WEBVTT 00:00:07.339 --> 00:00:14.720 Please be seated. Good afternoon, Your Honor. 00:00:15.099 --> 00:00:17.660 Sean Greach from Yonkanawe on behalf of the debtors. 00:00:17.980 --> 00:00:22.780 Your Honor, just two matters that are going forward 00:00:22.780 --> 00:00:26.379 today. One is a status conference and then the 00:00:26.379 --> 00:00:30.940 other is a further in -arm dip hearing. Start 00:00:30.940 --> 00:00:34.179 with status if I could. I'd like to give an update 00:00:34.179 --> 00:00:39.320 first on animal welfare. I think positive news. 00:00:39.500 --> 00:00:41.960 At the beginning of this month, the debtors completed 00:00:41.960 --> 00:00:44.100 the move of the dolphins from the Gulf World 00:00:44.100 --> 00:00:47.039 Marine Park to various other locations. Gulf 00:00:47.039 --> 00:00:49.579 World housed two varieties of dolphins, and one 00:00:49.579 --> 00:00:51.020 of the reasons why I like doing bankruptcy is 00:00:51.020 --> 00:00:52.759 you get to learn lots of things that you never 00:00:52.759 --> 00:00:55.780 thought you would. There are two types of dolphins 00:00:55.780 --> 00:00:58.780 that Gulf World housed. One is the bottlenose 00:00:58.780 --> 00:01:00.960 dolphin. That's your terciops truncatus, your 00:01:00.960 --> 00:01:03.619 honor. And the other is the more rare rough -toothed 00:01:03.619 --> 00:01:07.129 dolphin, which is the stenobrenadensis. So there 00:01:07.129 --> 00:01:09.269 may only be one other aquarium in the U .S. that 00:01:09.269 --> 00:01:12.109 presently houses the Stenos, so we coordinated 00:01:12.109 --> 00:01:14.590 with that facility, the Clearwater Marine Aquarium, 00:01:14.730 --> 00:01:16.989 to get the Dettors Forest Stenos to that facility. 00:01:17.989 --> 00:01:20.090 The Bottlenose Dolphins were rehomed in Marine 00:01:20.090 --> 00:01:22.250 Land in St. Augustine and the Dolphin Connection 00:01:22.250 --> 00:01:25.120 in the Florida Keys. All reports are that all 00:01:25.120 --> 00:01:27.060 the animals are acclimating well to their new 00:01:27.060 --> 00:01:29.659 locations. I need to say this is a challenging 00:01:29.659 --> 00:01:32.480 process. It involved numerous facilities, staff 00:01:32.480 --> 00:01:35.420 and vets from numerous facilities who made sure 00:01:35.420 --> 00:01:37.760 that the animals were kept very safe every step 00:01:37.760 --> 00:01:40.379 of the way. We had universities assisting with 00:01:40.379 --> 00:01:43.870 fast tracking, animal health screening. We had 00:01:43.870 --> 00:01:47.469 federal regulatory agencies helping to fast track 00:01:47.469 --> 00:01:50.269 and give emergency waivers to move the dolphins. 00:01:50.950 --> 00:01:52.890 And we had state and local authorities in Florida 00:01:52.890 --> 00:01:55.489 who the debtor team worked with on a daily basis 00:01:55.489 --> 00:01:57.890 as issues came to our attention and helped us 00:01:57.890 --> 00:02:00.569 facilitate these transfers. So this was a significant 00:02:00.569 --> 00:02:04.430 undertaking and I didn't want to make that. Turning 00:02:04.430 --> 00:02:08.889 then to the first matter on the agenda, which 00:02:08.889 --> 00:02:11.199 is the status comments regarding. Your Honor's 00:02:11.199 --> 00:02:14.439 order enforcing the automatic stay. Your Honor 00:02:14.439 --> 00:02:17.240 entered that order on June 5th. We're back here, 00:02:17.319 --> 00:02:18.979 Your Honor, to provide an update and connection 00:02:18.979 --> 00:02:22.759 with that order. We did file on Monday a report 00:02:22.759 --> 00:02:26.740 from Mr. Wagstaff. It outlines some developments 00:02:26.740 --> 00:02:30.460 which in our view are concerning. And it highlights 00:02:30.460 --> 00:02:33.000 areas where Mr. Albor is continuing to interfere 00:02:33.000 --> 00:02:37.620 with the debtor's operations. The report focused 00:02:37.620 --> 00:02:40.569 on really three main categories. One is... Interference 00:02:40.569 --> 00:02:42.750 with financial operations, second is interference 00:02:42.750 --> 00:02:46.129 with access to records, and third is ongoing 00:02:46.129 --> 00:02:48.449 legal actions in violation of Your Honor's order. 00:02:49.789 --> 00:02:52.310 So first, interference with the financial operations. 00:02:52.629 --> 00:02:55.030 Your Honor may recall at the hearing on the motion 00:02:55.030 --> 00:02:57.150 to enforce the stay, we noted that Mr. Albor 00:02:57.150 --> 00:03:00.349 had reported the debtors among all of their approximately 00:03:00.349 --> 00:03:03.069 40 bank accounts had roughly $47 ,000 in the 00:03:03.069 --> 00:03:05.849 bank. And this struck us as remarkable given. 00:03:06.879 --> 00:03:09.800 given and really despite Mr. Albor's sworn testimony 00:03:09.800 --> 00:03:11.919 that it was simply a low point as a result of 00:03:11.919 --> 00:03:15.060 various costs that need to be paid and the park 00:03:15.060 --> 00:03:17.000 revenues from the company's busy season were 00:03:17.000 --> 00:03:20.379 due to come in. We discovered after finally being 00:03:20.379 --> 00:03:23.039 granted access to the employees and the financial 00:03:23.039 --> 00:03:26.219 records that at some point after the May 21st 00:03:26.219 --> 00:03:29.169 hearing on the state violation motion. Mr. Albor 00:03:29.169 --> 00:03:31.729 apparently went to a store, purchased a number 00:03:31.729 --> 00:03:34.469 of point of service credit card scanning devices, 00:03:34.990 --> 00:03:37.210 and used those devices to reroute all of the 00:03:37.210 --> 00:03:39.449 Mexican park revenues into a non -better company 00:03:39.449 --> 00:03:42.710 by the name of Proyectos Ejecutivos Sostentibles, 00:03:43.250 --> 00:03:46.810 called PES. Mr. Albor apparently directed the 00:03:46.810 --> 00:03:49.530 company's legal counsel, Ms. Esteban, to create 00:03:49.530 --> 00:03:52.620 a backdated agreement. between Controladora Dolphin 00:03:52.620 --> 00:03:55.319 and PES whereby Controladora would essentially 00:03:55.319 --> 00:03:57.759 hand over operations of the Mexican parks and 00:03:57.759 --> 00:04:00.840 all Mexican park revenues to PES and PES would 00:04:00.840 --> 00:04:03.180 in addition receive some additional consideration 00:04:03.180 --> 00:04:05.680 from Controladora Dolphin. I think we found today 00:04:05.680 --> 00:04:09.139 there was also a backdated lease agreement that 00:04:09.139 --> 00:04:12.000 Mr. Albor was negotiating in connection with 00:04:12.000 --> 00:04:15.770 that transaction. We also have discovered, Your 00:04:15.770 --> 00:04:17.829 Honor, Mr. Albor had been directing the Caribbean 00:04:17.829 --> 00:04:19.889 affiliates to circumvent the debtor bank accounts 00:04:19.889 --> 00:04:23.189 with respect to funds transferred upstream from 00:04:23.189 --> 00:04:26.089 the Caribbean affiliates. Those affiliates funded 00:04:26.089 --> 00:04:28.769 cash into an account held by Elysium Properties 00:04:28.769 --> 00:04:31.750 Investment. We learned at Mr. Albor's deposition 00:04:31.750 --> 00:04:34.689 back in May that Elysium Properties was a company 00:04:34.689 --> 00:04:37.230 that Mr. Albor incorporated in Delaware about 00:04:37.230 --> 00:04:40.250 10 years ago. and that it is a completely Albor 00:04:40.250 --> 00:04:43.209 family -owned entity with Mr. Albor as its only 00:04:43.209 --> 00:04:46.649 member. Mr. Albor insisted at his deposition 00:04:46.649 --> 00:04:48.589 that Elysium did no business with the Dolphin 00:04:48.589 --> 00:04:50.550 Company and had nothing to do with the Dolphin 00:04:50.550 --> 00:04:53.009 Company at all. Our access to the bank records 00:04:53.009 --> 00:04:56.050 shows that was not accurate. Exhibit F to Mr. 00:04:56.209 --> 00:04:59.990 Wagstaff's report demonstrates over $263 ,000 00:04:59.990 --> 00:05:02.889 being transferred from just two of the company's 00:05:02.889 --> 00:05:05.329 Caribbean affiliates to Elysium in just the month 00:05:05.329 --> 00:05:10.139 of May. 15 ,000 May 1, 12 ,000 May 6, over 55 00:05:10.139 --> 00:05:16.000 ,000 May 7, 23 ,000 on May 9, 78 ,000 May 13, 00:05:16.240 --> 00:05:21.120 over 20 ,000 May 23, 50 ,000 on May 28, and over 00:05:21.120 --> 00:05:24.959 10 ,000 on May 30. So RiverOn has taken steps 00:05:24.959 --> 00:05:27.660 necessary to stop this ongoing diversion of the 00:05:27.660 --> 00:05:29.779 estate's revenues in Mexico. We're doing what 00:05:29.779 --> 00:05:31.819 we can to make sure that similar diversions of 00:05:31.819 --> 00:05:33.720 revenues are not taking place in connection with 00:05:33.720 --> 00:05:36.500 the other parks. Riveron has begun the process 00:05:36.500 --> 00:05:39.839 of going back through the bank records to find 00:05:39.839 --> 00:05:43.259 out where the money from PES has gone. What we 00:05:43.259 --> 00:05:45.100 found is that the funds diverted to PES were 00:05:45.100 --> 00:05:47.259 used to pay, for example, Mr. Albor's personal 00:05:47.259 --> 00:05:50.000 legal counsel, Cervantes Diaz Gutierrez. That's 00:05:50.000 --> 00:05:52.259 shown in Exhibit B to Mr. Aguagstaff's report. 00:05:53.199 --> 00:05:55.540 The bank records from the Caribbean parks demonstrate 00:05:55.540 --> 00:05:59.329 some irregularities as well. One example being 00:05:59.329 --> 00:06:01.649 a payment made to Mr. Harris -Caston, who you 00:06:01.649 --> 00:06:04.110 may remember was here in court on May 21, sitting 00:06:04.110 --> 00:06:06.370 right next to Mr. Albor as his personal attorney. 