Please be seated. Good morning, Your Honor. Good
morning. Robert Brady on behalf of Leisure Investment
Holdings, LLC, at all. Your Honor, as we've done
in other hearings, we'd like to start with a
status conference, if that's acceptable. OK.
And let's just start, Your Honor. We've had another
sad development. Last Tuesday a dolphin named
Samira passed away at the debtors golf World
Park facility in Panama City, Florida What makes
this even more tragic is In our view but for
mr. Alvors continuing obstruction and interference
this loss of life possibly could have been prevented
So we have a timeline that we'd like to walk
the court through of what happened the exhibits
attached to it were shared with Councilman Alvore
over the weekend. So, Your Honor, on the left
side is the timeline and then the exhibits are
behind the tabs. So, Your Honor, you may recall
at the May 21 hearing, which was the evidentiary
hearing on our motion to enforce the automatic
stay and the turnover order, Mr. Albert testified
that he did not tell any Dolphin Company employees
not to speak with River Run. And that testimony
is at exhibit A. That testimony was directly
contradicted on Cross when Exhibit B was presented
to the witness. That was Exhibit 32 in the record
where he specifically tells the chief veterinary
officer, Dr. Guillermo Sanchez, not to have any
communications with the debtor's new management
team. 23rd your honor. Mr Wagstaff. Took up Mr
Albor on his testimony. And. He sent an email
to the Dolphin Company employees, including Mr
Doctor Sanchez, the CBO, requesting a meeting
in Cancun. And that's at Exhibit C and again
that was based on Mr Albor testimony to the court
that he had not instructed any employees not
to talk to River on. So. May 23, exhibit C goes
out. Mr. Weichstaff did not receive any response
to this email. But we do know that Dr. Sanchez
was reading and sending emails during those times.
So it's not that he was out of the office because
we have other emails now that we've obtained.
So if you look at bullet three, Your Honor, Dr.
Sanchez, again, the CBO, sends an email to certain
of the employees. but not Riveron, indicating
that he is aware that Samira is in distress.
That goes out on May 23rd, Exhibit D. This appears
to be one of the weekly reports that Mr. Albor
testified that he receives on animal health and
welfare. At this point, Riveron had not received
any of these reports, and they did not know about
this email. The first time Riveron seized this
email, it was forwarded to them four days later
on May 27th. And I'll get to that in a minute.
Between May 23 and May 30, Riveron again is blocked
by the dolphinco .com domain. Any emails Riveron
sent to any employee with that as their domain
were blocked. So May 26, this is bullet five,
Your Honor. This is Memorial Day. Dr. Sanchez
sends another email to employees, again, not
copying Riveron. And this time he advises of
concerns over vendor payments, including no access
to laboratories and medical supplies in the U
.S. He says he's unclear on that and is asking
for clarification, but he provides no basis for
that concern and again does not contact Riveron.
The next morning, May 27th, unfortunately, Samira
was found dead at approximately 8 a .m. At approximately
1052, Mr. Gonzalez forwards To River on Doctor
Sanchez is May 26 email. And this is the first
time River on receives information that Samira
is in distress so. Three hours after the Dolphins
passing River on receives notice that the Dolphin
is in distress. Although the prognosis listed
is favorable. A bullet 8 your honor immediately
after learning of Samira's death. Riveron reviews
the condition of the tanks at the Gulf World
facility. Mr. Strom and Riveron make the decision
to close the park and begin immediately to create
a plan to mobilize a dolphin evacuation from
Gulf World because of the deteriorating conditions.
On May 29th, this is bullet nine, your honor.
The chief veterinary officer emails Mr. Gonzalez,
again, a non -vet employee at Golf World, but
not Riveron, and says he's learned about the
evacuation plan and he has some concerns. You
can see from this email, Your Honor, and this
is bullet nine, that the CBO had already started
planning for an evacuation of dolphins at at
Golf World. He was aware of deteriorating conditions.
Your Honor, tanks don't degrade overnight. Pumps
don't explode with no warning. Mr. Albor and
the CVO knew about the dangerous conditions at
Golf World and never advised Riveron. The key
here is Riveron, Your Honor, has access to financing
through the DIP and an animal health and welfare
consultant. and could have taken action had they
been advised of Samir's condition. A day later,
so this is May 29th, the CBO is raising concerns
about the evacuation. Mr. Gonzalez forwards that
email to Riveron. So some emails are getting
through to Riveron, but there's often a day or
more delay because Mr. Albor and the CBO refused
to... to work directly with River on. After receiving
this email, this is bullet 11. Mr. Wikes have
immediately attempted to contact the CBO to discuss
his thoughts on an evacuation plan. That email
was blocked. Those exhibits are H and I, your
honor. What's even more shocking? emails that
Mr. Wagstaff sent on or around May 23rd were
not blocked. Someone had removed the block on
emails from River On, but someone put them back
in place by May 30th. So somewhere between May
23 and the 30th, As Mr. Wagstaff was trying to
take up Mr. Albor on his testimony that he was
allowing employees to talk to Riveron, the block
went back into effect. So really, despite Mr.
Albor's testimony and promises to this court,
I think the record shows it's clear he continues
to try to stone all the debtors and their advisors.
In fact, Your Honor, since the hearing on May
22nd until Friday afternoon, Mr. Albert and his
counsel had uploaded two documents to a share
file site in response to our information request.
Last Friday around 3 o 'clock they uploaded hundreds
of documents to the share file site. It's amazing
what happens when there's going to be a hearing
on a motion on stay violations. So just on Friday
hundreds of documents were finally turned over.
If you look at bullet 12, Your Honor, one of
the documents produced after 3 o 'clock on Friday
was exhibit J. This is a May 2nd report. This
is the weekly report Mr. Alvord testified he
receives from the CBO. And who is the first dolphin
listed on that report as needing intensive monitoring?
It's Samira. It says that she's not eating. So
Mr. Albor and his team knew at least since May
2nd that Samira was in distress and never informed
Riveron. Bullet 13, Your Honor. Again, around
7 o 'clock Friday night, for the first time,
the CDO reached out to Mr. Wagstaff and indicated
that he was able to speak with him. This is after
millions of dollars of costs. more than two months
of delay, potential further damage we don't fully
understand yet, and the deaths of two dolphins.
Bullet 14, Your Honor, is just another example
that Mr. Albor is not done violating the automatic
stay. On Friday, we learned that he took steps
late last week to take control of the dolphin
limited organization in Jamaica. I think my notes
don't have it. Dolphin Cove, I'm sorry. The Dolphin
Cove Limited in Jamaica. DCL, Your Honor, is
an indirect, wholly owned subsidiary of Control
the Door Dolphin, a debtor in these cases. And
just last week, Mr. Alborg took steps to take
over the board. So obviously, Your Honor, we
have closing arguments today on a motion to enforce
the stay and the turnover order. hopeful to obtain
an order that will rectify this unmanageable
and frankly dangerous situation. I have a few
other updates for the court, but we wanted to
leave with that because of how sad it is that
this had to happen. Your Honor, as you may have
seen, the Unsecured Creditors Committee has been
appointed and retained counsel. Mr. Fransello
is in the courtroom today. We had a productive
call with Mr. Fransello and Mr. Savio last week,
and we note for the court that the UCC has filed
an adjoinder to our motion to enforce the stay
and the turnover. Your Honor, we did also file,
I think it was Tuesday, with the agenda of requests
to file supplemental authorities. This had to
do with the former concurso mercantile. There
were orders that came out of the second district
court in commercial bankruptcy matters. Your
Honor, they're candidly a little tough to get
through. But the primary takeaway is that the
Mexican bankruptcy court affirmed the withdrawal.
of the Concurso Mercantile, thereby continuing
to recognize Mr. Strom as the sole director of
Controladora. Interestingly, Your Honor, the
Court also found the counsel that is advocating
for Mr. Albor's interest is prohibited from purporting
to represent Controladora Dolphin. And the orders
also provided that any actions in contra... Contribution
of those orders would be a basis for the referral
of the matter to criminal prosecutors in Mexico.
Your Honor, the debtors are also continuing their
efforts to take control of the Mexican bank accounts,
as Your Honor may recall, and this was part of
the record at the hearing on May 21. On May 14,
the Mexican State Court issued orders. to all
of the debtor's known Mexican bank accounts requiring
them to remove Mr. Albor and prior management
as authorized users and to provide immediate
access to Mr. Strom and the Riveron team. After
a significant effort from Riveron, the Mexican
banks have started to cooperate. I will say,
Your Honor, what we've seen so far raises concerns.
For example, The Mexican entities appear to have
over 40 bank accounts at a bank called BBVA.
The total available balance among those 40 accounts
is $15 ,000. Of course, Your Honor, since we've
been denied access to the books and records,
it's possible that Mr. Albor is now using different
banks. It could be a reason why there's only
$47 ,000 total. among the banks he's identified.
If that's the case, if he's using different banks,
Your Honor, that's another violation of the note
purchase agreement and would be a violation of
the automatic stay. So we've added some relief
in our proposed form of order to try to address
this situation. Because there's a new concern,
Judge, as the banks are removing Mr. Albor as
an authorized user, There may be a gap between
when they allow the river on team and Mr. Strom
to become authorized users, thereby in effect
freezing those accounts for that period of time.
We're trying to get our arms around that. But
again, you'll see in the form of order that we're
presenting the court today. We've added a provision
that we hope will address that concern. But we
are concerned that this is the high season for
these parks in Mexico. Any financial information
we've received says they still have only about
$47 ,000 and the accounts we've gained access
to have had very little activity, which tells
us there are other accounts that we just don't
know about. Thank you. Thank you. Thank you.
Sir, I want to start and address this issue with
Samara. And I think it's it's really important
because. Put this in context, Your Honor, I want
you to look at when these incidents occurred
and who was in charge of those facilities when
they occurred. The other thing I want you to
look at, and it's right there in the emails in
front of you, they keep talking about the fact
that Riveron wasn't contacted. Remember what
Edwin Gonzalez's role is. He is the person at
the US entities that is in charge of those parks.
He is the one that is now working for Riveron.
I don't know why, if what they say is true, he's
not communicating. But you can see right there
in the email that the chief veterinary officer
is doing what he has always done and communicate
directly with Mr. Gonzalez and the veterinarians
at those facilities. That has always been the
case. The chief veterinary officer, Your Honor,
is simply the one in charge of providing advice
to all the veterinarians in every one of these
parts, has veterinary staff that are in charge
of dealing with the welfare of those animals.
And recently... Why this is certainly a very
inflammatory topic is the Florida Attorney General
is about to open, or at least he says he's going
to open, a criminal investigation into Gulf World
and has also leveled allegations against the
dolphin group in Mexico. Well, of course, Mr.
Alba was not in charge of Gulf World and hasn't
been for a while. With respect to these issues,
Your Honor, those emails clearly show that the
Chief Veterinary Officer is being concerned.
And also, Your Honor, I have and I provided to
debtors a recent report from the 31st, which
is a preliminary case report on Samara that I'd
like to hand up to Your Honor if you're willing
to take a look at it. What's interesting about
this particular report? is it tells you when
the initial signs were observed with Samira,
what was going on. And you'll see there where
there are talks about behavioral signs, but in
the summary, it talks about the preliminary findings
suggest the presence of a large volume ingested
foreign material and possible pulmonary hemorrhage.
And then if you go down further, you'll see just
as you flip through it, this is a pretty extensive
report about what's going on with Samira. I will
also tell you, Your Honor, that although evidence
has been closed, I'm even just now getting emails
that are coming as far back as April 9th that
were reporting about the concerns with respect
to the foreign particulate in those particular
pens. And it was addressed with the people that
were responsible at those particular facilities
to take care of that, not only to fix the pens
to get the foreign particulate out, but also
to deal with the course of treatment with respect
to the dolphin. So I raised that issue, Your
Honor, to say that it's disingenuous to suggest
that Mr. Albor has somehow prevented the CDO
from talking with Riveron. Riveron are not veterinarians.
They don't do animal care. And if Mr. Gonzalez
at that facility is not talking to Riveron, whom
he now works for, I don't see how Mr. Albor can
be held accountable for that. situation of, if
you will, divided governance is not working.
And so I'm going to have to step in. Normally
when there is a governance dispute, at least
as I understand it, for example in the Court
of Chancery, there is some kind of agreed upon
order as to how things are going to continue
while that dispute is handled quickly, very quickly.
And the lack of communication here, And the lack
of a coordinated approach is not working. So
I appreciate that there are differing views on
whose fault it is for the death of this eight
-year -old dolphin. But I think it just highlights
the fact that this arrangement, such as it is,
is not working. Your honor, and in my main arguments,
you'll note we can see that point. I think we're
all very wide -eyed about what's going on at
this point, especially with what I'll refer to
the practical realities right now. One of the
things I've been concerned about, your honor,
is trying to at least illuminate a path for the
court to provide an order that makes sense. All
along we talked about the fact that we think
that it makes sense to allow the corporate governance
to dispute, or at least the Mexican courts, to
deal with this issue to a point where we have
some clarity. Some of that's occurring, although
I will say none of the orders are final. I'll
do with that in my report. But make no mistake,
Your Honor, we're not suggesting, we will not
be suggesting today that you're not going to
be entering an order. We know that. I think it's
what that order looks like that we'll probably
be arguing that we'd like to discuss safeguards
with respect to Mr. Albor's personal stuff. But
we understand with the allegations that you as
the court are gonna be looking at this and gonna
wanna do what's best for creditors, the state,
and certainly the employees in the Dolphin. So
we get that, we'll address that in our main remarks,
Your Honor. Your Honor, this dispute brought
to mind a quote that I like from Neil deGrasse
Tyson, which is, the good thing about science
is that it's true whether or not you believe
in it. And I feel like if Dr. Tyson had chosen
to become a bankruptcy lawyer instead of an astrophysicist,
he probably would have said, the good thing about
the automatic stay is that it applies whether
or not you believe it should or shouldn't. Your
Honor, there have been a lot of facts, there
have been a lot of misstated facts, there have
been a lot of allegations, suggestions thrown
at you in the evidence. presentations and the
arguments are pitched and they're emotional because
the history here and the results here have been
dramatic. We think many of the arguments presented
by our adversaries here are simply misdirection
or outright fabrication, but I want Your Honor
to focus you on the simple and streamlined set
of facts that we think you need to accept to
grant the relief we're requesting. One, there
are pending Chapter 11 cases. Two, thus there
is a valid automatic stay. Three, Mr. Albor is
un - unquestionably, admittedly taking actions
post -petition to exercise possession and control
over the estate assets. That's it. Because there
are pending cases, there's an automatic stay,
and there's a person acting to exercise possession
and control over those estate assets, Your Honor
should find Mr. Alborz in breach of the stay.
Your Honor, I went through Mr. Alborz's supplemental
objection carefully. I did a Control -F search
for the word stay. The only references to the
stay in the objection were in connection with
the use of the defined term stay enforcement
motion. The objection does not substantively
engage in discussion of the automatic stay at
all. I also noted paragraph 47 of the supplemental
objection that says, it is important to emphasize
that the relief sought by the debtors is injunctive
in nature. That's not true, Your Honor. We already
have an injunction. It's called the automatic
stay. The existence of the automatic stay appears
to be an inconvenient truth. to Mr. Albor here,
but it's a critical foundation of any bankruptcy
proceeding, and particularly this one. And Mr.
Albor continues to violate that automatic stay
with impunity. So let's talk about Mexico, Your
Honor. I want to start here because it was foremost
in your mind at the first hearing, Your Honor
said, I will have questions about the status
of the orders in Mexico because to me they look
like they were provisional in nature. We feel
like we've... to interpret this maelstrom of
Mexican court orders and to find where the Mexican
orders have stated that control resides today.
And to do that, we enlisted the aid of no less
than a former justice from the Mexican Supreme
Court, the highest court in Mexico, to review
the record and to provide you with her interpretation
regarding the present control determination.
We didn't ask her to predict the future. If Mr.
Albor files another half dozen proceedings that
the estates are forced to beat back, as we've
done over the prior weeks, the past week. We
have not asked her to provide you with an opinion
as to whether Mr. Albor could ultimately be successful
in his challenge of the March 28th governance
resolutions. Again, we're not asking you to rule
on how that challenge may ultimately be decided.
