WEBVTT 00:00:01.899 --> 00:00:09.660 Please be seated. Good morning, Your Honor. Sean 00:00:09.660 --> 00:00:12.359 Greacher from Young Conaway on behalf of the 00:00:12.359 --> 00:00:16.120 debtors. Your Honor, thank you for setting this 00:00:16.120 --> 00:00:20.699 special hearing time. We don't have a lot on 00:00:20.699 --> 00:00:23.859 the agenda, and you may have noticed there's 00:00:23.859 --> 00:00:26.239 not a lot on the docket, but there is, I can 00:00:26.239 --> 00:00:28.539 assure you, a lot going on off the docket around 00:00:28.539 --> 00:00:30.480 the world. So I thought maybe it's a good time 00:00:30.480 --> 00:00:34.600 to give you just a quick update. My World Wildlife 00:00:34.600 --> 00:00:37.219 Fund calendar in our kitchen said that yesterday 00:00:37.219 --> 00:00:39.240 was National Dolphin Day, so why don't I start 00:00:39.240 --> 00:00:44.179 with animal welfare issues. So the independent 00:00:44.179 --> 00:00:47.799 director and the River On team have spoken with 00:00:47.799 --> 00:00:51.359 authorities in Florida. We've been speaking with 00:00:51.359 --> 00:00:55.299 the company's existing advisors. We've been speaking 00:00:55.299 --> 00:00:57.979 with the company's employees who are located 00:00:57.979 --> 00:01:01.079 in the Florida parks, particularly the veterinary 00:01:01.079 --> 00:01:04.219 staff. We've also been speaking with parties 00:01:04.219 --> 00:01:07.260 to serve as an independent advisor to the independent 00:01:07.260 --> 00:01:10.319 director and CRO regarding animal welfare efforts 00:01:10.319 --> 00:01:13.379 at the company's facilities. We're hoping to 00:01:13.379 --> 00:01:15.700 have a party on board shortly to assist with 00:01:15.700 --> 00:01:20.980 that. So that continues to be top of mind. Operationally 00:01:20.980 --> 00:01:24.530 and financially, the river on. The team has made 00:01:24.530 --> 00:01:26.909 good progress getting our arms around financial 00:01:26.909 --> 00:01:29.489 and operational details at the U .S. Parks. As 00:01:29.489 --> 00:01:31.790 Ms. Milke will be discussing in presenting our 00:01:31.790 --> 00:01:34.109 emergency wage motion, we are engaged with the 00:01:34.109 --> 00:01:35.769 company's employees that are doing what's necessary 00:01:35.769 --> 00:01:38.549 to ensure appropriate stewardship of the business 00:01:38.549 --> 00:01:41.069 and the animals. And of course, a critical part 00:01:41.069 --> 00:01:45.129 of that is paying our employees. Governance -wise, 00:01:45.549 --> 00:01:47.810 outside of the U .S., as we discussed at the 00:01:47.810 --> 00:01:50.430 first day hearing, the process of effecting governance 00:01:50.430 --> 00:01:52.879 changes that are necessary. based on the corporate 00:01:52.879 --> 00:01:55.040 laws of various foreign jurisdictions, remains 00:01:55.040 --> 00:01:57.859 ongoing. These are simply processes that in many 00:01:57.859 --> 00:02:00.560 cases require some time. All is moving forward 00:02:00.560 --> 00:02:05.040 on that front. Now onto Mexico. As we mentioned 00:02:05.040 --> 00:02:08.560 at the first day hearing, the concorso mercantile 00:02:08.560 --> 00:02:10.979 was filed by prior management with respect to 00:02:10.979 --> 00:02:13.719 one of the company's Mexican entities. Evidence 00:02:13.719 --> 00:02:15.599 has been provided in Mexico that this filing 00:02:15.599 --> 00:02:17.840 was done without the requisite corporate approval. 00:02:18.840 --> 00:02:21.729 The dismissal of that concorso has been... by 00:02:21.729 --> 00:02:25.310 prior management's counsel and the judge overseeing 00:02:25.310 --> 00:02:27.509 that proceeding has been reviewing the papers 00:02:27.509 --> 00:02:32.050 and we expect that dismissal will occur shortly. 