00:06:07.250 --> 00:06:10.209 There will be more, we suspect, as Riveron continues 00:06:10.209 --> 00:06:12.970 to peel this onion. Just this morning, as I mentioned, 00:06:13.189 --> 00:06:15.810 we found out about this lease agreement that 00:06:15.810 --> 00:06:19.910 was apparently signed and backdated. And Riveron 00:06:19.910 --> 00:06:22.850 is working feverishly to put together a reliable 00:06:22.850 --> 00:06:25.550 cash flow budget and make sure operations remain 00:06:25.550 --> 00:06:28.899 steady. Your honor, Mr. Albor has not provided 00:06:28.899 --> 00:06:31.199 any information to assist us. The only thing 00:06:31.199 --> 00:06:33.279 Mr. Albor has done in connection with addressing 00:06:33.279 --> 00:06:35.339 his interference with the financial operations 00:06:35.339 --> 00:06:37.819 is ask for debtor employees to provide information 00:06:37.819 --> 00:06:41.079 regarding PES to Rivron. But even there, he suggested 00:06:41.079 --> 00:06:42.939 that cooperation should be conditional, only 00:06:42.939 --> 00:06:44.600 to the extent the parties are released from any 00:06:44.600 --> 00:06:47.939 liability. We attached it to the report exhibit 00:06:47.939 --> 00:06:51.399 C from Mr. Albor. Your honor, this is slow progress 00:06:51.399 --> 00:06:54.069 in addressing Mr. Albor's misconduct. It's multiplied 00:06:54.069 --> 00:06:56.410 the costs to the debtors in addressing this PES 00:06:56.410 --> 00:06:58.949 scheme. And as I mentioned, we've gotten absolutely 00:06:58.949 --> 00:07:01.269 no information regarding the Caribbean Park funds 00:07:01.269 --> 00:07:03.670 diverted to Elysium, where those funds went, 00:07:03.970 --> 00:07:06.129 why they went there, and when we should expect 00:07:06.129 --> 00:07:08.709 them back. This has definitely put the debtors 00:07:08.709 --> 00:07:12.430 in a tough position. We were forced to scramble 00:07:12.430 --> 00:07:14.990 at the end of last week to make sure that there 00:07:14.990 --> 00:07:18.009 were sufficient funds available in the company 00:07:18.009 --> 00:07:20.329 accounts to pay payroll, which we did manage 00:07:20.329 --> 00:07:24.860 to do. So that's interference with financial 00:07:24.860 --> 00:07:28.540 information and assets. Interference with access 00:07:28.540 --> 00:07:31.720 to records. Mr. Wagstaff's report also outlines 00:07:31.720 --> 00:07:34.199 the pattern of interference, both overt and covert, 00:07:34.319 --> 00:07:36.600 with respect to Riveron's efforts to obtain the 00:07:36.600 --> 00:07:38.639 necessary records to operate the business, both 00:07:38.639 --> 00:07:41.360 in the ordinary course and in the manner required 00:07:41.360 --> 00:07:44.220 of a debtor in possession. It seems as though 00:07:44.220 --> 00:07:46.959 every day progress is marred by some distraction 00:07:46.959 --> 00:07:49.759 or delay tactic. Fortunately, Riveron has worked 00:07:49.759 --> 00:07:51.920 closely with key debtor corporate employees and 00:07:51.920 --> 00:07:53.660 developed a positive, trusting relationship with 00:07:53.660 --> 00:07:56.139 them, which has allowed the debtors to make progress 00:07:56.139 --> 00:07:58.540 in many areas. One area, however, where it's 00:07:58.540 --> 00:08:01.660 notably not been the case is in the legal group. 00:08:02.500 --> 00:08:05.680 As noted in Mr. Wagstaff's declaration, on Saturday, 00:08:05.839 --> 00:08:09.120 Mr. Albor sent his personal driver, who we discovered 00:08:09.120 --> 00:08:11.660 is on the debtor's payroll, to go to the headquarters 00:08:11.660 --> 00:08:13.620 building and attempt to change the locks for 00:08:13.620 --> 00:08:16.420 the legal department. Similarly, the company's 00:08:16.420 --> 00:08:18.620 incumbent in -house counsel, Ms. Esteban, has 00:08:18.620 --> 00:08:20.560 not willingly cooperated with any request of 00:08:20.560 --> 00:08:22.939 her. In fact, Riveron learned that the debtor's 00:08:22.939 --> 00:08:25.019 contract files are located in a locked room in 00:08:25.019 --> 00:08:27.379 the headquarters, normally accessible only by 00:08:27.379 --> 00:08:29.579 Ms. Esteban with the use of her fingerprint. 00:08:30.639 --> 00:08:33.039 Exhibit G to the report is an email sent to Ms. 00:08:33.179 --> 00:08:35.460 Esteban seeking her cooperation in accessing 00:08:35.460 --> 00:08:39.570 the contract files. After not getting a response 00:08:39.570 --> 00:08:42.029 to this, I emailed Mr. Albor's counsel on Friday 00:08:42.029 --> 00:08:43.970 last week to try to resolve this and let him 00:08:43.970 --> 00:08:46.169 know, absent cooperation, Riveron would be forced 00:08:46.169 --> 00:08:48.730 to gain access to that building, that area of 00:08:48.730 --> 00:08:50.269 the building by circumventing the fingerprint 00:08:50.269 --> 00:08:54.450 access lock. Perhaps, uncoincidentally, the day 00:08:54.450 --> 00:08:56.149 after that email was sent is the day that Mr. 00:08:56.269 --> 00:08:58.169 Albor sent his driver to the headquarters to 00:08:58.169 --> 00:08:59.690 change the lock for the entire legal department. 00:09:01.009 --> 00:09:02.690 Ultimately, though, as Mr. Wagstaff's report 00:09:02.690 --> 00:09:05.269 states, we were able to get Ms. Esteban to send 00:09:05.269 --> 00:09:07.490 a notary to document the contract records that 00:09:07.490 --> 00:09:09.169 were being collected from the contract room. 00:09:09.649 --> 00:09:12.470 She sent that notary. The debtors had two notaries 00:09:12.470 --> 00:09:14.669 there to similarly document the records. Again, 00:09:14.830 --> 00:09:19.029 make a record of what we were taking out of that 00:09:19.029 --> 00:09:22.049 building or out of that facility. However, just 00:09:22.049 --> 00:09:24.590 as that process began, Mr. Albor shows up at 00:09:24.590 --> 00:09:27.009 the headquarters and he threatens everyone that 00:09:27.009 --> 00:09:28.750 he will contact the district attorney if they 00:09:28.750 --> 00:09:31.009 continue this process. Again, the same district 00:09:31.009 --> 00:09:33.110 attorney who dispatched multiple armed personnel 00:09:33.110 --> 00:09:35.230 to the headquarters back in April when Mr. Albor 00:09:35.230 --> 00:09:40.250 made such a demand of that office. So, Your Honor, 00:09:40.950 --> 00:09:43.710 continued interference with access to the records. 00:09:44.570 --> 00:09:46.950 Finally, legal actions and violations of your 00:09:46.950 --> 00:09:48.690 order. Again, this is a black and white example 00:09:48.690 --> 00:09:51.669 of Mr. Albor's ongoing contempt. Exhibit H is 00:09:51.669 --> 00:09:53.809 another Amparo that Mr. Albor filed with the 00:09:53.809 --> 00:09:56.679 assistance of Clyde & Co. challenging the dismissal 00:09:56.679 --> 00:09:58.759 of the concursive mercantile and various other 00:09:58.759 --> 00:10:01.860 orders entered in connection with that dismissal. 00:10:02.740 --> 00:10:04.500 Your Honor, you'll recall that those are the 00:10:04.500 --> 00:10:06.299 orders finding that the actions taken by the 00:10:06.299 --> 00:10:08.879 debtors to obtain such dismissal were authorized, 00:10:08.980 --> 00:10:12.220 appropriate, and not enjoined in any way. In 00:10:12.220 --> 00:10:14.419 sum, Mr. Albor is continuing to wage the control 00:10:14.419 --> 00:10:16.960 litigation that paragraph 4A of your order stated 00:10:16.960 --> 00:10:19.899 he could not pursue without obtaining stay relief. 00:10:21.159 --> 00:10:23.059 In addition, he stated in the papers that he 00:10:23.059 --> 00:10:26.789 filed in Mexico, he filed in those Amparo papers 00:10:26.789 --> 00:10:29.769 that he was serving as attorney in fact for Controladora 00:10:29.769 --> 00:10:32.009 Dolphin, a statement that's completely inaccurate 00:10:32.009 --> 00:10:34.470 as a matter of Mexican law and it's also inconsistent 00:10:34.470 --> 00:10:36.710 with Your Honor's order, which concluded that 00:10:36.710 --> 00:10:38.990 Mr. Albor has no authority to act on behalf of 00:10:38.990 --> 00:10:43.049 the debtors. So Your Honor, this is all proof 00:10:43.049 --> 00:10:45.629 positive of what we've suspected for some time. 00:10:45.870 --> 00:10:48.809 Mr. Albor is defiantly violating the state and 00:10:48.809 --> 00:10:51.090 not only simply by ignoring the effect of the 00:10:51.090 --> 00:10:54.019 governance changes. Rather, the violations are 00:10:54.019 --> 00:10:56.740 far more audacious and cynical than that. He's 00:10:56.740 --> 00:10:59.659 attempted to appropriate state funds. He's threatened 00:10:59.659 --> 00:11:01.940 debtor employees and advisors in an effort to 00:11:01.940 --> 00:11:04.320 impede access to the records. He's ignored a 00:11:04.320 --> 00:11:06.360 clear and unambiguous restriction on continuing 00:11:06.360 --> 00:11:08.639 to prosecute the control litigation without getting 00:11:08.639 --> 00:11:10.960 stay relief. There can be no doubt, Your Honor, 00:11:11.019 --> 00:11:13.139 as to his willfulness in continuing to violate 00:11:13.139 --> 00:11:16.039 the stay, and of his continuing and ongoing contempt 00:11:16.039 --> 00:11:19.919 of the order. So, Your Honor, We're here today 00:11:19.919 --> 00:11:23.500 asking the court for further help. Your honor, 00:11:23.759 --> 00:11:25.320 paragraph nine of your order provided that the 00:11:25.320 --> 00:11:27.299 court will set a hearing to determine actual 00:11:27.299 --> 00:11:29.899 damages. It's clear the company has been actually 00:11:29.899 --> 00:11:32.580 damaged by Mr. Albor's various schemes to exert 00:11:32.580 --> 00:11:35.500 control over the debtor's assets, both prior 00:11:35.500 --> 00:11:38.200 to the entry of that enforcement order and after 00:11:38.200 --> 00:11:41.080 the entry of the enforcement order. So your honor, 00:11:41.200 --> 00:11:44.259 we'd ask the court set a date for that hearing 00:11:44.259 --> 00:11:48.679 on actual damages. We propose to have that hearing 00:11:48.679 --> 00:11:52.679 set in phases. First, with respect to hard costs, 00:11:53.299 --> 00:11:55.399 meaning professional fees and expenses related 00:11:55.399 --> 00:11:57.820 directly to litigating with Mr. Albor and winning 00:11:57.820 --> 00:12:01.080 compliance with the stay. And we'd ask your honor 00:12:01.080 --> 00:12:04.519 to hear us on that at the July 23rd omnibus hearing. 