We simply need, for purposes of enforcement of
the automatic stay, a determination that based
upon the state of play today, as Justice Luna
explained, it's clear and unambiguous that the
terms of the March 28th governance resolutions
are binding and controlling that Mr. Strom is
and has been the sole independent director of
all the debtors, U .S. and Mexico based, and
that Mr. Al Gore and his confederates have been
removed from any officer or director roles over
all of the debtors. Your Honor, this is clear.
And I think you can, you don't need to go any
further than to see, you know, to the review.
What do you think is the distinction that Justice
Luna's interpretation has from Mr. Oskos? Well,
I'll tell you exactly what I view the differences.
I believe that Justice Luna sat here and explained
to you what the orders provide, and I think Mr.
Oskos explained to you what he thinks orders
in the future may provide. And I think that's
the world of difference. Justice Luna said...
I've reviewed these orders. This is what these
orders say today. And this is what these orders
say that the rights of the various parties are
today. And we should act based upon those. Mr.
Oskos said, I believe that those orders may be
challenged. I believe that there are rights to
challenge those. I believe that under Mexican
law, Mr. Albor's appeal rights have not been
distinguished. We take no issue with that, Your
Honor. We take no issue with that. That's true.
But the point today, in connection with a stay
violation motion is today, as Justice Luna explained,
Mr. Strom is in charge. Mr. Albor is not in charge.
Therefore, Mr. Albor's actions to exercise possession
or control over the property of the estate are
stay violations. And Your Honor, if you look
at docket number 95, this is paragraph four of
Mr. Duenas Barajas' declaration in support of
Mr. Albor, he states that the March 28th resolutions
shall be considered valid until the court rules
on the motion to accumulate. The status has not
changed as of today. And in fact, some subsequent
orders from the Mexican courts, including those
in our supplemental submission, have only reinforced
Mr. Strom's authority under those resolutions.
And I think Justice Luna also elaborated on this
in paragraph 17 of her declaration. Even that
April 11th order, which is that order that's
so central to Mr. Al Gore's argument, quote,
did not have restitutory effects. And we all
learned a little bit about Mexican law here,
but in plain terms, that means the precautionary
measures that were entered on April 11th could
only apply, could only apply to future resolutions.
They did not affect or undermine what took place
before that order was issued, including approval
of the March 20th resolutions. Now contrast that
with the other principle we talked about, the
both effects principle, and that's discussed
in paragraph 14 of Justice Luna's declaration.
That principle, which you see in practice through
Sibanko's successful suspensive appeal of that
April 11th order, means an enjoined order can
have neither restitutory nor retroactive effect.
Your Honor, Mr. Albor never has obtained an order
with a both effects suspension, so he has no
legal basis to argue that the March 28th resolutions
are not in effect. He has never had such a basis,
and never even for a moment. obtained an order
undoing those March 28th resolutions. Justice
Luna also discussed the May 9th order from the
Mexican District Court. That federal court found
that that April 11th order to be prima facie
unconstitutional, suspended it, and held that,
quote, it cannot have any legal effect whatsoever.
If that weren't enough, Justice Luna further
explains that the April 11th order was nullified
by the very judge who issued it. And under Mexican
law, one last argument, which was raised in Justice
Luna's declaration, a subsequent injunction cannot
override a prior one on the same subject. It
kind of reminded me of the first -to -file rule
under the UCC. So based on the current record
and the March 28th resolutions, those resolutions
are binding. Mr. Strom is in charge. And Mr.
Alborz continued interference with the debtor's
operations constitutes an ongoing violation of
the automatic stay. Justice Luna confirmed that
when she was asked. On cross -examination as
to whether the March 28th resolutions were valid
and validated, she said, those acts are affirmed.
And Mr. Albor can't dispute this. All he can
say is he continues to file more challenges.
Those challenges, though, continue to be rejected,
most recently just last week. So in acknowledging
this, he admits the April 11th order that he
keeps pointing to has been suspended. His own
objection says so. If you look at the bottom
of page three and the top of page four. debtors
mexican council filed an appeal before the 10th
civil circuit of civil court of mexico city and
obtained an order suspending the april 10th order
yet again they say april 10th we call it the
april 11th order the april 11th order is when
it was docketed it's the same order uh paragraph
seven of the the supplemental objection debtors
obtained another non -final suspension of the
april 10th order and again as you mentioned mr
oskos admitted that the april 11th order was
suspended he said that in paragraph 60 of his
declaration the last bullet point He said it
in paragraph 68. So as Justice Luna notes, and
Mr. Albor and his counsel have noted and admitted
as they must, the March 20th resolutions represent
the valid existing governance structure. They've
been formalized. They've been registered in the
Mexican Public Registry of Commerce. That's the
current legal reality. And as I said, speaking
to Mr. Oskos, he argued that certain actions
may have violated Mexico's Cuncurso -Mercantil
laws. We disagree on the facts on the law. First,
there is no order finding that the March 28th
governance resolutions are unenforceable. It's
simply an opinion with no supporting legal authority.
Mr. Oskos admitted during cross -examination
exactly this point. All he could say was that
the issue may be the subject of a future decision.
And as we noted in our supplemental notice of
further authority, the Mexican courts have continued
to reject Mr. Albor's arguments. None of this
even if Mr. Oskos is right about what may happen
in the future, provides a basis to find that
Mr. Albor isn't violating the stay today. What
we think Mr. Albor is really trying to ask this
court to do, through Mr. Oskos, is to grant perspective
relief based upon their interpretation of Mexican
law, without any supporting order from a Mexican
court. Mr. Oskos' argument also ignores a key
principle of Mexican law. Assets held in trust
for a secured lender are not the subject of an
injunction under a concorso. Justice Luna explains
this in paragraph 26 of her declaration and she
provides supporting case law in exhibit O to
that declaration. The precautionary measure that
arose from Mr. Albor's flawed concorso filing
did not and could not include the equity that
were held in the other Mexican debtor entities.
Those assets were in a collateral trust. They
were not part of the concorso estate and therefore
they're not subject to the concorso stay. I'm
going to just wade into the further Mexican law
issues for a moment. But our view is that Mr.
Oskos simply got the facts wrong, and therefore
his legal analysis falls apart as a result. Contrary
to his testimony, the note holders did not exercise
their right to vote the shares under the Mexican
Security Trust. Instead, the parent borrowers,
Leisure Investments Holdings and Dolphin Capital
Company, which are the two top of the food chain
debtors here, Those two entities, acting under
Mr. Strahm's direction, instructed Cibanco, the
trustee under that Mexico collateral trust, to
issue proxy letters to vote the shares. The shares
had already been contributed to the trust by
each parent's respective subsidiary borrower
and were not part of the concursive estate. And
as I mentioned, leisure investments holdings
in Dolphin Capital I'll note, Mr. Albor hasn't
raised no credible argument challenging those
debtors' governance changes. Why? There is none.
So the formalities Mr. Oskos described, those
that apply to note -holders acting to creditors,
just don't apply here. It's a critical distinction.
Further, the Concorso Court itself, in dismissing
the proceedings, stated that the injunctions
are to be treated as if they never existed. And
Mr. Albor filed an Amparo action to suspend that
dismissal. But the Amparo court denied any stay
and refused to grant any rehabilitative effect
to the concorso injunctions. No rehabilitative
effect. So the injunctions, even if they could
have been applicable to any action that was taken,
were not rehabilitated. So your honor, despite
all the protestations that Mr. Albor doesn't
want this court to wade into Mexican law, wants
the Mexican courts to decide, his arguments give
the game away. That's exactly what Mr. Albor
wants you to do. He's asking this court to stand
in as a Mexican judge to ignore the current state
of affairs, to disregard the orders entered in
Mexico, and to speculate about what might happen
in future litigation. That's not how bankruptcy
works. That's not how Chapter 11 works. That's
not how the legal system works, either in Mexico
or in the U .S. The Mexican court has spoken.
The governing orders in Mexico provide that today,
Mr. Albor is not in control. The scoreboard in
Mexico shows that Mr. Albor has lost every single
time. He's failed in every attempt to obtain
relief through Amparo proceedings or other injunctions.
He's not succeeded in adjoining the current governance
structure established by the March 28th resolutions.
Mr. Elborg's objection raises grave concerns
about the risk of inconsistent rulings, but that's
exactly what he's asking this court to issue,
an inconsistent ruling that contradicts the current
state of play in Mexico. And Your Honor should
not and cannot endorse that outcome. So having
gotten the Mexican law out of the way, How did
we get here? Mr. Wagstaff's declaration and testimony
described in detail the steps that the debtors
were forced to take to obtain access to any bit
of estate property, specifically information,
records, and data because of Mr. Albor's interference.
Mr. Wagstaff outlined the process that he followed,
the attempts to communicate with Mr. Albor and
his team, and the judicial process. Mr. Albor
obtained the necessary authority from courts
in both Mexico City and Cancun. The actions he
took to access the headquarters and retrieve
estate property were carried out under a valid
court order and underseen by a Mexican actuary,
an officer of the court, tasked with enforcing
that order. And why did he have to take those
steps? Because Mr. Albor refused to communicate.
He refused to provide access to the debtor's
books and records. He blocked emails from Riveron
being received by company employees. And he instructed
company employees not to communicate with the
debtor's representatives. He also instructed,
river on to not not communicate with the company
employees you have the records on that it's in
the record the stonewalling left the debtors
with no choice but to act through the courts
in mexico to enforce their rights as lawful management
the objection states that mr wagstaff's actions
were somehow lawless or unauthorized and that
could not be farther from the truth what was
lawless your honor was mr albor's response and
continued defiant posture retaking the premises
in the middle of the night withholding access,
blocking communications, and continuing to hold
himself out as CEO while denying access to the
records, all despite rulings from the Mexican
court that he has been removed from any position
of authority. That's self -help, plain and simple,
and it's self -help in service of his personal
interests as a minority shareholder. There was
talk about the headquarters building. Mr. Albor
argues that Controladora has no leasehold interest
in the headquarters building. testified that
the lease expired at the end of 2024. The claim
is suspect. The note purchase agreement signed
by Mr. Albor states in black and white that there
is a lease agreement between Mr. Albor personally
and Controladora for the Dolphin Center office
with a monthly rent of $25 ,000 and that the
headquarters lease was valid until 2030. That's
exhibit 35. Mr. Nyberg read that document to
Mr. Albor. Mr. Albor acknowledged what it said.
He gave no explanation, however, as to why he
testified to something completely different just
minutes before. And I don't think that Mr. Nyberg
even got a compliment at that point about how
well he read in English. So even more telling,
in his own pleadings to initiate the concursive
mercantile proceeding in Mexico, Mr. Albor described
the building as the company's headquarters. Those
pleadings were filed in December, and today the
company's website still lists that building as
its headquarters. In a further twist, differing
stories between the deposition and on the stand,
but Mr. Albor testified that he negotiated a
lease for a second building next door, apparently
with himself as both landlord and tenant. We
asked for documents to support Mr. Albor's testimony
at deposition and at trial. Council apparently
received them as early as Wednesday when they
were translated into English, but we didn't receive
them until yesterday. Given that, we haven't
had the chance to confirm whether they're valid.
or whether they were registered in the public
registry, which is what the documents indicate
that the parties were required to do. And there's
still no explanation for why, even if these are
accurate documents, Mr. Alboard's representations
in the note purchase agreement would have then
been inaccurate. In one case, misstating a termination
date, and in another case, failing to disclose
a self -dealing transaction. But even if we take
Mr. Alboard's word, which I find it hard to do
based on his testimony and the record, and we
assume that the headquarters lease expired, the
debtors still have a right to access the books
and records stored in that building. They also
retain whatever possessory interest is recognized
under Mexican law, and I understand there may
be such a possessory interest. But again, we're
not asking he to wade into the issue of the Mexican
law there. Mr. Alborna himself admits that the
estate records, estate property, is located in
that building. He testified that the building
is, quote, where some of the top management have
an office. It sounds like a headquarters to me.
And the debtors need full access to those records
and that property to administer these Chapter
11 cases. We've asked for access to the debtors'
computer networks and electronic records systems
that Mr. Albor acknowledged are housed in that
building. That request has been flatly rejected.
So right now, we can't produce sufficiently rigorous
financial statements, not for the Mexican entities
and not for even the U .S. entities where Mr.
Wagstaff's team is on the ground. We haven't
yet been able to review the banking records.
We haven't... been able to verify the company's
cash position to ensure that funds are being
properly maintained or used. Finally, Mr. Albor's
claim that he's not interfering with Rivron's
ability to communicate with company employees
is simply false. That was his sworn testimony
on the stand, of course. It was page 199 of the
transcript of the hearing. It was also his sworn
testimony at the deposition, which is exhibit
41, and that was on page 136. But it's not true.
You have the documentation. Exhibit 32, that
he told the chief veterinary officer not to speak
with Riveron. Mr. Albor also conceded that he
instructed his personal counsel to tell Mr. Wagstaff
not to speak with the company's Mexican employees.
That correspondence is at Exhibit 15. And even
after the last hearing, after Mr. Wagstaff emailed
employees to schedule a meeting about company
records, which email presumably seemed to go
through, Riveron's emails to the Dolphin Company
were blocked again. by the company's server.
And as Mr. Brady said, that happened at some
time between May 23rd, when Mr. Wagstaff sent
an email requesting a meeting that was not responded
to, and May 30th. The May 23rd email, there was
no bounce back. May 30th, there was a bounce
back. You know, this is not a misunderstanding.
This is a pattern. It's a deliberate, active
effort to obstruct the debtor's ability to manage
these states. So why is this all important? Let
me step back again and explain why this matters
so deeply, why the relief we're seeking is not
just legally justified, but urgently necessary.
And I think Your Honor understands this, but
first, we need to understand and ensure that
in every facility around the world where Mr.
Albor has refused to relinquish control, animals
are being properly cared for, employees are being
properly paid, post -petition obligations are
being met, and that the companies are operating
in compliance with their legal and financial
responsibilities. This is not a business that
can be put on pause. The health and the welfare
of the animals are at stake, and the employees
who care for them must be paid. The business
must continue to function, even if Mr. Albor
doesn't like the illegal outcomes so far. Second,
we represent debtors in possession in Chapter
11. That comes with responsibilities. As debtors
in possession, we're required to prepare and
file a range of documents, schedules, sofas,
2015 .3 reports, monthly operating reports. We
must also provide cash flow budgets to demonstrate
the administrative solvency of these estates.
And the dip financing that allows these businesses
to operate is conditioned on compliance with
an approved budget, one that we cannot complete
on a final basis because we don't have the records.
And all these reports must be signed and attested
to by the officers as true and accurate. But
without the full unfettered access to the books
and records, we can't provide the transparency
and compliance that Chapter 11 demands. The idea
that the debtor in possession should be limited
to estate books and records that a third party,
Mr. Albor, chooses to filter and selectively
share is simply untenable. Mr. Albor's response
to all of this, I think, boils down to really
two points. One, because there's pending litigation
in Mexico, Mr. Strom doesn't have the right to
access or control the Mexican entities' books,
records, and assets, even though the Mexican
court orders say otherwise. And two, the debtors
already have the information. to manage day -to
-day operations at the US parks. So essentially,
where's the fire? Well, let's see those arguments
for what they are. They're nothing more than
an attempt to minimize the significance of the
inconvenient truth of the automatic stay. Mr.
Albor wants the court to ignore the stay because
he's challenging the governance changes in Mexico.
That's not how the stay works. You don't get
to disregard the automatic stay just because
you believe you have a basis to challenge the
filing or the authority of the dip. Channeling
Dr. Tyson again. The automatic stay applies whether
or not Mr. Albor believes it should. And as I
said before, the argument misstates or best obscures
the current legal statuses laid out by the Mexican
courts. So Your Honor, we will continue to pursue
every available remedy in Mexico, but we are
entitled to and we need relief from this court.
Relief to address both the violations of the
automatic stay and the failure to comply with
Your Honor's order under section 542. Now, the
suggestion that where's the fire and that there
can be some protocol to solve these issues, let
me explain why that view is not only myopic,
but dangerous. In their papers and in depositions
of Mr. Strong and Mr. Wagstaff, the other side
focuses almost exclusively on Section 542E, suggesting
Mr. Albor is willing to provide specific documents
if we just ask. And I'm sure that they'll point
to... Hundreds of documents they dumped on us
Friday afternoon and over the weekend But the
problem is we don't know what we don't know and
tragically what we didn't know can likely contributed
to the dolphin death of a dolphin last week Break
these down from operations standpoint. We don't
know what we don't know about the state of the
operations Mr. Wagstaff testified about the dilapidated
state of the Florida parks when his team took
over He saw the pictures from Miami Seaquarium.