00:02:35.069 --> 00:02:38.250 Additionally, the federal civil court in Mexico 00:02:38.250 --> 00:02:42.090 City issued orders in joining the former CEO, 00:02:42.590 --> 00:02:45.189 Mr. Albor, from acting as an authorized representative 00:02:45.189 --> 00:02:47.949 of the company and voiding the board meeting 00:02:47.949 --> 00:02:50.849 that purported to authorize that filing. We also 00:02:50.849 --> 00:02:56.729 obtained an injunction that directed all governance 00:02:56.729 --> 00:03:00.750 activities run through Mr. Strom and Mr. Wagstaff. 00:03:01.629 --> 00:03:04.789 Those orders were obtained in Mexico City, the 00:03:04.789 --> 00:03:08.229 federal civil court. On Friday last week, the 00:03:08.229 --> 00:03:10.490 state court in the state where the company's 00:03:10.490 --> 00:03:13.669 Cancun headquarters is located, which is Quintana 00:03:13.669 --> 00:03:16.449 Roo. I tried to say that properly. I'm sure I 00:03:16.449 --> 00:03:20.659 didn't. The state court there entered a companion 00:03:20.659 --> 00:03:23.500 order recognizing the federal order. With that, 00:03:23.620 --> 00:03:25.319 the River On team was able to, for the first 00:03:25.319 --> 00:03:28.020 time, access the headquarters and begin to communicate 00:03:28.020 --> 00:03:30.719 with staff at the headquarters regarding records 00:03:30.719 --> 00:03:32.520 of the debtors that are needed to conduct these 00:03:32.520 --> 00:03:37.300 cases. Unfortunately, at some point after midnight 00:03:37.300 --> 00:03:39.659 on Saturday morning at the direction of the former 00:03:39.659 --> 00:03:44.900 CEO, the headquarters building was forcibly and 00:03:44.900 --> 00:03:47.930 illegally retaken. The Riveron team was barred 00:03:47.930 --> 00:03:50.270 from the premises and prohibited from any further 00:03:50.270 --> 00:03:52.770 communication with company staff or access to 00:03:52.770 --> 00:03:55.389 the debtor's books and records. So the debtor's 00:03:55.389 --> 00:03:57.349 professionals in Mexico were taking appropriate 00:03:57.349 --> 00:04:00.889 steps to address that, to enforce the valid court 00:04:00.889 --> 00:04:03.069 orders that have been obtained and ensure that 00:04:03.069 --> 00:04:06.569 Riveron can regain access. Those efforts have 00:04:06.569 --> 00:04:09.069 been feverish. They've spread throughout numerous 00:04:09.069 --> 00:04:12.090 courts in Mexico. Council's been working around 00:04:12.090 --> 00:04:14.469 the clock, traveling around the country, personally 00:04:14.469 --> 00:04:18.079 appearing in court. and in person at the facilities 00:04:18.079 --> 00:04:20.220 in connection with these various steps that are 00:04:20.220 --> 00:04:22.300 being taken alongside the Mexican authorities. 00:04:23.779 --> 00:04:26.819 Given the ex -CEO's conduct, we suspect that 00:04:26.819 --> 00:04:28.519 this high level of effort will unfortunately 00:04:28.519 --> 00:04:32.019 be likely to continue, particularly if the circumstances 00:04:32.019 --> 00:04:35.240 continue to escalate as we fear that they may. 00:04:36.639 --> 00:04:39.019 In the meantime, At a minimum, we view the former 00:04:39.019 --> 00:04:42.839 CEO's actions to exercise possession and control 00:04:42.839 --> 00:04:45.079 over the books and records related to the debtor's 00:04:45.079 --> 00:04:47.879 assets, liabilities, and operations, and to bar 00:04:47.879 --> 00:04:49.819 Riveron from access to such books and records 00:04:49.819 --> 00:04:54.420 as brazen violations of the automatic stay. Additionally, 00:04:54.560 --> 00:04:55.879 Your Honor entered an order on the first day 00:04:55.879 --> 00:04:57.899 of the case compelling former officers, including 00:04:57.899 --> 00:05:00.480 the former CEO, to turn over books, documents, 00:05:00.759 --> 00:05:03.839 records, papers, ESI, and emails related to or 00:05:03.839 --> 00:05:06.079 connection with the debtor's property and finances. 