00:12:06.080 --> 00:12:08.659 We propose scheduling at a further hearing down 00:12:08.659 --> 00:12:11.100 the line after Riveron has had the opportunity 00:12:11.100 --> 00:12:13.379 to complete the deeper dive into the financial 00:12:13.379 --> 00:12:17.279 records. And we ask that that later hearing we 00:12:17.279 --> 00:12:19.580 consider other economic losses incurred by the 00:12:19.580 --> 00:12:22.519 debtors in the form of lost revenue, unnecessarily 00:12:22.519 --> 00:12:24.500 incurred costs borne by the debtors as a result 00:12:24.500 --> 00:12:27.139 of the finance of the stay and assets diverted 00:12:27.139 --> 00:12:29.519 by Mr. Albor for his personal interest and not 00:12:29.519 --> 00:12:33.759 return to the estates. Finally, Your Honor, paragraph 00:12:33.759 --> 00:12:36.500 11 provides that sanctions may be awarded in 00:12:36.500 --> 00:12:38.779 appropriate circumstances to ensure no further 00:12:38.779 --> 00:12:41.320 violations of the stay. Based on what we've learned 00:12:41.320 --> 00:12:43.490 in just the The past two weeks, we submit that 00:12:43.490 --> 00:12:45.370 these circumstances cry out for the imposition 00:12:45.370 --> 00:12:48.009 of daily sanctions referenced in the order. There 00:12:48.009 --> 00:12:50.429 doesn't appear to be any other way to impress 00:12:50.429 --> 00:12:54.009 upon Mr. Albor the criticality of complying with 00:12:54.009 --> 00:12:56.830 the stay. It seems as though Mr. Albor's attitude 00:12:56.830 --> 00:12:59.870 is one of catch me if you can. Nearly each day 00:12:59.870 --> 00:13:02.610 for the last two weeks, the result of that day 00:13:02.610 --> 00:13:04.789 has been the need for some discussion with Mr. 00:13:04.850 --> 00:13:07.929 Albor's council, which in some cases has resulted 00:13:07.929 --> 00:13:11.289 in token compliance, but in many cases it's been 00:13:11.500 --> 00:13:14.679 partial compliance, partial remedies, non -answers, 00:13:15.019 --> 00:13:21.139 or an outright ignoring the request. So some 00:13:21.139 --> 00:13:23.240 of the discussions with Mr. Albor's counsel appear 00:13:23.240 --> 00:13:27.100 to result in more serious non -compliance, which, 00:13:27.519 --> 00:13:31.679 again, I think goes to the point that we're not 00:13:31.679 --> 00:13:35.700 in a position where Mr. Albor is intending to 00:13:35.700 --> 00:13:38.679 comply with the order. Our employees and advisors 00:13:38.679 --> 00:13:41.750 are continuing to be threatened by Mr. Albor's 00:13:41.750 --> 00:13:44.889 threats to resort to local police. That's where 00:13:44.889 --> 00:13:48.230 we were back in April, Your Honor. Your Honor 00:13:48.230 --> 00:13:50.889 has an inherent power to issue sanctions and 00:13:50.889 --> 00:13:53.870 punish noncompliance with the court's orders. 00:13:54.409 --> 00:13:56.049 The debtors suggest that nothing less than a 00:13:56.049 --> 00:13:58.190 daily sanction is likely to coerce Mr. Albor 00:13:58.190 --> 00:14:01.149 to truly comply. We believe you're within your 00:14:01.149 --> 00:14:03.629 power to act in furtherance of your order. Your 00:14:03.629 --> 00:14:07.490 order gave Mr. Albor notice of the potential... 00:14:07.360 --> 00:14:10.500 Results of his failure to comply and we believe 00:14:10.500 --> 00:14:14.220 that your honor Should should should take take 00:14:14.220 --> 00:14:17.899 take that take that order and and revise it to 00:14:17.899 --> 00:14:21.360 impose a daily sanction In fact, we'd urge your 00:14:21.360 --> 00:14:23.720 honor to do so to allow us to move forward in 00:14:23.720 --> 00:14:30.039 an appropriate way with this case Your honor 00:14:30.039 --> 00:14:32.879 we would ask that you that that you do that today 00:14:32.879 --> 00:14:36.419 we believe that that was something that your 00:14:36.419 --> 00:14:40.190 honors order previously contemplated. If you 00:14:40.190 --> 00:14:43.629 look at the order, the order requested that Mr. 00:14:43.889 --> 00:14:49.570 Albor submit a notification, a certification 00:14:49.570 --> 00:14:54.470 when he had corrected the, corrected his violations 00:14:54.470 --> 00:14:58.570 of the automatic stay. We have absolutely no 00:14:58.570 --> 00:15:00.309 corrective certification, Your Honor. And in 00:15:00.309 --> 00:15:05.230 fact, as noted, it does not appear that one is 00:15:05.230 --> 00:15:08.070 in the offing. In fact, we're going the opposite 00:15:08.070 --> 00:15:11.090 direction. So, Your Honor, we don't believe that 00:15:11.090 --> 00:15:14.370 there's any way to move forward here other than 00:15:14.370 --> 00:15:22.049 to impose a daily sanction. Okay, let me hear 00:15:22.049 --> 00:15:26.730 from anybody else on that oral request. Thank 00:15:26.730 --> 00:15:28.370 you, Your Honor. This is James Moon on behalf 00:15:28.370 --> 00:15:30.889 of Mr. Elbor. Can you hear me okay? I can, Mr. 00:15:30.970 --> 00:15:33.549 Moon. And, Your Honor, thank you for hearing 00:15:33.549 --> 00:15:35.720 me. I'm actually the Florida Bar - conference 00:15:35.720 --> 00:15:38.120 right now, so this is the best I can do, but 00:15:38.120 --> 00:15:40.659 I really did want to make sure that I gave you 00:15:40.659 --> 00:15:42.860 at least another side of what's going on with 00:15:42.860 --> 00:15:45.899 respect to the hearing. The first thing I want 00:15:45.899 --> 00:15:47.419 to point out, Your Honor, is we're here for a 00:15:47.419 --> 00:15:49.820 status conference, and while I appreciate that 00:15:49.820 --> 00:15:53.120 there's some very severe allegations here, I'd 00:15:53.120 --> 00:15:55.960 like to point out that, number one, we just got 00:15:55.960 --> 00:15:59.100 the declaration on Monday. We intend to respond 00:15:59.100 --> 00:16:01.519 to it. I can tell you I'm literally holding in 00:16:01.519 --> 00:16:04.389 my hand right now an English translation. of 00:16:04.389 --> 00:16:07.250 an affidavit of the driver that they have accused 00:16:07.250 --> 00:16:09.649 of going to change the legal department door 00:16:09.649 --> 00:16:12.149 that has an affidavit that that he was there 00:16:12.149 --> 00:16:14.929 for the personal office, not for the legal department. 00:16:14.990 --> 00:16:17.669 In fact, was blocked by security cards when he 00:16:17.669 --> 00:16:20.909 tried to go to Mr. Albor's office. So we would 00:16:20.909 --> 00:16:23.289 submit that at the appropriate time, but just 00:16:23.289 --> 00:16:25.149 pointing out procedurally first. And then I'd 00:16:25.149 --> 00:16:27.169 like to get into a couple of the responding to 00:16:27.169 --> 00:16:29.049 a couple of the allegations made, Your Honor. 00:16:30.389 --> 00:16:32.889 Your Honor. What's been alleged here are some 00:16:32.889 --> 00:16:35.070 allegations that there are continuing violations 00:16:35.070 --> 00:16:37.809 of the stay and I'd like to put that aside and 00:16:37.809 --> 00:16:40.210 talk about that as opposed to violations of your 00:16:40.210 --> 00:16:42.830 stay enforcement order if you recall it you're 00:16:42.830 --> 00:16:45.169 hearing your honor you made a very clear distinction 00:16:45.169 --> 00:16:48.789 between Allegations of stay violations that you 00:16:48.789 --> 00:16:52.230 wanted to see cease and you made very clear that 00:16:52.230 --> 00:16:57.070 if there were any further Violations of your 00:16:57.070 --> 00:16:59.809 order you would consider daily sanctions. So 00:16:59.809 --> 00:17:02.190 I want to put those in two buckets. And you've 00:17:02.190 --> 00:17:03.789 heard today, Your Honor, that there's about three 00:17:03.789 --> 00:17:06.690 things that they're alleging that are problematic 00:17:06.690 --> 00:17:11.190 in the declaration. The first has to do with, 00:17:11.210 --> 00:17:14.109 I believe they said, access to records. Now, 00:17:14.109 --> 00:17:16.349 Your Honor, if you look carefully at Mr. Wagstaff's 00:17:16.349 --> 00:17:20.289 declaration, he alleges that Mr. Albor's personal 00:17:20.289 --> 00:17:23.630 representatives are the ones that are somehow 00:17:23.630 --> 00:17:27.009 advising the employees what records can and cannot 00:17:27.009 --> 00:17:30.180 be turned over. There are two points I'd like 00:17:30.180 --> 00:17:32.940 to make about that, Your Honor. First, you'll 00:17:32.940 --> 00:17:35.859 recall that pursuant to the order, Mr. Albor 00:17:35.859 --> 00:17:38.599 was to have his personal representatives in there 00:17:38.599 --> 00:17:41.700 to make sure that his personal records were not 00:17:41.700 --> 00:17:43.440 caught up in any records that were turned over 00:17:43.440 --> 00:17:46.460 to the debtors. So on some level, there had to 00:17:46.460 --> 00:17:49.299 be a gatekeeping function. Now, what was said 00:17:49.299 --> 00:17:51.420 and to whom we don't know, that's not in the 00:17:51.420 --> 00:17:55.440 declaration. I would like a chance. to test whatever 00:17:55.440 --> 00:17:59.259 those allegations are. But what we hear are that 00:17:59.259 --> 00:18:02.880 Mr. Albor's representative said something about 00:18:02.880 --> 00:18:06.079 certain records. We don't know why. So I don't 00:18:06.079 --> 00:18:08.059 know if they were telling the employees, well, 00:18:08.059 --> 00:18:10.000 you can't turn that over because that's a personal 00:18:10.000 --> 00:18:12.039 record. You can't turn that over because that 00:18:12.039 --> 00:18:14.079 has nothing to do with the debtor's records. 00:18:14.279 --> 00:18:17.599 That's another legal entity. I don't know because 00:18:17.599 --> 00:18:20.140 we haven't taken discovery. So that's just a 00:18:20.140 --> 00:18:22.579 procedural point on that specific issue, Your 00:18:22.579 --> 00:18:25.269 Honor. The other thing is, you may have heard, 00:18:25.289 --> 00:18:29.369 there seems to be an issue with Ms. Esteban, 00:18:29.490 --> 00:18:32.470 who is the chief legal officer or was. It's not 00:18:32.470 --> 00:18:34.730 really clear to me what her status is right now. 00:18:35.069 --> 00:18:37.690 And she's filed, I think, some sort of a labor 00:18:37.690 --> 00:18:40.630 dispute or something with respect to being terminated. 00:18:41.210 --> 00:18:44.430 And so that's an issue all unto herself. She 00:18:44.430 --> 00:18:47.450 doesn't want to cooperate until she's paid. But 00:18:47.450 --> 00:18:50.670 that is not Mr. Alvore's doing. And Mr. Albor 00:18:50.670 --> 00:18:54.690 only had personal representatives for access 00:18:54.690 --> 00:18:57.150 to the building, Your Honor, not for everything 00:18:57.150 --> 00:19:00.089 that goes on in that office, especially when 00:19:00.089 --> 00:19:02.730 it's unclear whether Ms. Esteban was acting as 00:19:02.730 --> 00:19:05.990 a chief legal officer at the time when she was 00:19:05.990 --> 00:19:08.230 making those statements. So that's a factual 00:19:08.230 --> 00:19:09.869 issue that we kind of need to drill down on, 00:19:09.910 --> 00:19:13.430 Your Honor. So that's on the records. With respect 00:19:13.430 --> 00:19:18.329 to the transfer to PES, Your Honor, that's an 00:19:18.329 --> 00:19:23.440 important point. And I will tell you that when 00:19:23.440 --> 00:19:26.200 I was notified of it, I immediately stepped into 00:19:26.200 --> 00:19:29.480 action. And I think Mr. Gricher will back me 00:19:29.480 --> 00:19:32.599 up here. Nearly every time something has come 00:19:32.599 --> 00:19:35.900 up and he has reached out to me, I have immediately 00:19:35.900 --> 00:19:38.720 responded. In fact, Your Honor, I can tell you 00:19:38.720 --> 00:19:42.039 on one specific occasion, one of their employees 00:19:42.039 --> 00:19:45.599 sent me an email, copied with a few other people, 00:19:45.980 --> 00:19:47.880 telling me action that they were taking that 00:19:47.880 --> 00:19:50.950 I saw. was clearly a violation of the stay order. 