That's exhibit 20 crumbling walls unsafe structures
Based on what we do know, we have serious concerns
about the conditions at the other parks. They're
still under Mr. Albor's control. These are estate
assets. This is lender collateral, and the risks
are real. As Mr. Brady said, we just received
an email from the chief veterinary officer sent
to other dolphin employees indicating that the
chief veterinary officer knew since May 3rd,
almost a month ago, that Samir's health is at
risk. Now, he didn't share that with Riveron
or Mr. Strom. Why? I think it's pretty clear.
It's because he received an email from Mr. Albor,
already in evidence, instructing him to communicate
with Riverond. We also learned that the employees
in Mexico have been aware of tank conditions
at the Gulf World Park, but didn't report them
to Riverond. Mr. Albor's interference and his
influence over employees who are unable or unwilling
to communicate with the CRO may have contributed
to Samira's death. It's unacceptable. Mr. Albor
argues there's no evidence of mistreatment in
Mexico. But we explain why that is. Mr. Wagstaff
tried to schedule a meeting with the CBO. Mr.
Wagstaff tried to schedule a meeting after Mr.
Albor's testimony in front of you saying that
he was not going to restrict communications with
the employees. But before it could happen, Mr.
Albor intervened. In the case of the CBO, you
have the evidence that he directed the CBO not
to speak with Riveron. You have the evidence
that he had his personal counsel send a cease
and desist letter. And in fact, the email from
the CVO that we received for the first time last
week indicates that there are other dolphins
in non -U .S. parks that the CVO is aware are
experiencing health issues. So you shouldn't
credit Mr. Albor's argument that the debtors
don't have specific evidence about mistreatment
or poor conditions elsewhere in the dolphin group
companies when he's actively blocking our ability
to investigate. Again, we don't know what we
don't know about the operations precisely because
of Mr. Albor's ongoing interference. Turn back
to finances and contracts. We also don't know
what we don't know about the company's financials.
Most of the relevant documents are maintained
at the corporate level. Mr. Albor tried to disassemble
about this on the stand, and he argued that,
well, there are employees at the park level,
but his testimony is simply not credible. We
don't know what contracts exist. what obligations
are outstanding, whether we're in compliance
with post -petition requirements. And sure, after
being admonished by Your Honor to start providing
those records, we did receive some glossy reports
filled with pictures of smiling dolphins and
humans, but no hard data. The reports are incomplete,
and in some cases, just incomprehensible. And
just last week, we received U .S. entity -level
reporting for the first time. Again, maintained
in Mexico. But even that was a glossy picture
-filled PDF, not even actual financial data,
and it included a bunch of unexplained, quote,
management adjustments. Those reports and those,
quote, management adjustments certainly weren't
coming from the Florida parks. They came from
Mexico. So the suggestion that Mr. Strom and
Mr. Wagstaff have enough information to administer
the Chapter 11 in connection with the U .S. parks
is not true. We continue to uncover surprises,
IRS issues, insurance lapses, failure to pay
employee insurance obligations, unsafe structure
violations. We don't know what else is out there
because Mr. Albor has instructed employees not
to speak with Irving. And we don't know how Mr.
Albor could possibly run the Mexican operations,
particularly now that the banks have been ordered
to cut off his access to the company cash and
to provide access to Mr. Strahm and his team.
I'd encourage your honor to ask Mr. Albor's counsel
that question. How are the dolphins to be cared
for with no cash access? How are employees to
be paid when Mr. Albor's authority to utilize
the company's cash and the bank accounts have
been eliminated? Finally, we don't know what
we don't know about how much this is going to
ultimately cost the estate. We know how much
it costs so far, though. This approach has been
incredibly costly. The estates and their creditors
are being forced to forensically recreate financial
records just to get a baseline understanding
of the business. It's not sustainable, it's wasteful,
and it's a direct result of Mr. Albor's defiance.
At its core, Mr. Albor's argument just ignores
the automatic stay, and it ignores the debtor's
right to access estate property. It assumes a
world where the court won't enforce the stay,
and where the debtors are only entitled to request
documents that happen to be in Mr. Albor's personal
possession as a former CEO and minority shareholder
under Section 542E. That's not the reality of
the situation, but since... That does appear
to be the lion's share of the argument. Let's
discuss Section 542E anyway. Section 542E applies
to books and records held by non -debtor individuals.
It does not limit the broader protections of
the automatic stay. The debtors' requests here
under Section 542E as to individuals did not
imply, certainly do not imply, that the parties
have the right to interfere with or exert control
over estate property. And in discussing Section
542e, Council conflates the immediate and irreparable
harm standard, which we use to obtain interim
relief under Section 542e with the general right
to obtain records. Immediate and irreparable
harm, Your Honor, is not the standard for final
relief after notice in the hearing under Section
542e. The statute doesn't say that the information
must be necessary to avoid immediate harm. That's
a limitation that they've invented today. Yes?
At the first day hearing, we focused on animal
care. That was the most urgent risk. We had no
documents, no access to employees, and no information
about how to care for the animals. Thankfully,
and I'll emphasize, not thanks to Mr. Albor,
Riveron was able to reach out to park level employees
through unofficial back channels. That's how
we've been able to pay employees and care for
the animals. Again. I say not thanks to Mr. Albor
because despite our efforts, the company blocked
Revron's email access to the Dolphin Company
domains. Your Honor, we've always viewed Section
542E as one tool among many, a potentially important
path to ensure access to as much information
as possible. As Mr. Estrahm and Mr. Wagstaff
testified, information is at a premium because
they don't know what they don't know. Tragically,
we know in the past week there are serious issues
known to employees in Mexico that are not being...
When we filed this motion, the 542e motion, we
expected access to company records, estate property.
We expected all of that would be forthcoming.
But we also wanted to avoid a situation where
a bad actor or a terminated executive could claim
that certain materials in their possession were
personal and not subject to turnover. The argument
that we have enough documents to keep the lights
on in the U .S. entities really misses the point
entirely. And it asks this court to embrace Mr.
Albor's chaotic day -to -day strategy for running
this business. And it's not a strategy. It's
a recipe for disaster. Let's also not forget
Mr. Albor admits the company is in payment default.
The assets and the cash of these estates are
collateral. Secured, the secured note holders
collateral, the dip lenders collateral. The debtors
are bound by the dip and the cash collateral
orders which govern how those assets and funds
can be used. Finally, the Mexican courts have
directed the Mexican banks eliminate Mr. Albor's
access to the company, bank accounts and cash.
Your Honor, what you're seeing here He's a minority
shareholder doing whatever it takes not to advance
a restructuring plan, not to argue that he has
a better path to restructuring here, but simply
to survive another day. He's not considering
selling collateral without court approval. He's
already doing it. That's based on information
that we obtained after flipping the governance
in Argentina. I understand Mr. Albor claims that
he had the right to do that. That's not true.
Section 10 .7 G of the note purchase agreement,
which is at exhibit 35, makes it clear. any such
rights that he may argue that support that dissolve
upon an event of default. And we're in default.
Finally, these cases are burning cash at an unsustainable
rate. If we can't move forward with a restructuring
that maximizes value for all creditors, and we
instead remain stuck in this holding pattern
dictated by Mr. Albor's personal agenda, this
case could quickly collapse. And that would,
of course, mean greater loss of value, lost jobs,
and even more risk to big animals. So Mr. Albor
and his counsel have said they do want to respect
this court and its authority. Well, if they wanted
to respect the court and its authority, there's
a simple path forward. He could comply with the
automatic stay, and he could stop trying to retain
possession and control over estate property.
Instead, he does the opposite. He continues to
file actions aimed at undoing the current governance
structure, actions that, by definition, seek
to exercise and retain control over the estate's
assets. And he's doing that based on a minuscule
shareholding in control of the drug. Dora Dolphin,
one share. representing 0 .0003%. That's it.
But it hasn't stopped him. In fact, as you saw,
just Friday, he sent a notice attempting to flip
the governance of the Jamaica subsidiary. And
in his communication, he made it very clear that
he expects nobody to challenge him. Are you suggesting
that the litigation in Mexico over corporate
governance cannot go forward? I'm not saying
that it cannot go forward, but I think it's a
textbook violation of the automatic stay. It
may be one that he has the right to ask your
honor to pursue, and your honor may certainly
consider that. We would hope we would have an
opportunity to be heard on that, because we don't
believe that he would meet the standards for
stay relief. But again, you don't have that motion
in front of you. And I guess that's the point,
Your Honor. He continues to take actions without
having a motion, without having asked for authority,
to undo governance changes implemented by the
trustees that held equity and control at Dora
for the benefit of the lenders. And all those
actions taken after the Chapter 11 filings violate
the automatic stays protecting the top two entities,
Leisure Investments Holdings and Dolphin Capital
Company. This is, Your Honor, I think what we've
come to call the original sin of these stay violations.
Mr. Albor has been trying to assert control over
entities that are debtors themselves and corporate
assets that belong to the debtors. Every action
he's taken since then is fruit of the poisonous
tree. So you're right. There is pending litigation.
And he may have a basis to challenge the board
flip at Controlador Adolphin. He could file a
motion to dismiss the case if he's successful
in obtaining that. After he's filed a motion
for relief from the automatic stay. We would
of course oppose those motions. We believe we'd
defeat them, but those aren't the motions you
have here. What you have before you, Your Honor,
are clear and continuing violations of the automatic
stay, and the law is clear. Parties don't get
the flout to stay just because they hope they
might have a basis to challenge the case later,
or because they hope the facts might change.
And if Mr. Albor wants to continue to litigate
this in Mexico, he does so at his own risk. Because
the Mexican courts have said the March 20th resolutions
shall be valid. presumed to be issued in accordance
with the law and must be observed until a judgment
is rendered. Mr. Strom is in charge today. Do
you have a form of order that you want me to
enter? We do, Your Honor. If I may approach.
Your Honor, I think this is a great time. You
read my mind. I wanted to talk about what we
believe the consequences should be to Mr. Alborne.
So Your Honor, the Third Circuit in Atlantic
Business and Community Corporation, and as Judge
Goldblatt recently acknowledged in the Healthcare
Real Estate Partners case, stated that Section
362K is applicable to a corporate debtor. But
even if it weren't, courts addressing state violations
have found Section 105A to give broad power to
any action that's necessary or appropriate to
enforce rules or prevent an abuse of the process.
Judge Dorsey discussed this in the NNN 400 case
against 2019 Westlaw 507 .38 .44. The plain meaning
of Section 105A encompasses any type of order,
whether injunctive, compensative, or punitive,
as long as it is necessary or appropriate to
carry out the provisions of the Bank of Seattle
Code. There is nothing in the bankruptcy code
to indicate that compared to other remedies.
Monetary relief under section 105 is particularly
not necessary or appropriate. I've heard there's
ample case law from the Atlantic business case
on down that even a good faith belief by a party
violating the automatic state that it had a right
to do what it did is not relevant to the question
of wilfulness of the violation. If you look at
section 62H of the bankruptcy code, it provides
an individual injured by any willful violation
of the stay provided by the section shall recover
actual damages, including costs and attorney's
fees, and in appropriate circumstances, may recover
punitive damages. It's a shall, not a may. And
in fact, many cases in this circuit indicate
that where willful violation of the stay is demonstrated,
compensatory damages are mandatory. I point you
to Judge Wismer's opinion in the Henry Malarkey
case over in New Jersey, 81 BR 280. Again, whether
your honor chooses to apply section 360. to H
or K directly, or as Judge Dorsey directed in
the NNN 400 case under 105A, there's certainly
authority and precedent to award these types
of damages where a stay violation is willful.
And so what's willful mean in this context? The
Third Circuit states a violation is willful when
the creditor violates the stay with knowledge
that the bankruptcy petition has been filed.
Again, back to my very simple list of three facts.
I point you to University Medical Center, 973F,
2nd, 1065, Lansdale Family Restaurants. And Your
Honor, we believe the facts show the violations
were willful under any meaning of that term.
Mr. Albor clearly was and has been aware of the
bankruptcy filings in the stay. He simply believes
that he shouldn't be compelled to abide by them
because he believes he will be successful in
future litigation. And that's not a basis upon
which the party can ignore the automatic stay.
If it were, it would gut the purpose and effect
of the stay, frankly any court order. It would
give a non -debtor carte blanche to exercise
all sorts of extrajudicial self -help. It's not
supported by case law. One last case I think
on this point that I think is useful is the Harley
-Davidson case, Harley -Davidson v. Morris, 19F
3rd, 142. This is from the 3rd Circuit. The defendant
had believed that he had received consent to
take certain actions and therefore was not willingly
violating a court order based on his good faith
belief in the legality of his actions. The court
held that despite the defendant's good faith
intentions, the defendant was in contempt. So
willfulness does not require... the creditor
intended to violate the automatic state provision,
nor does it require that the debtor knew his
violations were unlawful. It simply requires
that the acts which violate the state be intentional.
And whether or not there was a good faith belief
that the party had the right to do what it did
is not relevant to whether the act was willful.
And again, that's from the Third Circuit's opinion
in Atlantic. But here again, we were rejected
suggestion that Mr. Albor is operating under
a good faith belief that his self -help actions
are legal. And so we believe based upon this,
Even if Mr. Albor believes in the heart of his
hearts that he's justified in his conduct, Your
Honor can and must impose a sanction. And so
I'll turn to the proposed order. Paragraph two
would find and conclude that there is a violation
of the automatic stay and the turnover order.
That those violations are willful and require
the imposition of actual damages. We also request
the imposition of coercive sanctions. as necessary
to compel the cessation of these violations.
So, Your Honor, we ask in paragraph three that
he be declared in contempt of the court for having
rulefully violated the stay in the term and over
order. We would ask that there be a deadline.
We've checked in. We haven't checked in with
chambers yet, but we would ask for a date this
week to confirm that he has taken the various
actions. to dismiss any actions on his – on behalf
– purportedly on behalf of the debtors to confirm
in written – in written communications to the
banks and the others located in Mexico that the
CRO and the designees are authorized to act on
behalf of the debtors with respect to the banking
relationship. That's the point Mr. Brady made
at the beginning of the day. To permit the CRO
and others that he may designate – access to
the headquarters and the records that are included
in the headquarters building, to email, in a
form acceptable to the CRO, all of the employees
of the debtors and their subsidiaries informing
them that they are to cooperate and take direction
from the CRO and the CRO's designees, to send
similar communications to the vendor suppliers,
vendors and other business partners, and to provide
all the necessary and the like for access to
the electronic records at the headquarters. Is
there case authority for the proposition that
I can impose these compliance measures? So Your
Honor, we believe there is, and certainly there
are cases that have sort of really tried to finally
tune this distinction between the access to documents
and records and documents that are in cases where
it's more along the lines of a turnover of hard
assets. This is not requesting hard assets. This
is requesting access for the facilities. So I
point to the Fisker case. 24 -11390, and it's
docket number 580. I believe that that was an
order that Judge Shannon entered. He was sitting
in for Judge Horan at that hearing. The court
there, Judge Shannon opted to grant the order
authorizing obtaining control over property and
ordered the party to cease interference with
the debtor's property. Judge Shannon, because
I think he wanted to leave all the fun stuff
for Judge Horan perhaps, suggested that he was
not going to enter the compensatory damages.
I'm not worried about the compensatory damages.
I'm looking at the mandatory injunctive relief.
That's what I'm looking at. That I'd like some
authority that says that I can order someone
to do specific acts. And we believe, yeah, if
you look at Biju's Alpha, that was Judge Dorsey.
And where unfortunately the party had failed
to provide information regarding the whereabouts
of the company's assets, he directed them to
provide information regarding the company's assets.
Now I don't believe that they actually complied
with that, but that was the order from Judge
Dorsey. Okay, this is different than that. This
is instructing him to move to dismiss litigation,
to countersign written communications to banking
and other financial institutions. Permitting
access to the headquarters, that may be something
I consider more within my daily work. But how
about these other mandatory injunctive? Well,
Your Honor, I guess I understand your suggestion
that these are These are injunctive, but again
to me these are simply the necessary steps to
provide access and control over these assets
and to the extent that the violation that you
find which I think you can is that That there
has been an action to prevent the debtors from
having Communications with the employees with
the vendors and others we believe it's completely
appropriate for your honor to say Those are violations.
And in order to be in compliance with the automatic
stay, here are the steps that you should take.
