Mr. Gricher, good morning. Good morning, your
honor. Sean Gricher from Young Conaway on behalf
of the debtors. Your honor, we did file an amended
agenda. It's a docket 170, which included a number
of additional documents. I am sure that your
honor was pleased to receive a whole lot of additional
documents. But before I move beyond that, it
would. Has your honor received everything that
the court expected to receive? I don't know,
but I assume I've got exhibit witnesses, I mean
exhibit finders, so that's what we'll go with.
Okay, very good, your honor. So parties have
discussed sort of the order of operations here
today. I think our hope is we do have a number
of witnesses. I would like to proceed with putting
in, making our record. Mr. Albor has witnesses
as well, so we propose to proceed. Right along
and get through the day today These are two copies.
Yeah, two copies, sir. Your Honor, prior to the
hearing, the parties met and conferred and obviously
subject to your approval to streamline the evidentiary
presentation. The parties asked that the court
move into the record the documents that are listed
on the party's exhibit list. For the debtors,
most of these documents will either be addressed
during live witness examination or have a foundation
later than through the party's declarations.
Okay, do you have a copy, or where in the hearing
binder is the witness list? The witness list?
I'm sorry, the exhibit list. The exhibit list
that's in the, I think your honor was provided
a copy, two copies of the debtors exhibit list
and it's right at the front of their Yeah. Okay,
so there's agreement that all of these come in
correct your honor and just to note you'll see
at least in the debtors exhibit list for declarations
and some of the exhibits that were admitted at
the April 29th hearing. It's noted like for example
the strong declaration and the Wagstaff Declaration
were admitted as well as if you look debtors
exhibits 27 to 29 Those were exhibits to the
Wagstaff or they were the foundation was lit
was laid and they were moved into the record
Thank you, Your Honor. Your Honor, with respect
to Mr. Albor's exhibits, our exhibit list is
in the front part of our binder. With respect
to those, we do have some that we will bring
in by addressing that with witnesses, Your Honor,
and most of it is just stuff that's already been
put forward on the docket, for example, for verified
responses and certain other documents that both
parties have had for quite some time. Okay. And
Mr. Moon, are these also admitted without objection?
It's my understanding. Correct, Your Honor. Okay.
Very good. That's A through double F. Your Honor,
with respect to Mr. Strom, who is the debtor's
first witness, we have no planned supplemental
live direct. I just want to do a brief proffer
with respect to debtor's exhibit two, which on
Your Honor's exhibit list or the debtor's exhibit
list says is a of sampling of certain governance
documents. And Your Honor, the three sets of
documents in this compilation are the March 28th,
2025 resolutions with respect to debtor, control
of the door dolphin, debtor dolphin capital,
and debtor leisure investments holdings. Your
Honor, these, with respect to control of the
door dolphin, these are among, March 28 resolutions
that I'm sure Your Honor has read about. It's
with respect to Control the Door Dolphin and
its Mexican subsidiaries that are at issue in
the next in proceeding. So Control the Door Dolphin
resolution starting on page four, Your Honor.
I think up front is a you'll see a document that
has a left column in Spanish and a right column
in English. So with looking at the the fourth
page and continuing on to the sixth page. Those
are the pertinent resolutions that are at issue
in the March 20th resolutions. With that, Your
Honor, the debtors will tend to Mr. Strong for
cross -examination and reserve for redirect.
Mr. Strong. Your Honor, just as a point of housekeeping,
I don't know that we ever made our appearances.
Gonzalez. I'm sitting here with our local counselor,
Mr. Busenkel. Yes, thank you. of a clear record
for the benefit of Judge Silverstein, I want
to identify the U .S. companies of the Dolphin
Group that are in bankruptcy and the Mexican
companies of the Dolphin Group that are in bankruptcy,
so we could compartmentalize them. Is that fair?
I don't know what fair means, but you can certainly
classify them by where they're incorporated.
Okay. So the U .S. entities that are in bankruptcy
are Leisure Investment Holdings, Trident Investment
Holdings, MS Leisure Company, Icarus Investment
Holdings, Dolphin Leisure Inc., Marine Land Leisure
Inc., GWMP, LLC, Golf World Marine Park, and
the Dolphin Connection. Is that correct? That
sounds right, yes. And moving forward, I'm going
to refer to those as the U .S. Dolphin companies.
Do you understand that? Yes. Now, it is your
position that you are the independent director
of the Dolphin Group U .S. companies, correct?
Those entities and others, yes. Now, again, we
want you to refer to the corporate chart that's
attached as exhibit B to your declaration, which
is in the exhibit binders up there. With respect
to the Mexican entities, those would be Dolphin
Capital Company, Controladores Dolphin, Ejecutivos
de Turismo Sustentable, Dolphin Astro Holdings,
Aqua Tours, Those are the Mexican entities that
are in bankruptcy, correct? Did you read the
list again? There's one entity I don't think
I heard. Sure. Dolphin Capital Company? Yes.
Controlador Dolphin? Yes. Ejecutivos de Turismo
Sustentable? Yes. Dolphin Astral Holdings? Yes.
Aqua Tours? Yes. and Promotora Garafan. Yes.
Did I miss any? I don't think so. So moving forward,
I'll refer to those as the dolphin Mexican companies.
Is that a fair characterization? It's one way
to designate it, yes. Super, thank you. Now,
as the independent director of the U .S. companies,
your duties include retaining lawyers for the
U .S. companies, retaining restructuring professionals,
and putting companies into Chapter 11, amongst
other items, correct? That's part of the role,
yes. Now, for day -to -day operating activities
for the U .S. companies, you retain the firm
Riveron and specifically Mr. Wagstaff as the
debtor's CRO, correct? Yes. And so would you
agree with me that you are in possession and
control of the U .S. Dolphin companies? Yes.
And as of May 13th, 2025, you, as the independent
director of the Dolphin Group US companies, have
not made any site visits to any of those marine
parks. Isn't that correct? As of May 13th? I
think that's right. Since May 13th, have you
visited any of the marine parks? Yes. Which ones?
Miami Sea Aquarium. as the independent director
of the dolphin group, U .S. companies. Those
duties include ensuring that the animals at those
parks are being fed and cared for, correct? Yes,
that's part of the role. And to this end, you
have authorized the U .S. entities to retain
an independent animal welfare expert to ensure
that the animals are being taken care of and
fed, correct? Yes. And that gentleman is a man
by the name of Bill Winhall? Yes. Is he still
employed by the debtors? Yes. And with respect
to the animal welfare costs, including food,
medical, veterinary care, the records related
to those costs and care are maintained generally
on site at the U .S. company's locations that
you are in possession of, correct? Generally,
yes. I don't know that all the records are held
on site in the U .S., but there are records on
site in the U .S. for those particular issues
you mentioned. Well, the records that are on
site, they have allowed you to feed the dolphins,
feed the animals. Yes. Yes. Yes. Yes. dolphin
group Mexican entities. You are aware of various
legal proceedings pending in various Mexican
courts related to the governance of the Mexican
companies, correct? Yes. And to be more specific,
you are aware that the issue of who has corporate
authority for control of Controlador Dolphin
is currently being adjudicated by Mexican courts,
correct? That's... about control, you don't have
any evidence that the employees under the Mexican
companies possession and control the employees
that work for them, that they're not getting
paid. You don't have any evidence of that, correct?
I know that historically there have been issues
that have been brought to my attention. I don't
have any information on what's happening today.
And same with the animals. You don't have any
information today that the animals are somehow
in immediate danger or In harm's way in the Mexican
companies, correct? Today I don't have any information,
but I've been made aware that historically there
were issues and even proposals to restrict. The
feeding of the animals by as much as 50 % because
of liquidity issues. So and so that the record
is clear. The corporate governance changes that
took place on March 28th, 2025. Which? led you
to being named the independent director. Those
occurred while Controlador Dolphin was in a Mexican
crucial mercantile, correct? Yes. the Mexican
entities that you referenced during your cross
-examination, they are debtors in these Chapter
11 cases in Delaware, correct? Yes. Do you consider
yourself a fiduciary for all debtors, including
the U .S.-based and Mexican debtors? Yes, and
also a UK entity, yes. And as the independent
director of all of the debtors, including the
Mexican debtors, do you have actual knowledge
about whether the animals... at the Mexican locations
are being cared for properly. I have no information
presently on what's happening in Mexico. I have
historical information that caused a lot of concern,
continues to, and the other information that
I have is debtors' cash levels, which appear
to be very low at $47 ,000 on the Mexican entities,
which to me would indicate that there's... Certainly,
a lot of risk with respect to animal welfare
and paying employees. You mentioned during your
cross -examination that the debtors have possession
and control of the U .S.-based locations, correct?
Yes. Do you actually have access or control over
any of the locations in Mexico? No. Do you actually
know, as you sit here today, if Mexican employees
are getting paid? No. No further questions, Your
Honor. Thank you. You may step down. Seating
the podium is my colleague Christopher Lamb.
The declaration of Mr. Robert Wagstaff, the debtor
CRO, is there any evidence? Mr. Lamb will be
doing a live supplemental direct examination.
I have a few witness recliners. May I approach?
You may. Robert Wagstaff, I'm a managing director
at River on consulting and chief restructuring
officer for the debtors Mr. Weiss, can you briefly
explain the diligence that you and your team
at Riverong has performed with respect to the
debtors and their businesses since March 31st
of this year? As it relates to the US entities,
we have been in direct communication with management
and staff at the parks, have access to banking
and banking payroll and vendor information, and
are producing operating budgets based on that
information. As it relates to the Mexican operations,
I have visited five of the parks, the front of
the house of five of the parks in the Yucatan
Peninsula. I have visited the offices in Cancun,
the corporate headquarters in Cancun, attempting
to have conversations with management there.
Myself or colleagues have visited financial institutions
in Cancun, where we understand the debtors hold
bank accounts, attempting to get access to records
there. I have visited the three parks in Italy
and have direct communications with the management
team there, and there's a flow of financial information
related to the Italian operations. And two of
my colleagues, as recently as last week, have
been in Argentina working with council to understand
the situation related to the park closure there
and manage an orderly wind down of those operations.
Extremely difficult I have limited to no access
to personnel there. I have been I've made attempts
to contact personnel there and I've been told
that they are to refrain from Any communication
with me? I have limited Financial information
that the debtors sorry that mr. Albor has and
his team have begun to provide it does not Come
close to providing a complete picture of the
financial situation down there He is the former
CEO of the dolphin group my understanding No,
I attempted to meet with him on March 31st the
day we filed for bankruptcy in Cancun and My
attempts were unsuccessful put you in contact
with any of the debtor's employees or key representatives?
No. Has he ever provided you with the contact
information for the debtor's key employees and
representatives? No. So without getting this
information from Mr. Albor how did you go about
I have resorted to other means to attempt to
find contact information for individuals with
relevant information. That includes Google searches,
WhatsApp conversations, and the like. I have
an email communication from the Chief Veterinary
Officer instructing from Mr. Albor instructing
him not to communicate with me. Have you seen
this document before? Yes. Now just focusing
on the top part of the two from subject lines
of this document. Can you explain what this document
is? This is an email from the personal email
account of Dr. Sanchez, the chief veterinary
officer of the group, addressed to myself, Mr.
Breacher's counsel to the editors and Mr. Strong,
the independent director. And what's the date
of this email? April 21, 2025. Does this email
forward any additional correspondence? Yes. Yes.
By looking at that email, can you tell whether
Dr. Sanchez is the recipient? Dr. Sanchez is
the recipient here to his corporate email address
at the Dolphin Co. Okay, and that's different
than the email that we saw up top from each email?
Yes, and he does not copy his corporate email
in the email he sent to me. I was informed that
all senior executives of the company were to
cease communications with me and that their email
and phone records would be monitored for such
communication. He clearly states there that Mr.
Sanchez is not to keep any communication. The
third paragraph beginning with therefore. No.
Yes I believe it was two Thursdays ago. We were
informed by Italy of the untimely death of a
dolphin named Robin an older dolphin Necropsy
analysis suggests it was an unforeseeable and
unpreventable event related to the dolphin's
age and an infection it had received We have
been working with Italian management and mr.
Winhall to interpret the results of the that
necropsy analysis, it would have been extremely
valuable to be able to get Mr. Sanchez's opinion
on that as well. Are you aware of whether the
debtors have reached out to Dr. Sanchez with
respect to that issue? I know Mr. Sanchez was
copied on the email from Italy announcing the
unfortunate death of Robin. I have not, I know
he was copied on an email from Mr. Strom requesting
a call to discuss the incident and I am not aware
that Mr. Sanchez has responded to that request.
Or anyone else at the company, for that matter.
Which one, sorry? Yes. Yes. Just like we did
the last time, just by looking at the top of
the email, the two from subject lines, can you
explain what this email is? This is an email
from an individual I understand representing
Mr. Elmore personally to myself, Mr. Strom and
Mr. Greacher with copies to his partners, to
the local council's partners, sir. And what is
the date of this email? Saturday, April 19th.
Yes. Did you send this email? I did. On what
date did you send it? April 15th. Who did you
send it to? I sent it to Dr. Sanchez's personal
email, his corporate email, and copied Mr. Greacher
from Young Conaway and Mr. Strong. I had a phone
conversation with dr. Sanchez on Saturday the
12th We had set up a further conversation for
Monday morning the 14th to discuss his views
generally on the animal on the state of animal
welfare within the dolphin group He informed
me by phone on he canceled the phone call Monday
morning informed me by Telephone on Monday night
that he was requested by mr. Halbor to get a
written request of the information I wanted to
discuss with Mr. Sanchez that produced this email
that you see in front of you and that was sent
the following day, March 15th, sorry, April 15th.
Yes. He did not and I never got a response to
this email. I read the preamble to the email
as a cease and desist request. In the United
States, yes. Yes. We have had visits from the
USDA, from Fish and Wildlife, from the Agency
of Environmental Protection, or Department of
Environmental Protection, with various citations
related to the conditions of infrastructure,
questions around quality of water, discharge
of water. What about the Florida parks themselves?
Were you made aware of any issues with respect
to the facilities? We've also had a visit in,
we hosted a visit last Friday with Miami -Dade
County representatives of the county. Legal representatives
of the county and members of the unsafe structures
board of Miami Dade County Yes We had a visit
in mid -april, I don't recall the exact date
from workers compensation to the marine land
park we were cited for not having worker's insurance
in place. The park was subsequently shut down
for a period of, I believe, 10 days. Did the
park set any time prior to your appointment to
have worker's compensation insurance? I understand
that they did, and it lapsed on January 17th
of this year. We have went out to the market,
identified a broker. We have now engaged a professional
employee organization that also provides workers
compensation, and we are in the final stages
of onboarding all employees to that entity. Yes,
we have engaged the services of Mr. Winn -Hall
and also discussed with another marine mammal
expert the potential for using the services as
well. Without any access to Mr. Sanchez and his
valuable history related to the health and welfare
of the animals we felt we needed third -party
assistance. He has been coordinating extensive
diligence visits to the Florida parks. He's completed
two visits to the northern parks in St. Augustine
and Panama City Beach. Next week I believe he
will begin his visits of the southern parks in
Miami Sea Aquarium and Dolphin Connection and
he is providing diligence reports related to
his visits. Yes No We have attempted to gain
access to them to them. We have communicated
with local representatives We have communicated
with legal representatives of the banks all of
whom are international banks and have so far
been unsuccessful in gaining access to those
records Yes. You can turn to the document in
your binder behind tab number 38. You can just
take a moment to flip through the pages here
and then I'll ask you a couple questions. Yes
Yes, I'm fully fluent reading writing I Understand
that these are orders from a federal judge issued
in Mexico I believe it's three separate financial
institutions to remove the previous authorized
persons from access to the bank accounts held
by the debtors and provide access to myself or
team members of myself with powers of attorney.
For which entity BBVA Sorry, it's in tab 38 or
yes BBVA Banco with respect to the governance
or control over the bank accounts at EGBA. Below
the list of accounts, it expressly removes directors
and their powers of attorney, former directors,
and revokes their powers of attorney for the
entities with whom the bank holds accounts and
expressly, sorry, I'm running out of glass. Expressly
recognizes Mr. Strong a sole administrator and
gives myself Mr. Michael Flynn, Mr. Eduardo Moyano
and Mr. Matias Aramio as powers of attorney access
to those accounts. Does it deny anyone's access
to those accounts? It does. And whose access
does it deny? Mr. Eduardo Albor, Concepcion Esteban,
Martin Flores, Valeria Albor. and Sergio Hakome.
Which Mexican debtors, oh sorry, let me just
write that. By looking at this document, can
you tell which Mexican debtors have bank accounts
at BBBF? Acuaturs, Controladora Dolphin, Viajero
Cibernético, and Promotora Garafon. There are
32 listed on here that we know I have no idea
I don't have access to the detailed records of
these accounts Okay Yes It is a similar order
issued by the same federal judge instructing
in this case Banco Santander to remove the authority
the authorized persons from access to the accounts
and providing Myself and my team members access
as legal representatives of the debtors Yes.
By looking at this document, can you tell what
Mexican debtors have bank accounts with Banco
Santander? Controlador Adolphin, Ejecutivos de
Turismo Sustentable, Viajero Cibernético. That's
it. And how many accounts do those Mexican debtor
entities have with Banco Santander? Seven. that
we know of. On the next page, is there another
bank that receives a similar notice? Yes, Banamex.
So you said Banamex? Yes. Which Mexican debtors
have accounts at Banamex? Controller Dolphin,
Ejecutivo de Turismo Sustentable, and Viajero
Cibernetico. I believe the number is nine that
we know. Again, don't have access to any detailed
information related to the movements in those
accounts. Yes We have received some documentation
through his counsel, yes Okay Yes The the column
labeled information request is the list of Initial
financial information requested from us a list
of 22 items and sub items the following comment
is commentary attached to the email Containing
some of the documentation this commentary understand
came from mr. Albor's US Council The column entitled
documents produced is a list of the documents
that that were that have been produced to date
related to those requests. And the last column
is the list of incomplete documentation and not
received yet. Sorry, I misspoke. I think the
initial request list sent on the 30th was the
17 items. We subsequently, over the weekend,
this past weekend, sent an incremental list that
starts with item 18. You read my mind. Thank
you. So there's operational reasons I need to
understand the financial picture of all of the
debtors I need to understand the obligations
the debtors have and then importantly I have
as the sole officer of the debtors a number of
statutory reporting requirements that I'm hoping
This information will enable me to start filling
in the blanks on. You mentioned statutory reporting
requirements. What is your understanding of those
statutory reporting requirements? We requested
and received an extension from the typical 14
day time period to file the debtor's schedule
of assets and liabilities and statement of financial
affairs. We also have an upcoming deadline to
deliver the debtors monthly operating reports
Myself No, the the schedules required a detailed
ledger of real property and their associated
encumbrances other assets that belong to the
debtors Secured claims outstanding priority and
non -priority unsecured claims a full listing
of litigation the debtors are involved in a full
listing of the contracts the debtors are counterparty
to among other things It would be a good start,
but this was not meant to be an exhaustive list.