00:19:51.349 --> 00:19:53.970 I did not wait for Mr. Greacher to contact me. 00:19:54.130 --> 00:19:56.869 I reached out to him, and I actually talked to 00:19:56.869 --> 00:19:59.130 Mr. Wagstaff, too, because that's how concerned 00:19:59.130 --> 00:20:01.950 I was about what I was seeing. I stopped it in 00:20:01.950 --> 00:20:04.089 its tracks. So I just want to be clear, Your 00:20:04.089 --> 00:20:06.970 Honor, it's not an issue that, when they raise 00:20:06.970 --> 00:20:08.930 something, we're not trying to address it. We 00:20:08.930 --> 00:20:12.230 absolutely are. But let's talk about that PES, 00:20:12.369 --> 00:20:15.349 and let's talk about the Elysium transfers. Your 00:20:15.349 --> 00:20:18.690 Honor, those transfers occurred before your stay 00:20:18.690 --> 00:20:22.910 enforcement order. So they may be additional 00:20:22.910 --> 00:20:25.289 accusations of violations of the state, but they 00:20:25.289 --> 00:20:27.390 are not violations of your enforcement order. 00:20:27.569 --> 00:20:29.569 And nothing has happened with those accounts 00:20:29.569 --> 00:20:33.630 since that time. With respect to PES, as soon 00:20:33.630 --> 00:20:35.910 as I found out about it was about the same time 00:20:35.910 --> 00:20:38.849 Mr. Gricher found out about it. And Mr. Albor 00:20:38.849 --> 00:20:43.089 was very clear that they could talk to the owner 00:20:43.089 --> 00:20:46.779 of PES. Get a full accounting of everything that 00:20:46.779 --> 00:20:49.799 went in and out of those accounts And that those 00:20:49.799 --> 00:20:53.119 accounts were used because it wasn't because 00:20:53.119 --> 00:20:55.740 let me say this the reason those accounts were 00:20:55.740 --> 00:21:00.059 open was not because The debtors got control 00:21:00.059 --> 00:21:02.579 of the bank records is because they were frozen 00:21:02.579 --> 00:21:05.480 your honor And what happened is once they were 00:21:05.480 --> 00:21:07.519 frozen and those orders that remember that april 00:21:07.519 --> 00:21:11.690 4th order They went to the banks I forget the 00:21:11.690 --> 00:21:14.690 name of the largest one, but the BMBV or that 00:21:14.690 --> 00:21:18.210 one. And they told them, they told Mr. Al Borden, 00:21:18.309 --> 00:21:20.369 I believe they told the debtors that they have 00:21:20.369 --> 00:21:22.789 to go to their legal department for review, but 00:21:22.789 --> 00:21:24.710 until they're done with it, the records were 00:21:24.710 --> 00:21:27.369 frozen. In the meantime, payroll needed to be 00:21:27.369 --> 00:21:30.430 paid, dolphins needed to be fed, and that's why 00:21:30.430 --> 00:21:32.890 they tried to bypass that. I'm not excusing it, 00:21:32.910 --> 00:21:35.670 Your Honor. I'm not excusing it. But I'm telling 00:21:35.670 --> 00:21:37.950 you that's what happened. And with respect to 00:21:37.950 --> 00:21:40.339 any potential damages, That will come out when 00:21:40.339 --> 00:21:41.859 they take a look at the accounting that's coming 00:21:41.859 --> 00:21:43.779 from those records because they have full access 00:21:43.779 --> 00:21:47.039 to them now. So, the point is, is I don't believe 00:21:47.039 --> 00:21:50.059 that that's something that a daily sanction is 00:21:50.059 --> 00:21:52.779 going to remedy at all. The same thing with the 00:21:52.779 --> 00:21:55.420 lesion, Your Honor. Your Honor, we have procedures 00:21:55.420 --> 00:21:58.180 in place. If transfers are coming out of debtor 00:21:58.180 --> 00:22:01.539 estates, we have a procedure in place for clawing 00:22:01.539 --> 00:22:04.759 those funds back, seeking avoidance, and they 00:22:04.759 --> 00:22:08.529 are fully able to either take discovery, or file 00:22:08.529 --> 00:22:11.950 an avoidance action to do so. But daily sanctioning 00:22:11.950 --> 00:22:14.309 Mr. Albor for those when they have other remedies 00:22:14.309 --> 00:22:17.390 that are actually pursuant to the bankruptcy 00:22:17.390 --> 00:22:21.650 code are the appropriate remedy to do that. Your 00:22:21.650 --> 00:22:24.210 Honor, I'd also talk about the fact that there 00:22:24.210 --> 00:22:28.269 were talks about the driver. And as I mentioned, 00:22:28.369 --> 00:22:30.690 we do have an affidavit that I only got this 00:22:30.690 --> 00:22:32.029 morning because we had to get it translated. 00:22:32.819 --> 00:22:36.299 But it is an affidavit signed by the driver talking 00:22:36.299 --> 00:22:38.799 about the fact that he was not trying to change 00:22:38.799 --> 00:22:40.400 locks on the legal department. In any event, 00:22:40.440 --> 00:22:42.720 he didn't change anything. Those locks were not 00:22:42.720 --> 00:22:46.099 changed by that driver. Now let's talk about 00:22:46.099 --> 00:22:49.140 the Amparo, because that's something that I immediately, 00:22:49.160 --> 00:22:51.880 I will tell you, made my eyebrows go up. I think 00:22:51.880 --> 00:22:53.900 Mr. Gricher will back me up on that, too, as 00:22:53.900 --> 00:22:56.700 soon as I heard about it. But let me be clear 00:22:56.700 --> 00:22:59.589 about something there, Your Honor. Mr. Albor, 00:22:59.670 --> 00:23:01.630 and I've had quite a few discussions with him 00:23:01.630 --> 00:23:04.589 since finding out about this Amparo filing. Number 00:23:04.589 --> 00:23:07.549 one, you may recall that we were at the hearing, 00:23:07.769 --> 00:23:09.990 there were Mexican counsel present in the courtroom. 00:23:10.970 --> 00:23:14.470 Those counsel were from the Cervantes firm, CDA, 00:23:14.630 --> 00:23:18.670 which are Mr. Albor's personal attorneys. The 00:23:18.670 --> 00:23:22.089 attorneys that filed that Amparo is Clyde and 00:23:22.089 --> 00:23:24.849 Company. Your Honor, I haven't even spoken with 00:23:24.849 --> 00:23:26.970 any of them since the beginning of this case. 00:23:27.269 --> 00:23:29.750 I don't know what they were doing. I don't know 00:23:29.750 --> 00:23:31.690 what their thought process was when they filed 00:23:31.690 --> 00:23:34.109 it. I had been trying to determine that, I assure 00:23:34.109 --> 00:23:37.309 you. But here's the point, Your Honor. Mr. Albor 00:23:37.309 --> 00:23:41.150 is crystal clear that he is concerned about preserving 00:23:41.150 --> 00:23:44.710 his constitutional rights in Mexico as a Mexican 00:23:44.710 --> 00:23:48.450 citizen. The actions that he took were on advice 00:23:48.450 --> 00:23:51.880 of counsel in Mexico. It did certainly did not 00:23:51.880 --> 00:23:55.380 come from me, but he did get counsel from Mexico 00:23:55.380 --> 00:23:58.160 that were emphatic that if he did not file the 00:23:58.160 --> 00:24:02.059 Amparo, when he did, he would have waived all 00:24:02.059 --> 00:24:06.059 rights to any of the dispute that he had. And 00:24:06.059 --> 00:24:07.440 Your Honor, I can give you a little bit more 00:24:07.440 --> 00:24:09.940 context of that. I'm not a Mexican lawyer, so 00:24:09.940 --> 00:24:12.000 I'm going to give you broad strokes here, but 00:24:12.000 --> 00:24:13.779 this is one of the things that I think at a further 00:24:13.779 --> 00:24:16.220 hearing you're going to want to hear about. But 00:24:16.220 --> 00:24:18.990 in any event, You know that there are a couple 00:24:18.990 --> 00:24:20.670 of legal matters that were pending in Mexico. 00:24:20.849 --> 00:24:23.529 One is a challenge to those March 28 corporate 00:24:23.529 --> 00:24:26.410 governance resolutions. And the other has to 00:24:26.410 --> 00:24:28.809 do with an amparo challenging the withdrawal 00:24:28.809 --> 00:24:31.069 of the concursive mercantile. Remember, this 00:24:31.069 --> 00:24:34.529 was not a dismissal. This is a withdrawal. And 00:24:34.529 --> 00:24:36.710 therefore, the concursive mercantile court simply 00:24:36.710 --> 00:24:39.609 accepted it and said, OK, well, if the person 00:24:39.609 --> 00:24:42.349 that's in charge of Controladora wants to withdraw 00:24:42.349 --> 00:24:44.930 it, who am I to say no? And allowed the withdrawal 00:24:44.930 --> 00:24:48.119 to proceed. that has been challenged in an amparo. 00:24:48.579 --> 00:24:50.940 The initial amparo on that matter was filed on 00:24:50.940 --> 00:24:54.200 April 23rd, but it wasn't admitted because of 00:24:54.200 --> 00:24:57.440 an internal appeal. And what has to happen, Your 00:24:57.440 --> 00:25:01.380 Honor, under Mexican law, is they have to basically 00:25:01.380 --> 00:25:05.339 extinguish all rights at the same time when they 00:25:05.339 --> 00:25:07.599 do that, and at the same time, they had this 00:25:07.599 --> 00:25:09.720 what was called a motion for reconsideration. 