Please be seated. Good morning, Your Honor. Robert
Brady on behalf of Leisure Investments Holdings
LLC at all. We thank the court for hearing us
this morning on some important motions. As we've
done the last few hearings, I'd like to start
with just a brief status report on our efforts.
These are the debtors' efforts to obtain control
over the debtors' operations, books and records,
protect the animals and other estate assets,
and develop our strategy to reorganize these
companies. The debtors have hired an animal welfare
expert who is now on board. In fact, he's currently
handling a move of sea lions, regulatory bodies
in Florida forced the closure of a sea lion pen
at the Gulf World facility in contemplation of
needed maintenance. So we, using our animal welfare
expert, are moving those sea lions to a different
location. He's also actively conducting diligence
on the animals and the conditions at the various
facilities that we have access to. The debtors
have hired and, Investment banker, that motion
will be coming. Greenhill was the selected banker
after interviewing five different banking firms.
And we've hired a real estate consultant, Keen
Summit. Of course, I'm sure very familiar with
Keen Summit. We've had kickoff calls with both
of those advisors to get that process started.
We have completed the governance changes in Italy.
As a result, Riveron is leaving for Italy tomorrow.
Since my schedule freed up a bit this week, Your
Honor, I might join them. But they're going there
to conduct necessary diligence and meet with
the management team in Italy. We've had several
meetings with the Mayor of Miami on the Miami
Seaquarium litigation, animal welfare. We've
retained regulatory counsel to assist with our
dealings and discussions with the United States
Department of Agriculture, so they're on board.
And we continue to make progress on affecting
the governance changes throughout the corporate
structure. As you'll learn today, Your Honor,
one area that we've struggled to make progress,
despite a significant amount of work and effort,
and that is in Mexico. And it comes down to...
In our opinion, Mr. Alvore's refusal to honor
the automatic stay and this court's turnover
order. So you don't have to take my word for
it, Your Honor. We have three witnesses available
today that we would proceed with. We think it
makes sense to just start with that motion since
it is so vital to our efforts. Before we start
with the motion, if you would like to make some
statements. Thank you, Your Honor. James Moon,
M -O -O -N, on behalf of El Duado El Boat. Also
with me is our local council, Michael Busenkel.
Thank you. Let me ask this. I saw in the responsive
papers An overture to work toward a resolution.
Have there been discussions? As soon as Mr Moon
was retained, we did have a conversation. I think
they were careful in the papers to talk about
giving us access to you and information on the
US entities. We really need. I mean, as you heard
on the first day. The company stopped sending
financial statements to the banks. stopped doing
any reporting almost a year before the bankruptcy.
And that's really why Mr. Albor was replaced,
that they were in default, and the banks were
getting none of their necessary reporting. We
need access to those financial statements, the
books and records. We understand, and you'll
hear today, Mr. Albor challenges Mr. Strom's
position. But I think you will learn today that
as of now Mr. Strom is the valid corporate governance
of control the door dolphin while litigation
is pending He is the sole director So we're entitled
to that information and it's necessary again
They have no access to any liquidity. So I don't
know how the Mexican entities are spending the
bank's cash collateral or the lender's cash collateral,
but they are operating the business in default
utilizing the lender's cash collateral, which
we think is impermissible. But we need access
to that information to make sure the animals
are being cared for, we understand the financials,
and we can start the process of determining the
best way to reorganize these businesses. So yes,
actually, as soon as we made our appearance,
Your Honor, the first thing that we did was called
debtor's counsel. We've been doing this a long
time. We don't sandbag. And we wanted to make
sure that we reached out to find out, is there
a way that we can work with this? And we've got
some really hard practical issues here. The first,
obviously, is that Mr. Albor does not want to
offend this court. He is a businessman of great
reputation in Mexico. I gave a little bit of
that background in our response, Your Honor.
But the issue is that he has real issues with
respect to his due process rights and those of
Controladora in Mexico. Now, they say that it's
completely resolved. We say that it isn't. And,
you know, from my view, Your Honor, the fact
that they're asking for another $300 ,000 retainer
for Mexican counsel tells you it's not resolved.