This was an initial request list pursuant to
the conversations about sharing information Since
I'm the one required to sign the certificates
I would need to I would not be able to take this
information on space value and file it accordingly
I would I need to conduct my own diligence to
understand the source and the veracity of the
information. I am aware that the U .S. debtors
have access to banking information, to vendor
information, to disbursement information, and
to payroll information, but not... all financial
information related to the legal entities. with
respect to the U .S. We are gaining understanding
of the obligations for the U .S. entities. We
are working with management to prioritize satisfying
those obligations. We are developing an understanding
of the operating profitability of the parks in
the U .S. and attempting to put together a go
forward forecast for the operations of the U
.S. parks. have piecemeal information from the
information that's been provided. Yes The top
table is a list of seven Mexican debtors in their
Individual and cumulative cash balance as of
April 29 2025 This was among the productions
that we received from mr. Alborz US Council It
is shocking to me that an entity of this size
would end any month with $47 ,000 in the bank.
There are seven debtors listed here. I believe
at least four of them to my knowledge are operating
entities. I've seen historical financial information
that the Mexican entities have produced upwards
of 13 million dollars in EBITDA in a given year.
As part of the other information produced by
Mr. Alvarez's counsel, I've seen a monthly payroll
record of in total of over a million dollars
to Mexican employees. There's 1 ,600 employees
in the Mexican operation. So I'm extremely concerned
about the level of remaining liquidity given
those facts. I don't have that information specifically
for the end of April. I do have historical financial
information that would suggest that end of April
would be the culmination of probably the most
busy season for the Mexican operations. Between
spring breaks in Q1 and late Easter this year
of April 20th, I would have expected to see much
more cash on hand. We received an order from
a Mexican federal judge to access and take possession
of the corporate headquarters in Cancun accompanied
by local law enforcement The company's main webpage
lists that address at the bottom as contact information
The Concurso Mercantil in Mexico was filed listing
that address as the place of business of Controladora
Dolphin. The building itself has a multitude
of company logos on the front, on the side, representing
the various doing business names the parks operate
under. My interaction with employees at that
building, most if not all of them are wearing
Dolphin Company hats, shirts. It seems evident
to me. Yes. Yes. Yes Absolutely not There there
was never a a Harsh word or harsh tone used during
the during the procedure No Forcible entry no
threats of any kind violence or otherwise People
were requested to close their computers and stop
work. I had the opportunity to interact with
30 or so employees to explain to them what was
going on. And in general, I felt the reception
was very warm to the conversation. There was
no threats, no force used at all. There was an
actuary, I understand effectively as a bailiff,
an extension of the court to apply the orders
that were granted. There was a fact witness in
the form of a notary. We had Cancun local legal
counsel. We had Mexico City Council on behalf
of the debtors. We had local Cancun law enforcement,
as was all right under the order. And we had
an outsourced building security firm. We were
trying to do things by the book. We wanted to
make sure that we had all of the elements present
to exercise our rights under that order to peacefully
and legally take control of that building. After
the debtors filed the Chapter 11 petitions on
March 31st, can you explain the visits that you
described earlier to the parks located in Mexico?
I visited five of the delphinariums in the Yucatan
Peninsula, the front of the house. I was hosted
by a Promoter for lack of a better term someone
responsible for greeting guests selling tickets
and otherwise hosting client experiences I Assumed
after our attempts to have a conversation with
Mexican management were rebuffed that people
were going to be alerted that my team and myself
were on the ground in Cancun and I may I may
have been prohibited from entering those parks
Without exception the folks that I spoke to Suggested
that they were the most senior people on site
there. I asked about operational oversight None
of the parks had a dedicated operations manager
above these sales and promotion people One of
them as a matter of fact said if the person he
reports to you gets a call. They're just going
to call him anyway, so it was very much a customer
experience and retail operation selling gifts
food and beverage and photography no admin stuff
to speak of on the State Structures Department?
Was that your testimony? Yes. When was that meeting?
Last Friday. May 16th? May 16th? Yeah. Okay.
Can you describe the general conditions? Actually,
let me take a step back. What park was that visit
at? Miami Sea Quarry. run down a lot of facilities
and requiring a lot of not only maintenance but
substantial structural repairs There are pictures
taken the various of the installations that were
visited with the unsafe structure board in Miami
-Dade County representatives last Friday the
16th May 16th The unsafe structures board came
to inspect for specific citations and violations
that had been identified by them before and wanted
to understand the progress related to remediation
of those installations. Yes. The first one I
understand is a former retention tank for marine
mammals. The second one is what's referred to
as the golden dome. It's the sea lion amphitheater.
This is at the back of the dome. The third one
I believe is associated with a violation related
to a pumping station. fourth and fifth ones are
under the stands of the former Killer Whale amphitheater.
So we walked probably two -thirds of the crescent
structure of the of the stands in these vertical
beams are purported to be holding up the cement
stands that customers would sit on. Are those
stands currently available to the public? No,
the park has been out of operation since 2023
I believe. Okay Yes This one is a follow -up
notification from the initial notification which
is the second document dated April 26th related
to violations, I believe related to the aforementioned
pumping stations. And then you said it was a
follow up. If you can flip the page, do you see
a document that stated there August 26, 2024?
Yes. Is this what you were just referencing?
Yes. And what are some of the notices of violations?
I can read here, a missing well vent, a missing
emergency generator, multiple missing emergency
generators. Yeah, a host of deficiencies that
we were told by unsafe structures of last Friday
had not been attended to. It is listed that there
was they were delivered by certified mail To
mr. Albor and mr. Gonzalez I have no knowledge
as to that. I have not been provided access.
Absolutely. I've seen reports as as recent as
October emergency reports produced by management
this reference some of the things mr. Strom referenced
about unpaid employee wages about unpaid withholding
taxes about rationing fish food and other emergency
requirements to pay vendors that As far as I
know without new money Injected would still exist
today We've run into cases of multiple violations
from infrastructure experts, from regulatory
experts that, as of the time we took control,
had not been addressed. I'm aware of certain
missed pay periods in the U .S., and then we
encountered this issue of operating without workers'
compensation for several months. That gives me
cause for great concern for the state of the
operations and the assets in Mexico. discuss
your testimony. the same I did with Mr. Strom
when you were sitting in here. We could agree
that the U .S. entities are the companies that
identify with Mr. Strom, and the Mexican entities
are the companies in Mexico that identify with
Mr. Strom, or do you need me to go through the
list again? No, I'm clear. Thank you. You are
with River On Management Services, correct? Yes.
In general terms, River On is a financial advisory
firm? Yes. And in these bankruptcy cases, Riveron
has been employed as the debtor's financial advisor,
correct? That's correct. And you are the debtor's
appointed chief restructuring officer, isn't
that right? Yes. And you are aware, correct,
that there is currently litigation in Mexico
regarding a corporate governance dispute of the
I am aware of litigation, yes. the day -to -day
operations of the Dolphin Group's U .S. companies,
correct? Yes. Now, there's a gentleman named
Edwin Gonzalez, who is the executive director
of the U .S. Group of Dolphin Companies, correct?
Yes. And he is a pre -petition, he held that
position pre -petition with the Dolphin Group
U .S. entities? Working for you and available
to you to advise on or help with the day -to
-day operations of the US group parks correct
Yes Yes Yes As it relates to you at the unsafe
structures board of Miami Dade County there are
citations that have not been cured yet I'm not
sure I can answer that definitively. I know there
are, we have past inspections, but there are
ongoing visits and questions related to water
quality, animal infrastructure, et cetera. But
generally you're otherwise not aware of any other
specific formal violations or regulations regarding
the animals in the US, correct? I'm also aware
that we got decertified by an association of
marine mammals. That is a condition to our...
The membership in which is a condition to our
license aquariums Some yes, and I believe was
this weekend Council for the debtors Communicated
an additional list of documents that you were
seeking for the Mexicans, correct? correct And
the response to that request was the documents
are going to be compiled or being compiled and
will be Provided to you to the extent it exists,
correct? That's my understanding. Yes that are
forthcoming have not blocked your ability to
pay the U .S. employees to feed and care for
the U .S. animals, correct? Can you repeat that
question, please? Sure. Despite not having all
of the Mexican documents as of today that theoretically
are going to be forthcoming, not having those
documents, you've still been able to pay the
U .S. the U .S. Dolphin Group employees and feeding
care for the animals of the U .S. Dolphin Group,
correct? Yes. I want to briefly talk about the
building incidents on April 11th, which you described
in somewhat detail in your declaration. Now,
it's your understanding that Mr. Albor Yes. And
you have not seen, at least as of April 11th
when you went to the building, you had not seen
a current lease for the building between Controladora
and Mr. Albor. Isn't that true? Correct. And
before going to the building on April 11th, you
did not take any steps to verify that Controladora
Dolphin had a possessory interest in that building,
correct? Personally, no. Turn to exhibit three,
which is your declaration mr. Wagstaff in front
of you, sir? Yes. If you turn to page 10 of the
declaration, that's where you begin to describe
the events of April 11th. See that? Yes. On paragraph
12, you state that you assembled a team or that
a team was assembled for the purpose of gaining
control You see that? Yes. And at the recommendation
of your advisors, you were accompanied by three
patrol cars of local police, two locksmiths,
personal security guards, and five members of
a building security firm to aid you in your effort
to go and take control of the building. Isn't
that right? Yes. No. And you described that when
you got inside of the building on April 11th,
your team immediately began changing locks in
that building. Isn't that correct? Yes. And then
once inside that building, I think this is in
paragraph 16 of your declaration, you state that
you encountered several groups of employees.
working and carrying out their daily job duties.
I think you cited, you identified purchasing
agents and amongst other people, group sales
representatives. Is that correct? Yes. Now in
paragraphs 28 through 30, you describe Mr. Albor's
return to the building that night. And in paragraph
28, you state that Mr. Albor was accompanied
approximately 20 armed men reporting to be state
police officers. Do you see that? Yes. I heard
him testify to that effect. Finally, I want to
ask about exhibit 38 and 39. Mr. Lamb questioned
you about concerning an order from the tenth
judicial circuit concerning number of bank accounts
in Mexico. Do you know, sir, if this order was
derived from the same court that issued the April
4th resolution that had instituted some precautionary
measures that Mr. Albor has appealed? I don't
know. Do you know if your Mexican counsel shared
a copy of this order? with Mr. Al Gore's Mexican
Council when it was entered. I was given his
contact information and reached out to him by
telephone and then arranged a meeting with him.
I believe is April 7th or 8th. No. Yes. Yes.
No. Line of questioning, Mr. Wax off. Mr. Gonzales
had asked you about whether any member of your
team was threatened on the night of April 11th.
Do you recall that question? Yes. Did you understand
that to mean? The River on team or the general
data? The River on team. Yes. What is your understanding
of that? Local Mexican, sorry local Cancun Council
returned. Actually call the next witness to the
stand maybe set the table. Well, I think it should
proceed as The next witness that the debtors
will fall is former Justice Luna She is a staff
speaker. So we do have a certified translator
who we talked to the courtroom will be sitting
there Your honor my witness finders have as exhibit
for So I'll be looking at Exhibit 5. I understand
Justice Lynn will be looking at Exhibit 4. We'll
do our best then to streamline the presentation.
We tried to make the live direct examination
as concise as possible. May I approach Your Honor?
You may. appreciate that too. Your honor, the
translator that's kind enough to join us today
is Mr. Armando Esquerra, husband, and he'll be
sitting right there. I understand that they typically
both get. Yes. Sir, please raise your right hand.
Yes, you. Sorry. Do you affirm that you will
well and truly interpret the questions to the
witness and her answers thereto to the best of
your ability? I do. Please state and spell your
last name for the record. Armando Esquerra Hasman,
H -A -S -B -U -N. Thank you. the best of your
knowledge and ability. Please state your full
name and spell your last name from the record.
Margarita Beatriz Luna Ramos, L -U -N -A. Thank
you, may be seated. Morning, Justice Luna. Thank
you for taking the time to travel to Delaware
to testify on behalf of the debtors at today's
hearing. Could you provide Judge Silverstein
with a brief overview of your legal professional
experience before joining the Supreme Court of
the Mexican United States in 2004? Muchísimas
gracias. Llega la Suprema Corte de Justicia de
la Nación nombrada en 2004 en un período de 15
años que era lo que la reforma constitucional
de 1994 establecía y concluí en febrero de 2009
en la Suprema Corte de Justicia de la Nación
tuve el honor de desempeñarme en la segunda sala
y la presidí en algún momento. Thank you. I have
the honor of being nominated to the Supreme Court
of the Mexican States in 2004. term of 15 years.
This was done in accordance to the reform law
that was passed in 1994 and I served there until
February 2009. It was an honor to be part of
the Supreme Court where I was a member of the
second tribunal, which sometimes I presided,
and there we looked at matters within the purview
of the Supreme Court jointly and both in chambers.
In the second circuit, there was a semi -specialization
that looked at administrative and labor matters,
but we were doing jointly. We had purview of
everything. And for me it was an honor to be
part of the highest court in my country. Let's
talk about some of the issues addressed in the
declaration that you submitted in support of
the debtor's motions. Let's turn to paragraph
17 of your declaration. Again, Your Honor, that
will be Exhibit 5 for most folks and Exhibit
4 for Justice Turner. May I proceed? In paragraph
17, you explain that the injunctions decreed
in the April 11th resolution relied on by Mr.
Albor do not have respiratory effects. Do you
see that? Let me explain. Of course, with pleasure.
In our country, when we have injunctive relief
measures, it's done in two ways. One of them
is the issuance of the injunctive relief and
then... the execution of the same. Continue.
The interpreter would like to verify the meaning
of the term in context. After the issuance of
the precautionary measure of the injunctive relief,
If that measure has been completed, it cannot,
later on, retroactively be given again as a motion
because, continue. Injective relief has the purpose
of keeping things as they were at the time that
the request was made. para buscar que se mantenga
la materia del juicio y que en un momento dado
no se causen daños y perjuicios de difícil reparación
a la persona que está demandando. Una de las
medidas cautelares que se concedieron el 11 de
abril de 2025, en el juicio ordinario mercantil
256 diagonal 2025, two five six dash two thousand
five two five six dash two thousand five two
five six dash two thousand five two five six
dash two thousand five So that it would not have
a restitutory effect to the decisions that had
already been made by that point. These injective
measures were related to a decision that had
been taken on the 28th of January of 2025, whereby
we had put measures in place to remove certain
personnel to change the responsible party. And
to name representatives, amongst others. So that
the decisions had already been taken and they
were determined. And we did not grant restitutory
effects, continue. We only granted them in terms
of their execution. And within the chapters,
we have copies of the resolution, if at any point
you would like to read it over. Specific question.
Because the April 11 resolution relied on by
Mr. Albert did not have respiratory effects,
did it impact the March 28, 2025 resolutions?
Si, de alguna manera establece esta decisión
que aquellas decisiones tomadas en el acta de
28 de marzo de alguna manera están determinadas.
No se concedió la suspensión respecto de ellas,
pero no son ejecutables. They would not be able
to be executed because of the injunctive relief.
So can you more generally describe what it means
when a resolution does not have respiratory effects
under Mexican law? Only if it were to be challenged
through evidence and through that it would be
defeated. So in paragraph 18 of your declaration.
You discuss the April 25. 2025 resolution that
is attached as. Zip it out to your declaration.
Do you see that? I do. Can you explain to the
court the relevance of the April 25 2025 resolution?
Yes. On April 25, 2025, the judge of Mexico established
that the assemblies that had been carried out
on January 28, 2025 had the possibility of continuing
to enjoy validity, and thus it was established
in a specific way in the agreement, enjoying
full validity and presumption of having been
carried out Yes, the decision that was taken
on the 25th of April of 2025, the Mexican judge
determined that the decisions that were taken
during the assembly on the 28th of January 2025
have the possibility of being currently valid
according to the specific agreements which were
within the law. Therefore, the legal efficacy
was not challenged, we just suspended its application.
Fair to say that the April 2025 resolution decreed
that the resolutions on March 28, 2025 with respect
to the governance changes were to be considered
valid and presumed to have been carried out in
accordance with the law. Are you referring to
the resolution on the 11th of April? Take a look
at paragraph 18 of the declaration. Can you explain
to the court what you mean in the first sentence
of paragraph 18? There were two ordinary bankruptcy
proceedings. The interval which is verifying
the data on it. So there was one where was a
decision that was issued about the injunctive
measures referred to on the 4th of April of 2025,
whereby it granted the suspension of the decisions
that had been issued on the 28th of January 2025.
This first injunctive measure of the 4th of April
of 2025 was issued within the bankruptcy trial
case 222 -25. brought on by the companies of
the Dolphin Group. Mr. Alvar was being requested
to produce an accounting. In the trial, or the
process that was the second one, Ordinary Trial
256 -2025 also. This was brought on by Mr. Albert.
In this trial, we also issued the injunctive
relief that was requested, and those are the
ones we just mentioned in your previous question.
Both actions were... presented before the same
judge. And the same judge himself issued two
injunctive measures which were contradictory,
one to the other. The interpreter would like
to verify the day again, because the first day
that I heard was 2005. So the first measure was
issued on the 14th of April of 2025, and it issued...
Can I... I think it's April 4, 2025. April 4,
2025, and then it contradicted the one on April
11th. Both orders, the one from the 4th of April
and the one from the 11th of April, were contradictory.
So the Dalton group and the action that is promoted
requested an incident of accumulation in which
they wanted to have the judge decide which one
of the two injunctive measures he wanted to prevail.
In response, the judge says that in terms of
the incident of accumulation, he reserves the
right to make a decision on it. later on, and
he does establish that the decisions that was
made on the 28th of January of 2025 were established
as valid and were issued within legality. Does
she mean March 28, 25? So could you just explain
simply what do you mean? in the first sentence
of paragraph 18, without the context, but what
does it mean? It just basically says that the
judge, in terms of the injunctive measure, external
injunctive measure, he established that the actions
taken on the 28th of March of 2025 were valid.
Now let's turn to paragraphs. 13 and 14 of your
declaration. Paragraph 13 discusses the possibility
that Mr. Albor could post a counter guarantee
for 200 ,000 pesos and that might lift the definitive
stay discussed in paragraph 12. Do you see that?
And based on the status today of the Mexican
court proceedings, does it even matter if Mr.
Albor posted the counter guarantee? May I explain
the context a bit? Please. Against the injunctive
relief measure of the 11th of March of 2025 La
institucion fiduciaria si banco, promovio un
juicio de amparo indirecto, que es un juicio
constitucional, en contra de algunos articulos
pero fundamentalmente de la medida cautelar de
11 de abril de 2025. against some articles, but
specifically about the injunctive measures of
the 11th of April of 2025. In this trial, Si
Banco obtained both the temporary suspension
as well as the definitive suspension in this
trial. In terms of the definite suspension once
it was upheld, he promoted a counter guarantee.
Which means if there was already a guaranteed
fixed. The other party can request the execution
of a guarantee so that the action is enforced.
The judge upheld that the application of the
counter -guarantee was appropriate, and he set
the amount for that counter guarantee. By the
time that I had issued my opinion, that counter
guarantee had not yet been presented, but when
I was already in the United States, I learned
that that was the case. This resolution was already
also impugned by C -Banco and it's underway.
That is explained in paragraphs 13 and 14 of
your declaration, correct? Yes, but I would like
to clarify something. The issuance of a count
guarantee can have as a consequence of the action
be executed. But in this particular case, there's
an interesting situation worth mentioning. In
the decision of the injunctive measure of the
11th of April of 2025, was also fought through
the ordinary means of defense through an appeal
before the Superior Court of Justice of Mexico
City. This appeal can be accepted by the Supreme
Court of Justice twofold. In a devolutive sentence
and a suspension sentence? Suspension sentence.
