:10:24.279 --> 02:10:29.359
to allow the parties to weigh in prior to a final

02:10:29.359 --> 02:10:31.640
hearing on the cash collateral. We don't necessarily

02:10:31.640 --> 02:10:34.939
object to the order per se, except to the extent

02:10:34.939 --> 02:10:36.819
that we are not able to work something out, which

02:10:36.819 --> 02:10:40.579
I think is pretty low in the scheme of things.

02:10:40.600 --> 02:10:42.880
But I just want to make sure we preserve all

02:10:42.880 --> 02:10:45.529
rights. Thank you, Your Honor. All right. It's

02:10:45.529 --> 02:10:47.449
definitely an interim order, so I think that

02:10:47.449 --> 02:10:52.430
should satisfy your concerns. Thank you. Thank

02:10:52.430 --> 02:10:54.390
you. For the record, Your Honor, Michael Reardon

02:10:54.390 --> 02:10:56.789
on behalf of Blacks Equipment LLC. It's the holder

02:10:56.789 --> 02:10:58.329
of royalty interests that the debtor has been

02:10:58.329 --> 02:11:00.649
referring to as the legacy royalty obligations

02:11:00.649 --> 02:11:03.189
in their filings. And when I made my appearance

02:11:03.189 --> 02:11:05.449
at the outset of the hearing, I admitted to mention

02:11:05.449 --> 02:11:07.350
that I'm also joined on Webex by my colleagues

02:11:07.350 --> 02:11:09.670
from Bradley, Brian Bates, and Jared Martin.

02:11:10.390 --> 02:11:12.369
So when we first started reviewing the debtor's

02:11:12.369 --> 02:11:14.090
first day filings, we were actually pretty surprised

02:11:14.090 --> 02:11:16.329
to find that our client had been singled out

02:11:16.329 --> 02:11:18.649
by the debtors in both the first day declaration

02:11:18.649 --> 02:11:21.810
and the div motion. With reservation of rights

02:11:21.810 --> 02:11:24.369
language, that essentially called into question

02:11:24.369 --> 02:11:26.710
the validity of our client's royalty rights.

02:11:27.250 --> 02:11:29.369
And I believe if I heard the debtor's counsel

02:11:29.369 --> 02:11:32.069
correctly earlier on in the slide presentation,

02:11:33.350 --> 02:11:35.649
he did confirm that the debtors do intend to

02:11:35.649 --> 02:11:37.779
challenge the act's royalty interest. So it does

02:11:37.779 --> 02:11:38.880
look like we're going to be front and center

02:11:38.880 --> 02:11:40.920
in this case, and we look forward to appearing

02:11:40.920 --> 02:11:43.039
before Your Honor to protect lags and legitimate

02:11:43.039 --> 02:11:45.939
rights. As the interim death order, we did reach

02:11:45.939 --> 02:11:48.079
out to debtors council yesterday asking if they'd

02:11:48.079 --> 02:11:50.039
be amenable to inserting some reservation of

02:11:50.039 --> 02:11:52.460
rights language that mirrored theirs, just to

02:11:52.460 --> 02:11:54.739
make it abundantly clear that whatever dispute

02:11:54.739 --> 02:11:57.199
is going to happen in the future, it's not being

02:11:57.199 --> 02:11:58.880
dealt with now and no one's being prejudiced

02:11:58.880 --> 02:12:01.350
at this point. And I can confirm that language

02:12:01.350 --> 02:12:02.930
has been added to the DIP order at Paragraph

02:12:02.930 --> 02:12:05.310
58. And I just want to express my appreciation

02:12:05.310 --> 02:12:07.369
for the professionalism of betters attorneys

02:12:07.369 --> 02:12:11.130
engaging with us on that. All right. All right,

02:12:11.149 --> 02:12:14.149
thank you. I did see that language when it was

02:12:14.149 --> 02:12:17.310
pointed out to me. So it looks like you should

02:12:17.310 --> 02:12:20.029
be squared away for purposes of the interim order.

02:12:22.770 --> 02:12:27.149
Yes, thank you, Your Honor. All right, any other

02:12:27.149 --> 02:12:31.159
party? Your Honor, Juliana Hoffman from Sidley

02:12:31.159 --> 02:12:33.579
Austin on behalf of the proposed dip lenders.