And it's not going to be resolved necessarily
fairly quickly. We have conflicting orders from
the very same court, the very same judge. We
have different orders from Cancun, from Mexico
City, from the Concurso Mercantile Court, which
are all under review. And those are going to
have to be resolved pursuant to Mexican law.
We have to remember, Your Honor, that these particular
entities filed well before any of these actions
were taken on March 28th with respect to the
Mexican entities. There was, as you saw in the
papers from both sides, there were precautionary
measures entered. And Your Honor, I don't know
if this is the right time to do it, but we did
see that there had been a declaration filed late
yesterday from their Mexican Council. We felt
the need to respond with ours. I have a copy
of it because I didn't know if you had a chance
to look if I may approach your honor. The point
of it, Your Honor, and I'm sure you'll get a
chance to read it, is that, and this is not to
disparage any lawyer or any position, but advocates
advocate. You're hearing two different sides
from two very well -entrenched, respected legal
teams that are dealing with this, that are fighting
tooth and nail in Mexico to deal with what they
both believe are their rights under the documents.
The problem is because this was initiated in
Mexico, these orders originated in Mexico, the
appellate procedures are in Mexico, the imparo
proceedings are in Mexico, Mexican courts need
to deal with this. And the problem is if you
interfere with that, two things happen. One,
you may issue an order that conflicts with those
orders, and now we have a problem of international
comedy. Because what is the Mexican court to
do? They've actually, if you look at the April
10th order, You'll see that they talked about
issuing a letter of regulatory to this court
to let you know what's going on. They're not
hiding. They're trying to tell you this is what's
going on. The other issue, Your Honor, is that
it looks to me, from the papers, there's this
clear intent to try to make it look like the
April 5th order is somehow better or more validity
in effect than the April 10th order, which did
not supersede it, but post -dated it. It's not
true, Your Honor. Both of those honors, both
of those orders were entered ex parte provisionally
in this exact same manner, Your Honor. And the
April 28th order, which you will see an actual
certified translation of that order attached
to Mr. Barajas' declaration, that makes very
clear, and Mr. Barajas points out, nothing has
changed. The only thing that's happened is that
there's been a motion to accommodate or accumulate,
a motion to accumulate those orders. because
the same judge that issued them needs to figure
out what to do with these two orders. And he
will do that. And my guess is fairly soon, but
that process has got to play out. In the meantime,
what are we to do? Well, we obviously don't want
the Dolphins to go without food or being cared
for. And we certainly want employees to get paid.
So the issue from our perspective is, number
one, they are very convinced that they had a
right to enter Mr. Albor's building. We have
shown that they did not. We've actually attached
the proof that he was able to provide just one
of the documents to the district attorney in
Cancun, which showed that this is Mr. Albor's
building. It's not any of the dolphin group entities'
buildings. There is no possessory interest in
that building, which means that if you want access
to those books and records, which we're saying
we're willing to work with you to get them, we
need a protocol on how to do that. And I think
that's reasonable. And I've been doing this quite
a while. Normally, the parties are able to talk
to each other and figure this out. And where
we don't agree, we can come back to the court
and have that decided. But the second problem
you have is that if you issue an order that says
he's either you turn over those records by X
date, if he and his legal team in Mexico are
telling him under Mexican law that he has a right
under his due process rights in Mexico not to
comply with it, he will not because he can't.
The issue here is not that he's just entitled
to avail himself of Mexican law. You'll see in
our papers we talk about the fact that he has
a requirement to do so. Mr. Barajas actually
puts that in his declaration as well from his
legal counsel. So, you know, this is a very sticky
problem. And if this were a law school exam problem,
it would be interesting, I suppose. But for us,
we have to think about practically how do we
deal with the situation in front of us. without
violating due process rights of those that are
entitled to avail themselves of it. The other
issue we have, Your Honor, is that, think about
it, we came in, I think, on April 17th. I think
by that time, by the terms of the interim order,
he was already not in compliance with that order,
assuming the service was correct. Assuming that
the service by his last known email address was
correct. Which may not even have happened because
they even talked about the fact that some of
the emails got blocked But even if it didn't
in Mexico their position is that they're entitled
to process to be at service through the Hague
because they're a Hague signatory I realize all
the issues in the case law about alternative
service But you know the issue is not Ultimately
at the end of the day, which I think they want
to try to prove today Which I would think would
be grossly inappropriate that they now control
the company that is disputed under Mexican law
Okay? And the issue is not did they have a right
to execute a board flip. The issue is did they
do it properly and did they do it when there
were actually injunctive measures in place by
the Mexican court, which we argue they were.