Can I just pause it? In paragraph 14, you indicate
that Sabanko has... an appeal of the April 11th
resolution, correct? And on May 15, that appeal
was admitted under the both effects principle,
correct? And that means the appeal was admitted
with suspensive effect. And therefore, the execution
of the April 11 resolution is suspended until
the merits of the appeal are resolved, correct?
Or under, I would prefer a yes or no answer if
you could. Under Mexican bankruptcy law, are
assets that a company transfers to a collateral
trust considered part of the bankruptcy estate
that that company later files a concurso mercantile
petition? No, because they pass on to the fiduciary
institution when there is a trust in between.
And the judicial precedent that confirms your
position is included as exhibit O to your declaration,
correct? What was the question? Correct. And
you are aware of the January 28, 2025 concurso
order, correct? And that order has what you phrase
as insolvency injunctions, correct? Si. Yes.
The Concurso Court Insolvency Injunctions did
not operate as a stay of any actions. That's
what she's here for, Your Honor. Against control
a door dolphins equity assets held in the collateral
trust, correct? Can you repeat the last bit?
Sure, and maybe can I just say one full time
through and then if you need any first, okay?
The concursor courts and solvency injunctions
did not operate as they stay of any action. against
control Adora Dolphins equity assets held in
the collateral trust, correct? They could not
apply to any suspension of the the actives that
were held within the trust because the measure,
or the assets within the trust because the measure?
Because the measures taken were issued precisely
in order to keep the company afloat and it would
continue. So let him continue operating and continue.
But if, as we said in the previous question,
if the suspension was over matters connected
with the assets and corporate decisions, They
are not connected with injunctive relief measures
of the bankruptcy trial. The assets are on a
collateral trust. The insolvency injunctions
do not apply to those assets, correct? No. They
don't. No further questions around. How much
cross do you think you have? Hard to tell judge
depending on the answers I would suspect. I'm
supposed to be. So we're gonna take a break now
and I would ask that Ms. Luna not speak with
anyone about her testimony during the break.
Please be seated. Good afternoon, Justice Luna.
My name is Daniel Gonzalez, and I have counsel
to Mr. Eduardo Albor in this matter. Likewise.
I'm going to ask you a few questions to hopefully
keep down the time of your cross -examination.
Depending on your answers. We could perhaps speed
it up. In your declaration and testimony, you
testified about two different legal proceedings
in Mexico, correct? Yes. One filed by the dolphin
group against Mr. Alvore and certain other individuals,
which you defined as the... As the initial proceeding,
correct? And then the second proceeding in which
Mr. Albor filed a claim against CI Banco, Wilmington
Trust, and Marco Velez, correct? And Marco Velez.
And you define that in your declaration as the
subsequent proceeding, correct? And as we sit
here today, those two proceedings are still pending
in Mexico, correct? And then with respect to
the Concurso Mercantil. You understand that the
Concurso Mercantil that was filed by Controladora
Dolphin back in December of 30, 2024 has been
withdrawn, correct? Whether it was withdrawn
or dismissed, whatever the action was, it was
done at the direction of the new independent
director and board that was put in place as a
result of the March 28th corporate governing
changes, which you discuss in your declaration,
correct? Yes, I understand precisely that there
was a new director in connection with the decisions
that were taken at the meeting of the 28th of
March of 2025. And with respect to the dismissal
of, I believe you called dismissal of the Concurso
Mercantil in Mexico, there's been an Amparo filed
in connection with that dismissal, correct? Excuse
me? An Amparo, Amparo, A -M -P -A -R -O. And
that Amparo is also still pending today, correct?
Yes, there was also a direct request of the Amparo
Ori against the dismissal, but it was denied.
With respect to the dismissal of the Amparo,
that is still pending a final resolution, correct?
Yes, indeed. That order still is pending. However,
the injunctive measures that were put in place
in the concurso mercantile by the judge herself,
which were admitted, continue. She lifted the
injunction measures which led to the suspension
of the Amparo Directo. The suspension was resolved
and it was denied. Because they decided that
had it been granted it would have been equivalent
to giving restitutory effect. The challenge to
the Amparo claim has still not had a final resolution.
I understand that you may have an explanation
as to why, but there still has not been a final
resolution, correct? Now, the bankruptcy trial
has just been installed. It's about to go through
paperwork. However, since there was... The bankruptcy
proceeding can go on, but the injunction measure
is in place and it does not impede from going
on. The reason I pause is because I heard the
translation and I wasn't sure it was accurate.
I understand Spanish. I apologize. I'm asking
the witness to repeat her answer, pausing after
every sentence. whereby the bankruptcy is being
dismissed or has been dismissed. The judge lifted
and left without validity the precautionary measures,
the injunctive measures. So then they proceed
with a bankruptcy trial against the dismissal.
Which is in its course. And they're asking for
the suspension. And that suspension has been
denied. But to answer my simple question, the
embargo proceeding has still not achieved the
final resolution. Is that correct? No. has not
reached the final resolution or no, I'm not correct.
I hesitate to do this, but I want to make sure
I understand two basic concepts. Exactly what
are restitutory effects? If a law is issued,
the law is already issued. If I ask for an injunction
because of the issuance of that law, it will
get denied because it's a consummated act. But
they could grant it to me on the grounds of the
effects and consequences of its application.
And that is what's happening in this trial. When
they issued an injunction due to the resolution
of the 28th of March of 2025, The judge said,
I do grant it, but not with restitutory effect.
What does that mean? That there are resolutions
of removal of the appointment of parties in charge.
somehow were established as have been issued.
If the judge were to consider the suspension
for these measures, he would have to go back
and retrofit those acts. Y la idea de los artículos
que regulan estas medidas cautelares es que se
mantengan las cosas en el estado que guardan.
No que se vayan hacia atrás. No que se retrotraigan.
Entonces, la concesión de la medida cautelares
es para que esos actos So the granting of the
injunction measure is so that those actions,
which were completed after they were issued,
that they just not be executed. Okay. That was
my second question. The justice used the words,
if I wrote them down correctly, that... The January
28th actions have the possibility of being currently
valid, therefore legally maybe effective, but
just suspend the application. During her testimony,
she may have mistakenly said January 28 a couple
times. I think it's the March 28, 2025 resolutions
that affected the governance. Okay. Okay. Sorry.
So my question is, what does suspended application
mean? And does that fit in with restitutory effects?
Restitutory would involve the revocation of the
removal or of the appointment of the representatives.
That cannot be done. Also because this resolution
was affirmed because the resolution of the 4th
of April of 2025 was not appealed. There was
a contradictory resolution in a different trial.
It was a counterpoint to the resolution of the
4th of April, the one of the 11th of April, but
not because it was an appeal to it, but because
it was a different trial. I understand that.
What is a suspended application? The execution
is that it would not be carried out, the dismissal
let's say, but the dismissal has been done. Okay,
so the suspended application has to do with an
order entered by the court. That's the injunction.
And not the actions, the corporate governance
actions taken on March 28th. No, those acts are
deferred. Gracias. If that prompts any questions,
I'll let you ask any other questions. I understand
that during my direct examination, my question,
which included equity assets, was only translated
to assets, and that impacts the answer. So I'd
like to rephrase the question to clear the record.
The Concorso Court's January. 28, 2025, insolvency
injunctions did not stay any actions against
controladoras, shares or equity held in the collateral
trust, correct? And then I'll move on to some
very brief redirect Based on everything you have
read and the Mexican court orders As of today
You agree that Mr. Strom is the sole director
of each of the Mexican debtors, correct? And
that is because there is no Mexican court order.
that as of today, suspends the effectiveness
and validity of the March 28, 2025 resolutions,
correct? That is correct. Thank you. And just
one more wrap -up question, Your Honor. You have
signed your declaration. You still believe that
everything stated in your declaration is correct
and true? Paragraph 4 of your declaration, you
state that the knowledge you have of the financing
and securitization of those financings came from...
You state that your understanding of the financing
and security structure for that financing came
from discussions from members of the Guerra,
Gonzalez, and Asociados law firm in Mexico. Is
that correct? And is it also correct to say that
you have not reviewed the trust agreement that
controls the, let me restate the question. Is
it correct to state that you have not reviewed
the CI Banco trust agreement? Yes. Yes, I even
have a copy of it with me here. Yes, I even have
a copy of it which was given to me here and I
have it underlined where they're talking about
the transference to the fiduciary. But that's
not discussed in your declaration, correct? I
did not have it available when I signed the declaration.
It became available to me when I arrived in the
city. And have you had a chance to review the
Mexican Fledge Agreements? And apparently in
Spanish, a pledge agreement is called a contrato
de prenda. Thank you. I also did not have that
available to me in Mexico, but once I got here.
And again, that's not discussed in your declaration,
correct? Because when I drafted it, I didn't
have it handy, so I couldn't have spoken about
something I didn't know about. I understand that.
Now that you've reviewed those two documents,
do you still agree with the conclusion in your
declaration that the March 28th governance changes
were done properly. Yes, it has reaffirmed my
belief that those agreements which were carried
out on the 28th of March of 2025 are still valid,
continuing. And there's no suspension or injunction
that nowadays would deprive them of their full
effect. But that wasn't necessarily my question.
Thank you for your answer. The question is concerning
the actual governance change. It wasn't whether
or not the proceedings where they stand today,
you think that they support that the governance
changes were valid. The question is based on
your review of the pledge agreement and the trust
agreement. Do you believe that the actual governance
change was done properly? Subject to the potential
of. Mr. Alvarez, Mexican law expert says that
the letters are done with our evidence. Okay,
thank you. Let's go ahead and proceed into our
evidentiary presentation with calling our expert,
our rule 44 .1 expert, Dario Oscos. Just a housekeeping
matter, Mr. Oskos does speak English. If something
happens and we need to grab a translator, if
something gets really technical, maybe, I don't
envision that, but he says that he's okay with
speaking English. Good afternoon, Mr. Roscos.
Good afternoon. Mr. Roscos, could you tell us
what is your current occupation and role? I'm
a litigator lawyer. I practice in the area of
commercial litigation, insolvency, arbitration,
and mediation. Can you briefly summarize your
legal background and areas of specialization?
Yes. I study law at the Escuela Libre de Derecho.
Thereafter, I study some post -graduate degrees,
including amparo and constitutional law, tax
law, and conflict of laws. How many years have
you practiced law in Mexico? Well, I've been
practicing law since I finished law school. That
was in 1980. So I've been practicing for a while,
and I started doing some legal assistance, I
would say, before. And what kind of clients have
you represented in your practice? In the practice,
I've been representing individuals, corporations,
private and public. Have you ever served as an
expert on Mexican law in foreign courts before?
Yes. How many times have you done that approximately?
Well, in foreign courts about four times. Are
you familiar with the requirements for expert
declarations in U .S. federal court proceedings?
Generally, yes. And are you familiar with Chapter
11 cases that may have a component of litigation
in Mexico involving a concurso mercantile procedure?
Yes. Yes, I've been involved. Can you describe
your academic and professional affiliations,
including any work with international legal institutions
like Un Central or Insal? Yes. I am a lifetime
member of the American Law Institute, where I
participated in the transnational insolvency
project between the NAFTA countries, Canada,
United States, and Mexico. I am a member of the
American College of Bankruptcy, and I participate
in the International Committee. I'm a member
of the International Insolvency Institute. I'm
a founder. We started back 20 years ago. I'm
a member of the Mexican Bar Association and other
domestic and international organizations. Thank
you. I also am a member of the International
Bar Association, where I was the chair of the
insolvency committee. And most importantly, I've
been delegated at Ocitoral Working Group Five
Insolvency, where I have devoted the last almost
20 years in participating in the drafting and
enactment of the modern laws on cross -border
insolvency and related modern laws. Okay, Mr.
Oskos, if you could look in the binder at tab
I, I'd like to show you your declaration that
was filed in support of the verified responses
at docket 164. You should see that at tab I.
I have it. Okay, thank you. And do you recognize
this document? Yes. And what is it? This is my
declaration that I drafted and it bears my signature.
Okay, and is that? Your signature on page 31
and 42? Yes, it is. Okay. Is there anything in
this declaration that you feel needs to be amended
or changed since you filed it? Well, you know,
when we do some of these kind of works and opinions
or declarations, we think about it and sometimes
we get additional ideas, but in essence, this
is my statement. Okay. And you understand that
you signed it under penalty of perjury, correct?
Correct. And to your understanding, as you sit
here today, is the information that you put forth
in your declaration true and accurate to the
best of your knowledge? Yep. Thank you. What
were you asked to do in connection with these
proceedings? I was asked to review judicial records
of different proceedings regarding a concurso
mercantil proceeding of a company, Controladora
Dolphin, and some related legal actions that
open two different proceedings. One proceeding
that was wrote by Mr. Eduardo One is a legal
action seeking avoidance of the stockholders
meeting carried out on 28 March 2025 and the
other action is a action seeking responsibilities
or liabilities of the former administration of
the companies, okay? And did you, if you take
a look at page, on page 39 and 42, we see exhibit
B. Page 39 and 42, it'll be on the top right
page. Whatever page or paragraph page up at the
top 39 of 42. It's exhibit B Okay exhibit yes
and could you tell me what exhibit B is Exhibit
a 32 to 42 This is my CB. Okay, and that's exhibit
A. Right behind that is an exhibit B. What do
you see there? Exhibit B. Well, this is my declaration.
I don't see where exhibit B is. Exhibit B is
a list of documents, of records. And these are
documents you reviewed in preparation for your
declaration, correct? Yes. And if you could,
we're going to flip through kind of quickly to
try to speed this up, but if you could take a
look at, for example, tab F. There you have it.
And do you recognize this document? Yes. What
is it? This is a court order dated April 10,
2025, about the provisional measures that were
granted, as far as I remember. Okay, and go to
tab G. Yep. And what is that? This is a translation
of a court order dated January 28, 2025. This
refers to the provisional or regulatory measures
granted by the Concurso Mercantil Court, mainly
staying payments by debtors, to debtors, by debtors,
and also the execution or enforcement of any
legal actions or extrajudicial acts. And we'll
talk a little bit more about what's in them.
I just want to know that you've looked at these
statutes. So we'll go to exhibit J. This is exhibit
J, I think. Yeah, this is the January 28, 2025
order precautionary measures under the concursive
mercantile. OK, and if you could go to tab X.
So what do you see in tab X? Do you know what
that document is? This is a provision in state
proceeding, regarding proceeding 5443 -2025.
Okay, and could you look at tab Y? The top line?
Tab Y of? Tab Y, Y. Y. Okay. Yes, this is a motion
by means of which a bond policy was filed before
the court, before the civil district court in
Mexico City. File, okay. I'm sorry, and you see
that there's actually two parts to tab. Why?
There's an English and Spanish translation? Yes.
English translation and Spanish, correct? Yes.
Okay. And what does this document reflect? This
is a voucher filed electronically before the
district court. Second district civil judge in
Mexico City filing, as I can see, the bond of
2 ,400 Mexican pesos. And is that the same counter
bond that we heard testimony about earlier? Yes.
Do you have any financial interest in the outcome
of this matter? No. Is your compensation contingent
on the outcome of this case or the substance
of your opinions? No. Can you summarize your
understanding of the dispute regarding the corporate
control of Controladora Dolphin? Yes, what I
understand and I learned from the documents and
records I reviewed. What I've been told by council
is that there is a financing that is structured
by the issuance of notes that were sold to finance
the border wear, let's call it that way, and
there was a specific and special security structure.
Basically, in two... legal instruments. One is
a warranty trust, Mexican warranty trust, and
second, pledge. In the warranty trust, assets
of the borrowers were transferred as guarantee
in case of default of the financing. One asset
where the 99 % of the stock of the Mexican companies.
And this trust provides some situations in case
of default, such as in case of default, the beneficiary
of the trust, meaning Wilmington Trust, may notice
the trustee, C. Banco. that an event of the fault
has been occurred. And there is a provision that
that event of the fault may be cured during a
certain period of time. If the event of the fault
is not cured, person to the provisions of the
trust, the trustee, C. Banco, may grant powers
of attorney to a person appointed by Wilmington
as beneficiary of the trust to exercise corporate
votes. But I must underline that the trust is
specific in providing that borrower keep the
voting rights unless this condition happens,
meaning the default, the notice of default, and
so on. So my understanding, you use the word
warranty trust. Does that have some kind of importance
with respect to the full transfer of the shares?
No, this is a special, let's say, warranty trust.
And I would like to tell all of you that it is
Mexican trust. It is not common law trust. It's
very different. The trust is a contract where
there is a trustee, generally a financial institution,
a bank. There is the settler of the trust and
the beneficiaries of the trust. The settler of
the trust are the parties that transfer assets
to the trust in order for the trustee to meet
the purposes of the trust, the specific purposes.
In this case, this is a warranty trust. It is
not a full nominal share transfers in ownership
to the trust. It is very important because it
is not the same to have transfer, let's say,
ownership of some immobile or any other property.
in order for the trustee to sell it and pay my
children. No, it is not. This is a structure,
business structure by means of which the trustee
upon the carrying out of certain terms and conditions,
the bottom of the voting for the chairs will
start an office. But in the... In the meantime,
if there is no event of default, the borrowers
keep full right to exercise their borrowing rights.
And is it my understanding that you reviewed
the Ciabanko Trust Agreement at issue here? Yes.
And is it, well tell me, is there, are there
specific procedures in place that need to be
followed to the extent there is an event of default?
The trust and in parallel the pledge agreements
provide that in case of an event of default,
default on the payments. Let's read that way.
The Wilmington Trust as holder of the pledge
or the trustee under the trust may give notice
of default in order for the borrower to be able
to cure the default. If the default is not cured,
then it may start with two things which are very
important to bear in mind. In the case of the
pledge on the shares, to execute a foreclose
on the pledge, to sell them, and with the price
of the sale, in auction sale, borrower will be
paid. In the case of the trust, the main objective
is to warranty payment. In order for the trustee,
upon the instructions of the beneficiaries, the
Wilmington Trust sell in a private proceeding,
sell the shares and with the product be given
to the first beneficiary, Wilmington. provision
of the voting of the shares something special
and it's kind of strange because it takes away
the most important weapon of shareholders to
organize to manage the companies but that's another
discussion. So just to try to get us moving through
here what is the significance of the March 28
2025 resolutions purporting to remove Mr. Albor
and others from the board? The The stockholders
between yes, they're 28 March 2025 well The trustee
see Banco and the holder of the pledge carry
out a stockholders meeting With hundred percent
of the shares represented in this stockholders
meeting We call that made on on the desk because
there is no a call and they determine or Decided
several situation one was remove the current
members of the board of directors and directors
To revoke and grant new powers of attorney To
seek filing of check to seek protection under
the U .S. Banner of Seek Court, and most importantly,
file for concursive mercantile, even though that
in the same stockholders meeting, they decided
to withdraw the concursive mercantile taking
place. So this may be a little bit out of order,
but we heard. a little bit of a discrepancy between
the words withdrawal and dismissal of the concursive
mercantile. Could you explain the difference?
Yes, yes. Dismissal is an action of the court
when the court finds that the action, the lawsuit
is foulness, lack of legal standing. So that's
a court decision. Withdrawal is different. So
I understand your testimony, it's your belief
that the Concurso Mercantile was not dismissed,
it was withdrawn. the declaration of concursive
mercantile to adjudicate debtor in concursive
mercantile. And just getting back to the March
28th resolutions, do you believe that they were
compliant? Well, actually, let me clarify something
that I thought I heard you say. Is it your testimony
that you believe that the March 28th shareholders
meeting had 100 % shareholder participation or
did not have 100 % shareholder participation?