00:05:06.699 --> 00:05:09.600 That order was sent to the former CEO's council 00:05:09.600 --> 00:05:12.079 on April 4th with a demand for turnover of such 00:05:12.079 --> 00:05:15.240 materials by last Friday, the 11th. There has 00:05:15.240 --> 00:05:17.259 been no response to this demand from council 00:05:17.259 --> 00:05:21.920 to the former CEO. Indeed, the former CEO's actions 00:05:21.920 --> 00:05:24.160 this past Saturday morning suggest, I think, 00:05:24.420 --> 00:05:28.459 an intent not to comply. All this said, assuming 00:05:28.459 --> 00:05:31.139 no change in circumstances, the betters anticipate. 00:05:31.819 --> 00:05:34.000 the need to file a motion as soon as possible 00:05:34.000 --> 00:05:36.220 to enforce the automatic stay and to enforce 00:05:36.220 --> 00:05:40.360 the court's Section 542E order. Given the urgency 00:05:40.360 --> 00:05:42.459 of the request, we'd request a hearing on shortened 00:05:42.459 --> 00:05:45.040 notice. Happy to work with Your Honor or Your 00:05:45.040 --> 00:05:47.139 Honor's chambers to find a suitable time for 00:05:47.139 --> 00:05:50.720 this hearing. Additionally, as we mentioned, 00:05:51.279 --> 00:05:53.620 the former CEO's conduct has required Herculean 00:05:53.620 --> 00:05:56.360 efforts from Mexican Council, firms that are 00:05:56.360 --> 00:05:58.160 not familiar with U .S. bankruptcy and frankly 00:05:58.160 --> 00:06:00.459 for whom. The expenditures of the time and costs 00:06:00.459 --> 00:06:04.240 here have been very significant in order to ensure 00:06:04.240 --> 00:06:07.339 that we can see this process through. And I'll 00:06:07.339 --> 00:06:10.120 note, parties should have no doubt that the debtors 00:06:10.120 --> 00:06:11.959 are resolute in their intention to see this process 00:06:11.959 --> 00:06:15.720 through. We will be requesting authority to provide 00:06:15.720 --> 00:06:18.100 some advanced retainers to Mexican Council, subject 00:06:18.100 --> 00:06:20.339 to their retention as ordinary course professionals. 00:06:21.100 --> 00:06:23.379 So we wanted to at least let Your Honor know 00:06:23.379 --> 00:06:38.250 all that was coming, likely in short order. Any 00:06:38.250 --> 00:06:42.910 questions about that preamble? If not, I'll turn 00:06:42.910 --> 00:06:46.230 over the podium to Ms. Milky to address the motion 00:06:46.230 --> 00:06:49.430 that we did file. I do not obviously reach out 00:06:49.430 --> 00:06:52.170 to chambers as usual when you have papers that 00:06:52.170 --> 00:06:54.230 are ready to be filed, and we'll figure out how 00:06:54.230 --> 00:06:56.589 to squeeze it in somewhere. Thank you, Your Honor. 00:06:56.589 --> 00:07:03.230 I appreciate that accommodation, as always. Good 00:07:03.230 --> 00:07:05.610 morning, Your Honor. I'm Alison Milky of Young 00:07:05.610 --> 00:07:09.079 Conway. debtors. Seems like a hard act to follow 00:07:09.079 --> 00:07:13.160 after that update. As Mr. Greacher previewed, 00:07:13.220 --> 00:07:15.860 the debtors have been working diligently to stabilize 00:07:15.860 --> 00:07:18.959 operations, to gain the trust of their employees, 00:07:19.180 --> 00:07:21.500 and to mitigate the uncertainty that these sector 00:07:21.500 --> 00:07:25.100 11 cases may have caused. We are before you today 00:07:25.100 --> 00:07:27.480 requesting some customary and limited relief 00:07:27.480 --> 00:07:30.579 to ensure that the debtors can satisfy their 00:07:30.579 --> 00:07:34.000 payroll, which is due to be paid today. The debtors 00:07:34.000 --> 00:07:36.259 specifically are seeking authority to pay up 00:07:36.259 --> 00:07:41.139 to $514 ,000 in payroll obligations. Those primarily 00:07:41.139 --> 00:07:44.620 comprise compensation liabilities and wage deductions 00:07:44.620 --> 00:07:49.639 and taxes. As indicated in the Wagstaff Declaration, 00:07:49.759 --> 00:07:52.339 which was attached to the motion, the failure 00:07:52.339 --> 00:07:55.620 to make payroll would severely disrupt the company's 00:07:55.620 --> 00:07:59.500 operations and cause substantial financial hardship 00:07:59.500 --> 00:08:03.259 to the company's employees, thereby causing irreparable 00:08:03.259 --> 00:08:06.959 and immediate harm. Mr. Wagstaff is present on 00:08:06.959 --> 00:08:08.699 Zoom today. We thank you for that accommodation. 