That's precisely why you have the April 10th
order saying that those were suspended. And,
you know, I encourage you and I'm sorry for the
late time. It's just I was traveling on a plane
yesterday and was dealing with this at 12 o 'clock
last night. to try to get you something to respond
so that you understand if you're getting just
one side of an advocate in a legal proceeding
in Mexico, you're not getting the full story
about what it is. But even if you have both sides,
your honor, is it this court's job to determine
what a Mexican court should be doing with the
Mexican court's order? I don't think so. So that
leaves us with practically what do we do. I think,
as I said, day one. Tell us exactly what it is
you need, right? Because number one, as you're
hearing, they're in charge of a lot of properties,
apparently in Italy now. They're obviously in
charge of the properties in the states. There
are some kinds of books and records there. I
understand that some are not, but I don't know
what they are because they haven't told me. We've
asked for a list. What exactly is it that you
think that you need from this headquarters building,
as you call it. We're saying it's Mr. Albor's
building, which it is, where there are some records.
Dolphin the second thing is your honor if the
issue is is related to financial documents It
would be surprising to me that this company doesn't
have electronic books and records Which means
that we would need a protocol for giving you
stuff or access to stuff that? Satisfies the
issues with respect to what you need for the
entities you control that do not invade Mr..
Albor's personal records or non -debtor company
records, and also with the understanding that
some of those are going to be protected right
now because of the Mexican entities of the dolphin
group. So I'm just trying to resolve this practically,
Your Honor, because I'm trying to put my head
to how does this court tell someone that is actively
engaged in the legal process, availing themselves
of their due process rights in Mexico, you can't
do that. I'm saying that Mexican law doesn't
apply to that. I just don't think you can, Your
Honor. And so let's try to work practically to
fashion something in the interim where the animals
are taken care of, employees are paid with respect
to the entities that they have. And I have not
heard yet with respect to this hearing that we're
having in three business days before the May
5th hearing. What was the emergency? It seems
to me from what I see in the papers, the emergency
has to do with Mr. Wachstaff. Basically trespassing
and illegally seizing mr. Albor's building and
keep in mind Mr. Albor did not come and throw
these people out with a group of thugs as they
suggest with their purported state police he
went to the district attorney in Cancun But these
declarations can't come in. Mr. Brady, let me
ask you a question. Mr. Brady, Mr. Moon is raising
issues that I have been thinking about in preparation
for this hearing, which is what is happening
in Mexico? What should I be doing with respect
to these entities while there are contested proceedings
as I understand it in Mexico? and several orders,
which on the surface appear to be contradictory,
which a judge has in front of him in Mexico.
And what should I be doing in that context? Well,
Your Honor, looking at the declaration they filed
this morning, paragraph four, they acknowledge
that the April 28th order states that the March
28th resolutions, those are the resolutions that
put Mr. Strom in place, shall be considered valid
until the court rules on the motions to accumulate.
So they admit in their own declaration that right
now Mr. Strom is in charge until further notice.
The council, we did have a conversation, he's
not provided a single document to us. not a single
document since April 16th. We asked for the electronic
books and records. We asked for access to the
corporate servers for Dolphin. And we've received
nothing. So it sounds nice that they want to
be practical and provide us with information,
but they haven't. And that's why we're here.
We're here to make clear that the automatic stay
and your honors turnover order requires them
to provide us with the company's books and records.
I don't know what they're hiding. I don't know
why it should be this hard. But they have not
provided us a single document. Nothing. We have
the orders. We're asking them to comply. Then
they ask us, well, what do you want? We want
the company's books and records. We're entitled
to them. And we think Your Honor can enter an
order that confirms that The automatic stay covers
the debtor's property that includes the books
and records of the debtors and we're entitled
to them. Okay, I will hear the evidence. I will
need to read the declaration that was submitted
and I will have questions about the status of
the orders in Mexico. because to me, they look
like they were provisional in nature, akin to
a preliminary injunction kind of equivalent,
not final orders, which is what the blurbs for
the cases that I received from counsel were talking
about, final orders, and it didn't appear to
me, the non -expert in Mexican law, that these
were final orders. So I need to understand more.