I mean, I have asked records, evidence that 100
% of the chair were represented. I have not been
given them. OK. And in your opinion, were the
March 28 resolutions compliant with Mexican corporate
and contractual law and procedure in your view?
I would say that the 28 March 2025 Stoneholders
meeting did not meet the standards agreed upon
under the trust nor under the pledge agreement.
And specifically, it was the lack of notice of
the default incurred by borrowers. I have asked
it and I have not given it. Well, just tell me,
is it important that a notice of default not
only be agreed, but also be served properly pursuant
to the contract? As far as I understand, notice
of default was never received by borrowers, specifically
by the Secretary of the Board of Directors, as
it is provided by agreement of the parties. Thank
you. And do you know when Controlador Adolphin
was accepted as a debtor in a concursive mercantile
proceeding? Oh, yeah. When was that? Controlador
Adolfi? Yes. Was the debtor filing for concurso
mercantile. That was a voluntary filing of concurso
mercantile. The petition was filed. In Mexico,
the concurso mercantile has two main stages with
one substage. The first stage is what we call
the visit, where A visitor is appointed by the
Special East Trustee Office in Mexico, where
the inspector or visitor reviews and makes sure
that the standard of insolvency is met. That's
a standard requirement in order to proceed with
the concurso mercantile. And I can say even that
since in Mexico we lack automatic estate, like
in Chapter 11 in the United States. Generally,
what the adapter's request to the court is to
grant immediately a precautionary measures in
order to protect, to get the stay. The stay for
payments, the stay for enforcement or legal action
in court or outside court. And when Contraladora
was accepted as a debtor in Concurso Mercatiel,
was it required prior to that to show that it
had corporate authority to file? Yes. Yes. Debtor,
with the petition of Concurso Mercatiel, filed
a corporate resolution authorizing the filing
of the Concurso Mercatiel. It's a very important
corporate requiring that has to be met. We're
using that as a fact with us. He's here to testify
about issues of Mexican law. These issues are
not set forth in his declaration. Your Honor,
we're happy to stipulate that the specific issues
with respect to the documents aren't in the declaration,
but just like with their counterparty, this has
been moving fast and he's been reviewing stuff
so that he was fully prepared to give you the
best testimony he could with what's going on
with this proceeding. So we're trying to advise
you, as an adjunct of the court, that he's trying
to act as. What's going on with these documents?
I'm going to give some leeway here and I'll submit
the testimony you can cross. Thank you, Your
Honor. So I think my question was what role do
bylaws in Mexican public order play in evaluating
the March 28th resolutions? Well, the bylaws
is the main governing instrument of a commercial
corporation, of a legal entity. And it has to
be pursued as he provides any violation of the
bylaws or the law governing commercial companies
may cause the act violating law of bylaws null
and void. And so we're going to move on a little
bit. Can you describe your experience reviewing
and interpreting legal documents governed by
Mexican law, particularly contracts with jurisdictional
or choice of law clauses? Yes. Yes. Documents,
contracts, agreements that provide for choice
of law, if there are contact connections. under
the circumstances of the specific transaction
is valid, could be done, such as those laws that
maybe govern a contract in New York law, having
New York as place of payment. So that's the general
rules and Mexico incorporates in our federal
civil codes and commercial code. commercial accompanies
law, the most current provisions of international
private law that are very common in any jurisdiction.
Yes, it's a smaller second version, but your
versions look a little bit different But you
have to exhibit binders. Yes, you're just gonna
go to CC Mr. Oskos if you could go to tab CC
CC I'm here. Okay. Could you tell me what this
document is that we're looking at? This is the
Pledge Agreement. And who's the Pledge Agreement
for? This Pledge Agreement is to warranty the
financing. And what does this document report
to do? To guarantee the full and timely compliance
of the terms and conditions of the financing.
Okay, and if you could, I'd like you to go to
paragraph 9 .09, and for this, our translator,
I'm going to need you to listen closely. See
section nine nine Nine oh nine nine. Oh nine.
Yes jurisdiction Okay, what I'd like you to do
is please read the full text of that section
aloud and I would ask the translator to provide
a translation for the record as he reads correct.
It's section nine. Oh Nine jurisdiction legislation
applicable shall I reading? Spanish or English?
Okay, if you could, and read slowly, please.
In Spanish. The translator needs to make an official
translation. 0909. Jurisdiction. Excuse me, I
need to get you in your microphone. Should we
get her sworn in? Thank you. Section 9 .09, jurisdiction,
applicable legislation. For everything related
to the interpretation and compliance of the present
contract, in this ad, the parts are committed
of express manner in. irrevocably irrevocable
the laws applicable of Mexico and the jurisdiction
of the court competence of the Ciudad de Mexico
in the renounce of expressly it is wreckable
at any other jurisdiction that could be Correspond
in visual of the respective Homes present presence
of futures to the location of the goods or any
other reason Mr. Oscoe's could you just tell
us in your own words what this provision? and
it provides that it should apply Mexican law.
And the competent court with jurisdiction should
be those of the city of Mexico. Okay. Does it
say anything else? No, that's it. And does this
clause affect which court has jurisdiction over
disputes arising from this contract? Yeah. And
does Mexican law recognize this type of clause
as binding on the parties? Yes. And what legal
effect, if any, does the express waiver of other
jurisdictions have under Mexican law? Well, this
is express submission of jurisdiction and may
not be waived unilaterally. It has, it wanted
to change, has to be by an agreement of both
parties. Otherwise, the parties, any of the parties
must submit any legal action related to any dispute
regarding this contract before Mexican courts.
And are you aware that other financing documents
in this loan package said that the governing
law was in New York? As far as I remember, there
is a mention in the notes, terms and conditions,
that provide for New York law. So with respect
to these Mexican pledge agreements, what courts
have exclusive jurisdiction to address the enforceability
of these Mexican pledge agreements? The court
located in Mexico. And I will say that in Mexico,
we have a double judicial system. For commercial
matters in general, state courts and federal
courts may hear and decide commercial cases.
Why? For insolvency cases, concursive mercantile
cases, there are special exclusive federal jurisdiction
courts. Courts of concursive mercantile. And
how does the principle of lex societatis apply
to Mexican corporations? Lex societis is a, I
would say, general principle in most jurisdictions
in the world. that provides that Lexus Societatis
is the governing law of the commercial companies
or legal entities pursuant to the law of their
incorporation. Basically, there are some other
cases, but that's it. The justice, give us a
description of the proceedings that are going
on right now in Mexico. Could you describe in
your own words your understanding of the proceedings
that are going on in Mexico regarding the corporate
governance right now? Yes. I would say that having
a bold and stockholic resolution, controladora
dolphin, fine. petition, voluntary petition for
concursive mercantile. The concursive court granted
precautionary measures to stay payments and to
stay any legal or extrajudicial actions, all
of them, including those provided for under the
trust, meaning the voting rights on the shares.
That was state. That was state because that was
a right of the debtor in filing for concurso
mercantil, controladora dolphin. I want to make
clear of that. These cases are very common. This
kind of provisions in trust and pledges are common.
Why? Because creditors, mainly lenders, try to
secure the most they can. And this is a way they
try to do it. but they have to respect the rights
of doctors. So that's regarding Concurso Mercantil.
The preparatory measures were in effect. Later
on, the new administration, I mean, Wilmington
Trust and the C Banco, the trustee, in the trust
carried out a stockholders' meeting on March
28. That was later. The precatory measures were
already in place, in effect. And the state was
applicable. So they carried out this stockholders'
meeting where they decided to remove the administration,
the members of the board of directors. to revoke
powers, to grant new powers, to gain authorization,
to withdraw the concursive mercantile proceeding,
to seek protection under the barricade laws of
the United States, and even to fight for concursive
mercantile. It's curious, but it is provided
for under these stockholders' meeting decisions.
After these stockholders' decisions of March
28, 2025, Mr. Eduardo Albor filed a civil action
seeking avoidance of the stockholders' meeting,
arguing lack of fulfillment of legal requirements
that those are subject decision by the Mexican
court, still subjudice. There were granted some
precultory measures to state the effectiveness
of the effects of that stockholder meeting. Nobody
does. And I would like just to clarify, precultory
measures are like injunction measures in every
jurisdiction of the world. They keep the status
quo of a legal situation to preserve the subject
matter of a dispute to be resolved in the instant
case, judicial case. And that dispute will be
decided eventually by the final judgment that
will determine if it is valid or not. Whatever.
And the other action that was filed by the new
administration, let me call it that way, they
filed an accountability action seeking liabilities,
responsibility of the performance of the former
administration, including damages. That action
is also still pending decision. by a Mexican
court that has assumed already jurisdiction.
There are also some provisional measures that
were granted, and they have been subject to appeals,
ordinary appeals within the, let's say, civil
proceedings, and also unparalleled actions. But
at the end, those two proceedings will have to
be decided by the court presiding the cases by
means of final judgment and the thing will be
it still will be decided upon final judgment
after all levels of appeal are overcome. Okay,
and not to get too far into Latin for those of
us that didn't pay attention in Latin class,
but you said sub judice. What does that mean?
Sub judice, this is the the legal procedural
judicial situation when one dispute is pending
decision in one court. And does that mean, so
that I understand, does that mean that the court
has taken jurisdiction of that matter? The court
has already taken jurisdiction and that dispute
has to be decided by the court assuming jurisdiction.
Yes. And what is your opinion of Mexican courts
Is that like an invitation for another court
and another jurisdiction to override what's going
on? No, it is a universal principle of law that
while one dispute is subject to a spending decision
in another jurisdiction, that the court that
first takes it over or assumes jurisdiction is
the court that must decide the dispute. I will
ultimately decide it, but I do think this was
in his declaration. Your Honor, I believe it
was too. But let's try to move forward to get
through this a little bit quicker. So you'd mentioned
about the fact that there were precautionary
measures that were entered, and we've heard about
it with various courts. In the context of the
recursive mercantile, just so that we're clear,
are precautionary measures similar to the, do
they have the similar effect of an automatic
stay under Chapter 11? Okay. And we heard earlier,
you mentioned that you believe that the precautionary
measures were in effect, including with the transfer
of shares. Did I get that right? Yes. Okay. And
does that have to do with respect to the type
of trust at issue here? The warranty trust. And
I may add something which is important and it
comes to my mind. It is that these provisions
under the trust agreement to exercise upon default
these voting rights of the shares is kind of
self -administration of justice. that with the
state has to be state because that's exactly
what the state is about. State enforcement by
means of legal action of out -of -court actions,
private actions. So let me ask you this. So we're
talking about Controlladora Dolphin filing a
concurrence of mercantile. Could or should have
Controlladora Dolphin filed a Chapter 11 in the
United States? I will say this. I'm one of the
authors of the modern law on cross -border insolvency
from Oncitron. And the United States adopted
the modern law, which is Chapter 15. Mexican
compulsory law includes the modern law in Title
12. And if the compulsory mercantile in Mexico
is prosecuted and wanted to be recognized in
the United States, it would be recognized and
be granted all the protection in the United States.
But here, there is one element that is very important
in the structure of the modern law, which is
the coming center of main interest. If the center
of main interest of the debtor is, for example,
in Mexico, this Controladora, Dolphin, and the
Mexican subsidiaries are located in Mexico, and
their commune is Mexico. Mexican law, by virtue
of public order, provides that Mexican court
have exclusive jurisdiction. So what is your
opinion of how U .S. courts should treat Mexican
court orders and precautionary measures in the
context of this dispute? Judicial acts, concursive
mercantile judgments, reorganization plan under
the concursive mercantile be recognized in the
United States. Granting international committee
under chapter 15. Being in mind that the Mexican
companies were adjudicated in concursive mercantile
had their commie center of main interest in Mexico
and vice versa. If the commie is. And do you
believe there are any risks inherent in not allowing
or honoring international comedy in this particular?
particular context. I would say that under the
modern law, Chapter 15 of the United States,
Title 12, Mexican dolphin companies with coming
in Mexico do not qualify to fight directly in
the United States for Chapter 11 from the Mexican
perspective. From the Mexican perspective, I
understand how the jurisdiction in the United
States may be assumed even by having one dollar
in one check in a can. It's incredible and beautiful,
the system in the United States. But we move
by rules, and the rule says that. So just so
I understand, let's assume for a second that
Controlladoria is properly, or not properly,
but filed as a debtor in the United States, an
orders issue from the court. What happens to
those orders? Do they have to get domesticated,
for example, in Mexico? I would say that the
United States has some very incredible weapon.
Extraterritorial jurisdiction. The wrong arm.
I wish I had it. But in order to recognize legal
acts, judicial decisions, those have to be recognized
in Mexico regarding insolvency under our Title
12, which is equivalent to chapter 15. It's like
the executor when one wants to enforce a foreign
judgment in Mexico or in the United States. Okay,
and have you had an opportunity to read the declaration
of Justice Ramos? Justice Doña Margarita? Yes.
Okay. I'm referred to as Justice. Yeah, I read
it. I read it. Okay. And is there anything in
your declaration or testimony here today that
you think requires a little clarification? Well,
first of all, I congratulate the former minister
from her declaration. It's quite interesting.
It's the view of a former minister, Justice,
the most prominent judges in our system. But
I think that there are some views that can be
complemented. that opinion. And I would say,
one, about the nature of injunctions in Mexico,
precarious measures, when given by court order
ex officio without the participation of the other
party, but being in mind that the other party
has a remedy to challenge the injunction, the
injunction just stay, suspend the effects of
the act. purported to be kept as status quo.
The decision about the legality, validity, enforceability,
and binding of that act, that's exactly the subject
matter of the eventual decision on the merits
that may confirm or declare null and void. that
the appellate, appado, and local court proceedings
have not proceeded to final resolution at this
time? No, no. Those two actions we have discussed
already are pending decision by the exclusive
jurisdiction of Mexican courts that have already
taken over these cases. Okay. And do you have
any concluding thoughts for the court about why
your opinion should be accepted and relied upon?
I would say that from the professional point
of view, and as I stated from the very beginning
in my declaration, I wanted to share what I have
learned and experienced in more than 45 years
of practice. And it's this, what I have told
you. I have no interest whatsoever of who prevails.
No, it doesn't matter. I want to have a clear...
effective insolvency system worldwide. And that's
what we do in Ocitoral, and I invite you to take
a look at that. And I think that if these Mexican
companies having come in Mexico are placed in
bankruptcy, in insolvency in the United States,
those proceedings will not be recognized in Mexico
because of violation, of manifestly violation
of Mexican public order. and fundamental principles
of law. Okay, and just one final thing, and this
is for the court's certification. You'd asked
earlier about what the meaning of respiratory
effect is, and I thought maybe we could have
him take a swing at it, and if you could, just
try to explain what does respiratory effect mean.
Yeah, I think that the concept of respiratory
is the grantic... of the relief sought in a legal
action in the merits of the subject sent dispute.
Meaning, if the Mexican court find that the stockholders
meeting is legal, valid, and binding because
all the legal requirements and contractual requirements
were met, fine. It will be confirmed, but. the
Mexican court finds that that stockholders meeting
did not meet the standards, the terms and conditions
agreed upon by the Paris, they will void that
stockholders meeting and the decisions with the
virtual effect as it is legally in procedural
judicial proceedings that it has to be retroactive
as of the date the stockholders meeting was carried
out. And it is not consummated. It's not consummated.
It's, you know, it's virtual. It's the law. We
cannot see the law. The law is in our thought.
It's our feeling. It's different. OK, just one
more question for the benefit of the court, if
it's a pleaser. What is suspended application?
What does that mean? Suspended application is
the request that a party ask a court to state
some court decision, court act, or some act of
the authority. In the Amparo action, when a administrative
act is performed and we consider that it violates
human rights or fundamental rights, we ask the
state to suspend. And in the Amparo, there are
two stages for this state. Suspension provisional,
which is shorter, and then it comes final state
or suspension that after a hearing, the court
decides whether to run it or not. And it is just
injunction. It's temporary. is limited for a
certain period of time, and the rules for granting
a bond or counter bond could be done, but the
student decision is pending to final decision
on the merits. Thank you. Your Honor, if I could
just have a brief minute, I may be done. So I
do want to clarify one point. You had mentioned
earlier in your testimony regarding the requirements
that had to happen with respect to the notice
of default and things like that. And I want to
clarify. Is it your understanding that based
on discussions? Are we going to ignore it like
we do? Let me find out what's going on. Okay,
let me see if I can get my question in okay,
so I just wanted to clarify Do you have you don't
have personal knowledge of whether or do you
have knowledge of whether a notice of default
was ever received by the secretary as you as
you mentioned in your testimony earlier? The
first thing or piece of record I asked was the
notice of default because by meeting the standards
the contractual standards that may enable entitled
borrowers beneficiaries to start. Provisions
under the cross and under the bridge and I was
not given it and to me it like if it was never
given okay, and Have you been advised since?
You've met with counsel whether or not the notice
of default was recently served I inquired today
Again insisted on that and I was told that there
was a communication that was sent by email last
May, some day, 27th of May, something like that,
and it was not received by the Secretary of the
Board of Directors as provided for under the
trust. And during the period of time that has
to be done. So your testimony is that you understand
it wasn't timely received based on information
that was given to you. Yes. With that... If it
was received, assuming it was received last week,
would that be timely notice of the default? Well,
that will be blocked by the state, by the concursive
state. Okay. With that, Your Honor, I'd like
to tend to the witness subject to redirect. Thank
you. Based upon the testimony during the direct,
the debtors are going to mark one more document
as an exhibit. It will be 43. I have copies for
the witness as well as the court and opposing
counsel. May I approach? You may. Good afternoon,
Mr. Oskos. You recall during your testimony during
direct exam, you testified that one of the fundamental
first things you did when you got engaged is
to look to see if notice of default had been
provided to the barbers. Janice, do you recall
that testimony? Yes, sir. I've put before you
debtor's exhibit number 43, letter dated May
17, 2024, with the title of Ray. Notice of event
of default and reservation of rights. Do you
see that? Yes. Let's see if you could turn to
the second page. Yes. And you see that first
full paragraph where it says, notices hereby
given that certain defaults and events of default
have occurred and are continuing under the senior
NPA as a result of the Albuquerque's failure
to comply with certain terms and provisions of
the senior NPA and other finance documents. Collectively,
the existing defaults. Including but not limited
to the existing defaults listed on exhibit a
attached here, too. Did I read that correctly?
Yes, if you could turn to the back where it says
exhibit a Do you see on these next three pages?
Where exhibit a lists? 19 events of default Yep
And if you go back to the front of the document
Do you see how it's addressed to Controladora
Dolphin? Concepcion Esteban. Do you see that?
Yes. Ms. Esteban is the Secretary of Controladora,
correct? Yes. Mr. Oskos, as you sit here today,
there is no order from any Mexican court. that
has stated that the March 28, 2025 resolutions
are not valid and enforceable, correct? What
happens, and I would like to answer your question,
saying that that will be precisely the subject
matter of a decision in the actions brought up.
that are pending this issue. I understand that's
your testimony, but if you could just answer
my question. As you sit here today, there is
no court order issued by any Mexican court that
has found that the March 28 -25 resolutions are
not valid and enforceable, correct? The answer
to your question is that as a general rule of
law, civil law is that once a contract or act
is executed, it is presumed to be valid until
decision is made to be null and void, if that
happens. But that is a general presumption. The
question is not... cannot be answered in the
way that the storeholders meeting of March 28,
2025 is valid binding. It's not. It's subject
to a judicial decision in a final judgment. You
know? Your Honor, can I instruct Your Honor to
ask the witness to answer that very particular
and precise question? Could you please repeat
the question? Sure. Just, I want to answer. Sure.