00:25:10.009 --> 00:25:12.609 a recurso de revocation, which meant that the 00:25:12.609 --> 00:25:15.089 Amparo couldn't be accepted until that was handled 00:25:15.089 --> 00:25:18.369 and dealt with. Once it was, which was recently 00:25:18.369 --> 00:25:21.809 and unfavorably to Mr. Albor, that allowed them 00:25:21.809 --> 00:25:24.990 to procedurally continue the defense with filing 00:25:24.990 --> 00:25:29.369 the Amparo. It does not in any way take control 00:25:29.369 --> 00:25:32.410 of the debtors. It does not in any way change 00:25:32.410 --> 00:25:35.130 their ability to operate. It is simply preserving 00:25:35.130 --> 00:25:38.420 its constitutional rights. under Mexican law 00:25:38.420 --> 00:25:41.059 and that's and there was a deadline to do that 00:25:41.059 --> 00:25:43.799 your honor and that's why they filed it as I 00:25:43.799 --> 00:25:46.400 Understand it and I'm sure you have more questions 00:25:46.400 --> 00:25:48.700 about it your honor I certainly would too but 00:25:48.700 --> 00:25:51.559 that needs to come at a later hearing but it's 00:25:51.559 --> 00:25:53.619 certainly not the basis I think at this point 00:25:53.619 --> 00:25:57.480 to incur daily sanctions for a couple of reasons 00:25:57.480 --> 00:26:01.519 your honor number one If it's not doing anything 00:26:01.519 --> 00:26:04.539 to change the ability of the debtors to operate 00:26:04.539 --> 00:26:06.480 their companies, and the only thing that it's 00:26:06.480 --> 00:26:09.160 doing is preserving his constitutional right 00:26:09.160 --> 00:26:12.859 to have a higher court hear his appeal, which 00:26:12.859 --> 00:26:15.279 has not been heard yet, Your Honor, then they're 00:26:15.279 --> 00:26:17.839 not really being harmed by it as it stands now. 00:26:17.920 --> 00:26:21.039 And I would be the first to say if it did, we 00:26:21.039 --> 00:26:23.059 would all need to step in and do something, Your 00:26:23.059 --> 00:26:26.839 Honor. But having said that, Your Honor, understand 00:26:26.839 --> 00:26:30.460 that If Mr. Albor, his understanding from Mexican 00:26:30.460 --> 00:26:34.319 counsel is if he withdraws that amparo, he will 00:26:34.319 --> 00:26:36.960 forfeit his rights or may forfeit his rights 00:26:36.960 --> 00:26:40.240 to any constitutional review of what occurred 00:26:40.240 --> 00:26:43.579 here. And as you know, as you rightly pointed 00:26:43.579 --> 00:26:47.359 out, this business was built by him over 20 -something 00:26:47.359 --> 00:26:49.480 years. It is very dear to his heart and very 00:26:49.480 --> 00:26:52.180 important to him. And so, no, he's not going 00:26:52.180 --> 00:26:54.039 to give it up easily, but he certainly doesn't 00:26:54.039 --> 00:26:56.579 want to give up his rights. But he is at the 00:26:56.579 --> 00:26:58.799 point now, Your Honor, to make sure Your Honor 00:26:58.799 --> 00:27:02.619 understands his willingness and duty to comply 00:27:02.619 --> 00:27:06.059 with your order, that if he has to, he will withdraw 00:27:06.059 --> 00:27:08.940 the emparo to make sure that you understand he 00:27:08.940 --> 00:27:11.839 is not trying to violate your order. And keep 00:27:11.839 --> 00:27:14.039 in mind, Your Honor, this was not something that 00:27:14.039 --> 00:27:18.940 was done with my knowledge at all. So, you know, 00:27:18.940 --> 00:27:20.759 I would have probably taken a different tack 00:27:20.759 --> 00:27:22.759 if it were me, but the counsel that did this, 00:27:22.799 --> 00:27:25.869 I haven't even been in contact with. Finally, 00:27:25.990 --> 00:27:28.289 Your Honor, I would say with respect to the sanctions 00:27:28.289 --> 00:27:31.009 that they want. Your Honor, we do have a procedure 00:27:31.009 --> 00:27:34.069 in place for that. It's called 362K. And they 00:27:34.069 --> 00:27:36.109 will have an opportunity to have a hearing on 00:27:36.109 --> 00:27:38.210 whatever injury and whatever party thinks that 00:27:38.210 --> 00:27:40.630 they were injured by any violations of the state. 00:27:41.130 --> 00:27:45.829 With respect to a sanction for violating your 00:27:45.829 --> 00:27:49.150 order, I think that requires us to take a look 00:27:49.150 --> 00:27:52.450 at what is the damage that can be stopped by 00:27:52.450 --> 00:27:55.359 entering those daily sanctions. To me, Your Honor, 00:27:55.880 --> 00:27:58.299 a daily sanction is designed to do one of two 00:27:58.299 --> 00:28:02.460 things. Force compliance or force them to stop 00:28:02.460 --> 00:28:05.799 taking an action, whoever is the recipient. But 00:28:05.799 --> 00:28:09.619 what action are we forcing to happen with the 00:28:09.619 --> 00:28:12.559 daily sanction if you were to enter it? And what 00:28:12.559 --> 00:28:15.140 action are we telling him to stop? He does not 00:28:15.140 --> 00:28:18.299 have control of the PES accounts. There are no 00:28:18.299 --> 00:28:22.539 further... Assets going to the Elysium accounts. 00:28:22.640 --> 00:28:24.779 There's nothing to stop. It's there the only 00:28:24.779 --> 00:28:27.920 thing left is an accounting to find out Where 00:28:27.920 --> 00:28:30.460 that money was going and if the debtors believe 00:28:30.460 --> 00:28:32.460 that there is a valid basis to do so they can 00:28:32.460 --> 00:28:34.480 certainly bring an avoidance action your honor 00:28:34.480 --> 00:28:38.599 So that would be my point about that And I'm 00:28:38.599 --> 00:28:40.700 sorry. Let me just make sure I've got all my 00:28:40.700 --> 00:28:43.779 So anyway, so that's what I think that you'll 00:28:43.779 --> 00:28:46.680 have the opportunity at the hearing as mr. Breacher 00:28:46.680 --> 00:28:49.690 laid out The only thing I would ask your honor 00:28:49.690 --> 00:28:51.650 is I think we're gonna need a little bit more 00:28:51.650 --> 00:28:54.930 time Before you set those hearings and it's not 00:28:54.930 --> 00:28:56.549 because I don't think those things should be 00:28:56.549 --> 00:28:59.410 teed up as soon as we can The problem is is if 00:28:59.410 --> 00:29:02.150 they're going to submit that they want to have 00:29:02.150 --> 00:29:04.950 a hearing on costs, I don't know what those costs 00:29:04.950 --> 00:29:07.829 and fees are. I have not seen time records. I 00:29:07.829 --> 00:29:10.069 don't know what has been categorized as what. 00:29:10.509 --> 00:29:12.990 And typically, and I've actually done this before, 00:29:13.950 --> 00:29:16.289 and actually analyzing the applications with 00:29:16.289 --> 00:29:19.599 respect to trustee. But we need to look at those 00:29:19.599 --> 00:29:21.339 and categorize them and whether they're subject 00:29:21.339 --> 00:29:23.160 to challenge, whether there was duplicate billing, 00:29:23.380 --> 00:29:25.299 and whether these fees would have been incurred 00:29:25.299 --> 00:29:28.079 anyway as a matter of an ordinary course of a 00:29:28.079 --> 00:29:30.480 Chapter 11. We need to have an opportunity to 00:29:30.480 --> 00:29:32.940 take discovery. So I would submit, if they believe 00:29:32.940 --> 00:29:36.579 that they have an ability or want to lay out 00:29:36.579 --> 00:29:38.460 what those costs are that they're seeking recovery 00:29:38.460 --> 00:29:41.000 for, they can do it with either something like 00:29:41.000 --> 00:29:44.500 a motion to tax fees and costs, motion to assess 00:29:44.500 --> 00:29:48.309 the injury. I think liabilities are already there 00:29:48.309 --> 00:29:50.069 with respect to the automatic state issues. But 00:29:50.069 --> 00:29:52.430 if they got something else, they can bring that 00:29:52.430 --> 00:29:55.529 up and then tell us what is it that you want 00:29:55.529 --> 00:29:58.650 to have monetarily come back and what's it based 00:29:58.650 --> 00:30:01.410 on so that we can challenge that. And finally, 00:30:01.470 --> 00:30:03.250 Your Honor, with respect to timing, the only 00:30:03.250 --> 00:30:05.109 thing I ask is for a little bit more time for 00:30:05.109 --> 00:30:08.190 Mr. Albor before you set that and preferably 00:30:08.190 --> 00:30:12.339 after July. As a housekeeping matter, and I only 00:30:12.339 --> 00:30:14.819 raised it at the last of my argument because 00:30:14.819 --> 00:30:16.740 I didn't want it to get in the way of what I've 00:30:16.740 --> 00:30:20.299 had to say substantively, I will be being replaced 00:30:20.299 --> 00:30:23.799 as counsel. We are currently looking for substitution 00:30:23.799 --> 00:30:28.440 of counsel and working quickly on that, Your 00:30:28.440 --> 00:30:30.319 Honor. But as you can imagine, it's going to 00:30:30.319 --> 00:30:32.839 take a few days to get that, and we're going 00:30:32.839 --> 00:30:35.539 to need to have counsel up to speed with respect 00:30:35.539 --> 00:30:37.440 to what's going on in this case, as you can see 00:30:37.440 --> 00:30:40.259 even in the past month. It can be very complicated, 00:30:40.319 --> 00:30:45.099 very quickly. But I don't want Mr. Albor's substantive 00:30:45.099 --> 00:30:47.440 rights to be challenged. You can see just in 00:30:47.440 --> 00:30:50.339 the applications, the legal array that's, you 00:30:50.339 --> 00:30:52.160 know, the legal power that's arrayed against 00:30:52.160 --> 00:30:54.660 them is going to need a little bit of time to 00:30:54.660 --> 00:30:56.880 get up to speed with this new council. So I'd 00:30:56.880 --> 00:30:58.799 only ask for a little bit of time for that, Your 00:30:58.799 --> 00:31:16.539 Honor. These are very, very serious allegations 00:31:16.539 --> 00:31:19.299 that have been made against Mr. Albor. And it 00:31:19.299 --> 00:31:22.519 is severely interfering with the debtor's operations. 00:31:22.920 --> 00:31:24.759 And we're concerned about financially, where 00:31:24.759 --> 00:31:26.559 is this going to go? With all this money being 00:31:26.559 --> 00:31:29.079 diverted, it's a major issue here. And that's 00:31:29.079 --> 00:31:31.220 why the lenders are having to ask for this additional 00:31:31.220 --> 00:31:52.980 dip. I'll just take maybe three or four minutes 00:31:52.980 --> 00:31:55.420 just to not repeat many of the arguments that 00:31:55.420 --> 00:31:58.500 were made by debtor's counsel, but to give this 00:31:58.500 --> 00:32:01.180 court an appreciation of the lender's point of 00:32:01.180 --> 00:32:04.579 view from this situation. First of all, Mr. Albor's 00:32:04.579 --> 00:32:06.660 counsel seemed to me just now to go at great 00:32:06.660 --> 00:32:09.279 lengths to explain that he was not aware of his 00:32:09.279 --> 00:32:13.180 client's stay violations. No one's accusing his 00:32:13.180 --> 00:32:16.500 counsel of being complicit in any stay violations. 00:32:17.359 --> 00:32:20.339 We are, of course, concerned about Mr. Alvarez 00:32:20.339 --> 00:32:24.220 violations of the automatic stay. We're essentially 00:32:24.220 --> 00:32:27.900 asking the court for three things today, which 00:32:27.900 --> 00:32:33.000 are expressly set forth in the court's order. 