Now, if he doesn't take those, then he's in continuing
violation of the stay. But what we're asking
for here, Your Honor, is these are the steps
that he would need to take in order to be in
compliance and not continuing to violate the
automatic stay. He's already done what he's done.
Mr. Albor has already taken the acts he's taken.
They are either in violation, either they violated
the stay at the time or they didn't, and we'll
deal with that. But now you're suggesting, and
I understand why, I'm sympathetic to it, but
I'd like to know what authority I have to say
to a particular person, you must take this action
versus... If from today forward, Mr. Albor stopped
everything he had been doing previously, okay,
then presumably from today forward, he wouldn't
be violating the automatic stay. But to order
him to take certain actions, I need some authority.
So I'll take one more crack at responding to
maybe challenging the question and then I have
another case I'd like to point you on to. Again.
What we're saying is that the actions that he
has taken, the failure to take any of these actions
in A through F are continuing violations of the
automatic stay. Now if he does these things,
then he will no longer be in violation of the
automatic stay. If... Well, okay, let's say if
pre -bankruptcy, party files a lawsuit, but post
-bankruptcy doesn't dismiss it, is that a violation
of the state? That may not be it, and I think
that, you know, Your Honor, this is where I would
suggest that I do have a case for you to look
at, and it's THD liquidating LLC. It's 2020 Westlaw
681 -8442, and it was Judge Dorsey. 681 -8442.
681 -8442. So, and I think this is exactly the
sort of scenario that you're talking about. If
there were just pre -petition litigation, and
I think there are cases in the Third Circuit
where parties have confiscated a vehicle, impounded
a car. If there was just that action. And there
were no further ongoing efforts to maintain possession
or control. It's simply locked up somewhere.
That might be a different situation. But as Judge
Dorsey said in the THGL case, the defendants
did not merely retain the same possession and
control over the debtor's prepetition property.
Rather, by withholding Payments for services
performed post -petition. The defendants engaged
in affirmative acts to exercise control over
post -petition property of the estate in violation
of the automatic stay. And we suggest that's
exactly what's happening. Failure to pay a contract?
Correct. I'm not sure I agree with that, but
I'll take a look and pay. I'm not sure I agree
with that position. They may have breached the
contract, but I'm not sure it was a violation
of the stay. Well, it was withholding and failing
to make payments that were required. But again,
the point is, this is not just a car being...
Did he require the payment? Did he direct a mandatory
injunction to direct the payment he made? He
did, Your Honor. And again, this is not, as I
mentioned, just simply a car being locked up.
I understand the concern, but this is what I
said last week was I need to know specific authority
if you want me to grant certain relief. And I
think there's a difference. I pulled out the
same case you did, the basic third circuit case.
Atlantic Business and Community Corp. I've read
that. I think it's actually very applicable to
this case. And I certainly think from that, there
is a point in time when you can find someone
in contempt and you can find them. That's fine.
This case says nothing about, for example, I
don't think it does, require the... the landlord
to let the tenant back in. So that's what I'm
looking for. I make him sign a piece of paper.
Where's the authority that says I can do that?
Well, I would say it again. I think it's throughout
Section 105 and elsewhere. Again, this is to
win compliance with the automatic stay. The actions
he's taking, the actions he's continuing to take,
constitute ongoing violations of the automatic
stay. And what I suggest, Your Honor, the intent
of the order here is to say, These are the things
that are continuing that, if they continue further,
will constitute ongoing stay hours. I'm not sure
the order says that. That might be a better order,
okay? That might be a better order. This doesn't
say that. Okay, well, so Your Honor, we're happy
to take a closer look at that, but essentially,
that's the goal here. The goal is to identify
that a violation of the automatic stay has occurred.
that there are certain steps that should and
could be taken to no longer be in violation of
the automatic stay. And that's an important fact
for us to all figure out how are we going to
move forward. And for Mr. Albor to no longer
be in violation of the automatic stay. So your
point is taken. We'll take a look at the order,
and we'll consider if there's some language that
we can be helpful in crafting. that concept into
it, but essentially that's what we're suggesting
is today there are violations, tomorrow there
will be violations unless or until these steps
are remedied and Mr. Albor should remedy these
in order to no longer be in violation of the
automatic stay in your order. That's the goal
of the order, Your Honor. Your honor, with that,
I believe that Mr. Keenan has some comments in
further support of the motion. Good morning,
your honor. Paul Keenan from Baker McKenzie.
for the firstly note holders who are the Prudential
Insurance Company of America, Prudential Legacy
Insurance Company of New Jersey, and Cigna Health
and Life Insurance Company. With me in the courtroom
today is our local council, Scott Cousins from
Louis -Brisbois. And I'd also like to take a
moment to introduce a few folks who are appearing
virtually, but they're all with us in the courtroom
a few weeks ago. That is Paul Prosic, who's the
managing director of PGIM Private Capital. PGIM
is the private investment arm of Prudential.
Stephanie Burbrow Greer, who's the vice president
and corporate counsel of PGIM Private Capital.
Leonard Maslisch, who's the head of fixed income
investments for Cigna Investment Management.
Michael Brown, who is senior counsel for Cigna
Investments. Sarah Semper. who is vice president
for Pigeon Private Capital. Also with us virtually
is Alfonso Cortez Fernandez, who's the chair
of the litigation practice for Baker -Mackenzie
in Mexico. And also virtually from Baker -Mackenzie
US is John Dodd, Blair Conn virtually, and in
the courtroom with us today is Graham Strike.
Your Honor, I'd like to take a few moments. We've
heard a lot from both the debtors and also from
Mr. Albor's Council. But I think it's important
to note that there is a first lien secured lender
in this case who has all of these assets as their
collateral. And I'd like to explain briefly their
point of view and how they view this whole situation,
how quite frankly it's affecting them, but all
the creditors in this case. First, the first
lien note holders are strongly supportive of
the motions filed by the debtors relief they're
seeking from the court today, and I can later
on try and answer some of the questions that
the court had about the terms of the order and
how we might modify it. And I certainly don't
plan to restate all the arguments made by debtors
council today regarding the specifics on the
numerous state violations, but I do want to take
some time to provide the court with perspective
in the context from the view of the firstly note
holders on the very unfortunate situation that
is before the court today. already said, pumps
don't fail overnight, tanks don't leak overnight,
concrete doesn't crumble overnight. Those things
take years for them to come to pass. So Your
Honor, what I'd like to do is just give a very
brief history of the secured loan, the status
of it, followed by a quick explanation of the
structure of the security, because it may not
be so familiar with the court, because it is
heavily based on Mexican law. The firstly, noteholders
first loaned $100 million to the in 2019. In
2020, when the debtors were in financial distress
due to the global pandemic, the firstly note
holders were very accommodating and cooperated
with Mr. Albor and the Dolphin Group to loan
an additional $7 .5 million. They also agreed
to amend the loan covenants and other terms to
assist the debtors through the pandemic. The
total amount outstanding has grown to nearly
$120 million. principal interest plus the extraordinary
amount of pre -petition and post -petition fees
and expenses that are being caused solely by
the actions of Mr. Albor, all of which are being
paid through the interim dip loan and continue
to recruit to this day. And quite frankly, the
interim dip loan is virtually exhausted at this
point. In 2022, the Dolphin Group took on second
lien debt. All told, the debtors have more than
$225 million in funded, secured indebtedness
from just those two sources, the first and second
lien debt. This $225 million figure does not
even include the many bilateral loans taken on
by the debtors over the years with local banks
in various countries. Now the first lien note
purchase agreement is denominated in dollars.
And for that, for other reasons, the no -purchase
agreement itself is governed by New York law.
The first lien debt is secured by substantially
all the assets of the debtors and those of many
of their non -debtor affiliates, many of which
will soon become debtors, and which are located
in the Mexico, United States, Italy, and throughout
the Caribbean. On the other hand, unlike the
MPA, the security documents are naturally governed
by the law. laws of the jurisdiction where the
assets are located. In particular, what's germane
to the hearing today is that all the assets located
in Mexico have been pledged or placed in a collateral
trust for the benefit of the secured lenders,
which is a very common structure for securing
a loan backed by assets in Mexico. The pledges,
collateral trust, and related documents are all
in Spanish and governed by the laws of Mexico.
the laws of the United States, and have been
duly registered in the appropriate public registry,
which is similar to a secure transaction registry
in the United States. Now, in Mr. Albor's reply
or his verified statement, as well as in the
declaration from his Mexican law witness, Mr.
Albor argues repeatedly that corporate governance
changes of entities organized under the laws
of Mexico cannot be made through loan documents
that are governed by New York law. But even if
this proposition were true as a matter of Mexican
law, it's irrelevant because the relevant security
documents are in fact written in Spanish and
governed by Mexican law. Just as one example,
while some of the collateral of Mexico is secured
by a pledge governed by Mexican law, the real
estate and the equity in the subsidiaries are
in a collateral trust that is governed by the
laws of Mexico. The collateral trustee is a financial
institution authorized by Mexican law to act
as a trustee. In this case, the collateral trustee
is Cibanco, C -I -B -A -N -C -O, which is one
of the largest banks in Mexico. Under this loan
structure, the collateral trustee holds legal
title to the assets placed in the trust and is
responsible for managing the assets in accordance
with the trust terms. Mexican law requires trustees
to act in the best interests of the trust and
the beneficiaries, which in this case are the
first lien total. There are countless loans made
to borrowers in Mexico using this structure.
Now under the terms of the collateral trust in
this case, the borrower can use the assets in
the ordinary course of business, but when there's
an event to default, the collateral trustee will
take direction from the beneficiaries of the
trust. One of the many reasons for using a collateral
trust governed by Mexican law, with a Mexican
bank as a collateral trustee, is that the assets
placed in the trust will be bankruptcy remote,
as we would put it in the U .S., under Mexican
bankruptcy law. Now, on the issue of bankruptcy
remoteness and the equity interests, it is held
by controlador and often, because a lot of this
dispute really centers around... So, the issue
of bankruptcy remoteness and the equity interests
in and held by Comptroller Dolphin that are held
in the Collateral Trust. This court heard testimony
from a former Supreme Court Justice of Mexico
who testified in court and filed a declaration
as to the following basic principles of Mexican
law. First, the Justice explained that the assets
in the Collateral Trust are not part of the bankruptcy
estate. in the event of a concourse American
deal as a matter of Mexican bankruptcy law. And
the Supreme Court Justice also testified when
asked in this court that she personally reviewed
the collateral trust documents in reaching that
conclusion. Second, we heard the Supreme Court
Justice testify conclusively under cross -examination
that the assets in the collateral trust here,
which include the equity interests held in control
at Oro Dolphin, in its subsidiaries were not
part of the concursive mercantile bankruptcy
estate. Third, the justice testified that the
proper interpretation of the precautionary measures
of provisional stay issued by the Mexican Bankruptcy
Court during the concursive mercantile is that
it did not operate as a stay of any actions against
the equity assets in the collateral trust. And
as an aside, among the exhibits that were presented
to the court, attorneys for the company and attorneys
from Mr. Albor repeatedly sent letters to Wilmington
Trust indicating that if they were to take actions
with respect to any assets in the trust, they'd
be violating Mexican law. And quite frankly,
it was those letters that caused Wilmington Trust
to resign and for us to work, quite frankly,
in overtime to find a successor trustee. So fourth,
the justice also testified that the March 28th
corporate governance changes are still effective.
So regardless of whether the bankruptcy court
injection stayed the corporate governance changes,
the terms of the order issued by the Mexican
Bankruptcy Court dismissing the concourse of
mercantile made it pretty clear in the English
translation that the precautionary measures or
the provisional stays, I would call it, did not
disturb the March 28th governance changes in
any way. So, with respect to the concursive mercantile,
in summary, Your Honor, the now -dismissed concursive
mercantile did not state any actions with respect
to the equity and the collateral trust that are
outside the bankruptcy case, and the Supreme
Court just has testified to this, and this is
even evident just from a plain reading of the
order from the concursive mercantile. But in
addition to the refusable by the Mexican Bankruptcy
Court, interfere with the administration of the
trust. On top of that, a state and a federal
court have also endorsed injunctions against
Mr. Alvore that actually prevent him from interfering
with the Mexican debtors, whose equity and other
assets are pledged in the trust. And these other
orders in no way prevent him from complying with
the Chapter 11 worldwide automatic stay. In fact,
The whole reason why the debtors sought these
injunctions in the first place is that they're
entirely consistent with the worldwide automatic
stay of the Chapter 11. If you will, it was an
attempt to domesticate the Chapter 11 automatic
stay in Mexico by getting a host of injunctions
against Mr. Albor that would be consistent with
the automatic stay of the administration of the
bankruptcy estates. With respect to the state
and federal courts in Mexico, the other argument
that's made repeatedly by Mr. Albor is that the
corporate governance issues should only be decided
by the courts in Mexico as a matter of international
comity, and that those governance matters remain
unsolved. So let's look at the first part of
that argument, that a U .S. bankruptcy court
cannot make a finding of fact as to the application
of foreign law. This is simply incorrect. U .S.
bankruptcy courts routinely hear from experts
on foreign law and subsequently make findings
of fact based on that evidence. In fact, there's
an entire rule, Federal Rule of Evidence 44 .1,
that speaks to a U .S. court's authority to make
a determination of foreign law, and that is the
rule under which Justice Ramos' testimony was
admitted. Now, even though it's clear that this
court can make a finding on foreign law, Mr.
Albor argues that adjudicatory comity requires
this court to defer to the courts of Mexico on
corporate governance issues in this case. So
first and foremost, while international comity
is an important concept in cross -border restructurings,
comity does not override foundational provisions
of the U .S. Bankruptcy Code, such as enforcement
of the world wide... This court has exclusive
jurisdiction of all property of the debtors wherever
located, and this court tenant of the Bankruptcy
Code is in no way derogated by the principles
of international economy. Mr. Keenan, I don't
think that the actual corporate governance issue
has been put squarely in front of me. Am I wrong
on that? Well, it hasn't by the debtors, but
it has as a defense by Mr. Albor. right? Because
when I read his reply, and I listened to a lot
of the argument a few weeks ago, what he's basically
saying is, is that I don't have to abide by the
automatic stay because I am in the process of
challenging the corporate governance of Mexico.
But there's a real issue there, right? Because
as Justice Ramos testified before this court,
There's an April 4th state court order for Mexico
from a court known as the 10th civil judge of
written process, confirming the removal of the
directors and officers, including Mr. Albor,
confirming the appointment of Mr. Straub, and
also issuing a litany of injunctions against
Mr. Albor. And we heard the Supreme Court Justice
testify that that is the law of the land. There
was a second conflicting state court order from
the state court, which the state court itself
removed or dismissed, and which a federal court
in Mexico City also said is not applicable. And
so I think the great irony of this case, Your
Honor, is that Mr. Albor's argument is, well,
I don't have to abide by the automatic stay because
I have these corporate governance rights in Mexico.
courts in Mexico that have considered this issue.
A bankruptcy court, a state court, and a federal
court. And they've all been consistent the entire
time. There is an injunction from a state court
in Mexico that was sought by the debtors using
local Mexican counsel that is very clear, and
I would encourage the court to read that. It's
in the Supreme Court Justice Declaration. At
paragraphs, it's 160 -2 in the docket. Paragraph
7 and 26 and 27. Those two pages of that April
4th order are critical. It flat out states that
Mr. Haboor and a number of other individuals
are removed as directors and officers. It states
that Mr. Strom is the independent director. And
it states that Mr. Haboor shall not 12345. to
say he's doing one, two, three, four, five. That
could be a remedy here, too. Absolutely. But
in terms of mandatory, get him to stop, make
him sign something, isn't it that court could
really get that to happen? Absolutely. And it's
my understanding that's in process. Absolutely.
See, the way I look at a court, Your Honor, is,
and this is coming from somebody, most of my
practice in the last 25 years has been cross
-border restructurings, primarily in Latin America.
And the idea is this, is that Chapter 11 is a
wonderful tool because you have, as I mentioned
before, 1334E, where property of the estate includes
all the assets of the debtors wherever located,
number one. Number two, we have this wonderful
door in the sense that we have an open door policy
to foreign debtors. You can file here as long
as you meet the eligibility requirements. And
even though your assets and liabilities are overseas,
because you're part of this corporate group,
that is filed in Delaware or New York or wherever
it is, we're going to administer you as one bankruptcy
estate, far more efficient than trying to administer
one corporate group in three or four different
jurisdictions. So we have these wonderful tools
available to us in the United States, the automatic
stay and the worldwide nature of it. Practically
speaking though, trying to enforce the automatic
stay in the foreign country is another thing.