As you sit here, you cannot point to any specific
court order issued by a Mexican court in which
that court held the March 28, 2025 resolutions
are not valid and not enforceable, correct? There
is a pending decision that will decide that.
The answer is, there is not yet bad de -qualification
is because it is subject to a final decision.
It's sub judici. And meaning sub judici is that
it is pending to a final decision to determine
its legal validity and if it is binding legal
and enforceable. But I cannot answer in an open
answer. but it's probably just easier. Since
you've been engaged by Mr. Albert, do you recall
seeing this document? Yes, this is a translation
of a judicial order rendered by the I believe
it is the Second District Court in commercial
bankruptcy matters Sure fair to say that this
is an April 14 2025 order of concourse of court.
Yes If you could turn to page seven of this document.
Looking at the, so there's, you'll see the one,
two, three, four, and then three paragraphs.
Do you see that? Yes. And in the middle paragraph,
and I'll read it, in this case, public instrument
number 33 ,553 of March 28th, 2025, and March,
and 53 of March 28th, 2025. shows the willpower,
shows the will of the majority shareholders of
Banco Sociedad, I'm sorry, Your Honor, Institucion
de Banco Multiple Parenthetical, who also appeared
in that capacity at the Ordinary General Shareholders'
Meeting of November 7, 2024, in which the Board
of Directors was empowered to formally request
on behalf of the company, before the competent
authorities and agencies, its declaration of
insolvency. conciliation stage and parenthetical
to withdraw from the insolvency proceeding being
fully empowered to do so. Did I read that correctly?
That's what it says, yes, you. That's the reading.
Your Honor, I have no further questions. But
I would like to clarify something. Your Honor,
I have no pending question. Mr. Oskos, what did
you want to clarify? Yes, I wanted to clarify
because I first of all, I thank you for the question
because I asked myself about this and the answer
to me is that when this motion to withdraw was
not explained and stated with all the facts surrounding
the issue of why this was this decision to withdraw
or this authorization to withdraw was made so
in general I would say that the motion should
tell the court the circumstances surrounding
this petition because it's just, I withdraw,
I have authority to withdraw, period. So it is
more complex because concursive mercantile cases
is not only the interest of creditors, it's the
interest of all the group of creditors, meaning
all labor, tax, suppliers, financing, everything.
Perhaps if the bankruptcy court were aware of
the circumstances, otherwise had ruled, perhaps
it will not admit this withdrawal. That's only
my concern. Thank you. So one more question.
Just referring to Exhibit 43, which is this letter
that you were just showing. Do you see it? Yes.
Do you see anywhere in this letter proof that
it was served timely? Well, first of all, it
is dated May 17, 2024, long before, long, long
before. And it has not acknowledged receipt.
And, you know, in my practice, I will object
this document because it's not authentic document.
It has no proof of any evidence of being true
and authentic, even the date and the content.
No further questions, Your Honor. Thank you very
much. Thank you. Yes. Yes, I do. Eduardo Albor,
A -L -B -O -R. Thank you very much. Thank you,
Mr. Albor. Has the translator been sworn in too?
Yes. Good afternoon, Mr. Albor. Good afternoon.
Okay, so just as a ground keeping thing, You
understand you have a translator here available
for you to use, correct? Oh, yes. And you believe
that you'll be able to answer questions for the
most part in English, is that right? I'll do
my best. OK. And if you get into difficulty,
you'll let us know so that we can get the translation.
You agree to that? Yes, thank you. Thank you.
Mr. Albor, you've given us your name. What is
your current position and role with Controladora
Dolphin? I am the... President of the concert
administration That's the position in the company
and I'm responsible for The CEO of the company
Can you perceive can you describe your professional
background and experience in business and law?
Well, I attended the law school And I that is
in Mexico then I had the opportunity also to
do some additional preparation in Philadelphia.
And I also practiced as a lawyer until I joined
the company, which is Dolphin Discovery. That
happened at the end of 1998. And then I took
the position of the director of the company since
January 1999. That's about 30 years you've been
involved, or a little bit less, with Dolphin
Company? Ask your question again. Yeah, so how
many years have you been involved with the dolphin
companies? Now 27. And do you have any other
recognitions with respect to, like, for example,
Romania? With respect to? Romania. Ah, well,
actually, yes, I'm the honorary consul for Romania
in... in Quintana Roo and Yucatan, the states.
That's something that has been like for eight
years. Okay. And are you any kind of regional
board with respect to BBVA Mexico? Actually,
I was invited to become member of the regional
board for BBVA since seven, eight years. And
what is BBVA? It's the bank, it's an international
bank. Can you tell the court a little bit about
the history of Dolphin Group and how it has grown
under your leadership? Turkey International.
We opened our first business, our first location
in the British Virgin Island. That was in 2003.
Then we had our first acquisition, which was
a park in Hawaii. We bought it in 2005. And then
we continue growing with our own resources. The
company... actually was the first company with
the Dolphins that went international. We went
and expanded the business in the Caribbean, expanded
the business in Europe, and then the company
grew by itself with its own resources until 2015
when we had our first financing. We issue a note
for $115 million with a company called MGG Investments.
That was in 2015. With that money we bought one
park in the United States. We bought the other
one park, the first park in Italy. And then we
bought the business, the whole business, the
dolphin business in Jamaica. So with those acquisitions
basically we became an international company
and we were really successful with this growth
to the point that in 2019 we restructured our
debt and this when potentially 2019 body notes
we have reduced the debt from 115 to 100 million
and I want to point out that we never fail in
the payment of our interest or in the payment
of our obligations with MGG investors but I give
it to that we were I mean that we showed that
we could fulfill our obligations with structure
and And we improved our conditions, like the
interest rates and all that. We improved our
financial conditions and we won 2019 potential
made investment. And with that, that gave us
the opportunity, we will reduce our cost of financing
to even make additional acquisitions. We bought
two more parts in, two other parts in Italy,
another business in Dominican Republic. So we
expanded our business. The refinancing was in
April 19, and we made these acquisitions. And
with these acquisitions, with the reduction of
cost, we were prepared to have the best year
of the company in 2020, until March 2020. And
what happened in March 2020? I mean something
that I never had thought was going to happen
because my strategy, my strategy in the business
is to make it global. So like we say, don't have
all the eggs in the same nest. I mean, we're
exposed to hurricanes, we're exposed to, we're
in Latin American countries, situations that
the exchange raised. We're exposed to many things
that I thought, well, I mean, it can never happen
that something happens in the world that I have
to stop my business. What happened? I mean, I
never thought, but on March, I think it was Friday,
March 13th, we closed all the business one day,
and because of the COVID, and that was an unexpected
situation. Okay, well, we'll talk about that
a little bit, more in a little bit. You mentioned
before that when you got involved with the company,
I think you said there were 60 or 70 employees,
is that right? Yeah, 60. And I'd ask you, as
of the time that you filed - No, no, no, let
me correct. 60 employees. 60 employees? No, it
was - Dolphins, we had like 12 Dolphins and 60
employees, yeah. Okay. And as of the time that
you filed for Concurso Mercantil in Mexico, how
many employees did the Dolphin Group employ at
that time? More than 2 ,000 employees. More than
2 ,000, 2 ,200, something like that. And you
started with 12 Dolphins. How many Dolphins do
you estimate you had when you filed for Concurso
Mercantil? Around 300 Dolphins. What steps has
Dolphin Group taken under your leadership to
ensure the welfare of marine animals? are the
people in charge like that, like vets or trainers,
they have open communication with our competitors.
When there is anything about the animal, even
if it's our competitor, business competitor,
they can go and help them, because animal healthcare
is the first. And that's a commitment that we
have, and that is what has made us to become
not only the largest company in numbers, the
largest company number of marine mamas, But we've
been always leading with respect to animal care,
animal well -being, anything related to marine
mammals. The company has become like a reference.
I'm curious, is the dolphin group, is it just
a dolphin welfare company? I mean, what kind
of company is it? Well, that's a very good point.
Our, that's a very good point. The company is
about making people swim with the dolphins and
interact with animals. And this is something
that has a component of educational, showing
the people, especially families and children,
the commitment with the animal cares and the
commitment with the environment. So basically,
we give experiences to the people of interacting
with the animals. And obviously, all the people
who come to our location to swim with dolphins
is people who love animals. I mean, animal laws,
mainly families, and they always care and look,
hey, how you treat the animals, how the animals
were taken care of. It's people that ask questions,
and we want to show them how by taking care of
the animals, you are taking care of the environment.
And from a business perspective, is it a good
idea to be mistreating the dolphins and the other
marine animals that you have? Well, we don't
look at this strict business. I have to tell
you, from my perspective, this is what I have
tried to deliver to the people who work in this
company. It's beyond business. It's beyond a
commitment. It's a mission that we have. And
then business come by itself. And so, just so
I understand, how important is it to your business
model to ensure that the marine animals under
your care are taken care of? That's top priority.
That's top priority. And for example, do you
have like, do you do wild captures of dolphins?
Not at all. I mean, this is something that, I
mean, I don't remember what was that we ever
did, but it's all about natural breeding. It's
a natural breed of our own animals. And you did
mention that you've had veterinary staff, veterinarians
on staff to ensure that the animal welfare is
taken care of? We have a very well -structured
group of vets. Actually, there is one vet in
each location. Each location has a vet. I want
to say, depending on the size of the location,
a junior or a senior vet. And then by group,
they have to, any situation, they have to speak
between themselves. And then they have a chief
vet. corporate bet that basically supervises
regional bits supervises local bits with the
idea that each location has to have in place
a bit to make decisions Recurrent decisions,
but any situation they have to speak with between
themselves and not only that sometimes they even
make groups of committees that they speak with
vets from other entities, from other companies
like Seawall, Shedd Aquarium, Georgia Aquarium,
and they have committees that exchanges experiences.
You mentioned you have a chief veterinary officer,
is that right? Yes, we do. What's his name? Dr.
Guillermo Sanchez. Just as a housekeeping matter,
let's, if you could, flip to exhibit H in your
binder. The part one? H. Document 88? That's
right. Okay. You recognize this document? Yes,
I see it. What is it? It's a verified document.
my verified response to deputies' motion. Okay.
And did you review this before it was filed?
Yes. And do you recall signing this document
with a verification? Yes, I did. Did you understand
that when you signed that verification, you were
signing under penalty of perjury? Yes, indeed.
Under the laws of the United States? Yes, indeed.
Okay. And could you also take a look at, real
quickly, at Exhibit E? Which page is it? It says
page 6 of law. Which page? Let's take a look
at a document. It's got a docket 87 on the top.
Do you recognize this document? Now we are in
tab E? Tab E. I hear you, Steven. I'm sorry.
Yes, tab E. Tab E. So do you recognize this document?
Yes. What is it? This is also Eduardo verified
response to dentist's motion for entry. That's
document 87. Did you read this document before
it was filed? Yes, I did. Do you recall signing
this particular document with a verification
at the back? Yes, I do. Do you understand that
you were signing this document under penalty
of perjury under the laws of the United States
of America? Yes, I do. With respect to these
two exhibits that I've shown you, E and H, you
understand you're only verifying factual statements.
You cannot apply them to law. Do you understand
that correct? I do. Now, we were talking a few
moments ago... before about the Chief Veterinary
Officer. Are any kind of health reports provided
with respect to the care of the dolphins on any
kind of periodic basis? Could you ask the question
again, please? Sure. We were talking about the
Chief Veterinary Officer and he's in charge of
the health of the dolphins. And so what I'm asking,
are there any kind of reports that are generated
with respect to the health of the dolphins on
any kind of basis, like weekly, monthly? Something
like that. From the chief legal vet? From the
chief veterinary officer, yes. From the chief
vet? Yes. Well, I mean, yes. He just did several
reports, but at least he sends me a weekly report.
That's, I mean, could be even a special situation
that he sends me a report when that happens.
But otherwise he has to send me every Friday
a weekly report. on the healthy status of any
animal that has is under any treatment. And do
you personally review these health updates for
animals that are at your facilities? I do. And
to your knowledge, have the marine mammals under
your care at the entities you possess and control
received ongoing veterinary oversight? Yes, actually
the report I mean, it is same to me as the chairman
of the committee. We have a committee where there
is the vets, senior vets of each region and the
people, the director of the regional parks, which
is Mexico, Caribbean, United States and Italy.
So the report goes to all of them as well. And
are there formal systems in place to monitor
the aging animals and those with medical conditions?
Yes, there are also some internal reports that
the trainers, especially the senior trainers,
send to the vets, to the local vets. And they
have to report because the vets are the people
who review on a weekly basis the diet of each
animal. Each animal has a special diet depending
on the season, depending on whether it's... the
gender, depending on the age, depending if it's
pregnant and so on. And the trainers have to
report sometimes changes or suggest changes based
on certain special situations. But that's a very
interactive communication and beyond reports,
I mean any situation they immediately get in
communication. Okay, so what I'd like you to
do now and to speed this up we're going to look
at a few quickly. But I'd like you to take a
look at your binder at exhibit L. And you can
go through L, M, N, O, P, and Q. And just look
at those briefly. Take one as an example shortly.
You can get all the way up to Q. Okay, so without
going through each one, are all of these documents
similar types of medical records? That is an
executive. This is an executive report of the
committee. It is, which is the one that I receive
every Friday. You have to keep in mind that it's
a report, it's a medical report, executive, not
for beds. Okay. So let's take a look at L, if
you would. And I'd like you to look at that front
page. And this title says Medical Report for
All Marine Mammals Located in All Habitats of
Dolphin Company in Mexico. You see that? And
what's the date of this particular report? The
one dated May 6? Yes. May 6, right? Which is
your question? I was just asking what the date
was. Okay. And it shows on here for the facilities,
these are the facilities where the dolphins are
that are under your possession and care? This
is the least facilities in Mexico. Okay. And
we also see there's a list of veterinarian lab
team. And are these the regional veterinarians
that you were speaking to before? Correct, in
Mexico. Okay. One in each location. Okay. And
then also we see that there's a list of individuals
and species in our care. Correct. And then it
also has a report about the preventative medicine
program. Do you see that? Correct. So let's just
talk about the preventative medicine program.
What's that about? Yes. What I was explaining,
there is a... It's better to do together with
the trainer daily. examination in the morning
of the dolphins. It may happen something during
the night and say, hey, this animal is now looking
different and they, I mean, this is on a daily
basis. That's between them. That's one of the
reports, which I don't get. That's okay. And
if you flip to the backside of that page on L,
you'll see current health status. You see that?
Yes. So as of May 6th, this is the health status
of the marine animals. in your care, correct?
And we see a name at the bottom. What name is
that down there with the signature? The chief
veterinary officer that you spoke of moments
ago, correct? So go to tab M. And I'm not going
to ask about all of these, but are these specific
reports on actual named dolphins? And it's telling
what the issues are. Why don't you tell me what
it reflects about these dolphins, generally?
Generally, I mean, this is what I was telling
you, a weekly report. And the weekly report is
even a follow -up of the prior weeks. So any
situation, if there's a follow -up, it comes
to the weekly report. or if there is any new
situation, it comes. Again, this is a weekly
basis, and it includes any health situation of
any dolphin in any location, not only Mexico,
in the Caribbean, in the U .S., or in Italy.
Okay. And the only difference, really, between
M, N, O, P, and Q is just the date? Correct.
It's a weekly report. Okay. And what do you do
once you get this report? What do you do with
that information? Well basically reviewed and
if there is if there is if I see any special
situation I Put you an example just last Friday.
I mean in the last report The chief vet mentioned
that we are implementing special program for
vet no for for Dolphins that are becoming senior
of age and they're added additional So basically
when I reviewed this, I began a discussion of
relocating them in one location. So if I see
any special situation, then I immediately get
in touch with the vet to see how it is treated.
Okay, and with respect to the marine animals
under your care and control, are you required
to follow any state or local regulations in Mexico
regarding their health, safety, and welfare?
I ask the question again. Sure. So with respect
to the marine animals in your care, the dolphins
in your care, are you required to follow any
state, like say Quintana Roo, any state or local
regulations, say Cancun, regarding their health,
safety and welfare? Well, there are indeed local
and federal regulations. Federal, okay. Federal
regulations mainly. We have to file also report
to the federal level. Is that similar to the
type of reports that you had with the USDA at
the U .S. based facilities? It is similar. It
is similar reports. Even more complex in Mexico.
Okay. And what regulatory agencies provide regulations
with respect to marine animals in your care in
Mexico? This is called CEMARDAD, the Minister
of Environment. And to your knowledge, are you
in compliance with your regulatory obligations
in Mexico regarding the health, safety, and welfare
of the marine animals under your care and control?
Definitely. Otherwise, we get our license suspended.
Can you explain to the court how you intend to
care for the health, safety, and welfare of the
marine animals in your care and control while
the corporate governance dispute is being addressed?
Can you explain to the court how you intend to
care for the health, safety and welfare of the
marine animals in your possession and control
while the corporate governance dispute is being
addressed? And by the way, let me tell you, this
weekly report, including the one last Friday,
the weekly report on the company, it is still
going to the regional director in USA and Italy
because the chief vet keeps in communication
with them and he knows that anything related
to animal health care feel that we are still
responsible for them. You've heard before that
there have been allegations of mistreatment at
a couple of the US facilities with respect to
dolphins, but are there any USDA reports currently
saying that you have done something improper
with respect to dolphins at the US -based facilities?
Not that I'm aware, or at least not until the
control of the responsibility went to the other
group. Not that I'm aware. You mentioned earlier
that the Mexican entities have employees, and
what obligations do you have with respect to
those employees? For example, do you have to
pay them wages? Among many, many, many others.
Do they have benefits that you have to pay for
as well? They have benefits. We need to give
them a safety environment, a safety place to
work, and I mean, all the benefits that they
have, including the payroll. Okay. Do you have
things like Social Security like we have here
in Mexico? We do and moreover even in this location
we have a we call a Well, it's a place where
they have we we give them food lunch to everybody
every day Okay, and how about insurance are you
required? We provide not only the insurance which
is by law, but a private medical Insurance for
as an additional benefit and just so we're clear
our wages currently being paid timely to your
employees? Wages are currently, some commissions
or bonds, we pay them a month after. Okay. But
we keep current. And with benefits or benefits
being paid? Benefits have been paid. Social security
is being paid? Social security has been paid.
And your insurance obligations have been met?
Yes, indeed. Are you aware of any pending audits
by labor or social security authorities regarding
employee care or payment? At least in Mexico,
I'm not aware of any. Can you explain to the
court how you intend to ensure going forward
that the obligations related to the employees
of the Mexican entities will be met while the
corporate governance dispute is being addressed?
Well, basically with you with your business at
your cash flow that we have We're meeting our
obligations Of course, we've been since a month
a basically since September October. We've been
reviewing how to become more efficient Making
Or making businesses to be more review how to
become more efficient and even reducing an expense
that is not necessary. So basically to make sure
that at least with the resources that we have,
we can meet our obligations. And we've heard
some reference before and certainly in the documents
with respect to about $47 ,000 being on hand
in a report that was provided to the debtors.
Do you recall that? Yes, I do. Okay. That seems
kind of low, doesn't it? It is. Is there an explanation
for that? Well, there is an explanation and...
regardless that there is a special situation.
That is a report that happened to be the last
business day of the month, which was Friday.