So I'll hear the evidence. And we'll go from
there. Thank you, Your Honor. Good morning. Michael
Nyberg from Yonkanawe on behalf of the debtors.
Just one quick table setting thing, Your Honor,
because it was confusing to me at first. So there
are two proceedings in Mexico. And the motion
to accumulate that was followed by the debtors
is to consolidate, essentially. The April 28th
There's two April 28th orders and that's confusing.
The one that the declarant for Mr. Albert talks
about one in the proceeding that he commenced.
The April 28th order that's attached and discussed
by Mr. Reyes Eskandone is in the proceeding in
which the motion to accumulate was filed and
it's that order. It's the one that their declarant
concedes in paragraph four says the provisional
orders are parked. Until I rule on the motion
to accumulate the March 28th resolutions that
appointed Mr. Strom as sole director of all the
Mexican entities in the dolphin group remains
valid. And it's the same resolutions that kicked
out Mr. Albor and the other directors. So as
the table sits currently, the Mexican court,
the one that's deciding everything, has said
those resolutions shall be considered valid.
Okay, and don't we have a third proceeding which
is the concourse sale or whatever the Mexican
bankruptcy proceeding? I believe your honor that
was dismissed. And I understand that the dismissal
is subject to some appellate type relief, but
as things stand it was dismissed. Acceptance,
your honor. So it gets even more complicated.
And what's an M paro proceeding? So your honor,
we do have next I can't see them, but we do have
some of our Mexican Council on the line as well.
They can tell you my understanding of it. I dropped
it in a footnote as well that they said was OK.
It's akin to a constitutional like my constitutional
rights have been violated. It's not an appeal.
It's something a little different. It's saying
you violated my constitutional rights by entering
this order. And it used to be undone, but it's
not necessarily an appeal. That's a separate
proceeding and appeals are also the accurate
way to go about both the April 4th. And April
10th order and also with respect to what they're
referring to in here. Keep reading the declaration
because also with respect to whether something
still in effect, the April 10th order is still
in effect. Both of them are in effect because
they are pending determination by the court that
is hearing the. Accumulation. Thank you. Okay,
Mr. Nyberg. Thank you, Your Honor. So just to
show the path forward, the debtors will seek
to admit three declarations. We'll take them
in order. The first is the declaration of Mr.
Strom. It's the first day declaration, Your Honor.
Docket number 10, Mr. Strom, you met at the first
day hearing. He is here in the courtroom. Is
there any objection to his declaration coming
in subject to CROSS? So, Your Honor, my only
issue with that, I have no problem with the declaration
coming in for the fact that it was filed. I have
not had the chance to ever meet him. I have not
had the chance to oppose him. And especially
on an expedited hearing like this, I've had absolutely
no opportunity to prepare for a cross. It would
be severely prejudicial if these are brought
in for truth of the matters that are raised therein.
I have no problem with the fact that they're
there. You can see what he said. That's what
he said. We have on the other side are verified
response and you can accept that. Determine what
you think about the veracity of the parties,
but it's it's ridiculous for me to try to cross
somebody at this at this juncture, Your Honor.
Your Honor, just may I respond briefly? Yes,
Your Honor. The declaration has been on the docket
since May 1st 2025. Debtors filed their motion.
factual assertions in the declaration, to which
they disagree. There's plenty of time, and perhaps
a short cross. Well, I've got an objection to
the declaration coming in, and it's an adequate
statement, so you can put them on the stand,
but I'm not gonna accept the declaration. He
would say the declaration is admitted. Does that
mean Mr. Griecher could make arguments based
upon statements that remain in the declaration
to the extent necessary? I'll take a break and
let y 'all talk is what I'm going to do. We're
in recess. Mr. Albuquerque's resolution in terms
of introducing the declarations. The debtors
will seek the introduction of the Stroum Declaration,
as well as, Your Honor, we ask that the Court
take judicial notice of the Chapter 11 petitions
and the resolutions that are attached to them
that are on the Court's docket. I think Mr. Moon
may have some clarifying language in terms of
the view as to the purposes for which the declarations
will be admitted. It may seem like a piquing
point, Your Honor, but I have no problem with
proffer of his testimony that that was his declaration
that he filed as a first -day motion with respect
to his authority and all that. We're here on
a motion to enforce an automatic stay with specific
relief finding that Mr. Albor has violated that.