Some countries have adopted the model law, which
we call Chapter 15, and kind of have a smooth
path and a practice, if you will, of being able
to enforce it there. Mexico, when they enacted
Chapter 15, made some modifications that make
it challenging to use Chapter 15. And that's
why the debtors instead went for these civil
court injunctions, if you will. When you read
those injunctions from the April 4th order, They
kind of read like an explanation of the automatic
stay. And that was very, very intentional because
we know that simply trying to enforce the automatic
stay in Mexico is not always that easy, right?
But here's the thing. This court absolutely has
personal jurisdiction over Mr. Albor. I agree
with that. And that's undisputed. Upon information
and belief, Mr. Albor owns substantial property
in the United States. And it is not uncommon
at all for U .S. bankruptcy courts to use their
power of contempt to enforce the automatic stay
against someone who lives in another country,
provided that they have personal jurisdiction
over them. And then when it really has teeth
is if they have contacts or assets in the United
States. And so there is a way for this court
to compel Mr. Al Gore to comply with the automatic
stay, even though he's sitting in Mexico. Does
that mean we're going to rely on this court entirely
and not pursue rights and remedies in Mexico?
Of course not. We're still going to pursue rights
and remedies in Mexico, the debtors are. But
it's part of the overall arsenal, if you will,
to ensure compliance so that things that happened
last week don't happen again. That's the problem.
I mean, Your Honor, I'll deviate from, you know,
my plan script a little bit, but I was shocked
and I assume the court was as well. this morning
was when Mr. Edwin Gonzalez is the one who operates
the Panama City location. And for the last two
months while we've been in Chapter 11, Mr. Edwin
Gonzalez has been providing regular reports to
the CDO located in Mexico and to Mr. Albor. And
as you heard from Mr. Brady this morning, those
reports were not shared with the debtors. Mr.
Gonzalez is not communicating with the river
on. Well, maybe it's because he received emails
like the Olson's did. And I can guarantee you
the debtors are going to start looking into that
as well. There is a practice in a pattern here
that is becoming very, very evident. And that's
why we're here today. And that's why we're asking
for quite frankly, extraordinary relief. I've
had to ask for relief and stay violations before,
never quite like this. your honor is correct
to ask some of the questions about the order,
whether or not it's really you have the authority
to do all this. And I think we can modify the
terms of the order in a way to accommodate those
concerns. But while it is extraordinary relief
that we're requesting, it's an extraordinary
situation we're facing. We need to have this
bankruptcy case get on sound footing or else
I'm really concerned about the path forward.
As I mentioned, the interim dip is almost exhausted,
that the first petition lien lenders are working
with the debtors on a renewed dip, whether it's
on another interim basis or on a final basis.
1600 employees, nearly 2 million visitors a year,
12 parks, and there's $20 ,000 or $40 ,000 in
the bank account? Where is the money going? Where
is it going? We need to figure that out. We need
to get the revenue from those parks funneled
into this estate because otherwise we're asking
Expenses of the parks in Mexico while what the
revenue goes somewhere else it can't work And
so we're at a very We're at an inflection point
in this case Quite frankly, we were all hopeful
that once the case would file it would just go
in the right direction It hasn't yet But we need
the assistance of this court to put it on the
right track and you're absolutely right. It's
it's not all on this We also have rights and
remedies, so the debtor does, in Mexico, and
those will be pursued as well. And we may have
to go to courts in other countries as well. I
don't mind it being all on me. I'm just looking
at the practical effect of what I can do. And
that's all. I can enter all kinds of orders.
And the question is, what's the effect of them?
With respect to paragraph four of the order,
which is the compliance and the compliance certificate,
I think, here's the challenge, thanks to this
court, the first day of the case, we actually
received an order affirming the automatic stay,
and we received an order on 442 and turnover.
And you can see that basically we have noncompliance.
So, quite frankly, this was trying to assist
Mr. Albor in telling him what he needs to do
in order to be... If you were to read these in
sort of the converse, if you will, right? So
look at, you know, for example, we know that
he has directed employees not to speak with Riverong.
So the way he can bring himself into compliance
with the automatic stay is by telling them to
speak with Riverong, right? And so quite frankly,
the intent of this was not to seek injunction,
injunctive relief for which this court might
not have a thought. to get in compliance. Because
I'm a little concerned that if we have an order
that lacks specifics, and if the court decides
that that's what it has to do, for lack of authority,
then that's what it has to do. But then we may
get back in front of the court again very soon.
No, I think specifics are good. And in the one
case where I have I entered a specific order
of what the contemptuous acts were. But there
I had the marshals who could go out, who I directed
to go out and get the property, because it was
in the United States. So I had an order, a general
order, then a more specific order, and then I
sent the marshals. And so I think... A specific
order is actually probably required to some extent
before I hold someone in contempt, which I'm
not adverse to doing. And as I said, I've done
before. But what I haven't done, for example,
was require the person who is in contempt to
take a particular action. I don't know that it,
maybe I can. But I need some authority for that.
And I think, you know, perhaps. Just using a
little bit of psychology here, even if the court
is uncomfortable and we can talk about the authority
in a moment. In terms of including in an order
something that might be considered injunctive
relief. What we could do is simply list the state
violations with some specificity and then the
obvious inference is. need to stop doing those
things or undo those things in order for the
coercive penalties. For example, if I look at
paragraph 4B, we're asking Mr. Elbor to countersign
written communications to banking and other financial
institutions in order to finish what the debtors
have already started in terms of getting control
of the bank accounts, right? But again, as you
heard this morning, we're alarmed by the lack
of... Yeah, I think the real question is where's
the money, which is not in those bank accounts.
And let paragraph C permit the CRO and other
persons that he may designate access to the headquarters
and records therein. I think I've heard some
remarks from Your Honor that, listen, we can
chew gum and walk at the same time here. We can
recognize that there may be some dispute as to
the legal status of where the company's clearly
headquartered. I mean, I think with all the evidence
in the record. or loosely speaking is that building,
okay? But even if this court wants to recognize
that it may be a dispute as to the status in
that building, whether who owns it, who's leasing
it, you know, does the debtor still have a possessory
right to it under Mexican law? It doesn't matter,
right? The debtor's books and records are in
there. Property of the estate of Controladora
is in there, right? And so I think it would be
useful. in that building that don't have to step
into the issue of who owns it, is the lease still
Why has he been sending all of the health and
welfare reports that Mr. Brady introduced into
evidence this morning to Mexico instead of to
Riveron? Again, quite frankly, I've got to believe
that Mr. Gonzalez has been receiving emails like
the ones he's received. And so I think the way
we fix that... One person could look at that
as, wait a minute, are you granting injunctive
relief? Another person could look at that as
a roadmap to get in compliance with the state.
And so maybe what this means then is that in
the entry sentence to paragraph four, maybe instead
of shall, we can work on some language that says
something in the laws of in order to gain compliance.
And then to get into compliance, those violations
would need to be remedied, among other things.
passcodes, passwords, and other credentials.
But just, Your Honor, that's on that issue. I
would like to speak just briefly for a moment
on damages. These actions have cost the lenders
millions and millions of dollars, depending on
when you start. course of the week. We essentially
had three hearings on the matter. You know how
these things go, Your Honor. We're well over
a million dollars just on the prosecution of
the motions to enforce. And we believe, based
on the case law, it is absolutely appropriate
to impose those fees and costs on a willful violator
of the automatic stay. This is not someone who
didn't get notice of the Chapter 11. This is
as willful as it gets. Second, we do believe
that substantial harm has been done to the business,
which is the lenders collateral as a result of
all these state violations. We do believe that
there should be a hearing at the appropriate
times. That's something that needs to be rushed
to ascertain what damage this has caused to the
business and what the lenders have suffered as
a result. It's not just. Increasing up sizing
the size of the dip to cover all of these fees
and costs But it's also on the other side We're
in the process of the debtors are in the process
of retaining an investment banker and a real
estate advisor and hopefully those It'll be interesting
to see how much loss in value there is been as
a result of all that You couldn't. I'm not after
everything that's happened. And finally, we need
that course of fine. So there's three in order
to compel compliance, which is pretty common
and there's quite a bit of authority for that.
So it's threefold, Your Honor. It's the fees
and costs in connection with preparing, filing,
prosecuting the motions. The second. Nothing
else, Your Honor, unless you have any questions.
I do not, thank you. Good morning, Your Honor.
We'll be brief. Adam Landis from Landis, Rath
and Cobb. I'm here with Mike Newmeister from
the Cooley firm, my co -counsel. He's been admitted
pro -op VJ. We represent certain majority equity
holders, one of the enterprises and Mr. Newmeister
would like to address the court. Let's take 10
minutes. I represent the majority shareholders
and directors of TDC Leisure Holdings LLC. TDC
Leisure is not a debtor in this bankruptcy, but
is the direct parent of Debtor Leisure Investment
Holdings LLC. Specifically, my clients are John
Olson, Scott Olson, Mike Wood, Donna Kasowitz,
and Stafford Burroughs. Collectively, they own
approximately 57 % of the equity in this business.
And still not bearing the lead, we support the
debtor's motion. Your Honor. Notwithstanding
my client's substantial ownership position, they
have not been a part of any of the decision making
with respect to the legal proceedings in Mexico
or in this court. In fact, we only learned about
the control of Doric and Corso petition multiple
weeks after its filing. I would simply state
I would object to any new factual evidence. I
haven't been able to test it. I haven't talked
to any of these people. So that's my only objection.
Thank you. I'm just going to hear it, but I'm
not going to consider it evidence. Thank you,
Your Honor. The Board of TBC leaders at our holdings
was given no prior notice of and did not consent
to the filing of that concursive petition. Similarly,
our clients were not made aware of these Chapter
11 cases until after they were filed. Notwithstanding
all of this, my clients believe in and care about
this business. They are focused primarily on
ensuring the safety and care of the animals,
and on finding a path that maximizes value for
stakeholders. Your honor, we believe that Mr.
Strom and Mr. Wagtstaff provide the best opportunity
to realize these goals. These companies in these
cases require stability, transparency, and proper
recapitalization. This is as evident as ever
with the most recent dolphin death, which my
clients are very concerned about. And we agree
with your honor that divided governance is simply
not working. We believe that stabilizing the
company and providing for the protection of the
parks animals are best achieved through these
Chapter 11 cases. And with Mr. Strom and Mr.
Wagstaff having control of the companies and
getting access to all information and processes.
So Your Honor, in sum, the company's majority
equity holders support the motion. They support
Mr. Strom and Mr. Wagstaff having the access
they needed. My clients are eager to help however
they can. And we hope that the Chapter 11 debtors
are granted the release necessary to stabilize
the company. Thank you. Mr. Fransala. Good morning,
Your Honor. Thomas Fransala of Rainsville and
Littrell, proposed counsel to the Official Committee
of Unscarred Creditors. In addition to myself,
on the Zoom call today is the other proposed
co -counsel to the Official Committee of Unscarred
Creditors, Christian Savio. In addition, the
Unscarred Creditors Committee is seeking to retain
Force 10 partners with financial advisors. They're
also on the call, Nicholas Rubin and Adam Measlake.
Your Honor, the reason I stand is we have filed
a jointer to the debtor's motion at docket number
195 and we wholly support and ask your honor
to grant the relief requested because we believe
it's very necessary here. So, Your Honor, I'd
like to begin by stepping back to briefly review
how we got here. Your Honor, it's undisputed
that Dolphin Group faced severe financial difficulties.
Negotiations between the note holders and Mr.
Albor on behalf of the Dolphin Group were extensive,
but ultimately unsuccessful. As a result, Controlador
Dolphin filed its concursive work until proceeding
in Mexico on December 30th, 2024, and the Mexico
Court entered its precautionary measures. On
January 28th, 2025, these facts are well supported
by the record. However, almost immediately, disputes
arose regarding corporate authority. The note
holders argued the control of the door often
lacked corporate authority to file the concursive
mercantile. Mr. Albor, however, maintains that
proper authority existed. Interestingly, while
the corporate authority issues could have been
raised immediately with the concursive mercantile
court, the note holders chose to wait. This dispute
intensified when the note holders orchestrated
the March 28 2025 shareholder resolutions that
they claim authorized the board flip and resulted
in the installation of the independent director
Mr. Strong and also authorized withdrawal from
the concursive mercantile. Mr. Albert contends
these resolutions are invalid and are currently
being challenged before the 10th Civil Court
of Mexico City, the court with exclusive jurisdiction
over these matters. Days later, Mr. Strong filed
these jointly administered cases. Mr. Albert
disputes the authority of the independent director
to withdraw the control of Dolphins Concurce
of Merk until proceeding, pointing out the control
of Dolphins Center of Main Interest, COMI, is
in Mexico and that Mexican law and not U .S.
bankruptcy law should govern that particular
proceeding. The corporate authority issue has
been moving forward in Mexico, but as Mr. Oskos
testified, and nothing has changed since, even
with the new orders, none of these enters are
final. They're not final, but there are orders.
They are orders, Your Honor. And the orders in
place to date, as I understand the testimony,
favor Mr. Strong. They do. We can see that. I'd
simply point out that it's a little different
in Mexico, as I've been learning as well, that
when you get these orders that, for example,
are both the April 4th order and what they refer
to the April 11th, we refer to April 10th, were
ex parte orders that have precautionary measures
that are put in place. But they can be tested
through the court system. And that's what's happening.
In fact, happening fairly rapidly, I think, with
the Mexican courts. For example, if you think
about when we first came here, for the first
time that we had a hearing, a lot has changed
since then. If we'd had a hearing that day, for
example, a lot of orders have been entered since
then. So I think that we've kind of been born
out with respect to waiting a little bit and
allowing clarity to form in Mexico has been a
little bit helpful, I hope, I think, with the
court. But Your Honor, so as we discussed the
case was entered and as for Mr. Albor's involvement
in this case, since his appearance, Mr. Albor
through his counsel immediately reached out to
debtors council to discuss how to provide identified
records required under 524E and his offer to
provide supervised access to his facilities.
Indeed Mr. Albor has had a protocol prepared
that can be part of any order entered by the
court. But we do anticipate that will need to
be negotiated, and I'll talk about that a little
bit more when we talk about it. And a lot of
time to negotiate. Gotcha. But at bottom, Mr.
Albor has been willing to provide books and records
to the debtors, and he has been doing so. And
he has availed himself of the Mexican court process
regarding the corporate authority issue, and
has not asked this court to opine about what
the Mexican court orders mean, other than with
respect to his expert. under Rule 44 .1, just
as the debtors have done. But I think Mr. Albor's
actions, and by the way, just to take a step
back for a minute, you'll notice one thing that
they mentioned that we don't talk about the stay,
they don't talk about the Concurso Mercantile.
And I think it's because, from our perspective,
Your Honor, there's been no point in this case
where we have argued. that we don't believe that
this day applies. What we tried to argue is that
we're trying to find a way forward with respect
to the two motions that were before you, right?
The first was a first day order, which was a
motion to turn over records pursuant to 524E.
Your Honor, Mr. Albor was in violation of that
order before he even got into the case by the
terms of that order. So when he did get into
it, the first thing he did was reach out through
me and my co -counsel to try to figure out a
way how do we start Working on this and we asked
them. Can you at least tell us what it is that
you want? Okay, which was I think a pretty simple
request Ultimately, they did that but it took
another week or week and a half for that to happen
and after we've already had a hearing But they
did provide a list we were not only did we provide
documents we were provided responses for those
documents that we did not provide and Said that
either it was delayed or it was coming the next
week or whatever the issue was And please let
us know if you have any issues with respect to
that so that we can address them. Because frankly,
Your Honor, as counsel, I need to be aware of
what the issues are because sometimes I have
to lean on my client to do what he needs to do,
right? So that's why I ask for those particular
things. But what they were asking for is a little
bit different, Your Honor, and that comes when
you start coupling in the stay relief or the
stay enforcement motion. The turnover motion
is very specific with respect to records. The
stay enforcement motion is clear that they want
control. And that was an issue that was being
adjudicated in the Mexican courts at the time.
And we simply asked, Your Honor, to allow the
Mexican courts to deal with that issue, why we
provide the records under the... It stays in
place here. And how is it that Mr. Albor's directing
employees not to communicate with Mr. Strong
is not a violation of his status? So, with respect
to that, Your Honor. I have seen the emails with
respect to that. And I will also tell you that
we also at the depositions of Mr. Labstaff and
Mr. Strom asked, what else are we looking at
here? There is the one email, maybe two. I saw
the emails are very clear. They're very clear.