00:32:33.539 --> 00:32:36.680 First is the per diem sanctions, which I'll revisit 00:32:36.680 --> 00:32:41.000 in a moment. Second is a July 23rd hearing fees 00:32:41.000 --> 00:32:44.579 and costs. And of course, as part of that process, 00:32:44.920 --> 00:32:47.799 we would like it to be set for the hearing on 00:32:47.799 --> 00:32:51.009 July 23rd. And of course, we're going to forward 00:32:51.009 --> 00:32:54.490 all of our invoices for all the various professionals 00:32:54.490 --> 00:32:58.410 involved detailing the time and expenses that 00:32:58.410 --> 00:32:59.829 were set on that. Obviously, we're going to have 00:32:59.829 --> 00:33:02.730 to redact a lot of the time entries to the extent 00:33:02.730 --> 00:33:04.630 that they contain attorney -client privileged 00:33:04.630 --> 00:33:07.069 information. But as is usually done in these 00:33:07.069 --> 00:33:10.549 situations, we can categorize the time that was 00:33:10.549 --> 00:33:13.490 spent. And then third, Your Honor, we'd like 00:33:13.490 --> 00:33:17.500 the reserve for a hearing after July 23rd. on 00:33:17.500 --> 00:33:19.720 damages to the business because it's going to 00:33:19.720 --> 00:33:22.700 take some time for Riveron to make an assessment 00:33:22.700 --> 00:33:26.039 of the damages to the business and to the value 00:33:26.039 --> 00:33:29.420 of the lender's collateral as a result of all 00:33:29.420 --> 00:33:33.480 of these stay violations. Your Honor, with respect 00:33:33.480 --> 00:33:35.619 to the per diem sanctions, I think that there 00:33:35.619 --> 00:33:39.720 is ample evidence on the record from before and 00:33:39.720 --> 00:33:43.329 now in order to impose those sanctions. You know, 00:33:43.609 --> 00:33:45.569 just briefly, Your Honor, in paragraph four of 00:33:45.569 --> 00:33:48.390 the CRO's affidavit, he describes the diversion 00:33:48.390 --> 00:33:53.529 of funds to PES by going to Costco and purchasing 00:33:53.529 --> 00:33:56.529 point -of -sale terminals. Now, the argument 00:33:56.529 --> 00:34:00.170 we just heard now was, well, that was done because 00:34:00.170 --> 00:34:03.269 the bank accounts were frozen and the former 00:34:03.269 --> 00:34:07.170 CEO needed a way in order to pay vendors and 00:34:07.170 --> 00:34:09.989 suppliers in Mexico. Your Honor, that's not how 00:34:09.989 --> 00:34:11.989 you comply with the automatic stay with this 00:34:11.989 --> 00:34:14.550 court's order. The way you comply with the automatic 00:34:14.550 --> 00:34:18.230 stay in this court order is you turn over the 00:34:18.230 --> 00:34:22.889 receipts from the Mexican parks to the CRO so 00:34:22.889 --> 00:34:26.309 that the CRO can then pay vendors and suppliers 00:34:26.309 --> 00:34:29.150 in Mexico. You don't comply with the automatic 00:34:29.150 --> 00:34:31.690 stay by setting up your own shadow banking system. 00:34:33.010 --> 00:34:35.610 Second, what the CRO is described is the creation 00:34:35.610 --> 00:34:38.769 of backdated agreements to convey the theme parks 00:34:38.769 --> 00:34:40.849 of Mexico, which are the lenders collateral. 00:34:41.309 --> 00:34:44.789 And also, we've heard on paragraph 10, evidence 00:34:44.789 --> 00:34:47.369 of funds being diverted to personal accounts. 00:34:48.090 --> 00:34:51.530 On the Amparo issue, Your Honor, I distinctly 00:34:51.530 --> 00:34:55.010 recall, at the hearing, Mr. Alboros sitting in 00:34:55.010 --> 00:34:57.409 the witness box and explaining that he wore three 00:34:57.409 --> 00:35:00.369 hats with respect to Controlador Adolphin. He 00:35:00.369 --> 00:35:03.210 was a director, he was an officer, and he was 00:35:03.210 --> 00:35:05.949 a shareholder. And I'm quite confident, Your 00:35:05.949 --> 00:35:08.269 Honor, that if - Look at the translations of 00:35:08.269 --> 00:35:10.690 the Amparo that was recently filed just last 00:35:10.690 --> 00:35:14.230 week or this week by Mr. Alvore. It was not in 00:35:14.230 --> 00:35:17.090 his capacity as a shareholder. It was in his 00:35:17.090 --> 00:35:20.010 capacity as a director or officer of Controladora 00:35:20.010 --> 00:35:23.250 Dolphin, which is directly contrary to the express 00:35:23.250 --> 00:35:26.230 terms of this court's order. This court was very 00:35:26.230 --> 00:35:28.869 clear in that order in multiple places, stating 00:35:28.869 --> 00:35:31.949 that Mr. Alvore should not hold himself out as 00:35:31.949 --> 00:35:34.730 a director or officer of Controladora Dolphin 00:35:34.730 --> 00:35:38.650 or pursue an illegal proceedings on behalf of 00:35:38.650 --> 00:35:44.070 Controladora Dolphin. Your Honor, what I recall 00:35:44.070 --> 00:35:48.190 is that, you know, Mr. Albor stated, and his 00:35:48.190 --> 00:35:50.530 counsel's primary argument at the hearing on 00:35:50.530 --> 00:35:53.090 stay enforcement, was that Mr. Albor was acting 00:35:53.090 --> 00:35:56.710 in a good faith belief under Mexican law. It 00:35:56.710 --> 00:35:58.969 is very clear from this court's order that he 00:35:58.969 --> 00:36:01.349 is not to hold himself out as director officer 00:36:01.349 --> 00:36:04.329 of Controladora, and he is continuing to do that. 00:36:04.329 --> 00:36:06.929 as evidenced by the MPRO that was filed earlier 00:36:06.929 --> 00:36:12.889 this week. We also have the CRO's affidavit testifying 00:36:12.889 --> 00:36:17.170 that he installed POS machines as early as April, 00:36:17.730 --> 00:36:20.849 and he was continuing to use those POS machines 00:36:20.849 --> 00:36:23.969 even after this court entered the state enforcement 00:36:23.969 --> 00:36:26.829 order. And I would submit to the court that those 00:36:26.829 --> 00:36:30.909 two things are not actions that one takes in 00:36:30.909 --> 00:36:43.210 a good faith belief. Because remember, also, 00:36:43.449 --> 00:36:46.090 it's in the court orders of Mexico that he is 00:36:46.090 --> 00:36:48.769 not to hold himself out as a director of officer 00:36:48.769 --> 00:36:52.469 control at Hora. So Your Honor, the DIP lenders 00:36:52.469 --> 00:36:56.150 here are in a bit of a quandary, right? These 00:36:56.150 --> 00:37:00.269 stay violations, and we have to remind ourselves, 00:37:00.869 --> 00:37:03.670 we're three months into this case. And this case 00:37:03.670 --> 00:37:07.250 was filed, I believe it was March 31st. So we're 00:37:07.250 --> 00:37:10.809 three months into this case, and we are still 00:37:10.809 --> 00:37:15.650 dealing... or raising stay violations on a daily 00:37:15.650 --> 00:37:20.929 basis. We do have control of the parks in Florida. 00:37:21.809 --> 00:37:26.469 We do have control of the parks in Italy. Unfortunately, 00:37:27.369 --> 00:37:30.449 from the perspective of the dip lenders, those 00:37:30.449 --> 00:37:33.130 parks are what I would describe as cash neutral, 00:37:34.010 --> 00:37:47.750 meaning that they generate enough... these state 00:37:47.750 --> 00:37:52.050 violations. So who is funding the defense, if 00:37:52.050 --> 00:37:54.309 you will, of all these state violations? The 00:37:54.309 --> 00:37:56.889 dip lenders are. And that's why in a few moments, 00:37:57.030 --> 00:38:00.010 you're about to hear a request for approval of 00:38:00.010 --> 00:38:03.369 the amendment to upsize the dip by $10 million. 00:38:04.610 --> 00:38:08.530 These state violations are substantial. They're 00:38:08.530 --> 00:38:20.630 ongoing three months into the case. As Your Honor 00:38:20.630 --> 00:38:24.889 saw, the debtors filed applications to retain 00:38:24.889 --> 00:38:26.929 both the investment banker and a real estate 00:38:26.929 --> 00:38:30.869 advisor in this case. We are hoping that what 00:38:30.869 --> 00:38:34.489 will happen is that this case will pivot from 00:38:34.489 --> 00:38:38.650 one being about trying to suppress state violations 00:38:38.650 --> 00:38:40.829 to one that's going to be about selling the assets, 00:38:41.230 --> 00:38:43.869 right? And once those assets are sold, hopefully 00:38:43.869 --> 00:38:50.920 money will come into the state. of the dip lender 00:38:50.920 --> 00:38:54.199 left unchecked. These stay violations will go 00:38:54.199 --> 00:38:57.519 on for weeks. If we give the additional time 00:38:57.519 --> 00:39:00.199 that Council for Mr. Albor was just arguing for, 00:39:00.619 --> 00:39:02.980 all that's gonna do is give them more time to 00:39:02.980 --> 00:39:05.820 continue to commit stay violations, which cost 00:39:05.820 --> 00:39:09.059 the dip lender in two ways. One is the money 00:39:09.059 --> 00:39:11.340 that goes out the door over the next several 00:39:11.340 --> 00:39:13.599 weeks while these violations go on may never 00:39:13.599 --> 00:39:17.500 be recovered. But two, every time it takes an 00:39:17.500 --> 00:39:20.460 action in violation of the stay, It costs the 00:39:20.460 --> 00:39:23.679 estate funds in terms of Riveron trying to redirect 00:39:23.679 --> 00:39:26.719 things to bank accounts, Riveron trying to remove 00:39:26.719 --> 00:39:29.880 unauthorized POS machines, and every time he 00:39:29.880 --> 00:39:32.380 files an Amparo, when he filed the Amparo this 00:39:32.380 --> 00:39:34.900 week, the debtor had to have their law firm, 00:39:35.019 --> 00:39:38.099 the Guerra Law Firm, go into court in Mexico 00:39:38.099 --> 00:39:41.199 to try and fend off those unauthorized filings. 00:39:41.960 --> 00:39:46.619 It is a daily, massive incurring of expense to 00:39:46.619 --> 00:39:49.360 fend off these state violations. And it's quite 00:39:49.360 --> 00:39:51.880 obvious what his strategy is. His strategy is 00:39:51.880 --> 00:39:54.659 to wear the lenders down. If I keep committing 00:39:54.659 --> 00:39:57.179 these stay violations and I keep upping the ante 00:39:57.179 --> 00:39:59.840 on the dip lenders, maybe they'll finally give 00:39:59.840 --> 00:40:02.340 up. It's very clear that's what the strategy 00:40:02.340 --> 00:40:04.920 is. So I understand, Your Honor, that we're asking 00:40:04.920 --> 00:40:08.119 for, I'm sure it is not every day that this Court 00:40:08.119 --> 00:40:11.380 has to impose daily sanctions on an individual 00:40:11.380 --> 00:40:13.840 for violation of the stay. And I'm sure that 00:40:13.840 --> 00:40:15.940 this Court doesn't take that lightly and it shouldn't. 00:40:16.329 --> 00:40:19.849 But this is about as egregious of an example 00:40:19.849 --> 00:40:22.289 that, quite frankly, I've seen in 25 years of 00:40:22.289 --> 00:40:30.429 practice. Thank you. Mr. Greger, can you clarify 00:40:30.429 --> 00:40:33.710 for me what is happening today with the receipts 00:40:33.710 --> 00:40:38.570 at the Mexican parks? I could clarify what we 00:40:38.570 --> 00:40:40.989 know, Your Honor, and this is the point. We know 00:40:40.989 --> 00:40:42.829 what we know. We don't know what we don't know. 00:40:43.090 --> 00:40:45.960 We know that... In connection with the Mexican 00:40:45.960 --> 00:40:50.119 parks, Riveron has communicated with the employees 00:40:50.119 --> 00:40:54.599 in the financial group of the debtors business 00:40:54.599 --> 00:41:02.179 to redirect funds from the park revenues into 00:41:02.179 --> 00:41:06.280 the BBVA debtor bank accounts. Do we know that 00:41:06.280 --> 00:41:08.880 that has been done across the board? Do we know 00:41:08.880 --> 00:41:12.420 that we've caught every single costco purchased 00:41:12.420 --> 00:41:15.119 pos system and that there is no more money going 00:41:15.119 --> 00:41:19.380 into some other bank account we don't and that 00:41:19.380 --> 00:41:21.940 your honor is the point uh you know i i certainly 00:41:21.940 --> 00:41:25.659 agree with mr moon and and and i appreciate the 00:41:25.659 --> 00:41:28.219 many many calls he's taken from me over the past 00:41:28.219 --> 00:41:32.099 couple of weeks with with daily requests i certainly 00:41:32.099 --> 00:41:35.719 as as mr keenan said we certainly don't blame 00:41:35.719 --> 00:41:43.469 him Excuse me, I hear someone's conversation. 