02:12:34.140 --> 02:12:37.159
Your Honor, my colleague Genevieve Weiner is

02:12:37.159 --> 02:12:40.420
trying to unmute her line, but I think we're

02:12:40.420 --> 02:12:46.239
having trouble. Is there a trick to unmuting

02:12:46.239 --> 02:12:50.100
a telephone line? For telephones, it would be

02:12:50.100 --> 02:12:55.300
star six, I believe. Okay. Star six to unmute

02:12:55.300 --> 02:13:01.729
if the audio is on. You're on now? Yes, I can

02:13:01.729 --> 02:13:04.930
hear you. OK, great. Thank you. And apologies

02:13:04.930 --> 02:13:07.409
about that. I was having issues with my computer

02:13:07.409 --> 02:13:09.630
audio. But again, for the record, Genevieve Weiner

02:13:09.630 --> 02:13:12.489
was still the option on behalf of the proposed

02:13:12.489 --> 02:13:15.689
DIP lender. And thank you, Ms. Hoffman, for jumping

02:13:15.689 --> 02:13:20.090
in. I want to reiterate the comments of Mr. Pfeiffer

02:13:20.090 --> 02:13:23.029
and Mr. Ashmead and, you know, the First City

02:13:23.029 --> 02:13:25.770
Council that this was the first that we had heard

02:13:25.770 --> 02:13:28.510
from them in terms of the filing rights right

02:13:28.510 --> 02:13:30.869
before the hearing, but they should, of course,

02:13:31.090 --> 02:13:33.510
feel free to reach out to us. As I understand

02:13:33.510 --> 02:13:35.449
it, though, there's nobody objecting here as

02:13:35.449 --> 02:13:41.390
to the interval and the order as proposed with

02:13:41.390 --> 02:13:45.689
potential changes that will be negotiated afterwards

02:13:45.689 --> 02:13:47.510
will be entered. But again, as I understand it,

02:13:47.550 --> 02:13:49.890
no one is objecting to the interim release here.

02:13:53.689 --> 02:14:04.340
All right. Thank you. Your Honor, Vicki Driver,

02:14:04.640 --> 02:14:07.659
I just had a question on the budget, but if we're

02:14:07.659 --> 02:14:10.239
just on the order right now, I can reserve that

02:14:10.239 --> 02:14:11.920
for if we're going through the budget separately.

02:14:16.399 --> 02:14:18.680
I don't care. We can, if you have a question

02:14:18.680 --> 02:14:20.960
about the budget, why don't we knock it out now,

02:14:20.960 --> 02:14:24.239
I guess. And I'm happy for debtors council to

02:14:24.239 --> 02:14:26.340
address this. I don't necessarily need a witness

02:14:26.340 --> 02:14:31.689
to. attest to this, but in looking at the budget,

02:14:32.050 --> 02:14:37.529
there is a line item referring to occupancy cost,

02:14:37.869 --> 02:14:40.829
and I believe it's approximately $1 .891 million

02:14:40.829 --> 02:14:46.050
for the first week. My question is, is that referring

02:14:46.050 --> 02:14:50.670
to lease costs? And if so, has the debtor made

02:14:50.670 --> 02:14:54.890
any decisions as to whom those payments are to

02:14:54.890 --> 02:15:02.869
be made? Yes, I believe those are with respect

02:15:02.869 --> 02:15:06.489
to lease obligations, particularly rent, and

02:15:06.489 --> 02:15:10.010
in some instances, including tax and other lease

02:15:10.010 --> 02:15:15.909
obligations. I will say that for any, and I believe