I mean, the day before we had much more cash,
but it was a payment of all the benefits and
the last, it's on a bi -weekly basis. But at
the end of the month, we have to pay bonuses,
commissions, and additional obligations that...
happy to have it at the end of the day, at the
end of the month. Besides, it was many commitments
that we had with vendors, suppliers, and that's
why it took a lot of our cash flow. And most
of the collections that we have from clients,
from travel agencies, from any other, comes at
the beginning of the week, Tuesday, Wednesday.
So, that was like a day that we had to make a
lot of payments. Based on your experience as
CEO of Dolphin Company over the years, what can
you tell me about the time of year that we're
about to enter into and the potential revenue
that Dolphin Companies get? Is it going to go
up or is it going to go down? Well, I mean, the
big season begins with the Memorial Weekend.
I think that is the last weekend of May. That's
when the big season begins. Then you have June,
July, August, which is especially because also
Mexico, there are vacations, the Caribbean, and
should be also the biggest season for the U .S.
parts and Italy. Okay, so I want to go back for
just a minute. We were talking earlier about
the concursive mercantile being filed, and you
were calling to file that on December 30th of
2024, correct? All U .S. Okay. Why did you file
the Concurso Mercantile in Mexico as opposed
to trying to file a Chapter 11 in the United
States? Well, number one, the main business is
in Mexico. Basically, more than 50%. I mean,
if you put all together, US, Europe, I mean,
in a yearly basis, nearly 60 % of our revenue
and business is in Mexico. You can see with the
number of locations. and the company that was
fighting for that is a Mexican company, Controladora,
which was like the holding company for all of
their subsidiaries, including U .S., including
Europe, and including the Caribbean. So the main
business is Controladora. And finally, because
Controladora was the issuer of the debt, so the
Controladora had the debt with the senior lenders
and the junior lenders, and the... So we had
to file in Mexico for all the resources of Mexican
company, predominantly in Mexico business, and
it was the issue of the debt. And to your knowledge,
after the Concurso, let me ask this. Prior to
the Concurso Mercantile being filed in January,
to your understanding, did the note holders have
any idea that you were considering Concurso Mercantile
if you couldn't get a deal with respect to financing?
Well, yeah, I was fighting a December theory
I'm ready days. What's for December theory? We
sustain for nearly I mean for Actually for from
December 20 December 23 until October 20 until
October 24 for nearly a year we kept work in
a potential restructure of the death all this
time with From December or to that time but in
June at the end of June Following the recommendation
of the senior landers especially from Prudential
We retain FTI which is an entity that represent
us in the negotiations with the senior leaders.
So like beginning July The communication was
the company with FTI and FTI with the senior
lenders, with Prudential and Cigna. And we continued
all the negotiations for the restructure until
mid -October, late October, when I received notice
that they didn't want to speak with me. So I
happened to hear that they decided to start any
negotiations. So under those circumstances, when
I brought this situation to the board, and we
review what were the other options that we had,
we said, well, I mean, if we have been told through
Baker and McKenzie, representing senior lenders
that... We don't want to continue any talk with
the company, and we don't want to speak with
Eduardo anymore. That means that we have nothing
to do. Then we decided to go to Concurso Mercantil,
which that was our plan B. And I remember this
is something that at one moment I even mentioned,
and I even spoke about this with... Well, not
the lenders which is culture that I mean if there
was a law Negotiations the company had no other
option to go to a concursive mercantile in Mexico
Okay, and Just so I understand you're talking
about What strike that was any kind of term sheet
provided prior to this shareholder or not shareholder
me? But this board meeting that you're referring
to in October of 2020. Yes We received a term
sheet provided by the lenders. We received it
through FTI, a term sheet that was approved by
senior and junior lenders. A term sheet that
took like four or five months to discuss terms
and conditions, and basically the financial terms
and conditions, we got to a point that was satisfactory.
I'm sorry? The financial terms of the term sheet
that was discussed through FTI. FTI did the negotiations
with the lenders, senior and junior. The financial
terms that we received, it was satisfactory as
a plan for restructure and going ahead in the
following years. But in the last... weeks we
start receiving you know, I mean first you focus
on I mean it was focused on the financial condition
and then governance and then we got into us different
Governance which included the governance I Have
to keep in mind that I had three roles one as
a CEO Was a member of the board and another as
a shareholder. So the three roles are very different
and I expected the lenders understand the three
rules. And then when this governance about governance,
I told FTI, and I put it even in an email, that
I couldn't decide anything about governance as
CEO. But that had to be decided by the board
because governance issues are not decided by
the CEO. I decided and I... And I always kept,
on a monthly basis, and maybe on a biweekly basis,
a report to the board members about the negotiations.
Even the financial decisions of the term sheet
that I received, I always discussed that with
the board members. And the financial conditions
of the term sheet were good and were approved.
When it was governance, I always said, hey, I
have to bring this to the board. And I clearly
remember that I sent an FTI, an email, telling
them, well, this is the term sheet, the final
conditions. I have to bring it to a board meeting.
And I clearly put for approval or disapproval.
OK, so let's try to work through this quickly.
So you took the term sheet to the board. What
was the board's response? Well, review all. and
basically basically there were i mean we made
a list of 10 points 10 points where clarifications
were mistakes in the bullshit that were corrected
there were another three four that were suggestions
and that we could discuss but they were not deal
breakers and and finally we made clear i mean
out of all this there's only one deal breaker
point which was related to governance Okay, so
is it fair to say that the corporate governance
issue is what kept you from getting a deal in
October with respect to the term sheet that had
been provided at that time? That's the first
statement as discussed and approved by the board,
not by Eduardo. Okay, and so you ended up filing
concursive mercantile, but I want to be clear.
When you were filing that concursive mercantile,
you mentioned three hats that you have. What
hat were you wearing when you... I mean, we were
following a resolution by the... I mean, we had
a meeting. Shareholders? Which among all the
decisions review the financial statements decided
a Given the current circumstances and a good
cash flow and the projections We want to enter
into negotiations with senior letters union letters
and all creditors everybody because we wanted
to protect the company the people the everybody
creators and then we just prepare this a valid
as a following the decision of the shareholders
as the CEO. And even after you filed for the
concoction of Mercantile, did you still try to
negotiate a financial arrangement with Prudential
and Signum? That's a very good question. We filed
it at the end of... We filed it in December 2013,
after 60 days of working papers, and then...
And then in the process the judge asked for clarifications,
asked for more documents, more papers, and it
took nearly a month for the judge to receive
the case. That was January 29, something like
that. Once he received it, there was part of
the process, but there was a moment in the process
that the firm represented us, got in touch with
the senior lenders. even before we do the process,
and try to reconnect on behalf of the company
and see if we could discuss any arrangement with
the senior leaders and avoid to go to the final
process. So that was the film, Clyde, Clyde was
the film representing us, that got in touch with
Baker McKenzie. OK, so I appreciate that. So
we're going to switch gears a little bit. We're
going to talk about this headquarters building.
We've heard referred to as a headquarters building.
Who owns that building in Cancun that's been
referred to as the Dolphin Group headquarters?
I do. I do. Is there any current lease between
Controlador and Dolphin? or any other Mexican
entity and you with respect to that property
that Mr. Wagstaff tried to enter? No, there is
not a current lease with Controladora. Had there
been a lease? Excuse me? Had there been a lease
with Controladora and you prior to? Yes, there
was a lease for 10 years that was signed on 2014
and was ended in December 2, 2024. Basically,
I mean, we were in a position to reduce as much
as possible expenses, relocated people, reduced
the space, and we didn't continue with the lease
agreement because we relocate people and we needed
to reduce expenses. The work is being done for
certain dolphin groupings in your building. That's
correct, right? The question is? Yeah, work is
being done with respect to the Mexican entities
in that building. Oh, yes. Okay. Are you charging
anybody rent? For the companies that are doing
business like control of Dora Dolphin? No control
of Dora Dolphin. Okay, so they're basically in
their rent free right now, correct? Correct.
Okay. You understand that at some point in April
2025, the chief restructuring officer Robert
Wagstaff and a team of people including police,
locksmiths. came to your building in Cancun,
correct? What did you do when you found out that
Mr. Wagstaff's team had taken possession of your
building? few people working and I happened to
learn that and and I was reported that some people
came uh took the building uh uh bro logs uh just
entered and took possession of the building I
happened to learn that there were even armed
people that were kept in the building to safeguard
um what it is what I had to do I went to report
this to the uh to the police and to the district,
the fiscal, and filed a complaint. Just filed
a complaint. So what happened after you filed
that complaint? Well, I filed a complaint, which
I basically, as part of the process, I mean,
it's not able to see the complaint. They said,
why did you complain? If it's your building,
I have to prove, I brought documents, papers,
everything to prove that it was my building.
What kind of documents did you bring to prove
it was your building? Title, criminal property
tax. The license, the license, it is my personal
office. All the papers approved ownership and
basically they sent people to verify if what
I was saying or what I was reporting was true
and verify if there was anybody in the building.
And then they verified that there were three
or four people that were not. authorized to be
there. So they got away and they delivered a
position of my building again. That was a trespassing.
Okay. And you mentioned before that there is
work being done for the Mexican entities in that
building, but are there other books and records
that have nothing to do with the dolphin group
companies in that building? Yes, I mean, because
this is not the only tenant. I mean, like for
instance, I have the office for the There are
offices of different companies that have nothing
to do with me or the group. I have my personal
office where I keep personal records, records
of other businesses or investments that I have,
personal records. And again, there are other
offices space that are leased to different people.
The whole building was taken. Is that one of
the offices where the locks have been changed?
Yeah, that was one of the offices that was blocked.
So you've been locked out of your office where
you had personal records, is that right? Oh,
yeah. OK. And you have other things there as
well, right? Well, let me ask you, do you have
things like email servers or where you keep documents
on a server? Well, we keep files. I have a computer.
I have just the infrastructure I request for
your businesses. Have you been willing to provide
access to Mr. Wagstaff and his staff into that
building? Have you been willing to offer access
to Mr. Wagstaff or his river on team under certain
circumstance on certain requirements to come
into that building? That's a complicated question
to answer willing that I would like and I would
love to do it Honestly, I mean after they did
and they just were right into my building and
trespass I mean you have to understand I'm not
too happy the way that they they are conducted
this untreating I'm I may I may be willing to
cooperate, I may be willing to cooperate as long
as we do it in the proper manner, in the legal
manner. Respect. That is what I would like to
see. Respect. most of the financial records with
respect to specific parks located? Well, it is
like when they took control of the parks in the
United States. They found all the financial records
in each park. Maridalán, they have financial
records there. The computers, everything is local.
So, the financial records of each park, even
in Mexico? are kept in each park to make it easy
to keep the records. There is a moment to consolidate.
We have people in that office, and there is another
office in Cancun, which is in another park, where
they consolidate records. But each park has records
for its own... The business, the local business.
So is it fair to say that most of these records
are electronic? In other words, they're not papers.
They're not somebody coming from a park with
a box of documents. They're sending you a report
over the internet, correct? Well, in that building,
yes, it is electronic. In this location, there
is hard papers. Right. As I understand it, the
information is, the financial information is
at the individual parks, and it is consolidated.
at that particular building in Cancun. Is that
an accurate statement? That is correct, but electronically.
I mean, the documents are in this place. And
you may have some paper records at your building
in Cancun. Is that a correct statement? I may
have. Well, I'm asking, do you have paper records
at your location in Cancun, at your headquarters
building, or what's been referred to as headquarters
building? For the company, or? For the company.
Well, I mean, the... Consolidated the reports
are they print them and they have them but yes,
I may have some. So I understand it's simply
information that's already at the particular
park, the individual parks. They already have
that information. It's just sent down to the
headquarters building. Is that right? By electronic
means. Electronic means. Okay. And you're aware
that that there's been a motion to turn over
books and records that was filed in this case.
You recall that, right? And your verified response
is a response to that particular motion. There's
another one that you have, but we'll talk about
just the books and records for now. Have you
tried to voluntarily comply with turning over
books and records to the debtors? We do, and
I think that we have done. And is it accurate
to say that you'd asked for them to identify
the books and records that they needed? Yes,
as far as I'm aware, yes. And did you recall
getting a list of documents that they had requested?
I do. And do you recall if documents had been
provided in response to that list? I do. Okay.
And are you aware that recently a few extra items
were added to the original 17 of items that they
are requesting? When you say recently, you mean
the... I think it was... Maybe Sunday? Do you
recall maybe Sunday? Yeah, because every day
they send something. I don't know if today was
something. Do you recall? Well, let me ask you
this. Are you going to look at those requests
and also the deficiencies that have been identified
by the debtors to attempt to rectify them and
get them the documents they need? I understand
that the people are already looking at that.
And just to be clear, you proposed a way to try
to resolve the issues with respect to access
as opposed to transmission of electronic records
by trying to agree to a protocol where supervised
visits can happen and as long as your personal
and non -debtor information is protected. Is
that right? That is correct. What would you like
the court to understand about your role and intentions
in this case? My role? unintentionally in this
case. Well, first, my role is to make sure that
the company is protected. And make sure that
anything that we finally agree or decide, it
is done in a legal manner and is protected. I'm
happy to work on that basis. I definitely agree.
I recognize that there is some debt and there's
payments, but I expect to follow protocol and
do it with respect. And aside from the issue
of the records, we also have a stay enforcement
motion and you also filed a verified response
to that. Do you recall that? Yes. Okay. And do
you understand that the issue really comes down?
Well, let me ask you this. Do you believe that
the issue comes down to the wanting to take control
of the companies that you're in charge of right
now? I have no shadow of doubt about that. Do
you have a good faith basis to believe that you
are still the CEO of Control the Door of Dolphin?
I am. Do you have a good faith basis to believe
that you're still on the board of Control the
Door of Dolphin? I am. I'm just asking his opinion.
He can ask the witness his view. Yeah. And without
telling me anything that you're being advised,
are you being advised by counsel in Mexico with
respect to what your rights and obligations are
with respect to Controladora Dolphin right now?
Correct. With that, Your Honor, I would like
to tender the witness subject to redirect. Thank
you. Can I take two minutes? Yes, let's take
a five -minute break. Thank you. You've been
the CEO of the dolphin group entities for approximately
27 years, correct? Correct. And you've been fighting
for a while to keep control of the dolphin group
entities, correct? What did you say? You've been
fighting with the lenders and other parties to
keep control of the dolphin group, correct? Fighting?
Have there been disputes over the control over
the dolphin group for a while? No. You want to
keep control? of the dolphin group correct uh
keep control do you want to stay in control of
the mexican i want to i want to stay in control
as uh as long as i'm uh i'm entitled as long
as i have to and the dolphin group has been in
payment default under the first lane notes for
quite some time correct Answer your question
again, please. You agree that the dolphin group
was in payment default under the first lien notes
for a long time before the debtors filed bankruptcy
cases, correct? What does long time mean? Approximately
a year? Approximately a year, yes. And the dolphin
group was also in payment default under the second
lien notes for quite some time before the bankruptcy
cases, correct? A similar time, yes. And in fact,
you testified earlier direct that to address
to the faults in 2024 you receive term sheets
from the lenders, correct? That is correct. And
you mentioned that in the fall of 2024, I think
you said October, that there was a term sheet
from the lenders that included both economic
terms and governance change terms, correct? That
is correct. And you thought the economic terms
of that term sheet were acceptable, correct?
That is correct. But the governance changes were
not acceptable because it required your removal,
correct? were not accepted. You yourself did
not accept them, correct? I am not myself, the
board. But you yourself voted against the term
sheet because it included the governance changes,
correct? Obviously. Let's turn to, in your binder,
there's various documents that have number tabs
on it. When I say term to tab 23, we'll search
for document that's buying tab 23. They're in
order. Which stuff? Do you see you have to go
through? It's right after 22. It says 23. 23
years. Are you there? I'm in 23 years. And this
is an email that you sent to John Olsen and others
on December 17, 2024, correct? I see an email,
it says May 16, 2025. It says from John Olson.
May 16, 2025. A look a little bit down on the
page, where it says from Eduardo Albert. Yes.
Do you see that? Yes. That's an email from you
on December 17, 2024, to John Olson, correct?
This is an email to my partner. How do you have
this? How do you have this? I don't understand
your question. Can you ask it again? You can
read it, yes? And John Olson is a large shareholder
of TDC Holdings, correct? That is not correct.
John Olson is shareholder of TDC Holdings? John
Olson is shareholder, just like me. You would
not characterize this holding as significant?
Oh, significant, but you said the largest. I
have the largest. I'll rephrase the question.
John Olson is a significant shareholder of TDC
Holdings, correct? That is correct. At the time
you sent this email, he was... is a board member
of TDC, correct? Yes. And Scott Olson, Michael
Wood, the other folks, they're also board members.
They were board members of TDC Holdings at the
time you sent that email, correct? That is correct.
If you could turn to the second page. You'll
see that the top of the page is a dolphin company
emblem, correct? Just trying to get you to the
right spot. Do you see right below that emblem?
That's an email from John Olsen on December 17,
2024, correct? An email too? It says March 17,
December 20, 2024? You responded to his email
on December 17, so at the very least you received
it, correct? So this December said my email To
the board members Is that you mean my email to
the board members because I don't see any email
to lenders But anyway, my email to the board
members dated December 17 2024 as 413 Yes, this
is an email from John Olson to you and others.
Do you see in the second paragraph? I don't see
that it says to me. You responded on the first
page, so you must have received his email to
respond, correct? Yes. So in the middle paragraph
of page two, it's fair to say that Mr. Olson,
in his email, is characterizing the debt that
is owed and the bad financial condition. of the
Dolphin Group at that time, correct? It is written
there. Yep, yep. And on same page, last sentence
of the last paragraph, where he wrote, nobody
in their right mind would loan TDC money in this
situation except Prudential and Cigna, who have
indicated that they will make loans to protect
their $1 million original cash input on the condition
that you are removed from a position of authority.
Did I read that correctly? Are you, are you?
Are you reading what is written here? Did I read
that correctly, sir? You read very well in English.
Thank you. And then in your response, you state
easiest to count up on the first page of this
document. Fourth line up, starting with if you
believe. You stated if you believe there are
grounds for me to go. You still have the option
to fire me, and I will see you all in court.
But do not expect my resignation just because
you asked me. Did I read that correctly? Which
part are you reading now? See the fourth paragraph
up from the bottom, starting with, if you believe.
Your email. First page. My email. That begins
with John and all others. Correct. Look down.
There's a paragraph starting with, if you believe.
First line says, John and all others. Second
line says you want my resignation? Two lines
says obviously it is what you are asking. So
you mean the paragraph says to consider my resignation
or what? Keep on going down. It starts with if
you believe. Ah, the line, yes. My question is
you wrote in that email, if you believe there
are grounds for me to go, you still have the
option to fire me and I will see you all in court,
but do not expect my resignation just because
you asked. In this email to the other TDC board
members, you threatened legal action if you were
removed, correct? That is your opinion. That
is your opinion. I will see you all in court.
Those were your words, correct? Those were my
words, yes. I mean, it's in English. The whole
email, I wrote it. There's no pending question.
Let's turn to Exhibit 24, please. I see at the
top, I'm going to step ahead of here. See at
the top, it's John Olsen to Scott Olsen. That's
what I want to focus on. Are we the same 23?
No, we moved to 24. All right. So what I want
to first ask you about is an email on the page
three. See where there's a little three at the
bottom? Page number three. Yes Where in the middle
of the paragraph John Olson says to you our goal
is to engage in an open and constructive discussion
About negotiating your exit from the company
Page three page three right in the middle of
the paragraph All right page three is this The
one that says you are a very, very smart guy,
is that? That's where it starts. I'm just focusing.