00:41:44.050 --> 00:41:47.750 Please mute your phones, your computers. Thank 00:41:47.750 --> 00:41:51.130 you. But frankly, the fact that Mr. Moon is going 00:41:51.130 --> 00:41:53.630 to be withdrawing from this case gives me even 00:41:53.630 --> 00:41:55.469 greater concern that he's not going to be there 00:41:55.469 --> 00:41:58.590 to answer those questions. So we are working 00:41:58.590 --> 00:42:00.690 to get information, and Mr. Moon has assisted 00:42:00.690 --> 00:42:02.510 with giving us this information, I think, as 00:42:02.510 --> 00:42:05.480 best as he can get it. We certainly don't have 00:42:05.480 --> 00:42:07.559 answers. We don't have answers across the board 00:42:07.559 --> 00:42:09.639 as to whether we've caught all of these POS systems. 00:42:09.940 --> 00:42:12.840 We don't have answers as to whether funds from 00:42:12.840 --> 00:42:16.059 the various Caribbean subsidiaries are being 00:42:16.059 --> 00:42:20.280 sent to Elysium or being sent elsewhere. We don't 00:42:20.280 --> 00:42:22.099 have control over Elysium. We don't have access 00:42:22.099 --> 00:42:25.280 to Elysium. So you ask a great question, Your 00:42:25.280 --> 00:42:27.659 Honor, and it's one that I don't know. if I have 00:42:27.659 --> 00:42:29.960 the answer to it. And it's why, Your Honor, we 00:42:29.960 --> 00:42:32.639 suggest that a sanction is necessary. Okay. And 00:42:32.639 --> 00:42:34.920 when does the sanction end? How do I know when 00:42:34.920 --> 00:42:37.719 there's compliance then? Well, Your Honor, what 00:42:37.719 --> 00:42:40.659 I would suggest is that you certainly have the 00:42:40.659 --> 00:42:43.019 ability to fashion this in the way that you think 00:42:43.019 --> 00:42:46.880 that's one option I think would be to set a hearing 00:42:46.880 --> 00:42:50.489 at some point within a week, two weeks, whatever 00:42:50.489 --> 00:42:53.110 the time may be, and we come back, and if we 00:42:53.110 --> 00:42:54.969 need to have an evidentiary hearing on whether 00:42:54.969 --> 00:42:57.289 he's complied or not, we can. And if he has, 00:42:57.489 --> 00:43:00.869 perhaps you'd say, I'm not going to impose the 00:43:00.869 --> 00:43:03.730 sanction. Again, the purpose here is to get compliance, 00:43:03.849 --> 00:43:06.469 is to get full information. But I'm trying to 00:43:06.469 --> 00:43:08.989 figure out what our procedural posture is. The 00:43:08.989 --> 00:43:11.130 debtor is choosing the procedural posture in 00:43:11.130 --> 00:43:13.230 which it's putting things in front of me. I am 00:43:13.230 --> 00:43:22.230 not. Fine him $10 ,000 a day. Okay When do I 00:43:22.230 --> 00:43:26.329 know that it stops? Okay, and that's what I'm 00:43:26.329 --> 00:43:29.550 trying to figure out and I'm not sure and the 00:43:29.550 --> 00:43:32.809 debtor so far hasn't given me Something that 00:43:32.809 --> 00:43:37.090 I can do. Listen, I am NOT happy here I am NOT 00:43:37.090 --> 00:43:40.449 happy that I am learning about the diversion 00:43:40.449 --> 00:43:45.269 of estate assets a clear violation of the automatic 00:43:45.269 --> 00:43:50.440 stay I am not happy that I'm hearing that there 00:43:50.440 --> 00:43:57.300 is, that there are, is a lawyer for the debtors 00:43:57.300 --> 00:44:00.380 who seems to be, and I say seems to be, because 00:44:00.380 --> 00:44:05.000 I have no evidence, obstructing the debtors access 00:44:05.000 --> 00:44:13.119 to books and records, contracts, areas in the, 00:44:13.230 --> 00:44:16.010 headquarters facility that the debtors should 00:44:16.010 --> 00:44:20.550 have access to. It's not clear to me quite frankly 00:44:20.550 --> 00:44:28.650 that Mr. Albor is not the impetus of all of this, 00:44:29.289 --> 00:44:33.030 that he is not creating the situation. It's not 00:44:33.030 --> 00:44:36.710 clear to me that he isn't in fact creating a 00:44:36.710 --> 00:44:40.909 situation where the employees are not cooperating. 00:44:43.789 --> 00:44:47.230 But this is somewhat of an amorphous kind of 00:44:47.230 --> 00:44:54.670 situation, okay? And I don't have any evidence 00:44:54.670 --> 00:44:58.329 in front of me today. Okay, Mr. Wachstaff isn't 00:44:58.329 --> 00:45:01.710 here. I don't have him on the stand. I have an 00:45:01.710 --> 00:45:06.090 unsworn declaration. Not a declaration, I'm sorry. 00:45:06.150 --> 00:45:09.309 I have an unsworn status report, preliminary 00:45:09.309 --> 00:45:12.090 report. I have no evidence in front of me today. 00:45:19.079 --> 00:45:25.940 And there are procedures for a debtor to follow, 00:45:26.800 --> 00:45:34.980 but I've got to have evidence to support the 00:45:34.980 --> 00:45:39.980 debtor's positions. Although I will say, it sounds 00:45:39.980 --> 00:45:47.449 to me as in... if in fact Mr. Albor is violating 00:45:47.449 --> 00:45:51.650 the state and possibly violating my order. When 00:45:51.650 --> 00:45:57.409 I drafted the order, as I assume both sides and 00:45:57.409 --> 00:46:01.349 the attorneys recognized, I carefully went through 00:46:01.349 --> 00:46:06.389 each side's draft order to make certain that 00:46:06.389 --> 00:46:10.050 I was comfortable, that I had evidence to support 00:46:10.570 --> 00:46:15.650 what was in the order and Quite frankly where 00:46:15.650 --> 00:46:25.170 I could I chose Language from mr. Alborz proposed 00:46:25.170 --> 00:46:28.269 order hoping that that would mean he would be 00:46:28.269 --> 00:46:32.449 more likely to follow it That may not be the 00:46:32.449 --> 00:46:37.610 case From what I'm hearing so I have grave concerns 00:46:37.610 --> 00:46:42.960 here about Mr. Albor's behavior from what I am 00:46:42.960 --> 00:46:45.539 learning though. I don't have evidence yet on 00:46:45.539 --> 00:46:56.380 what was in the CRO's status report And I of 00:46:56.380 --> 00:47:04.460 course as we all know have concerns about The 00:47:04.460 --> 00:47:10.099 animal welfare here I'm just not sure what the 00:47:10.099 --> 00:47:13.380 debtor has given me and certainly what authority 00:47:13.380 --> 00:47:17.860 the debtor has given me to impose on an oral 00:47:17.860 --> 00:47:23.500 motion at a status conference with no evidence 00:47:23.500 --> 00:47:32.880 that the sanction it wants. I am very happy to 00:47:32.880 --> 00:47:35.539 schedule and I will schedule a hearing on July 00:47:35.539 --> 00:47:41.820 23rd. And Mr. Moon, I understand that may create 00:47:41.820 --> 00:47:46.139 a time crunch for your successor, but so be it. 00:47:46.199 --> 00:47:52.280 That is because of Mr. Albor's conduct and not 00:47:52.280 --> 00:47:55.420 the debtor's. So I will have that. Of course, 00:47:56.659 --> 00:48:00.760 any damages the debtors seek at that time, they 00:48:00.760 --> 00:48:06.360 should be immediately forwarded so that counsel, 00:48:06.380 --> 00:48:09.449 whoever it is, has the opportunity to take a 00:48:09.449 --> 00:48:11.349 look at it and challenge it, and that will be 00:48:11.349 --> 00:48:15.070 an evidentiary hearing. Mr. Moon, you can tell 00:48:15.070 --> 00:48:17.929 your client that I think you have represented 00:48:17.929 --> 00:48:27.349 him very well, and that I personally think it's 00:48:27.349 --> 00:48:39.269 a shame that you are going to be replaced. Unfortunately, 00:48:39.269 --> 00:48:41.789 for your successor, he's gonna have to just get 00:48:41.789 --> 00:48:44.550 in and get up to speed and deal with things. 00:48:44.650 --> 00:48:48.610 And let me add this. I think I said it before, 00:48:49.550 --> 00:48:55.289 but it is not workable to every day have to call 00:48:55.289 --> 00:48:59.190 Mr. Albor's counsel to report on something. And 00:48:59.190 --> 00:49:01.389 quite frankly, that shouldn't be counsel's function. 00:49:01.969 --> 00:49:08.179 That is not counsel's function to be the... emergency 00:49:08.179 --> 00:49:13.199 call every time Mr. Albor decides to do something. 00:49:15.559 --> 00:49:23.480 So we're in a situation that is quite frankly 00:49:23.480 --> 00:49:27.940 somewhat untenable. And even if I don't impose 00:49:27.940 --> 00:49:31.219 a fine today, that doesn't mean that I won't 00:49:31.219 --> 00:49:38.190 retroactively impose a fine starting today. So 00:49:38.190 --> 00:49:42.329 Mr. Albor should be apprised of that, that I 00:49:42.329 --> 00:49:45.750 may retroactively, depending on the evidence 00:49:45.750 --> 00:49:52.650 I hear, impose a fine beginning today. Thank 00:49:52.650 --> 00:49:54.750 you, Your Honor. If I could just add one more 00:49:54.750 --> 00:49:57.329 thing, because Mr. Albor wanted to make sure 00:49:57.329 --> 00:49:59.670 that I made this point, and I missed it in my 00:49:59.670 --> 00:50:04.210 first presentation. But he has directed me previously, 00:50:04.210 --> 00:50:07.250 and I have spoken with Mr. Gricher. of his willingness 00:50:07.250 --> 00:50:10.030 to try to work with Mr. Wagstaff and talk with 00:50:10.030 --> 00:50:12.530 him directly because he believes that there are 00:50:12.530 --> 00:50:14.690 some of these issues he can resolve directly 00:50:14.690 --> 00:50:17.170 if they just talk. He also believes there might 00:50:17.170 --> 00:50:19.650 be some issues because of his experience with 00:50:19.650 --> 00:50:23.150 the vendors and the issues that these parks have 00:50:23.150 --> 00:50:25.650 with assisting in the success of these parks. 