02:15:15.909 --> 02:15:18.029
that that is for any locations that are not being

02:15:18.029 --> 02:15:22.470
rejected as a petition date, we do expect to

02:15:22.470 --> 02:15:26.420
honor our lease obligations. Thank you, and I'll

02:15:26.420 --> 02:15:28.439
just I'll be in contact in a little bit more

02:15:28.439 --> 02:15:30.619
detail with you guys as I've been brought on

02:15:30.619 --> 02:15:32.140
board So I appreciate you addressing that on

02:15:32.140 --> 02:15:40.300
the fly. Thank you All right, any other parties

02:15:40.300 --> 02:15:44.880
any concerns about the dip motion Your honor,

02:15:45.119 --> 02:15:47.140
this is Jonah well balance bar we had provided

02:15:47.140 --> 02:15:49.319
some additional proposed language that I don't

02:15:49.319 --> 02:15:52.819
see in the red line but we'll continue to work

02:15:52.819 --> 02:15:54.899
with debtors council presumably to be addressed

02:15:54.899 --> 02:15:58.260
in the final order specifically in relation to

02:15:58.260 --> 02:16:01.439
paragraphs five and six and paragraph 28 of the

02:16:01.439 --> 02:16:04.739
interim order but just made that note but we'll

02:16:04.739 --> 02:16:06.699
continue to work with them and presumably be

02:16:06.699 --> 02:16:10.899
addressed prior to the next hearing all right

02:16:10.899 --> 02:16:18.220
all right very good that's right any other parties

02:16:30.570 --> 02:16:44.729
Last call for comments on the dip motion All

02:16:44.729 --> 02:16:46.670
right, well that motion is approved after the

02:16:46.670 --> 02:16:48.389
hearing I am going to go through just quickly

02:16:48.389 --> 02:16:51.610
and go through the rest of the red lines the

02:16:51.610 --> 02:16:53.969
rest of the comments on the red lines, I didn't

02:16:53.969 --> 02:16:58.559
see anything that stuck out to me and So I fully

02:16:58.559 --> 02:17:01.420
expect I'll sign that order once it's uploaded

02:17:01.420 --> 02:17:05.819
with all the revisions that are made So that

02:17:05.819 --> 02:17:11.940
that motion is approved on an interim basis Mr.

02:17:12.040 --> 02:17:14.620
Eke of least benefit your honor with that I'll

02:17:14.620 --> 02:17:21.149
pass the podium back to my colleague Good afternoon,

02:17:21.250 --> 02:17:23.170
Your Honor. Stephen Jones on behalf of the debtors.

02:17:23.309 --> 02:17:25.469
I think the last item we'd like to address with

02:17:25.469 --> 02:17:28.930
the court today is docket number three, and that

02:17:28.930 --> 02:17:32.709
is the notice of complex case. So essentially,

02:17:32.870 --> 02:17:35.209
Your Honor, we're asking for complex case treatment

02:17:35.209 --> 02:17:38.129
under the complex case procedures in the district.

02:17:38.450 --> 02:17:41.770
We'll work with Ms. Bergerine to secure omnibus

02:17:41.770 --> 02:17:45.569
hearing dates. Otherwise, the complex case procedures

02:17:45.569 --> 02:17:50.110
would control. No comments on these. on the proposed

02:17:50.110 --> 02:17:52.389
order as filed with the U .S. Trustee or anyone

02:17:52.389 --> 02:17:56.170
else. All right. Mr. Bublick, are you good with

02:17:56.170 --> 02:18:01.270
this one? Yes, Your Honor. No concerns. All right.

02:18:01.430 --> 02:18:04.409
Anybody else have any comments on the notice

02:18:04.409 --> 02:18:13.489
at docket number three? All right. So I'll enter

02:18:13.489 --> 02:18:15.309
that order. I didn't have any problems with it.

02:18:15.709 --> 02:18:17.950
Thank you, Your Honor. I think that concludes

02:18:17.950 --> 02:18:20.909
the Vedder's presentation for the day. We certainly

02:18:20.909 --> 02:18:23.129
appreciate the court's time both in this matter

02:18:23.129 --> 02:18:27.629
or earlier matter. Unless... Actually, Your Honor,

02:18:27.670 --> 02:18:29.870
I think we have one other housekeeping matter.

02:18:30.149 --> 02:18:32.049
I think we do need to schedule the second day

02:18:32.049 --> 02:18:34.649
hearing. My apologies. It's Chris Dickerson for

02:18:34.649 --> 02:18:40.489
the record for Robson Gray. All right. So I don't

02:18:40.489 --> 02:18:43.670
know... Since I've been in court all day. I haven't

02:18:43.670 --> 02:18:45.850
had a chance to check with my well my courtroom

02:18:45.850 --> 02:18:48.209
deputies out But we have some stand -ins that

02:18:48.209 --> 02:18:50.309
are helping with the scheduling. I don't have

02:18:50.309 --> 02:18:54.010
you reached out or have you? Gotten a proposed

02:18:54.010 --> 02:18:56.709
list of dates or have you do you have any idea?