Because again, we're talking about your potential
removal. And I read the line. So they did 27?
Yeah. Our goal is to engage in an open and constructive
discussion about negotiating your exit from the
company. Do you see that sentence? I'm trying
to find where it is at. Our goal, the challenges.
Let me read it all. A very, very smart guy. So
let's come up with a solution. We all understand
your frustration and disappointment with the
current situation. The challenges Dolphin is
facing are substantial, but we believe that by
working together, we can find practical solutions
to find a way out on this difficult time. It
is important to address that all three lenders
have expressed their wishes to have you removed
from your role. Despite this, we're committed
to find a fair and reasonable way forward. Our
goal is to engage in an open and constructive
discussion about negotiating your exit from the
company. Time, however, is running out, and we
strongly urge you to meet in person with us to
try to reach a resolution. We're confident by
working together, We can reach an outcome that
serves everyone's best interests. Please, let
us know your availability so we can schedule
a meeting at your release opportunity, John.
Is that the email you mean? Yep. And in that
email, Mr. Olson was inviting a meeting. And
you respond on January 3, 2025. This is the first
page of this document. In part, there is no way
in hell... On January 3? Yep. January 3, 2025,
you respond to John Olson and others. And I'm
looking at the second full paragraph, where you
stated, there's no way in heaven or hell I can
sit down again with you in the same table as
partners. The reasons? You described granted
a waiver to B &M against TDC interest after I
disclosed to you the strategy to challenge B
&M. B &M is Baker -McKenzie, correct? That is
correct. And Baker McKenzie was and was counsel
of the first lane lenders, correct? I'm counselor
of my partner. I'm sorry, I didn't hear that
answer. I'm counselor of John Olson as well.
And you had a strategy to get Baker McKenzie
out of the case, correct? Correct. And at the
time you wrote this email, you were mad that
the TDC board had provided a waiver. There's
been a conflict on the part of Baker -McKenzie,
correct? That is not correct. There was no TDC
board. The TDC board didn't grant any waiver.
I am part of the TDC board. So let me ask you
a question. When you say granted a waiver to
B &M against TDC interests, who did you say granted
the waiver to B &M? To John Olson. He was the
one that granted a waiver, not the Dolphin Company.
I didn't say who granted it, you said that TDC
did not grant it. I didn't say Dolphin Company,
I said TDC. So what did you say? You were mad
when a TDC board provided a waiver of any conflict
on the part of Baker McKenzie, correct? That
is not correct. TDC board never ever granted
any waiver. There's no other say there. In what
capacity in your mind? If that's the case, then
why would you have written, you chose again,
TDC, strike one? against TDC, against TDC, not
TDC grant, against TDC interest. After I disclosed
to you the strategy to challenge Baker and McKenzie
conflict of interest in defense of TDC, you chose,
you John Olson chose, against TDC. Try one. That
is what I wrote. Let me just ask the question.
What did you specifically invite? because one
of the defense that TDC had against the lenders
is to prove that there was a conflict of interest
of what Baker and McKenzie was doing against
the company because Baker and McKenzie were also
lawyers, counsels for one of the founders. So
there was a letter of Baker and McKenzie treading
in the board of the dolphin company saying that
if the board didn't farm it, they were going
to go behind the board. And you were angry at
John Olson, correct? Extremely upset. And that's
because he was siding with the lenders and wanting
you to resign, correct? He went and granted a
waiver to Baker -McKinsey. He betrayed the company.
He sided with the lenders in wanting you to resign,
correct? Besides what? He sided with the lenders
in wanting you to resign. I didn't know that
he was going to betray the company and be with
the lenders. In your first sentence here, you
state, you open the Pandora box and make your
decision, John, asking me to go. After 26 years
and counting, immediately the lenders asked for
my head. Did I read that correctly? That is correct.
26 years will be my pardon. And at the top of
page two, in the all caps, you say, I am still
a lawyer and very, very good one. You were reminding
John Olson there that you were a very good lawyer
there, correct? This is exactly what I wrote.
If we could turn to exhibit seven, please. Exceed?
Exhibit seven seven See it's a letter of January
31 2025 on dolphin company letterhead Yes, and
it was sent to Wilmington Trust as collateral
agent, correct? Correct And if you could just
turn to the back This was sent to Wilmington
Trust by an in -house attorney of Controlador
Dolphin, correct? That was sent to Wilmington
Trust, yes, and yes, that's correct. By one of
your in -house attorneys at Controlador? No,
not attorney, in fact, he had the power of attorney.
You authorized this person to send the letter
to Wilmington Trust? before the letter was sent,
correct? I authorized to do it as advised by
our following legal advice. Is it fair to say
that if you look at third paragraph where it
says on January 28th, 2025, do you see that?
Yes. This paragraph is talking about what you
believe to be the precautionary measures entered
by the concursor court, correct? That is correct.
And in the last paragraph, the dolphin goes,
although we understand that this may cause some
disruption, we kindly request for such precautionary
measures to be complied to avoid any liability
that may arise from acting otherwise. Do you
see that? Yes. You're aware that Wilmington Trust
later resigned as collateral agent before the
end of February 2025, correct? That is correct.
You were not upset when they resigned as collateral
agent, correct? You were not upset when Wilmington
Trust resigned as collateral agent, correct?
Can you turn to exhibit 8? Exhibit 8. Exhibit
8. This is a cover email. With the letter in
the same exhibit your honor So this is if you
see the email is from the CDA firm I'm here.
So for the sake of these, I'll just call it the
C .D .A. firm, is that fair? That is correct.
And this is an email and letter from the C .D
.A. firm to Baker McKenzie, correct? Indeed.
And C .D .A. represents you personally, correct?
That is correct. It does not represent any of
the dolphin group, Mexicans, correct? It is representing
me. But it does not represent any of the dolphin
group Mexican entities, correct? That is correct.
You authorize the CDA firm to send this letter
to Baker McKenzie, correct? Yes, indeed. And
if we go to the letter itself, this is a letter
that you authorize CDA to send in which they're
alleging that there was conflicts on the part
of Baker McKenzie, correct? If you could go to
page two next to last paragraph Yes This letter
which you authorize states in reference to your
request made on behalf of the note holders to
remove mr. Alvarez chief executor of dolphin
Neither Baker and Mackenzie nor the load holders
have any right to request dolphin to remove its
chief executive officer Even under threat of
bringing legal actions against dolphin and the
sport of directors. Do you see that? Yes So it's
fair to say that by the time CDA had sent this
letter to Baker Mackenzie in February 2025 the
lenders had requested that you be removed as
CEO, correct? Exhibit 21. This is a two page,
it's a continuing text message from you to Scott.
Is your understanding that Scott here is Scott
Olson? Yeah, I know him. I was in personal communication
to my partner. Okay, so just so the record is
clear. You agree that the Scott being referenced
in your text message is Scott Olson, correct?
Correct. And if you go, you'll see several references
to John in your text message. That's John Olson,
correct? That is correct. And Scott Olson at
the time was also a TDC Holdings board member?
That is correct. And if you look, first page,
about two thirds down, you state to Scott, please
Scott. I am an honorable person and will not
let lenders take control of the company unless
they buy our shares. Do you see that? Scott,
I very much appreciate you and I will always
have endless gratitude for your father. Much
of what I am and have is thanks to him. I will
always be loyal and grateful to him and your
family. I have always regarded both of you acting
in good faith and being very transparent. The
Dolphin Company is my number one priority, even
above my family. Please. Go down several more
sentences starting with the word. Please do you
see that please? I am an honorable person and
will not let lenders take control the company
unless they buy our shares Do you see that correct
at the time you sent this text message to Scott
Olson you would agree that The dolphin group
was under payment default for many months as
the first and second lien debt, correct? Look
at the date it is true it's an obvious question
and if we could go to the second page starting
with the sentence i will do it and i will go
down with the boat if necessary but anyone who
tries to remove in the middle of the storm will
be treated as a riot and i will consider my enemy
so you believe that anyone wanted you removed
at that time was your enemy correct did i Ask
your question again. So, at that time, you believe
that anyone that wanted you removed, you would
consider as your enemy, correct? That's what
I told him. So it's fair to say that you were
hurt and disappointed when the lenders called
for your resignation, correct? When the lenders
wanted your resignation? No, I was not disappointed
with the lenders. I was disappointed with the
board members that... Asked for my resignation.
My disappointment was with them. With my partners.
The people were my partners for 26 years and
I supported them all the time and worked for
them. Asked me for one day to another. You have
to go. I was disappointed with them, not with
the lenders. And this is an email from you to
John Olson on March 25 Michael 25 To John Olson
Yeah Say John, how can he ask me to work together
when he asked me to leave the company before
you see that? Yeah Again, you were angry with
John Olson for siding with the lenders as of
March 25, 2025, correct? Very upset. And you
felt betrayed with him siding with the lenders,
correct? Correct. If we could go to tab 9, please?
I want to focus on the second email. It's your
email to Andy Sullivan and others on April 7,
2025. Do you see that? Correct. It was your understanding
that at that time, Mr. Sullivan was the CEO of
Prudential, correct? At that time what? What's
that? What is your question? You understand?
We're still in tab 25? April 7, 2025. In tab
25. No, no, no. Sorry. Tab 9. Which one? 9. Oh,
9. All right. Yes. Yes. And what I want you to
look at is the second email in tab 9. Yes. Which
is an email from you. to Andy Sullivan on April
7, 2025, correct? Correct. All right. My question
was, at the time you sent this email, you understood
that Mr. Sullivan was the CEO of Prudential,
correct? That's exactly what he says the first
line. I understand you have been in the position
as CEO. There you go. He's reading them. Easy
answer. And Prudential is one of the first lien
lenders, correct? Correct. And if we could go
to the top of page two. You stated to Mr. Sullivan,
we are completing all the legal actions we will
file during the day of today and tomorrow and
have a press conference to make public all the
legal actions to defend our company from the
illegal actions of Prudential and their advisors
such as FTI and Baker and McKenzie. Do you see
that? Correct. Just so, FTI was representing
the Dolphin Group in negotiations with the Lenders
Over Charmsheets, correct? I'm not sure about
that. I'm not sure who he was representing. He
was supposed to represent us. I'm not sure he
was representing. Let's just stick with what
you're saying. FTI was supposed to represent
the dolphin group during negotiations with the
Lenders, correct? That is correct. It was supposed
to. And at some point FTI resigned from handling
negotiations with the Lenders, correct? I don't
remember I ever seen a resignation letter from
FTI. Did they? There came a time where they stopped?
being involved in negotiations between the dolphin
group and lenders correct could you ask the question
again there came a time in 2024 that fti was
no longer involved in negotiations between the
dolphin group and lenders correct when the negotiation
ended so they stopped their involvement at some
point correct there was nothing to do though
but they didn't resign at the time that the negotiations
with the lenders ended fti was owed a substantial
amount of money correct fti was FTI was owed
a substantial amount of money by a dolphin group,
correct? I'm not sure about that. I'm not sure
because what I remember about the agreement is
that they were supposed to get a bonus depending
on the performance. So I'm not sure because I
don't remember they ever sent any letter of collection
to us. They didn't send any letter of collection.
As you sit here today, your testimony isn't that
they're fully paid, correct? At this moment,
as your question to make sure that I understand.
I just want to make sure, you're not testifying
right now that FTI has not owed any money, correct?
Your question has two negatives. It's confusing.
As you sit here today, do you know whether FTI
has owed money by the Dolphin Group? What I do
know is that I do not have any letter of collection
from FTI. If we also monitor, they will have
sent any letter of collection. I don't remember
seeing any letter of collection from FTI. So
in this letter you were trying to convey to Mr.
Sullivan what you believe to be ethical violations
on the part of people at Prudential and lawyers
at Baker -McKenzie, correct? That is correct.
You had sent this email. Negotiations with the
lenders had failed, correct? Correct. If we could
turn to 26. 26. 26. So this is email exchanges
with Michael Wood and yourself in April of 2025.
I want to first start with Michael Wood's email
on the bottom of page 2. Do you see that? Yes.
Was Michael Wood at the time a board member of
TDC? Or was he formerly a board member of TDC?
He was. He was a board member. I'm a partner
for 26 years as well. Do you recall getting this
email from Mr. Wood? Oh, sure. And he was asking
for missing information. that would be needed
to prepare TDC tax returns, correct? That is
correct. And in his email he stated that he was
informed that missing this deadline would trigger
a penalty in excess of $2 million. Isn't that
what he said? That is correct. And also that
doing so could result in significant penalties
to individual shareholders. That's what he said,
correct? That was his lecture. And he was asking
you for the necessary information, correct? That
is correct. And if you go back to the first page,
in the first paragraph, you indicate that yourself
and Valeria, is that your daughter? That's my
daughter. And also board member. And board member.
And you state that you're not only managers,
you're only managers and members of TDC, correct?
Exactly. And you're not accountants? Correct
that we are not and you didn't believe you had
the responsibility to provide the information
to mr. Wood, correct? That is correct And at
the bottom paragraph Your first sentence I have
nothing more to talk to with people like you
get your lawyers come for me and take care of
the situation Did you say that's mr. Wood? the
debtors filing for bankruptcy here in the United
States. You learned within a couple days of the
filings that the U .S. based entities filed for
Chapter 11 protection on March 31, 2025, correct?
What happened on March? I was sitting here. Sure.
Just want to make sure that let's just start.
You know that the debtors filed, U .S. debtors
filed for bankruptcy on March 31, 2025, correct?
I happen to learn that, yes, absent. And on that
same date, some of the Mexican dolphin entities
also filed for bankruptcy, correct? On March
21st? Correct. I don't recall it because I was
not part of that, but if you say it is, it is
what it is. Should be. You learned of the bankruptcy
filing within a couple days of it happening,
right? Correct. And you just, without revealing,
not asking for the substance? You discussed the
bankruptcy filing with your attorneys within
a couple days after learning that the debtors
filed for bankruptcy, correct? I'm not asking
you to reveal what you actually talked about
with attorneys. I'm just getting you to confirm
that after you learned about the bankruptcy filing,
you discussed it with your attorneys, correct?
I discussed it. I don't remember which day. But
it was within a couple days after learning of
the bankruptcy, correct? Probably. You also learned
that Controlador Dolphin had filed for Chapter
11 protection on April 16, 2025, correct? I'm
a little bit confused. Are you telling me that
it's filed for Chapter 11 on March 31st and on
April 16, two times? Controlador Dolphin filed
bankruptcy after the other debtors. aware of
that um yeah because let's see if i understand
you said that i happen to learn that on march
31st controller five for chapter 11 i didn't
say that i said you haven't learned that the
us -based debtors debtors and certain mexican
entities filed for bankruptcy on march 31 2025
correct all right and you also learned within
a couple days after it happened that Control
the Door Dolphin filed for Chapter 11 on April
16, 2025, correct? Correct. Despite the fact
that you knew about the Chapter 11 filings, you
instructed employees not to speak with the debtor
representatives, correct? No, that is not correct.
Despite knowing about the debtor's Chapter 11
cases, you authorized your attorneys to send
letters. to the debtors saying don't speak with
dolphin employees, correct? Send my lawyers what?
You authorized your lawyers to send letters to
the debtors saying do not speak with dolphin
employees directly, correct? Are you telling
me I told my lawyers? I'll try this again. And
despite knowing about the debtors' bankruptcy
cases, you authorized your attorneys to send
letters to the debtors. in which those letters
said don't speak directly with dolphin employees,
correct? Correct. So if we go to exhibit 15,
just let me know when you're there, sir. 15?
1 -5, correct? Yes, yes, yes. Thank you. Do you
see the email? from CDA to Mr. Wagstaff on April
19? Correct. And if you go back to the fourth
page, it's in the same tab. This email attaches
an April 18 letter from CDA to Mr. Wagstaff.
You see that? And then on the first, on the cover
email, that's CDA sent to Wagstaff. They indicated,
please see attached correspondence and refrain
from contacting any of Control Door or Dolphin's
employees or subsidiaries' employees directly.
Did I read that correctly? You read very well.
At the time this letter was sent, CDA and yourself
were aware that Mr. Wagstaff was the CRO of the
debtors, correct? At the time of... At the time
of... Sending this email. You and CDA knew that
Mr Wagstaff was the debtor CRO, correct? Yeah,
we heard that. Do you have any reason to believe
that he was not appointed CRO in these chapter
11 cases? I never see any engagement that he
was engaged to CRO at that moment, but what did
you say? I guess that whatever. And just to confirm,
you authorized? CDA to send this email letter
to Mr. Wagstaff, correct? Indeed. If we could
turn to 31. 31? 3 -1. 3 -1, yes. This is an April
21, 2025 letter from CDA to Young Conaway, correct?
Yes. And you are aware? at the time that Young
-Kanaway represented the debtors in their bankruptcy
cases, correct? That is correct. And you instructed
CDA to send this letter, correct? I authorize.
Correct? I authorize. And in the middle paragraph
on the page two, CDA advised Young -Kanaway that
any continuance of the chapter 11 proceeding
for any of the Mexican entities constitutes a
direct violation to the precautionary measures
issued by the Mexican court. Mr. Eduardo Alvaro
Villanueva is prepared to seek relief and claim
any damages caused to him or any of the Mexicans.
Do you see that? I see that. If we go to tab
30, please. Tab 30 is a letter from the Santa
Marina Esteta law firm that was sent to young
Conaway on April 23 2025 correct. Mm -hmm You
authorized this firm to send this letter to mr.
Wagstaff or I'm sorry to mr. Brady, correct a
letter 26 to six three zero 3 -0, April 23, 2025
letter from Mr. Brady at Yonkanawe. You authorized
Santa Marina instead of to send this letter to
Mr. Brady, correct? I authorized that. So, after
the debtors filed for bankruptcy, you directed...
Dolphin Group employees not to speak with the
debtors or the representatives directly, correct?
After? Yeah. What's your question again? After
the debtors had filed for bankruptcy and you
were aware of it, you instructed your employees
not to speak directly with debtor representatives,
correct? I instructed my lawyers to tell the
CRO and these people not to speak to the people
of... Let's turn to top 32. Page two, please,
starting with... Second paragraph sure and I
just I'm sorry because I think I think Mr. Wagstaff
talked about this one. This is an email on April
21 2025 From you to dr. Glamour Sanchez, correct?
Correct, and he is the chief veterinary officer
for Correct and then if you could go to the second
paragraph on the next page Yes, therefore you
should not keep any communication with this people
who claims to have authority and control the
door as of today You will continue reporting
me directly. Do you see that? All right You mean
you mean an email dated Monday 21st of April
correct So I just want to say your testimony
was you never directed any employees not to speak
directly with debtor employees and I just pointed
to your email April 21 2025 in which you were
telling the chief veterinary officer not to speak
directly with the debtor representatives, correct?
Yeah, that is the one that I tell. him and you
can keep communication with them with edwin gonzalez
and you can keep communication with any people
with anything related to anima so you're going
to speak about that but do not do not speak about
any legal position about about who you report
or who you work with because that is basically
what's telling that is subjudice i mean uh so
if it's just about legal counsel i mean he's
the chief legal bed i always tell him you are
free to speak to them as long as it's anything
related to animal hair care, but not discuss
about who is running the company. Your own words
said, do not keep reporting me directly. I'll
move on. So you would agree that the lenders
hold liens on all the dolphin group assets under
the financing agreements, correct? Please repeat
your question. The lenders hold liens on the
dolphin group assets under their financing agreements,
correct? Let me rephrase it. Are the dolphin
group assets the lenders collateral under the
agreements between the lenders and the dolphin
group? Some of them. The liens that the lenders
have include liens on live animals, correct?