I believe they say what they say. I believe Mr.
Albor meant what he meant. And they're very clear.
And what has to happen is. Every employee has
to be able to communicate with Mr. Strom, Mr.
Wagstaff, and whoever they direct them to. It
just has to happen. How is that not a violation
of the state? Right. And what I would say, Your
Honor, is that when that came up, as these sort
of things happen and we become notified of it,
then we have the opportunity to interject ourselves
and say, you can't do that. It can't be piecemeal.
That's the problem. It can't be piecemeal. It
just needs to be blanket. I think the issue,
Your Honor, is from Mr. Albor's perspective is
that what he was trying to suggest is that communication
doesn't have to be with every single person because
no business runs that way. You're right, but
it needs to be with whomever Mr. Strom and Mr.
Wattstaff think they need to speak with and whoever
they think needs to report to them. And Mr. Albor
may think that's a different group of people.
But it's not who he thinks, it's who Mr. Strom
and Mr. Watzak think. I understand, Your Honor.
I understand. But just to continue with my presentation,
make a record. Sure. Absolutely. So for their
part, the Mexican courts have been working diligently.
They've issued a flurry of orders that sometimes
favor Mr. Albor in the case of the April 10th
order. But in other instances, in most of them,
they do favor the debtors. And as I said, that
they're not final. And recently, I will say that
the debtors did utilize the ex parte in preliminary
order from April 4th to at least get the Mexican
bank accounts frozen. The precautionary set forth
in that order included the ability to seize bank
accounts and those issues are being challenged,
including an appeal whose admission was requested
with suspense of effect. That would aim to halt
the enforcement of those measures. That appeal
is expected to be admitted in the coming days.
And if it's accepted, would suspend the effect
of the precautionary measures and therefore prevent
creditors from accessing the bank accounts, especially
since the appeal could be resolved in Mr. Albor's
favor, and thus revoke the April 4th order. And
how is that not a violation of the state? Well,
Your Honor, that's where we go back to, okay,
so if they have rights that they are veiling
themselves of, and they have told you that, we're
veiling ourselves of our rights and responsibilities,
or rights and Well, let's just say they're rights
in Mexico. But I think it's kind of counterintuitive
to say that they can avail themselves of their
rights, but there's no response on the other
side. Isn't that a question I've been asking
for relief from, say, to be able to respond?
And I think responding is different than taking
affirmative acts. So if Mr. Strom is taking some
action, then should Mr. Albert will be able to
defend it? Absolutely. So that can be worked
on. But in the meantime, a case has been filed
here. Mr. Albert has not challenged in this court
the filing of that case. So the automatic stay
applies. I hear counsel recognizing that it does,
being candid. And so now, if you were down the
street in the Superior Court, it would be no
different. Or in Chancery Court, it would be
no different. Either come here for relief from
stay to take those actions or take them here.
Yeah, but Totally agree totally get the point
your honor What I would say about that your honor
is number one We do recognize and remember this
has been kind of a moving Issue where we've tried
to comply while reserving the right to deal with
the corporate governance the extent we can and
Addressing the immediate issues that the court
had addressed which was taking care of the employees
and making sure that the dolphins were being
fed and cared for. So that is the context of
what we were trying to do initially. I will say
we certainly understand the issue with respect
to coming to this court to the extent we understand
the court's going to issue an order. Remember
I told you we're going to get there with respect
to we understand that and we want to work cooperatively
to get that so that you don't have to feel like
you have to issue a compulsive order that's a
little iffy that could be appealed because I
think we can get there. But let me get there
your honor so your honor mr. Albor recognizes
the practical reality as it sits today Control
the door is currently locked out of its bank
accounts and without access to accounts It cannot
pay employees and or assure the welfare of marine
animals So what's happening with the daily till?
So good question. Here's a couple of things that
I would say about that because frankly I want
to know too Number one this issue with the bank
records came in after the evidentiary hearing
so I don't know I haven't seen What's in those
accounts? I've heard them say what they think
is in the accounts, but I've seen no evidence
with respect to it Therefore I can't either respond
to it nor can I prepare my client to explain
What are we looking at? Because at some point,
he will have to, right? So, but we're not there
yet. All I can tell you, Your Honor, is that
with respect to him being locked out of the bank
accounts, that's a practical reality, which means
that he wants to make sure that the employees
and the dolphins are taken care of. And so how
do we get there? Obviously, an order needs to
be entered. Right, but that's a problem with
assuming at that point, right, because I really
don't know. And so I don't want to put, I don't
want to, I'm not going to get out in front of
my skis on that. I definitely hear the point.
I'm just saying we don't know because he is not
able to speak on that because this is a fast
-moving issue. In fact, I believe he's having
to go to Mexico City to deal with some of these
issues today with his attorneys. But in any event,
I will say. Not withstanding the fact he's not
going to be able to pay employees or take care
of dolphins for very long They have been paid
the employees and the dolphins have been cared
for at least right now That will cannot continue
in the future. It just doesn't make any sense
So that is a practical reality that we all have
to accept. Mr. Albor accepts it But you know
the other thing that he wants to make clear to
the court your honor And wanted me to make sure
that I conveyed this is that he is deeply committed
to the welfare of the dolphins and the employees.
He's built this business over the last 27 years
to provide unique experiences for the public
and he understands he must live with the current
state of affairs unless and until the Mexican
court reverses the April 4th order and therefore
he's willing to work with the debtors to ensure
a smooth transition of operations so the employees
are paid and the animals are cared for. However
the draft order submitted by the debtors and
the note holders is not a cooperative framework.
It's punitive, it's one -sided, and in our view,
designed to humiliate Mr. Albor rather than foster
a smooth transition to protect all stakeholders.
And he had actually given me an analogy, Your
Honor, that I'll share with you. I'm going to
modify it a little bit. But, you know, there's
the history, right, where Caesar was marching
on Rome. And rather than risk Rome falling and
falling to destruction, pumping in the Senate
left. And so his view here is... He doesn't agree
with what's happening, but he knows that he has
to cooperate to protect the business, to protect
the employees. So he doesn't want to see Rome
burn, Your Honor. And that's the practical reality
he's in. And I'm just trying to convey, Your
Honor, there's been a lot of talk about him.
And, you know, it's easy to make a boogeyman
out of him. It's easy to point the finger at
the guy that's not in the room for all that's
happening with the Dolphins. And as you pointed
out, We can sit here all day long and play the
blame game. But at the end of the day, we need
to look, how are we going to move forward here,
Your Honor? Let me assure you that I understand
that this was Mr. Albor's baby. There is no question
that it was. It was his business, and he built
it, and it was successful, and he expanded it.
That's the testimony I heard from him, and I
believe that. While there may have been other
factors, the pandemic hit, right? And everything
shuts down. And that may not be the only factor
that contributed to the financial challenges,
but it was a big one just like it was here in
the United States generally. And for this type
of business where one day people are coming in
the turnstile and the next day they're not. So
I understand that. Thank you. And I want Mr.
Albor to know I understand that. But then there
becomes a time at which the financial distress
has hit, the lenders have their rights, they
exercise their rights, and we are where we are.
You're right. And that's a reality that we accept
too. So we have to deal in reality. And to date,
cooperation does not seem to have worked. So
does Mr. Albor have another form of order that
he wants me to enter? That's not this one? Here's
what I would suggest, Your Honor. You've already
pointed out some of the issues that we've certainly
identified with the order. I'm not suggesting
one way or the other. I'm just suggesting a potential
pathway to deal with this, Your Honor. What I
would suggest and I think it makes a little bit
of sense Especially because it needs to be retooled
on some level is for them to do that Send it
to us We can redline it and try to work amongst
ourselves on the things we can agree with just
like I've done with competing orders before a
lot of it We're probably going to agree on some
of it We're not and I think when we get to that
point and you can give us a short leash to do
this your honor and then submit the competing
order so that you can take a look at where our
You know pressure points are with what we're
willing to do and what we're not I will tell
you on a global basis what Mr. Albor is willing
to do is obviously he knows that he's got to
turn over books and records. Now the practical
reality of his building is that he does have
his personal stuff in that building and there
are other business operations in there. So it's
not the typical thing, Your Honor, when you have
an issue with respect to you know what you typically
have with the turnover of books and records where
you get the keys to the building if it's the
landlord's building but you do get to go in and
get access. I've been on those sorts of all through
my career where you've got to go and you've got
to go into access you bring your copy people
you take take whatever records you need but there's
it's curated in that there's a somebody supervising
you and watching so you're not going over into
the server and remember there was testimony about
the fact that Mr. Albor keeps his stuff on a
separate server So I think it's fairly easy to
do. It's just it needs to be stage managed and
just hasn't happened yet. But I do think it can.
And I think in the context of an order, there's
probably an appropriate way to do it. So my suggestion
would be that after I get them making my record,
and you're going to tell us what your view is.
And I don't think there's going to be a lot of
mystery about where a lot of that's going, Your
Honor. We're certainly clear -eyed about that.
But I do think that from Mr. Albor's perspective,
I think even from the debtors perspective and
certainly the note holders, preserving the value
of this enterprise for whatever it is that they're
going to do, whether it's to sell non -core assets
or whether it's going to be sell it to somebody
that can operate it as a dolphin park or whatever,
you don't want to damage that business. Of course,
they're going to stand up and say, Mr. Albor
is the one that's damaging it. Well, Mr. Albor
says that they're the ones damaging it. It doesn't
get us to a resolution. And it doesn't get us
to a way that you, as the bankruptcy court, can
preserve the value of these assets for the estate.
We are where we are now. And I think that we've
certainly, and I think you've been very good
in giving us an opportunity to have at least
a little bit of leeway to see what's going on
in Mexico and get an explanation. But it's okay.
I'm going to get back to my remarks here. But
I think that's where we should go with respect
to the order, Your Honor. Your Honor, while the
note holders do point the court to a bevy of
authority regarding the scope and effect of the
automatic stay, you know, none of them really
speak to a case like this exactly where you have
an insolvency proceeding that was started in
Mexico where precautionary measures or the stay,
if you will, was violated, certainly in our view.
And then a separate insolvency proceeding started
here in the United States. where the automatic
stay, in our view, has been used as a sword,
not a shield. Because the intent is to do what
the Mexican courts are not able to do right now,
or what they cannot get the Mexican courts to
do yet, which is to take control of these operations
for Mr. Albor. Remember, Mr. Albor knew about
the issues with respect to the financial distress,
negotiated for months. He will say that the note
holders walked away. They say that Mr. Albor
was being uncooperative. They didn't get a deal.
That's the reality. So when you don't do that,
what are you supposed to do? Mr. Albor took control
of Dora, which you have heard they've admitted
that over 60 % of the assets and business are
in Mexico That's Comey filed a concursive mercantile
to deal with it That was the appropriate place
to do it precautionary measures did not preclude
the lenders from exercising their pledge rights
because the stock was in a trust. So that was
in my remarks, but I'll jump to that. So Mr.
Oskos also testified about that. And Mr. Oskos
gently tried to provide a counterpoint with respect
to what Justice Luna provided. And I think we're
all impressed with Justice Luna. There's no doubt
about that. I think I'm pretty impressed with
Mr. Oskos, too. I didn't know him before this.
But as a co -author of the model, it's a trial.
I mean, it's pretty amazing. And number one,
he tried to distinguish the fact that, as Justice
Luna said, the case, the concursive market was
dismissed. He made clear, no, actually, it was
withdrawn. And there is a distinction between
those two under the law. And he explained it,
that a dismissal requires a finding that this
is not a valid Concur so it is dismissed as opposed
to a withdrawal, which is I have authority I'm
the one that filed this I don't want it in concur
so anymore and now I'm withdrawing and that's
what happened It is I'm simply pointing out there
were a couple of things that he gently tried
to redirect Because we certainly all respect
justice Luna I'm simply pointing out that with
respect to the trust he also talked about that
and that this is not a common -law trust this
is a What he called I think a warranty trust
and explained how that worked and then the issue
becomes The default and what happened with respect
to the default and notice of it now We know that
there that they have a letter of default. We've
seen that the issue is you're on our I've seen
the correspondence and the Envelope coming back
that they didn't get that until May so well outside
of the time frame They were supposed to get it,
which is one of the issues we talked about original
sin The original sin, Your Honor, was this concursor
was filed, and what happened at that point was
instead of dealing with the issues of control
at the concursor mercantile level, they filed
a motion to dismiss at the concursor mercantile
level and never waited for it. They didn't wait
for it. So they ended up filing for Chapter 11,
and it's a bypass of the concursor mercantile.
In our view, forum shopping, Your Honor, because...
It was Mexico was where this was started. And
you refer to, well, it's a valid place. It was
the place where the insolvency proceedings were
started. That's a fact. So the issue of whether
the concursive mercantile was filed properly,
whether it was dismissed properly, it seems to
me as an issue for a Mexican either insolvency
court or, in the interesting way that they deal
with it down there, the civil courts. Because
they don't have this exclusive jurisdiction with
the bankruptcy court to deal with the bankruptcy
issue. Which is strange to me, but here we are.
And that's why the 10th Civil Court entered those
orders ex parte on both sides. But now that's
moving forward and moving forward rapidly, Your
Honor. But even having said all of that, we're
beyond that at this point because we don't have
access or at least we're frozen out of the bank
accounts. That is forcing us to have to acknowledge
that we need to, you know, we don't want to just
turn over the keys. We think that would be disruptive
to the employees. and disrupt it to the animals.
We don't think that's in anybody's interest to
do that. And Mr. Albor has committed to me that
he's willing to work on a transition so that,
you know, you meet with Mr. Waxap and his staff
and talk about who the vendors are, whatever,
but a transition process, because that's what
adults do. They'll argue he's not an adult. I
already know what their arguments are. I'm telling
you, the difference is, Your Honor, is that he
has very competent counsel right now. guiding
him, trying to explain to him what his rights
and obligations are because we don't want him
to get in trouble, Your Honor. We don't. And
to the best of our ability, we're trying to make
sure that that happens. So it's not where you
have this renegade loose cannon that's just doing
whatever he wants to do at this point. We want
to see an order that does provide guidance. I
actually like that framing for Mr. Keenan with
specifics. But I think we can negotiate a lot
of those specifics amongst ourselves because
responsible adults that know that they need to
enter into a transition can get those. They'll
be skeptical. I get that. But at the end of the
day... Two months in. I hear that, Your Honor.
But from day one, we suggested that we at least
get a protocol with respect to access to the
building and start turning over records. They
will tell you, we don't like the fact that we've
gotten what we've gotten or that we've gotten
it too late. Documents have been provided, Your
Honor. And in those instances where they are,
we have asked them to tell us what you don't
like about that. I'll give you an example. One
of the things that they'd asked for, I can't
remember exactly what it was, but they wanted
like a weekly report or something. Well, they
don't create weekly reports like that. And I
mentioned that even in my response, 542 doesn't
require that. It requires you to turn over a
record that's generated or that's made in the
ordinary course, but you don't have to make something
out of whole cloth. I agree, but doesn't that
just? illustrate the issue that on this go -forward
basis, Mr. Strom wants certain reports. Mr. Albert
doesn't create those reports. If Mr. Strom had
access to all the information, he could generate
those reports. He could ask the debtor's employees
down in Mexico to generate those reports. So
doesn't that just illustrate the problem? two
separate issues on that. One of them was with
respect to 542 and turning over records that
exist. The other is what I think you're pointing
to, which is we're entitled to access to those
books and records, and we make of it what we
will. My only point is, Your Honor, is that we've
gone in stages here. We had two separate orders
that we were addressing. We responded to both
of them separately. And with respect to the books
and records, what I've tried to do is say, okay,
look. put the corporate governance issue over
here for a second, and let's deal with this issue
of records because you know you have got to provide
copies of books and records. That's been very
clear. The court was very clear about that. And
we tried to do that. But for example, when I
talk about the fact that he doesn't create weekly
reports, it doesn't mean the reports don't have
the information. And in that particular case,
I think we were coming up on the end of May,
and the report would be a month -end report as
opposed to a weekly. So it's not that he's being
deliberately obstructionist with respect to that,
and to the extent that they think he is, I want
to know about it. I'll give you another example.
And maybe it was historically when everything
was going well for Mr. Albor, but maybe it's
just not now. I understand the point, Your Honor.