That declaration does not speak in large part
to any of that. So my only issue is, did he file
that declaration? Yes, he did. I have no problem
with that. That's what he says his corporate
authority is. Your honor also understands, from
the contrary, we dispute that. So, yes, he said
that, and yes, he filed that declaration, but
it's not really pertinent in large part with
respect to the relief requested today. So, if
you proffer that, I have no objection to that.
He did file that declaration, and at some point,
your honor will be able to look at that, assume
that it's true, and hopefully you'll be able
to look at stuff that was filed under penalty
of perjury on our side and determine that. At
the appropriate time as well with some of the
documents that we have, Your Honor. That was
my only point. Okay, thank you. It's admitted
with that discussion. Thank you, Your Honor.
Next, the debtors will seek to introduce and
admit the declaration of Mr. Wagstaff. Your Honor,
it was filed as Exhibit B to the Debtors Stay
Enforcement Motion. The declaration of mr. Waxf
references and lays the foundation for what has
been identified as debtors exhibits three to
eight in the binder. Let me just through the
declaration seek the introduction of those documents
into the record. If necessary, I can offer a
short proffer about the documents that are at
tabs 14A through D. Your honor, these are letters
that Mr. Waxf received in his capacity as the
debtor's chief restructuring officer. They're
letters sent or emails sent by or on behalf of
Mr. Albor or council representing him. We just
seek to introduce those documents. Lastly, Your
Honor, for the debtor's evidentiary presentation,
we seek to admit the declaration of Mr. Reyes
Escondon, which was docket number 91. There's
evidence. OK. Mr Moon, I take it you have nothing
evidence. Just just my verified responses. They
are declarations under penalty of perjury of
the laws of the United States of America, Your
Honor. I think in terms of the verified response,
we do object. It's it's not like a declaration
where there's identifiable facts. It's it's law
and facts next. So as of right now, it's just.
Someone signed a one page slip of paper and representing
that everything stated in the response is true.
Law and facts. We just think that at the very
least you should have been on zoom. You should
have been here. All our all the debtors witnesses
are here, so we just object. To the court taking
in. response is evidence because it's not evidence.
Let's get sure who was going to be attending.
I just figured I'd see them on Zoom. Yes, we
are here. Mr. Barajas is also on the call. Thank
you, Alejandro. I'm going to consider the verified
response, admitted with respect to facts that
are in it, not legal argument. I'm doing that
because obviously this was a short notice hearing,
and given that everything's coming in by declaration,
I think it's appropriate and fair. Is he available
for cross -examination to the extent the debtors
wish to do that? Do you wish to? I'd have to
confer with counsel. Okay, well, confer. We're
going to recess for 10 minutes and you can ask.
Your honor, Sean Greacher from Yonkanawe. Thanks
for giving us some time this morning to figure
things out. I think we've agreed on a path forward
for this hearing and also the hearing that is
scheduled for next week on the Section 542E order.
Parties intend to proceed with depositions of
the various witnesses. Those depositions will
take place in person in lovely Miami, Florida
on the week of the 12th to the 15th. The next
week, the week of the 19th, we would ask for
your honor to take a look at the calendar and
find out when everyone could be in lovely Wilmington,
Delaware, with again, witnesses appearing in
person to. So, is the idea that we will continue
this hearing, we'll continue the hearing next
week, and in the meantime, is there some agreement
on any kind of necessary access to documents?