In some places and in some locations. Some others
not. Are you aware of a company called Clunamar
SA? Yes. That's a non -deader entity based in
Argentina, correct? That is correct. You would
consider that still part of the dolphin group,
correct? That is correct. Are you aware that
Plunamar sold five sea lions to a third party
on April 30, 2025? I'm not aware that it sold
any animals. I mean, what is your question again?
Are you aware that Plunamar sold five sea lions...
to a third party on our route, April 30, 2025.
The company was taken by your client. I don't
remember which day it was taken by your client,
but it was taken by your client. Could you turn
the tab 16? Which 16? Yeah, 16. Have you seen
this contract before? I'm not sure. I saw it,
but I know about it. I know about it. You would
agree this reflects that as of April 30, 2025,
Clunamar sold five sea lions. to shark supply
for a total of $160 ,000, correct? That is correct.
The lenders did not consent to the sale of their
collateral, correct? That was not the collateral.
Those animals were not the collateral. The animals
in Argentina were never pledged. And the NPA
indicates that any asset that is not pledged
could be used as long as it is for a purpose
of any business of the company. So we are allowed
under the MPA to dispose of any acid that is
not a collateral as long as the funds remain
in the company, which is the case. So those animals
were sold to make payments. The funds from those
animals remain in the company because the company
needed the resources. And we were allowed to
do this because the animals were not pledged,
were not part of the guarantee. That is correct.
If we could turn to 34. There was earlier testimony
about the corporate headquarters of the Dolphin
Company in Cancun, Mexico. Do you agree? This
is 34. Yeah, it's the color photo. The picture?
The picture. That's the picture of the Dolphin
Group headquarters in Cancun, correct? That's
the picture of my building. Yes And your verified
response you call this building the dolphin corporate
headquarters, correct? All right Dolphin group
employees work out of this building, correct?
Some of them And some of the top management still
have offices in this building, correct some of
them You have an office in this building what
you do dolphin company work, correct? As one
of my Three offices that I have. Just so the
record is clear, you have an office in this building
in which you do dolphin company work, correct?
One of the three offices that I have where I
do work for the dolphin company, work for myself
and work for other businesses as well. And one
of the offices in which you do business or do
work for the dolphin company is located in this
building, correct? Correct. Now, there was talk
about a concorso filing, do you recall that?
Controllador, you recall testimony and your verified
response, you talk about the concorso mercantile
petition that was filed for Controllador, correct?
Yes. And as part of that proceeding, do you recall
that an official investigator called a visitador
was appointed? Visitador, yes. And during that
visitador's investigation, He went to the dolphin
group corporate headquarters, correct? I went
to this building and to other two buildings.
And he went to this building that's depicted
on 34, correct? He went to this building. Okay.
And let's talk about there's some testimony.
in your direct exam as well as your verified
responses about books and records that are stored
at this building reflected in tab 34. Your personal
non -debtor company and debtor corporate files
are all stored at the headquarters, correct?
Mike, please could you ask the question? So at
this building, there are your personal records,
correct? There are also some non -debtor company
records, correct? That's correct. And there are
also some debtor corporate files that are stored
at that building, correct? That is correct. And
the debtors book some records that are also in
hard copy, and they are also stored on a server
located in this building, correct? Some of them.
Testify your deposition. I just may ask this
question your Your personal records and the non
debtor company records. They are separate and
Distinct and stored separately from the debtor
corporate records, correct? That is correct You
would agree that the US debtors cannot access
the electronic server from the US, correct? From
please ask the question So in Mexico you have
a server and that server has some information
that relates to the u .s. Debtors, correct? Had
information on to March Say on to March or the
day that you took the parts but Copy of those
records because all the hard records are kept
in each location in the United States You would
agree that prior to the petition date, U .S.
debtors were sending information and there's
an electronic server in Mexico that contains
U .S. debtor records and information, correct?
It contains information of the U .S. entities
until you people took the management. And as
of today, you have not provided the debtors with
access to that server. Correct? For the US entities
records? I mean, they have the records in the
place. You haven't provided the debtors with
access to the server, correct? The server that
is in this building. Whichever server contains
debtor records, you have not provided the debtors
access with that server, correct? I have not
provided access to... So the server, yeah, it's
not, I mean, it's a server that is in this building,
but this building, there is no right to be there.
So I'm not providing information on this building
or to the course resource otherwise. And you
talked earlier about the lease agreement between
Controladora and you that used to exist as to
this building, correct? The lease is the lease
between the company, control adora and the owner
of this building? What lease you mean? You testified
earlier that control adora used to lease this
building from you, correct? The lease was finished
or not terminated. The lease agreement was for
three years. From January 24, 2014 until December
20, 2024. That was subscribed 10 years ago for
10 years, and we decided not to continue with
the lease That is correct. Yeah, I was was terribly
date. It was terribly dated at the end of the
lease term I asked you during your deposition
whether there was a written lease termination
agreement. Do you recall that? It was a letter
of sending notice that it was going to terminate
at the end of the lease agreement. So we were
not renewing the lease. As of today, you have
not provided the debtors with either the lease
agreement which you in control of yourself or
this letter agreement by which you purport to
have terminated the lease, correct? Well, I provided
the lease to my lawyers, and I'm not sure if
they have provided this to you about that. I
mean, I was asked after that day, I was asked
by my lawyers about the lease agreement, and
we sent it to them. So as you sit here today,
you don't know whether or not the debtors have
actually been provided with either a copy of
the lease agreement or the letter that terminated
or failed to renew the lease agreement which
you can control the door on yourself, correct?
I'm not sure if it has to be provided. If it
has to be provided, I'm happy to send it to you.
Do you believe that providing the debtors with
their books and records and the electronic server
stored in Mexico will allow the debtors to take
control of the entire dolphin group, correct?
I'm sorry if I asked you your question again.
One of the reasons why you haven't provided the
debtors access to the headquarters or the server
or all the records they have asked for is you
believe that'll help them take control over the
dolphin from you, correct? That's what you're
understanding, that we have been provided most
of the information that you have requested. We
have been provided information, so I mean, why
to take any time to come here? I mean, we're
sending most of the information that we have.
We're sending the information. Were you ever,
were you in the courtroom when Mr. Wax had the
CRO testifying? Yes. Do you recall what he was
saying about the information he's asked for but
has not yet received? Do you recall that? I recall
what he said. It's what he said. Mr. Wax, they
have tests about all the information he needs
and why he needs it, correct? It's what he said.
As you sit here today, have you ever served with
the CRO of a debtor in possession that has reporting
requirements in a bankruptcy case? Well We have
we have provided information That we have been
requested that we have available and we can produce
we have provided a Information that we have available
That we can produce that we have available that
we've been provided that I'm not sure if it's
all that he wants And I'm not sure if all what
he's been asking We have it, or we can provide
it. But everything that he's asking, he has asked,
and by the way, he keeps asking information.
He just asked information one day ago. But we've
been provided as much as we can. Have you provided
the debtors with all contracts that are in existence
with dolphin group entities and third parties?
Are they asking all the countries that what?
You haven't provided the debtors with all the
contracts that the dolphin group entities have,
correct? I understand that we're asking information
about control at all and not about all the call
all the companies that but we provided information
that I mean I I mean I'm Provided all the contrast
that all the Dolphin companies has that would
be like I mean more than this room of papers
about that I mean we've been asking precise information
because I mean it could be contrast for the last
26 years we've been asking to be more precise
to be more efficient I know what he's been asking.
I don't know what he needs. He hasn't even gone
to see the places or the locations. I don't see
how he's going to have time to read all the contests
of the company for 26 years. We've been provided
information that we have. Not that he asked because
maybe he's asking information that we don't have.
And you haven't provided Mr. Wagstaff and Riveron
with specific access to the facilities located
in Mexico, correct? Access to the building? To
the facilities located in Mexico, correct? No.
Let's change gears a little bit. So, Mr. Albor,
during your testimony, you said that the lease
between Controladora and yourself expired on
its own terms in 2024, correct? Correct. Do you
recall entering into the second amended and restated
note purchase and guarantee agreement in June
of 2022? June of 2022, yes. Correct. Your Honor,
maybe it's exhibit 35. I'll just represent that
this is an excerpt from 35, So your honor, this
page is one of the pages in schedule 10 .1, existing
affiliate transactions. And is your honor there?
I'm sorry. Section 10. Your Honor, can I come
get the binder? And then I'll find the page.
Super quick. It's 10 .1 .8. It's like 10 .1,
and then it says like a dash 8, so it's the eighth
page. Eighth and last page. Your Honor, it's
in the schedules at the end of the agreement.
Oh, it's not the agreement. The schedule, okay.
You recall executing this agreement in June of
2022, correct? Correct. And this page of this
schedule reflects that you represented to the
lenders in June of 2022 that you had a lease
between yourself and Controlador Dolphin at this
location, correct? That is correct. And this
schedule to this second amendment and restated
no purchase agreement indicates that that lease
expires in 2030. Correct. That is correct. I
can come get that page. That is the date of what?
You testified earlier that you retook possession
of the building from the debtors, correct? From
the trespassers? You retook possession of the
building from the debtors, correct? You were
not present at the headquarters while Mr. Wagstaff
and his team had arrived earlier in the day,
correct? That is correct. You never saw Mr. Wagstaff
at the headquarters, correct? Personally not,
in the cameras, the video cameras. You never
saw Mr. Wagstaff at the headquarters, correct?
Not personally, but I saw it in the videos. And
I understand from your deposition testimony that
you said within approximately two hours, after
you learned that Mr. Wagstaff and his team were
in the headquarters, you went to the district
attorney's office, correct? That is correct.
And you provided information to the district
attorney, correct? That is correct. And then
after investigation, the district attorney had
prepared a written complaint, correct? After
what? After the investigation that the district
attorney conducted per your verified responses.
You signed a written complaint, correct? Correct,
and that the process of the investigation and
preparing the complaint took about four to five
hours, correct? Correct. So that process was
finished between 12 and 1 AM on April 12 2025,
correct? What process? Going to the district
attorney's office, providing them documents.
Having the district attorney prepare the complaint
you signing it that took about four or five hours
Yeah, right for five hours And after you had
the complaint you went to the headquarters with
The state police crack correct and mr. Wagstaff
was not there at the time you retook possession
of the building correct correct And you were
not aware of any specific facts that mr. Wagstaff
himself was threatening correct I was not aware
of what? You have no specific knowledge, no personal
knowledge that Mr. Wagstaff himself said or did
anything threatening, correct? Please repeat
the last part. I didn't understand that. So in
your verified responses, you stated that Mr.
Wagstaff and his entourage were threatening.
Now I'm asking you. Do you have any personal
knowledge that Mr. Wagstaff himself did anything
threatening or forcible? No, no personal. Do
you recall when Mr. Wagstaff was on the stand,
he was asked questions about whether you had
verbally threatened any of the debtor representatives
that night when you retook possession of the
building? I'm beginning to need some help with
this. Could you tell me with the translation?
Let's just start that again. Did you verbally
threaten any of the debtor representatives that
night when you retook the building? I don't remember
any debtors representative. So is your testimony
that you weren't aware that people at the building
at the time included Mexican lawyers that had
been engaged by the debtors? You weren't aware
of that? I wasn't aware. Did you threaten anyone
that was there? retook the building. I mean the
people were taken by the police. Is it your testimony
that you did not verbally threaten anyone that
night? I didn't threaten anyone. If you learned
that there was a 911 government recording of
the events that night, would that change your
testimony? What are you asking me? I'm saying
if you learned that there was a 911 recording
of the events that took place when you retook
possession of the building. Would that change
your testimony about whether or not you verbally
threatened anyone? That was there when you retook
possession of the building. I don't really threaten
anyone, correct? You're asking me that if I threaten
anybody at the building, whether we took the
building? Correct. I don't threaten anybody at
the building. You remember testifying about that
as of April 29, 2025, the Mexican dolphin group
entities collectively at $47 ,000 in available
cash, correct? Yes. And part of the reason why
the available cash is so low is because of the
money you've had to spend as a result of litigation,
correct? Please repeat the question. I'm not
sure. And it was your position that among the
reasons why the $47 ,000, why that is so low
in terms of why the available cash is so low
is because of litigation, correct? because of
the litigation situation. However, this time
it's not the first time that the Mexican Dolphin
Groups have had liquidity issues, correct? Correct.
And you've even taken actions to reduce costs
and preserve funds at Controlador Dolphin and
the other Mexicanities, correct? I did? You question,
I'll just question again. Sure. And you've taken
actions to reduce costs, preserve funds... at
control the door dolphin and the other Mexican
entities, correct? Yes, I took actions. And among
your cost reduction actions is to terminate the
lease with control the door dolphin at headquarters,
correct? Correct. So let's turn. Mr. Albert,
this is a October 2nd, 2024 management presentation,
correct? And this one? You would agree that this
is a dolphin company management presentation?
Which time? As of October 2nd, 2024? Is it the
document here? Did you have tab 12? Number 12.
Number 12. Okay. Oh yeah. Yes. And I'm just I'm
just kidding. You confirm that this is a updated
special financial report. This for control consolidated
for control door and its affiliates as of October
2nd, 2024, right? Yes. If you could turn to page
four of this presentation. that this all cap
is management statement from the CFO, correct?
That is correct. And in this management statement,
the CFO expresses great concern relating to lack
of payment of taxes in Mexico, the US, and the
Dominican Republic, correct? That is correct.
And in this management statement, the CFO also
states that the dolphin group management will
resign. if the company does not get the necessary
resources to pay taxes, correct? the management
being forced to allow this to happen despite
the knowledge of potential signal and sculptor.
I would please be advised that in case by the
end of this month of September the company does
not have the necessary resources for payment
of the due taxes, the administration will send
our notice of assignation to all of the shareholders
of the entities have not paid these taxes and
the trustee as well as the note holders for our
senior and junior debtors. So as of this time,
October 2024, that was the same time period which
the lenders had provided a term sheet that had
acceptable economic terms, but there were governance
changes that you did not accept, correct? That
is correct. And we talked about the cash position
as of April 29 only being 47 ,000. You would
agree that you have no long -term business plan.
for the Mexican dolphin group entities, correct?
Please repeat the question. Sure. So you would
agree that you currently have no long -term business
plan for the Mexican dolphin group entities,
correct? That is not correct. Chris, can you
pull up his deposition? I'll move on, but then
we'll come back to this, Your Honor. If you go
to page nine of this document, I think you testified
during your direct exam that all the fish, all
the employees are being paid for the Mexican
enemies, correct? You testified during to those
facts during your direct examination, correct,
Mr. Albert? Okay, so let's look in the column
titled fish, third bullet point down. All right,
I'm sorry. Second, since we have outstanding
balances that we have not been able to pay, the
suppliers stopped the delivery of product. Do
you see that? The third bullet point says, as
a consequence, we have to immediately reduce
diets of animals up to 50 % to have the necessary
time for the next delivery if suppliers are paid
in part within the following week. Do you see
that? What is that? Third bullet point in the
fish column. In the page 9? Page 9. see where
it says as a consequence we have to immediately
reduce diets of the animals at 50 percent to
have the necessary time for the next delivery
if suppliers are paid in part within the following
week do you see that that is yeah i see that
also says the reduced diets may cause a risk
in the animal welfare as well as negative behaviors
from the dolphins that was to reduce that to
have the necessary time for the next delivery
i mean that was like uh for a week And the next
row block where it says payroll, bonuses, and
commission. Do you see that? It says that the
company has failed to make complete payments
of the payroll. There were the bonuses and sales
commissions. Do you see that? Yes. And then you
would agree that the debtor's finances have not
improved. Since October of 2024, correct? All
right. This is, I believe. 41. Yeah, you go 41.
And everyone's behind your honor. Mr. Alvarez
recall I just asked you if you have a long term
business plan. Could you turn to page 200 of
your deposition? You recall sitting with me for
a number of hours during your deposition last
Wednesday? So at the top of page 200, during
your deposition, I asked you those very straightforward
questions. So is it fair to say that at this
time, you don't have a long -term business plan?
And you answered, that is fair, yeah. Let's take
five minutes. I appreciate the extra time. I'm
happy to report. No further questions. Thank
you. One quick redirect. Mr. Albor, could you
go to tab 12, which is that report we were just
talking about, about the fish? I just wanted
to ask you a question about that statement about
having to reduce diets of the animals to 50%.
That was that this was report was of October
of 2024 correct. Yes, and what I'm concerned
about is where we are now Are you taking care
of making sure that the animals are being paid?
Okay, it's past six, okay, are we making sure
that the dolphins are being fed what they're
supposed to be fed right now Are you making sure
that their welfare is being taken care of right
now? Are you making sure that their welfare is
being taken care of right now? Completely. And
you're committed to make sure that they are fed
and their health, safety, and welfare are taken
care of going forward? That is correct. Thank
you. No further questions, Your Honor. Thank
you. You may step down. Thank you. or evidence?
No, Your Honor. Okay, thank you. Any rebuttal?
No, Your Honor. Thank you. Okay, then our evidentiary
record is closed. I am not going to start argument
at 610, but I do have a question, Mr. Brady.
I assume you're doing the argument. Who's doing
the argument? It's me, Your Honor. Oh, then I
have a question for Mr. Greacher. Mr. Brady.
is exactly what relief you want. Not the arguments
for it. I'll hear that at a later time. I want
to know exactly what orders you want me to enter.
argue that today, we're entitled to that. of
some kind of fine. Mr. Moon, if you have anything
to say in response, I'll hear you for a moment,
but I really wanted to understand what orders
I was being asked to enter. Well, my only response,
Your Honor, is I think we're pretty clear in
our responses how we think that the court could
rule. We see a path forward. We're trying to
give you a path that makes sense, but also honors
what's going on in Mexico. We understand what
they want and they'll make their presentation,
but We object to it for the reasons that we do,
and I think it's pretty clear. Okay, thank you.
Okay, as I said, I'm not going to have argument
tonight. And I do want to read, there's some
documents in particular I absolutely want to
read before argument. And I have another contested
matter tomorrow, which I have not prepped for.
So I'm not going to have argument tomorrow. We
will get back in touch with you and we will come
up with a day. Some of you who have been in front
of me, particularly this week, know that I will
have to find a time to squeeze you in. I also
have started contested confirmation next week.
So I'll find the time, but... So it's not very
long, but just letting you know about that. Okay,
well, yeah, I'm not gonna be able to get you
in before that, so you're okay. Okay, I will
find a time as soon as I can to get you back
here for argument. In a particular argument,
I want to have the authorities for what it is
for the relief that you're asking me for. the
authority on the state violations, the authority
on the access and what that means and how 542E
is interpreted. And the imposition of a fine
as a contempt is what it sounds like. And so
I want the authority on contempt and what a bankruptcy
court can do. And if it's already in your filings,
which I will read, and I have read quickly, I
will hopefully get up to speed on that, but that's
what I'm looking for. And what's my authority
for entering the orders that the debtor and the
lenders are asking me to enter, given the evidence
that we've heard? And obviously, anything opposing
that, that's what I'm looking for. Okay? So we
will be in touch, and I will get you back here
as soon as I can for argument. And I plan to
be prepared to be able to address the legal authorities
at that time. So any questions? Thank you. We're
adjourned.