I do. Okay, let me try to get through this here.
So I did want to point out that from the outset,
Mr. Albor has been acting in good faith, guided
by Mexican counsel, to protect the company and
its assets for what he perceives as an illegitimate
takeover. He has consistently emphasized cooperation,
providing information under Section 542E, while
allowing the Mexican courts to adjudicate the
governance dispute caused by their conflicting
orders, Your Honor. I'm not even sure how you'd
want to wade into that. they made conflicting
orders, the same judge. And so the issues are
complex. The parties have obtained conflicting
ex -party orders and parole proceedings, and
even the debtors themselves shifted from lying
on their Mexican counsel to hiring a former Mexican
Supreme Court justice as an expert on Mexican
law, while Mr. Albor had to engage a leading
cross -border insolvency expert and co -author
of the Unicetral Model Law, reflecting just how
complex those issues are. The noteholders argued
that the March 28th resolutions legitimize their
actions, but those resolutions remain under challenge
in the tent civil court. And if declared invalid,
the debtors withdraw from the concursive market
till it collapse. But I get your point. That's
not where we are today. Moreover, the debtors
reliance on Mexican court orders is misleading.
Under Mexican law, these orders are not final.
They remain subject to appeal, revocation, and
constitutional challenges, which are the imparos.
And until those processes conclude, as Mr. Oskos
testified, they cannot be treated as binding
by this Court. Importantly, the Mexican Insolvency
Court lacks jurisdiction to decide the validity
of the March 28th resolutions. That issue is
probably before the 10th Civil Court. Thus, any
reference by the Mexican Insolvency Court to
those resolutions cannot bind the Court. Now,
I know Your Honor's saying, well, how are you
testifying about what the Mexican Court can do
or do not? That's precisely the point. I can't.
The Mexican courts can, but my Mexican counsel
are telling me emphatically that that's the issue.
And I simply raise it to once again explain how
difficult this can be. I would do all of the
debtors and all of the note holders' cases, Your
Honor, all of them. And one thing that I noticed
is that some of them were a little bit more on
point than others. I thought like Edisto, Bello,
those were... fairly helpful with respect to
corporate governance issues. But one thing I
noticed about those cases, Your Honor, is that
in each one of them, they do not have the situation
here where a foreign insolvency proceeding was
started, then the U .S. Bankruptcy was initiated
and there was a corporate governance dispute
regarding the ability to even go into the Bankruptcy
Court. Nortel is another good example where you
had, you know, the U .S. Bankruptcy Court had
issued rulings with respect to Nortel, an administration
was filed in the UK, and then you had a court
-appointed administrator that was taking actions.
And in that case, once again, as with all of
them that I saw, you had the U .S. bankruptcy
court was the first with respect to the insolvency
proceedings going. Here, the concursor was the
first. And you've heard scant anything about
the concursor mercantile. You don't even see
it referenced hardly in their filings. I would
suggest there's a reason for that, because that's
a difficult thing to get around, because none
of these cases are that scenario. But interestingly,
and this goes to my point of why we should work
on an order together, the Nortel court was dealing
with a lot of very complex issues, not just in
the UK, but worldwide. I think Nortel's like
a phone manufacturer. But what the court said
that I thought was interesting is with respect
to the stay violations, it ordered them to go
to mediation. And the court's... View of it was
it's just churning up and I'm paraphrasing right
now because I don't have a photographic memory
but basically what it's saying is you're gonna
go to mediation because If you guys are gonna
fight about every little thing that's going on
here without getting to a process that you can
work with It doesn't make any sense for anybody
So you guys go try to work some of this these
issues out. I'm not suggesting mediation here
I'm suggesting working together with respect
to a form of order that has the simple protections
that we're requiring or asking for to protect
his personal stuff. That's all I'm asking for.
And then the coercive stuff, because I think
you hit upon a good point with respect to the
orders. I'm getting a little bit out of, this
is probably as good a time as any. I don't think
your honor has the authority to be ordering people
to do X. You can punish people for not doing
X, but telling people you have to go do, you
have to sign documents or you have to do whatever.
I think that's problematic, and I think that
The easiest way to deal with that, or what I
would typically see, is that if you feel like
there's been a violation of the state, you'd
make those findings, and then there's an opportunity
to purge that contempt, right? That's at least
the normal way that I would see it. So whether
we do it that way, or whether we do it the way
Mr. Keenan suggests, which is providing a roadmap,
which I'm not hostile to, not, I think it gives
clear direction, because otherwise, I think you're
left with a very unclear issue of what is it
he's supposed to do. I'll give you a great example,
Your Honor. Let's look at the proposed order
in paragraph 4E. This is just an example. I'm
sure they'll fix it on their next round. But
what they want Mr. Albor to do, or to greet you,
is to send emails or similar communications informing
substance reasonably acceptable to CRO. to their
vendors, suppliers, and other business partners
or stakeholders as a CRO may reasonably designate
and copy the CRO in such persons as he designates
on such emails and communications. So my first
question is to say what? To do what? That's a
really open -ended thing. And so what I worry
about is an order like this, Your Honor, where
we haven't agreed to what those parameters are,
is simply, it's just a trap, Your Honor. And
I just don't think it's appropriate. But anyway,
so let me get back into here. So, you know, the
note holders have argued that they didn't violate
the stay because the precautionary impact, the
precautionary measures didn't impact their ability
to take control of these shares. You heard that
a little bit more today. But Mr. Oskos testified
that the trust is a Mexican warranty trust, there
is not a full transfer of ownership, and the
required default procedures weren't properly
followed. And even if the no -holders believe
that the Concurso Mercantile was improperly filed,
that did not excuse their obligation to respect
the precautionary measures, much like we're hearing
today, Your Honor. If there's a stay in place,
it's in place. The interesting thing in the Concurso
Mercantile that I find anyway is that unlike
here where you have an immediate stay, and you
know, we get these fire filings all the time
where you get in just to get the stay, just to
stop everything, to get your breathing room.
It's not that way in Mexico. There was a gap
between December 30th, 2024, and then January
28th. And during that time, just massive amounts
of documents have to be provided to the Concurso
Mercantile Court to ensure to the Concurso Mercantile
Court's satisfaction that it is a validly filed
debtor. It's a little bit different. And then
it issues the precautionary measures, and that's
what happened here, Your Honor. So I don't want
to lose sight of the fact that, you know, It's
called something different, but I think it has
a similar intent and it started there first and
so In my view when you talk about original sin
and why this is a little bit of a different situation
I'm not saying to say that the state doesn't
apply I think it requires some kit gloves with
respect to how to resolve this dispute between
these parties. There's obviously emotion, you
know to varying levels your honor But at least
from my perspective, as you know, I didn't know
these people before I got involved. And I try
to look at things objectively, too. I try to
look at how do we move forward and get to a position
where all parties are going to feel like justice
has been done, at least with respect to their
rights. They can disagree about a lot of things,
but having things imposed on them when they don't
have an ability to say anything back or to have
these open -ended provisions requiring them to
do things that don't say anything other than,
in my view, a trap is difficult. And while I
say while the debtors have been successful in
getting control the doors bank accounts locked,
Mr. Albor does acknowledge this reality. But
he does still remain willing to cooperate, providing
electronic records, and allow access to physical
records, so long as appropriate safeguards to
protect his personal and non -debtor records
are in there. And just trying to not go over
the same things twice. But let's talk about comedy
for a second, Your Honor. I think we're a little
bit beyond it, but I do want to talk about it
for just a minute. I heard it said on by Council,
and I can't remember which one at the moment,
but they said that we were demanding the comedy
be applied. We said in our papers, Your Honor,
that we acknowledge as we must. that comedy is
a doctrine that is something that the court can
consider, that you're not compelled to do anything.
We were clear about that. But what we said was
we believe these factors augur in favor of you
doing so. That's what we said. And it's up to
the court to decide what it wants to do at that
point. And the reason why, Your Honor, and I
think Mr. Oscoe's kind of exemplified... The
problem in his testimony, and you actually mentioned
it a little bit earlier when you talk about I
can enter any order I want, but what's the effect
of that? If we have an issue where there's a
question of whether your order is going to be
accepted in Mexico because of these issues, then
that causes a real problem for Mr. Albor, right?
Because Mexico courts say that this is not something
we have to listen to, but yet... If he subjected
himself to the personal jurisdiction of the court
here because of business in the United States
or whatever, he's caught between a civil and
caribidus. He's forced to comply and give up
rights that he might otherwise have. And so that
to me is something that just requires some kid
gloves and not simply just smashing him and saying,
you violated the stay. It's willful. And now
we're going to not only deal with damages, which
by the way, Your Honor, They're referring to
damages going back to when we don't have any
evidence of that They were gonna have to get
an investment banker. Anyway, are they claiming
that they were gonna have to give a dip loan
to protect their Pitch You know their pre -petition
debt anyway Some of us have been doing this a
long time. We know what roll -ups are We know
what they're gonna do to protect their stake
and a bankruptcy. They were gonna do that Anyway,
I haven't had a chance to take any discovery
about what these particular Charges were for
so I think it's a little bit premature and I
think I understood mr. Keenan at least to be
saying he wants a hearing later Maybe but if
we do that I need to take discovery with respect
to that just like we would in any other the issue
And that that would be all I would ask for there
But the one thing I did want to mention and I
think it was brought up by mr. Keenan and his
presentation is I think it is important to point
out the security agreements are governed by Mexican
law, right? And we had brought up the specific
language section 909 in the pledge agreement
that said, for all matters relating to the interpretation
and performances of this agreement, the parties
hereby expressly and irrevocably submit to the
applicable laws of Mexico and to the jurisdiction
of the competent courts of Mexico City and expressly
and irrevocably waive any other jurisdiction
that may correspond to them by virtue of their
respective present or future domiciles, the location
of their assets, or for any other reason. I think
that's pretty clear. agreement or the guarantee
agreement, I think it was an exhibit. I think
it was one of ours, Your Honor, and it might
have been a composite where it's probably behind
a sheet right behind the Mexican version or the
Spanish version. But if you don't have that,
Your Honor, we'll be happy to provide you with
that. Someone could just tell me what document
it is. When we get done there, I can get that
for you, Your Honor. So, Your Honor, this isn't
a question of the court validating foreign rights.
It's a matter of respecting the jurisdiction
of a sovereign court with primary and plenary
authority over domestic Mexican entity. And as
Mr. Alborz's expert, Mr. Oskos, has opined, Mexican
courts, not a New York law, choice of law provision,
and a no purchase agreement control the corporate
governance under lex societatis principle. I
don't remember what that means, but that's what
he said. Your Honor, the debtors argue in their
motions. that expedited relief was required because
of the threat of immediate and irreparable harm
to the marine animals. And you heard the testimony,
Mr. Strong and Wackstaff did testify that they
were taking care of their dolphins and feeding
or paying their employees. You've also heard
this tragic issue with respect to the dolphin
Samira under their watch. It may be, but they're
not getting, the vet is not communicating with
them. And that's an issue. I don't understand
that at all. Why that has to be an issue. To
me, I accept that Mr. Albor is concerned about
his business. He cares about animal welfare.
And in that event, differences have to be put
aside. And that vet needs to be communicating
directly with Mr. Strom. I don't understand that.
So, Your Honor, in the exhibits that you've got
today, and I believe it is... for the continued
hearing. This is just a point to it, Your Honor.
I think you go to tab K. If you look at tab K,
you'll see on the top, below it is the first
email you'll see from Robert Wagstaff to Guillermo
Sanchez. where he wants to talk at the earliest
convenience. And then you'll see below that there's
emails from Guillermo to Edwin and some other,
Kelly Fischbach and Eduardo with respect to the
report. And you'll also see in the Robert Waxhack
email to Guillermo Sanchez, you'll see some other
people. I don't know who they are, but Michael
Flinnit, Riveron and Steven, oh, that's Steven
Strom, okay. But in any event, you'll see their
direct communication between the Chief Veterinary
Officer and Mr. Wagstaff, the CRO. So. And that's
going to continue. That will have to continue.
We concede that point. Remember, Your Honor,
I'm trying to navigate some real hard issues
here to get practical resolution to this dispute.
That's really what I'm trying to do. But that
will have to continue. I will say that the only
thing I reference with respect to what happened
before is typically this chief veterinary officer
talks with the veterinary staff at the individual
parks and Edwin is supposedly, from what I understand,
in charge of those U .S. parks so he's involved
with those communications too. But going forward,
just as you see here, there's communication going
on with Mr. Wagstaff and I will represent it
well because it has to continue, Your Honor.
I'm just trying to speed this up. So in context,
Your Honor, and I think this is more with respect
to dealing with these issues of trying to sanction
or be punitive to Mr. Albor. Number one, he has
ensured that his employees have been paid throughout
all the parks in Mexico, which there are a lot,
as you've heard. He has been making sure his
marine animals have been paid. None have died.
And he's cooperated with the debtors in providing
documents and access consistent with his obligations
under 542e and is committed to continuing to
do so. And I will be pushing him to do that,
your honor. And to the extent document deficiency
exists, I would hope and expect that council
would let me know so that I can intervene and
do something about that. And I'll give you a
perfect example. With respect to this issue,
with respect to the blocking of the chief veterinary
officer, I got an email last week. from debtor's
council saying that he's continuing to block
the chief attorney officer from talking from
where we're on staff. I immediately wrote back
and said, who tried to contact him? Because when
I talked to Mr. Albor and said, what are you
doing? You can imagine what I did, Your Honor.
You don't have to have a lot of imagination.
I immediately go to my client like, what are
you doing? And he was emphatic that he is talking
to the chief veterinary officer. The chief veterinary
officer is talking through his reports and also
with respect to Mr. Gonzalez with the individual
parks. That's always the way it's been done.
Our understanding is Mr. Gonzalez works for the
River on People. So whatever's happening at that
level, I don't know, but I can tell you the response
from Mr. Albuquerque. So I said, when was the
contact attempted? What was said? Who was it
that did it so that I can address it? Because
if somebody is doing that with respect to Mr.
Albor or his staff anywhere down the line, we
needed to stop it. I did not get a response to
that, Your Honor. And I tried to explain the
reason why I wanted that information was because
I'm trying to deal with issues as they come up
because that's my job. And I don't think playing
gotcha helps anybody. And that's how I feel about
these sort of things. If you've got a problem,
or there's non -compliance, or I find out that
my client is telling me something, but I'm hearing
that something else is going on, we're going
to have a Come to Jesus meeting. We have to.
But I've got to know what's going on. I can't
act on it if I don't know about it. So I'm just
pointing out that that has got to be the process
going forward. If there's an issue, I need to
know about it so that I can address it. Because
Mr. Albor has committed to me. that he wants
to try to work to these issues cooperatively
as best he can, but also preserve his rights,
which brings us to the issue of certainly the
stay. Now, I would argue, Your Honor, you've
already heard that they want him to withdraw
his filings. I don't think that's appropriate.
I do think he should be able to defend himself
from actions where they're taking this order
and forcing on him to do things, and it's not
fair that he can't defend himself. So I would
say, Your Honor, There's nothing before you or
there's nothing in a motion for stay -relief
that you're gonna see that's any different from
what you've seen already and To the extent that
that your honor is willing to entertain it I
would make an or a tennis motion to allow him
to at least proceed with his personal His personal
and paros those issues with respect to his constitutional
rights I'm not suggesting that he has the right
to do anything for controller Dora Dolphin once
they take control But I do think you should be
able to defend himself From those particular
actions because otherwise he just sit there and
getting pummeled and he's not allowed to do anything
in return And I don't think that's really fair
To see And also with respect to mr. Albor status,
okay I think it's kind of important to point
out they refer to him as being like a point zero
zero three interest holder of control adored
often But there's two things I want to point
out about that number one Mr. Albor was not acting
as a point zero zero three minority shareholder
with his actions He was acting as a CEO of a
company with a board that he's responsible to
so Number one number two with respect to his
status all the way up at the TDC parent level
where you heard you actually heard Council talk
about the other shareholders that they have fifty
seven percent. Mr. Albor is the single largest
shareholder at the TTC level and remains so today
So it's not like he has no interest in the success
of these particular operations. The issue has
always been one of control and that he was being
forced to seek control. And as we talked about,
I think, in one of the earlier hearings, Your
Honor, the issue for him was that late into the
game with respect to the negotiations, they demanded
that he have to resign or go away from management.
He took it to the board. The board has questions.