02:18:57.430 --> 02:18:59.010
When you might want to come back. I think the

02:18:59.010 --> 02:19:03.129
only one that we've are I think we can work around

02:19:03.129 --> 02:19:06.110
Primarily the the final dip hearing your honor

02:19:06.110 --> 02:19:08.309
and which would need to be at least 28 days.

02:19:08.649 --> 02:19:11.870
So it Anything that you would have available

02:19:11.870 --> 02:19:15.469
a month out, I think would be helpful and acceptable,

02:19:16.010 --> 02:19:19.590
obviously, subject to your calendar. I think

02:19:19.590 --> 02:19:29.549
28 days out takes us to the 30th. All right,

02:19:29.629 --> 02:19:41.979
give me just a minute. In honor, I didn't mean

02:19:41.979 --> 02:19:43.299
to surprise you. I know you've been in court

02:19:43.299 --> 02:19:46.319
all day. If you would like us to take this offline

02:19:46.319 --> 02:19:48.680
with your scheduling clerk, we're happy to do

02:19:48.680 --> 02:19:52.159
that as well. I'm happy to knock it out now.

02:19:52.540 --> 02:19:55.719
I'm just looking. Thank you. My normal courtroom

02:19:55.719 --> 02:19:58.600
deputy is out. And so I think it's probably just

02:19:58.600 --> 02:20:25.040
as well to look at the calendar now. On the 30th

02:20:25.040 --> 02:20:31.959
There's a case that's listed as set for all day,

02:20:32.040 --> 02:20:34.459
but I'm familiar with a case and I don't I think

02:20:34.459 --> 02:20:38.700
it's at most an hour hearing And that's at 930.

02:20:38.700 --> 02:20:42.020
I have some preliminary lift staterings at 130

02:20:42.020 --> 02:20:45.719
Are you do you prefer mornings or afternoons?

02:20:47.639 --> 02:20:49.840
I Think for those that would be traveling your

02:20:49.840 --> 02:20:51.510
honor would make it a little bit easier to do

02:20:51.510 --> 02:20:57.850
in the afternoon. How about 2 .30 Central? Would

02:20:57.850 --> 02:21:00.850
that work? Is that too late? That works, Your

02:21:00.850 --> 02:21:04.790
Honor. No, I think that's acceptable. I obviously

02:21:04.790 --> 02:21:07.209
allow others to speak up if there's an issue,

02:21:07.250 --> 02:21:13.409
but that works for the debtors. All right. Anybody

02:21:13.409 --> 02:21:18.969
else have any problems with the 30th at, what

02:21:18.969 --> 02:21:23.799
did I say, 2 or 2 .30? 230 230 230 Yes, your

02:21:23.799 --> 02:21:29.760
honor All right, why don't we go with that then

02:21:29.760 --> 02:21:33.780
Thank you your honor and I think as mr. Jones

02:21:33.780 --> 02:21:36.780
indicated that is all we have for you today unless

02:21:36.780 --> 02:21:38.280
there's anything else you'd like to cover with

02:21:38.280 --> 02:21:42.739
us I Don't think so again for the time sure I

02:21:42.739 --> 02:21:46.430
will save the The papers were excellent. The

02:21:46.430 --> 02:21:49.250
presentations were excellent by everybody who

02:21:49.250 --> 02:21:51.430
presented today. So I look forward to seeing

02:21:51.430 --> 02:21:55.090
you all in court again for the second days and

02:21:55.090 --> 02:21:56.770
the other hearings. And I appreciate the efforts

02:21:56.770 --> 02:22:00.670
of all the parties on reaching agreements on

02:22:00.670 --> 02:22:02.950
the matters that are set today. So thank you

02:22:02.950 --> 02:22:07.409
all. Unless you, unless anybody else has anything

02:22:07.409 --> 02:22:10.909
else for this afternoon, court will be in recess.

02:22:11.010 --> 02:22:14.260
Thank you. Alright.