00:08:09.459 --> 00:08:12.680 He is available for questions of the court and 00:08:12.680 --> 00:08:15.100 other parties in interest. At this time, we'd 00:08:15.100 --> 00:08:17.500 like to move his declaration into evidence. Is 00:08:17.500 --> 00:08:21.500 there any objection? I hear none. It's admitted. 00:08:22.000 --> 00:08:24.579 Thank you. Your Honor, the relief we've requested 00:08:24.579 --> 00:08:26.759 is very customary. I'm happy to answer any questions 00:08:26.759 --> 00:08:28.980 that you have, but otherwise we'll rely on our 00:08:28.980 --> 00:08:32.309 papers. Thank you. I guess the only question 00:08:32.309 --> 00:08:34.850 I had in reading this is that this request goes 00:08:34.850 --> 00:08:38.529 to U .S. employees. It does. And what's happening 00:08:38.529 --> 00:08:41.230 with employees worldwide? It's an excellent question. 00:08:42.169 --> 00:08:45.490 For the, we don't have visibility into the payroll 00:08:45.490 --> 00:08:48.330 of those entities, and frankly we don't have 00:08:48.330 --> 00:08:50.590 access and control to the books and records that 00:08:50.590 --> 00:08:53.370 would inform us of that information. We are working 00:08:53.370 --> 00:08:56.009 diligently, as Mr. Greacher mentioned. We will 00:08:56.009 --> 00:09:01.129 be back before you with additional relief. anticipate 00:09:01.129 --> 00:09:03.389 filing sort of traditional operational first 00:09:03.389 --> 00:09:06.509 days with respect to the Florida entities and 00:09:06.509 --> 00:09:08.990 those operations because we do have visibility 00:09:08.990 --> 00:09:12.649 and control over those operations. And then once 00:09:12.649 --> 00:09:16.389 we are able to further progress and with respect 00:09:16.389 --> 00:09:34.419 to the Mexican operations. that are not in the 00:09:34.419 --> 00:09:42.840 US and not in Mexico. I see Grand Cayman in Jamaica 00:09:42.840 --> 00:09:48.759 and Rome. And maybe I should have asked Mr. Breacher 00:09:48.759 --> 00:09:52.820 this, but what is happening with those locations? 00:09:53.519 --> 00:09:55.759 Right, so to the extent they are debtor entities, 00:09:55.879 --> 00:09:58.940 Your Honor, the information that's necessary 00:09:58.940 --> 00:10:03.149 to... operate those is being held at the headquarters 00:10:03.149 --> 00:10:05.990 in Mexico. So to some extent, the criticality 00:10:05.990 --> 00:10:08.090 of getting into Mexico and getting those books 00:10:08.090 --> 00:10:11.850 and records is really what will open up control 00:10:11.850 --> 00:10:14.830 to all the other entities. With respect to Italy 00:10:14.830 --> 00:10:17.409 and some of the other Caribbean entities that 00:10:17.409 --> 00:10:21.289 are not quite debtors, we are presently undergoing 00:10:21.289 --> 00:10:23.549 sort of the governance processes in those jurisdictions 00:10:23.549 --> 00:10:26.730 to effectuate the transition of the board. So 00:10:26.730 --> 00:10:29.759 in some, for example, in Barbados if there's 00:10:29.759 --> 00:10:32.679 a notice requirement that requires various steps 00:10:32.679 --> 00:10:36.120 in certain time periods to pass. So we are going 00:10:36.120 --> 00:10:40.340 through those processes and complying with applicable 00:10:40.340 --> 00:10:42.600 law in those jurisdictions. There have been site 00:10:42.600 --> 00:10:47.000 visits? Not to, for example, Italy or Jamaica, 00:10:47.059 --> 00:10:48.919 but we have been in contact with the operators 00:10:48.919 --> 00:10:51.120 of those entities and we're in close contact 00:10:51.120 --> 00:10:53.220 and trying to obtain additional information. 