And at that point in what he tells me, communication
ceased. So he didn't even give them a no. He
said that the board had questions about that,
had an issue with respect to the corporate governance
and needed to talk through it further. But I
think the financials were pretty much agreed
to. Although there were some blanks. I understand
there were blanks on terms, interest rates, things
like that. But a lot of that had gotten there.
So I think it's important to understand that
context, Your Honor, and I think... I'm not in
any way suggesting that the note holders don't
have a right to get paid back their money. I
represent creditors all the time, okay? And I'm
not suggesting that they did not try on some
level to get compliance with the terms that they
wanted. I'm simply stating a fact that they didn't
get there. And ascribing blame one way or the
other to he said, she said, I don't think it's
helpful at this point, but I wanted to give context
for the intent in his mind, which I will concede
the state doesn't care about your intent. I know
the law on that, Your Honor. That's not really
what this issue has been about and the narrow
lane that I've been trying to show the court
because I realize the complexities and I'm trying
to get us to a point where we can get an order
that we can all live with. And I think the easiest
way to do that at this point is if we have an
opportunity to take the order and we can put
in some provisions, see where we go with that.
And when we disagree, we give it to Your Honor
as a competing order. At least that's what I
typically do in Florida. And then you have the
ability to put in what you believe is appropriate.
I'm just going to shift to my just responses
about some of the things that I heard in the
other arguments. There was a comment made by
Gettys Council, for example, about the Barajas
Declaration. You've heard of that a lot. There's
this admission by Mr. Barajas that the April
4th order was effective. In that very same declaration,
Your Honor. It says that the April 10th, what
they refer to the April 11th, was effective too
at that point. They were both ex parte orders
obtained from the same court, and he was simply
stating that what was at play at that time was
that both of them were effective. So it's a little,
you know, I don't want to say disingenuous, but
it's not quite the full story to say that we
conceded that the April 4th order was effective.
Both of them were. So that's that. I will agree
that we have not asked this court to determine
anything about Mexican law. In fact, we've been
very clear. We think the Mexican courts need
to deal with Mexican law. Oh, and there's just
an interesting thing with respect to the NPA
had some section in it that said that there was
a lease until 2030. We don't have it in the evidence
before us. Why that is? I could explain to you
at least what's been told to me, but I will tell
you at the end that didn't happen. And there
was a, and because of the fact that they were
in such financial distress. So what happened
was the leases, the two leases, and I have provided
them to debtors council both in Spanish and English.
I did not provide them to you because evidence
is closed. But they're very clear that the termination
ended in December of 2024 with no renewals, no
anything like that. There may be an issue with
respect to whether there is some kind of holdover
tenancy or something like that under Kintana
Rood law. But I don't think there's any law anywhere
that says you can hold over and not pay rent.
And no rent's been paid. So that is an issue
that will have to be addressed to the extent
that they want to stay in that building or do
whatever. And I'm not even sure that's available.
I'm just simply pointing out the fact that those
leases are pretty clear on that point. And there
was a comment made that access was flatly rejected.
Not true, Your Honor. We have said over and over
again, both in our papers, both in our communications
with counsel, that we would allow for supervised
access such that Mr. Albor's personal documents
are protected. We'd also talked about reasonable
hours, you know, because we're going to need
to be there too, because it is not a possessor
interest of the debtor. That doesn't mean the
books and records aren't. What I'm saying is
if you want to get into that space to look at
that stuff, just like with any other issue with
respect to books and records that you want to
copy or access and view, that you do under 2004,
for example, you're going to have to figure out
when you're going to do that. You don't just
show up any time. But isn't it kind of a daily
need? Yeah, it could be, Your Honor, but people
will be there. But we need to at least spell
that out during working hours. That would work,
right? But we can put that in. And I would like
the opportunity to do that. I'm just reading
through real quick because some of the stuff
I've already talked about. Oh, there was a comment
made that when they came into the case, that
they had no records and no books. That was the
definitive statement they said. But the testimony
of Mr. Albor, and in fact, Mr. Strom and Mr.
Wagstaff at their depositions, is that there
are books and records at the actual sites where
the dolphins are. They say they don't know what
they don't know, that there might be other stuff.
But they certainly have some records. So to say
that they have no records is just not true, and
it's belied by the evidence before the court.
And we're trying to provide more. We already
talked about the issues that we have with the
proposed order. Yeah, the other issue your honor
is look I think I think it behooves everyone
especially with the high burn rate of this case
Is that if we can? If we can get a process together
where we can agree on the majority of the provisions
that we have in there And then maybe come to
the court for those that don't it makes a lot
less likely that that's the kind of order that
would be appealed and cause Costs to continue
and going forward people don't get to appeal
what they agree to So I think giving them at
least an opportunity For the parties to try to
come up with something and allow you to call
the balls and strikes on what we don't I think
is a probably pragmatic approach not suggesting
what you should or shouldn't do I'm just simply
saying that's something that I would offer might
be a way to do it Because right now the order
that at least the way it's currently drafted
There's no way he doesn't violate it on day one
because it's just vague and it requires him to
do things I don't think the court has the authority
to do Almost done. And just by way of response,
Mr. Keenan gave some explanation about what he
believes that the security documents say, what
they do. Those documents, I think, speak for
themselves, number one. And I think that we've
already had testimony with respect to what was
at issue in this case. And that was the issues
with respect to the Mexican law. You do not have
before you, as you've rightly pointed out, the
dispute over what happened or whether it was
right or wrong that hasn't been teed up before
you. So while I understand from his perspective,
he wants to tell you what that is, I don't think
it's evidentiary in basis. Oh, and, you know,
the issue, as I talked about with respect to
the bank accounts, I think I mentioned it earlier,
we don't really know. I would like to see that.
I imagine it's going to be an issue that's going
to come up to you sooner or later, but it's not
before you now. You just have pronouncements
without any evidence to back it up, and evidence
closed. So I think it will get teed up for you
at some point. I just don't think it's in front
of you today. And I would just caution the court
not to... make assumptions about what we haven't
seen in evidence because there may be an explanation
for it. You'll remember with respect to the $47
,000 Mr. Albor had explained that that was at
the end of the month and they'd already paid
all the bills and things that they needed to
do. Now the court will take that testimony for
what it wants with respect to the strength of
that testimony. I'm simply saying that's an example
where there might be an explanation that he can
provide. I think I talked about the issue with
respect to damages on with respect to any sanctions
and I think with that your honor, I think I'm
done with my presentation. Thank you. Good afternoon,
your honor. For the record, Paul Keenan from
Baker McKenzie on behalf of the note holders.
I'd just like to make three points in rebuttal.
It'll be very brief, your honor. First, as a
former naval officer, I was delighted by the
analogy to Skilla and Corrivedas. And so I'd
like to illustrate it a bit. That's right. On
the one hand, let's pretend Skilla is the Mexican
legal system. On the other hand, Corrivedas is
the U .S. legal system. The safe passage through
the Skilla and Corrivedas for Mr. Albor is to
comply with the orders in Mexico. coming out
of their legal system and to comply with bankruptcy
code and hopefully soon the orders coming out
of the U .S. legal system. We have an April 4th
order in Mexico that removes Mr. Albor and others
as directors and officers. It installs Mr. Strong
and it includes a litany of injunctions against
Mr. Albor with respect to the company. That is
the law of the land. as we sit here today in
Mexico, and we have nothing less than a Supreme
Court justice from Mexico testify as much. Second,
with regard to the concursive mercantile, it's
been dismissed. The concursive mercantile has
been dismissed. Now, Mr. Albor may not be happy
that it was dismissed. He may continue to appeal
the dismissal. But as we stand here now, the
concursive has been dismissed. And I don't think
that this court, with all due respect, should
supplant its judgment for that of the Mexican
bankruptcy court as to whether or not it should
have been dismissed. Second, Mr. Alboros' counsel
is arguing that they want nothing more than to
protect the business and care about the... Conclusive
that mr. Albor was receiving reports during the
last two months about the conditions of the animals
in Panama City And that was not being passed
on to river With regard to the business financially
You know, it was just represented that mr. Albor
is arranging for the payment of the employees
in Mexico So let's take a back step back and
look at this 12 parks in Mexico 1600 employees
1 .7 million visitors a year. And the bank accounts
are empty. Yet, he's still making payroll. How
is this happening? Third, and this is the most
important takeaway, I think, because it gets
lost in all the depositions. It gets lost in
hours and hours of testimony and hearings. Mr.
Albor... through his counsel is attempting to
negotiate the terms of his compliance with the
automatic stay. But Mr. Albor is not a director
of any of the debtors. He's been removed. Mr.
Albor is not an officer of any of the directors.
He's been removed. Mr. Albor is not even an employee
of any of the debtors. He's been removed. Mr.
Albor is a 38 % shareholder of the ultimate top
coat. And so what we have here this morning,
your honor, is we have someone who is a minority
shareholder, who's a former CEO and director
trying to tell this court how the automatic stay
should apply to him. We believe that's totally
inappropriate and quite frankly, it's proof that
we need an order that has maximum coercive effect
because we still have somebody. who doesn't believe
that the automatic stay applies to him as a former
director, officer, former employee. Thank you.
Thank you. Thank you, Your Honor. Again, Sean
Greacher. It cannot be the case, and it is not
the law, that a bankruptcy court must stand by
while a party engages in a collateral attack
on the automatic stay of the court's orders.
Not in a U .S. federal court, not in a state
court, and not in a foreign court. It's wrong,
and it's dangerous. Mr. Albor has shown open
contempt for the note purchase agreement, for
the cash collateral order, for the authority
of this court. He's tried to sell assets. He's
ignored the court's orders. He's interfered with
communications with employees, and the Mexican
courts have confirmed he has no right to access
the bank accounts. Those rights belong to Mr.
Strom. So how would Mr. Albor run the business,
feed the animals, pay the employees? He can't.
He has no access to cash. The banks have been
ordered to give Mr. Strom access and to cut off
Mr. Albor. Testimony was that $47 ,000 was at
a low point last month. Guess what? We just got
a report at the end of this past week. How much
money is in the account? About $47 ,000. It was
not a low point or I guess there's another low
point. Yet Mr. Albor continues to interfere with
communications just to serve Mr. Albor's personal
legal campaign. And it's company -wide and it's
completely inappropriate. So, Your Honor, Mr.
Albor says that he wants to assist, or his counsel
says he wants to assist with a transition, a
smooth transition of operations. Reminded of
the Chinese proverb, talk doesn't cook rice.
Your Honor, we have not been able to proceed
for a significant amount of time. because Mr.
Albor is continuing to interfere. His testimony
was absolutely false on this point on the stand.
He testified that he would provide access to
records. Also false. When Riveron followed up
with specific requests on May 23rd, an email
to all of the executives saying, let's discuss,
consistent with Mr. Albor's testimony, that he's
willing to communicate with us. Let's pick a
time. We will come to Cancun. We'll have that
discussion. We want the following list of information
to be topics for discussion. Was there any response?
No. There was no response whatsoever. In fact,
what happened after that was that Mr. Albor or
somebody on behalf of Controlador Dolphin once
again shut off Riveron's ability to communicate
with the Dolphin Company employees. He went the
opposite direction. Doesn't sound like somebody
who's ready for a smooth transition. And it's
only now. when the bank accounts have been shut
down, and he realizes that he does not have the
ability to continue to operate that, he's suggesting
this great sort of broad gesture that he's going
to turn things over. Well, Your Honor, we don't
believe it. It's not been the case for the past
two months. If the past two months tell us anything,
it's that he's going to continue to fight. And
in fact, he is. Friday night, he sends an email
to the board members in Jamaica saying, I have
removed the independent director. Mr. Burroughs
and the company better not spend any more money
fighting me over this. That was the email. It's
in the records. And yes, Mr. Moon said, there
are now conversations with the chief veterinary
officer. Those conversations have happened after
two months, two dead dolphins, millions of dollars
of costs. Too little, too late, Your Honor. So
yes, we're happy to have a discussion about the
terms of the order and to ensure that the terms
of the order are consistent with what Your Honor
can do, but to suggest that Mr. Albor is going
to have a change of heart in how he's intending
to proceed here, we don't buy it, Your Honor.
Mr. Albor's campaign of active interference is
an ongoing violation of the stay, and it needs
to stop. I'll say just a couple more things.
What happens when the debtors get control here?
The debtors will operate this business in the
ordinary course. The debtors will comply with
the dip. They'll comply with the cash collateral
orders. They'll file schedules. They'll file
sofas. They'll report assets and liabilities
publicly. They'll file operating reports. They'll
file motions when necessary to take actions outside
the ordinary course and will provide notice to
all parties in interest, including Mr. Al Gore.
You know, that's how Chapter 11 works. And counsel
argues that Mr. Albor is willing to agree to
terms by which there is this smooth transition
of operations. As Mr. Keenan said, I presume
that he's in the driver's seat. He's not. The
fiduciaries of this company are Mr. Strom and
Mr. Wagstaff. The Bankruptcy Court provides them
powerful tools. It provides for global reorganizations.
It provides for assistance that could help us
resolve the serious challenges here. We have
lenders, thankfully, that are willing to fund
that process. The price of those tools is transparency,
oversight, and due process. That's the deal.
It's a deal that protects everyone, including
Mr. Albor. But it only works if the fiduciaries
who are entitled to operate this business, consistent
with the terms of the Mexican orders, have the
authority and have the information to do so.
And Mr. Albor's suggestion that as a deposed
CEO and a minority shareholder that he could
be allowed to continue to operate or make decisions
or dictate the terms and the timing and the extent
of access to information threatens the integrity
of the process. Your honor, it jeopardizes our
ability to carry out a responsible and coherent
restructuring and that's why we're asking your
honor to act. with respect to violation of the
stay and the access to documents under 542E.
But as I've already expressed, I have concerns
over this particular order. And I'm willing to
enter an order because, as I understand from
the testimony, I think the experts are in agreement
that the current state of play in the Mexican
courts is that Mr. Strom and Mr. Wagstaff are
the current CRO. I understand that it's not a
final order and that the matters can still be
contested, but this is the current state of play.
And to the extent I think of comedy, I'm going
to give recognition of the current state of play
in Mexico. certain of Mr. Albor's actions have
clearly violated the stay, including blocking
access to the bank accounts, blocking access
to the headquarters. and books and records there
that are, that belong to Controlladora Dolphin,
obviously not his personal records. Directing
employees of the company not to communicate with
Mr. Strom and Mr. Wax Staff. Quite frankly not
permitting Mr. Wagstaff and Mr. Strom to run
the operations on a daily basis. I say all that
again recognizing that Mr. Albor believes he
has a legitimate corporate governance dispute.
That particular dispute hasn't been brought in
front of me, could have been by a motion to dismiss
the case, but Mr. Albor has chosen to exercise
his remedies in Mexico. I don't have a judgment
on that. I simply recognize that. And therefore,
the stay is in effect, as I believe now Mr. Albor
recognizes, based on representations of counsel.
I do have concerns as I expressed about this
particular order and my authority to order Mr.
Albor to take affirmative action versus a recognition
of the violations of the stay and listing of
the ways in which this day is being violated
and quite frankly it's probably not possible
to list them all so I'm willing to enter a form
of order including with respect to a civil sanction
in the event that Mr. Albor fails to comply with
the order that I'm going to enter and damages,
if any, will be left for another day. But I'm
also willing to give the parties 48 hours to
submit an agreed form of order. That's a short
period of time, short on purpose. It's to focus
the parties on coming to an agreement if there
can be one. I don't necessarily view permitting
Mr. Albor to some ability to influence the order
as having him negotiate the automatic stay. I
do not view this as a negotiation of the automatic
stay. But this is, in my experience, a somewhat
unprecedented situation. And I think cooperation
on the transition could be helpful. But it's
48 hours. And if there's no agreement, I'll enter
a form of order. I need to see the debtor's order
obviously revamped. And I'd consider an alternative
form of order. I'll certainly review it. But
as I indicated last week, I wanted authority
for my ability to enter a form of relief that
I was going to be requested to enter, and at
least at this point, I don't have that authority
for the way the current proposed form of order
is structured. Let me say this, too. It's only
been a week since we had our hearing, I believe,
and we lost a dolphin. And I don't want my delay
to create that situation again. Obviously, it
didn't happen overnight. Because the deterioration
of the facilities, the deterioration of the health
of an eight -year -old dolphin didn't happen
overnight. But Samira, to the extent we could
have saved her. because of communication. It's
on all of us. So 48 hours and that's it. or disagreement
before that 48 hour period.