I was going to get there, Your Honor. Obviously,
the debtors have a very different view of the
status quo and the implications of that. We will
take up council, Mr. Elbor's council on the offer
and proposal to provide necessary documents and
information. We'll work with the Riverong team
to assemble that list. Just to off the top of
the head, the one piece of information that we
would ask for in particular is information regarding.
period, obviously, our view is that there is
not a meeting of the minds, and obviously we
need court intervention to help resolve it, but
we certainly don't want to be in a position where,
to the extent our position is successful, that
Are the funds that you're talking about, are
they park receipts? What are they? What are the
funds? They would be park receipts related to
visitors who are attending the parks. As we understand
it, the company was likely in a cash positive
position over the past year. the accounts and
so again not asking for parties to surrender
any of their substantive rights we're just simply
asking for the information obviously I'm putting
Mr. Moon on the spot with respect to that request
but there will be a handful of other requests
that we will work with him to make sure that
we understand what's going on over the next Mr.
Albor is on the Zoom. He's at the back of the
boardroom that you see there. His camera zooms
in on him, I guess, when he talks, but he is
here. And he does respect this court. The issue
that we're trying to work out, Your Honor, just
from our perspective is we have to be very careful
with respect to the jurisdiction of Mexican courts
and what he can agree to. Not that he doesn't
want to or wants to be cooperative. He's going
to definitely try to be, as I was directed to
do as soon as I got into the case, Your Honor.
So we just wanted to make that representation.
Okay, well I'm hoping there's a sharing of at
least information so that whoever is in actuality
controlling day to day has what they need to
ensure that the animals are being taken care
of and the people are being paid for their work.
and other operational matters are being resolved
while the management governance dispute is out
there. And I recognize that may mean that that
split, that whoever is actually on the ground
handling things is split. Some is the debtor's
team. And some is, and particularly, I guess,
in Mexico is Mr. Albert's team. So we need to
make certain that notwithstanding the governance
issues, that regulatory concerns, safety concerns,
people are being paid. But I would hope information
could flow. And that there wouldn't be a violation
of any order that's been entered in Mexico to
share information. So thank you. Thank you, Your
Honor. Good afternoon, Your Honor. Paul Keenan
from Baker McKenzie on behalf of the Prudential
Insurance Company of America, Prudential Legacy
Insurance Company of New Jersey. at Cigna Health
and Life Insurance Company, which I'll just refer
to as the first lien lenders. The first lien
lenders are happy and pleased that the court
has set a schedule for depositions and for continuation
of this hearing. I'd be remiss if I did not inform
the court that the first lien lenders do have
grave concerns. The first lien and second lien
debt total amount outstanding at this point is
approximately $225 million. The debtors have
been payment default for well over a year. The
debtors have not provided the required financial
reports under the documents since the fourth
quarter of 2023. As Debtors Council mentioned,
the last couple of weeks were very busy weeks.
Debtors are flush with cash at this moment in
Mexico. And the debtor's view, excuse me, the
secured lender's view is that that is our clash
collateral. So we would be very keen and insist,
quite frankly, upon some kind of transparency
as to the use of cash during this interim period
so that if the court does rule in the debtor's
favor, there can be some accounting of sending
the reports they're required to under the loan
agreement. We can't see how that could possibly
violate anything. They are part of the loan agreement
and the lenders are entitled to the reports that
they've been denied for over a year. So that'll
be part of our request over these two weeks.
Okay. Thank you. Okay. I need another minute
now to see when I can fit you in. So we're in
recess. Council for the reasons that we set forth
in the motion, and I guess you've gotten the
flavor of today. Our Mexican Council are working
extremely hard to address various issues that
have arisen and continue to arise in Mexico in
recognition of that and in recognition of the
significant departure from exposed to in the
United States Bankruptcy Court. We've requested
authority to pay advance retainers to those firms.
We did speak with Mr. Hackman. He did provide
one revision to the form of order. upon receipt
in any amounts funded pursuant to the order shall
be subject to clawback in the event Mexican Council's
retention is not approved in the Chapter 11 cases.
With that, the U .S. Trustee was comfortable
with this order and we would request that it
be entered. Okay. Anyone wish to be heard? I
hear no one. I've reviewed it. I think the change
is appropriate. If you upload that revised order,
I will sign it. We will, Your Honor. Nothing
further from the debtors today, but thank you
very much for your time. Thank you. We're adjourned.