00:10:53.679 --> 00:10:56.399 You could volunteer. Good. You're not the first 00:10:56.399 --> 00:10:58.500 to have made that joke, Your Honor. I'll volunteer 00:10:58.500 --> 00:11:01.080 for Italy. Maybe someone else would like to check 00:11:01.080 --> 00:11:04.500 out Barbados. Your Honor, just to show and greet 00:11:04.500 --> 00:11:10.220 you, Mr. Wagstaff has personally visited most, 00:11:10.340 --> 00:11:12.539 perhaps not all, but most of the parks located 00:11:12.539 --> 00:11:18.720 in Mexico. He did look at them from the outside 00:11:18.720 --> 00:11:22.039 looking in to some degree, had some communications 00:11:22.039 --> 00:11:25.509 with individuals at the parks, but... Given sort 00:11:25.509 --> 00:11:28.750 of the situation in Mexico the that process is 00:11:28.750 --> 00:11:35.590 complicated. Yeah Okay, I hope in Mexico people 00:11:35.590 --> 00:11:37.970 are taking whatever security precautions need 00:11:37.970 --> 00:11:41.029 to be taken including Retaining security to the 00:11:41.029 --> 00:11:45.389 extent necessary. Yes Okay, okay, does anyone 00:11:45.389 --> 00:11:47.429 wish to be heard with respect to the employee 00:11:47.429 --> 00:11:54.230 wages motion I Hear no one I did review it We 00:11:54.230 --> 00:11:57.690 just discussed it addresses the U .S. employees, 00:11:58.470 --> 00:12:05.870 which the debtor has visibility into. And the 00:12:05.870 --> 00:12:08.590 relief is obviously appropriate. We need to ensure 00:12:08.590 --> 00:12:29.870 that employees who are working get paid. Nothing 00:12:29.870 --> 00:12:33.110 in the motion shall be deemed to violate or permit 00:12:33.110 --> 00:12:36.129 a violation of 503 C. I assume that language 00:12:36.129 --> 00:12:46.049 I think is a little. Well, I assume what this 00:12:46.049 --> 00:12:48.750 language says is we're not giving anyone any 00:12:48.750 --> 00:12:52.070 insiders, any bonuses, etc. Correct, we're not 00:12:52.070 --> 00:12:55.330 authorizing. Yeah, payments made pursuant to 00:12:55.330 --> 00:12:58.190 section 503 C. So let's, why don't we say it's 00:12:58.190 --> 00:13:01.330 not being authorized. There are no, rather than 00:13:01.330 --> 00:13:03.830 that, I think that's actually better. Nothing 00:13:03.830 --> 00:13:08.789 in this emergency order is authorizing or permitting 00:13:08.789 --> 00:13:12.350 any payments under 5036. We can make that, and 00:13:12.350 --> 00:13:14.090 just to clarify, I think you said paragraph four, 00:13:14.210 --> 00:13:18.490 but I think that's paragraph three. I've got 00:13:18.490 --> 00:13:20.389 it as paragraph four, so am I looking at the 00:13:20.389 --> 00:13:22.870 right order? Let's make sure I'm looking at the 00:13:22.870 --> 00:13:23.929 right order. I'm sorry, I'm looking at the final 00:13:23.929 --> 00:13:38.320 order. I apologize. I understand why this is 00:13:38.320 --> 00:13:42.639 in here, but I would prefer to deal with future 00:13:42.639 --> 00:13:49.480 debtors in a separate motion or something else, 00:13:49.480 --> 00:13:55.899 but not preview that. We did upload an order 00:13:55.899 --> 00:13:58.159 in advance of the hearing, so just to confirm, 00:13:58.639 --> 00:14:01.919 we will revise the order and upload a replacement. 00:14:02.159 --> 00:14:04.860 Yes, then there's no reason to do a COC on that. 00:14:08.030 --> 00:14:11.110 Okay. That's all we have for today? Okay, very 00:14:11.110 --> 00:14:12.450 good. We're adjourned.