00:50:26.289 --> 00:50:29.590 And he also told me he actually has had a conversation 00:50:29.590 --> 00:50:32.170 with Mr. Wagstaff. I see Mr. Wagstaff is on the 00:50:32.170 --> 00:50:34.969 Zoom, so maybe he can confirm it, but they have 00:50:34.969 --> 00:50:38.309 spoken by phone and had discussed maybe meeting 00:50:38.309 --> 00:50:40.030 when Mr. Wagstaff got back from, I believe it 00:50:40.030 --> 00:50:42.829 was in Canada. So at least on that level, I'm 00:50:42.829 --> 00:50:45.630 hopeful that there can be, we can like tone down 00:50:45.630 --> 00:50:48.050 the litigation aspect of everything that's occurring 00:50:48.050 --> 00:50:50.690 with every time there's a question. And some 00:50:50.690 --> 00:50:52.909 of these questions can be resolved at the business 00:50:52.909 --> 00:50:55.070 person level as opposed to the legal level, which 00:50:55.070 --> 00:50:57.289 I always... I think is a much better way to do 00:50:57.289 --> 00:51:00.489 it. But I'm just pointing that out for your honor 00:51:00.489 --> 00:51:03.170 so that maybe you could make the representation 00:51:03.170 --> 00:51:05.489 or have your thoughts as you would think that 00:51:05.489 --> 00:51:07.170 that would be a good thing that they do talk. 00:51:07.750 --> 00:51:10.409 And I realize there's a trust issue. But we don't 00:51:10.409 --> 00:51:12.610 get anywhere if we're not talking. Mr. Moon, 00:51:12.989 --> 00:51:15.250 talking is fine and it should occur at the business 00:51:15.250 --> 00:51:18.550 level. But what is there to talk about? OK, that's 00:51:18.550 --> 00:51:23.429 the question. What is there to talk about? Mr. 00:51:23.590 --> 00:51:28.690 Watt staff is and I Forgotten Mr. Strong. Thank 00:51:28.690 --> 00:51:34.869 you are in charge What they say goes? Mr. Albor 00:51:34.869 --> 00:51:40.309 should no longer be involved in the debtors and 00:51:40.309 --> 00:51:45.030 their operations What happens on a daily basis? 00:51:45.590 --> 00:51:49.889 the receipts from the parks or quite frankly 00:51:49.889 --> 00:51:53.519 even and they say this The welfare of the animals, 00:51:53.599 --> 00:51:59.059 it's no longer his concern. It just isn't. So 00:51:59.059 --> 00:52:04.800 there is nothing to talk about. Okay? So Mr. 00:52:05.039 --> 00:52:07.800 Albor needs to understand that he is not in charge. 00:52:07.860 --> 00:52:10.599 He is not in control of the operations of these 00:52:10.599 --> 00:52:13.760 debtors. Those decisions are in the hands of 00:52:13.760 --> 00:52:19.449 Mr. Strom and Mr. Wachstaff. And... He should 00:52:19.449 --> 00:52:22.750 not be communicating with employees to suggest 00:52:22.750 --> 00:52:28.190 in any way that they not cooperate with Mr. Wagstaff 00:52:28.190 --> 00:52:32.769 and Mr. Strom and their representatives. All 00:52:32.769 --> 00:52:36.349 communications, all direction should be coming 00:52:36.349 --> 00:52:40.429 from Mr. Strom and Mr. Wagstaff. So while Mr. 00:52:40.690 --> 00:52:44.829 Albor can certainly have a discussion with Mr. 00:52:45.030 --> 00:52:52.110 Wagstaff, It's not a negotiation I agree with 00:52:52.110 --> 00:52:54.010 that your honor and he wasn't even suggesting 00:52:54.010 --> 00:52:56.469 that he was just suggesting as he comes into 00:52:56.469 --> 00:52:59.150 this business and Trying to deal with the vendors 00:52:59.150 --> 00:53:02.329 and all the issues that come up That he may have 00:53:02.329 --> 00:53:04.130 some experience that he can bring to bear to 00:53:04.130 --> 00:53:06.110 help because he does care about these companies 00:53:06.110 --> 00:53:08.670 I'm simply conveying that message. It's not to 00:53:08.670 --> 00:53:11.670 try to exercise control It's because he really 00:53:11.670 --> 00:53:13.989 does care about these companies and I can tell 00:53:13.989 --> 00:53:16.820 you Just from my discussions with him, and you 00:53:16.820 --> 00:53:18.739 can imagine over the amount of years that he's 00:53:18.739 --> 00:53:21.219 been with it, it's been a bumpy ride at the end 00:53:21.219 --> 00:53:24.159 here. But I don't question at least that he does 00:53:24.159 --> 00:53:26.659 care about the animals, Your Honor, so. Well, 00:53:26.679 --> 00:53:30.019 I understand that and I appreciate that. But 00:53:30.019 --> 00:53:34.340 at this point, if Mr. Wagstaff needs some assistance 00:53:34.340 --> 00:53:40.239 or thinks that Mr. Albor's knowledge and history 00:53:40.239 --> 00:53:44.099 is helpful. I'm sure he'll reach out. At this 00:53:44.099 --> 00:53:48.579 point, though, Mr. Albor needs to step back, 00:53:49.440 --> 00:53:54.940 and he needs to let Mr. Wagstaff and Mr. Strom 00:53:54.940 --> 00:54:01.460 take control and not interfere in any way with 00:54:01.460 --> 00:54:06.599 the operations of the company. So... I don't 00:54:06.599 --> 00:54:08.980 know that I can enter an order today, but I hope 00:54:08.980 --> 00:54:12.920 I've been real clear on what I expect. And I 00:54:12.920 --> 00:54:18.559 will not hesitate to, in essence, retroactively 00:54:18.559 --> 00:54:40.429 fine Mr. Albor if I find it appropriate. could 00:54:40.429 --> 00:54:43.409 purge by showing full compliance with the stay 00:54:43.409 --> 00:54:45.329 at a later date. Because if you look at your 00:54:45.329 --> 00:54:48.329 order, Your Honor, what it says is that Mr. Albor 00:54:48.329 --> 00:54:51.389 is to take the corrective measures that are listed 00:54:51.389 --> 00:54:55.030 in paragraph four. And then in paragraph seven, 00:54:55.289 --> 00:54:58.110 it states that Mr. Albor is to file a corrective 00:54:58.110 --> 00:55:02.989 certification. This order came out on June 5th. 00:55:03.090 --> 00:55:10.940 It's now. The corrective certification has not 00:55:10.940 --> 00:55:13.219 been filed. I'd submit to the court that the 00:55:13.219 --> 00:55:17.119 failure to file the corrective certification 00:55:17.119 --> 00:55:21.139 would be grounds to impose the penalty, which 00:55:21.139 --> 00:55:24.780 could be purged if the corrective certification 00:55:24.780 --> 00:55:28.440 is filed by some later date and it's not contested 00:55:28.440 --> 00:55:32.619 factually by the CRO. Because here's our concern, 00:55:32.780 --> 00:55:36.880 Your Honor. He's been violating the automatic 00:55:36.880 --> 00:55:39.199 stay every single day since this order came out. 00:55:39.880 --> 00:55:42.119 We will continue to do it between now and July 00:55:42.119 --> 00:55:46.980 23rd, even if we obtain compliance by July 23rd. 00:55:47.039 --> 00:55:49.260 That's four more weeks of damage that we might 00:55:49.260 --> 00:55:55.079 never recover. And so perhaps if the daily fine 00:55:55.079 --> 00:55:59.400 is accruing, for again, for failure to file the 00:55:59.400 --> 00:56:01.960 corrective certification, it's been since June 00:56:01.960 --> 00:56:05.980 5th. I mean, normally I think a normal former 00:56:05.980 --> 00:56:08.980 CEO of a debtor would file that within days. 00:56:10.480 --> 00:56:13.440 desperate to show their compliance with the court's 00:56:13.440 --> 00:56:16.760 order in the automatic stay. It's now two or 00:56:16.760 --> 00:56:20.659 three weeks later, it's not on file. It's not 00:56:20.659 --> 00:56:23.940 on file because he can't say that he's corrected 00:56:23.940 --> 00:56:26.420 the automatic, made the corrective measures. 00:56:27.320 --> 00:56:30.920 So let's impose the fine and this court can expunge 00:56:30.920 --> 00:56:34.860 or purge the fine if he later files the corrective 00:56:34.860 --> 00:56:36.760 certification and it's deemed to be accurate. 00:56:38.090 --> 00:56:40.269 Perhaps that's a way in which we can actually 00:56:40.269 --> 00:56:42.489 compel compliance, because to be frank, Your 00:56:42.489 --> 00:56:44.909 Honor, if if we're going to set the hearing for 00:56:44.909 --> 00:56:50.690 July 23rd, I would. Include the court to allow 00:56:50.690 --> 00:56:52.889 us to be able to file an emergency motion between 00:56:52.889 --> 00:56:55.690 now and then. I haven't stopped any of that. 00:56:55.750 --> 00:56:59.349 As I said, the debtor has been deciding procedurally 00:56:59.349 --> 00:57:04.969 how to handle this matter. I have not. Thank 00:57:04.969 --> 00:57:08.519 you, Your Honor. Mr. Kenan stole my thunder. 00:57:08.760 --> 00:57:10.559 I was going to point to paragraph seven. And 00:57:10.559 --> 00:57:13.539 again, Your Honor, my suggestion had been that 00:57:13.539 --> 00:57:16.159 the procedure that the debtors had chosen to 00:57:16.159 --> 00:57:18.440 follow was what we thought was the procedure 00:57:18.440 --> 00:57:21.159 that Your Honor had suggested, which was anticipating 00:57:21.159 --> 00:57:23.559 that the next move here, if you will, was for 00:57:23.559 --> 00:57:26.639 Mr. Albor to come into compliance with your order 00:57:26.639 --> 00:57:29.159 and to certify that he had come into compliance 00:57:29.159 --> 00:57:31.860 with your order. And given that we are three 00:57:31.860 --> 00:57:35.639 weeks away and just three days ago, three business 00:57:35.639 --> 00:57:38.849 days ago, Mr. Albor continued to violate your 00:57:38.849 --> 00:57:43.230 order in black and white by filing an amparo 00:57:43.230 --> 00:57:45.789 without asking your honor for relief from the 00:57:45.789 --> 00:57:49.070 automatic state to do so and filing that allegedly 00:57:49.070 --> 00:57:51.789 on behalf of the debtor, which your order said 00:57:51.789 --> 00:57:54.210 that he did not have the right to do so. That's 00:57:54.210 --> 00:57:56.070 why I say your honor, we seem to be going in 00:57:56.070 --> 00:57:57.789 the wrong direction. And so your honor, we're 00:57:57.789 --> 00:58:00.000 certainly happy to take. take the court's lead 00:58:00.000 --> 00:58:02.320 and will certainly proceed with with the hearing 00:58:02.320 --> 00:58:04.559 on the 23rd if that's that's that's the correct 00:58:04.559 --> 00:58:06.699 approach but i'll just i just wanted to note 00:58:06.699 --> 00:58:09.639 that that was for the hearing on the 23rd i'm 00:58:09.639 --> 00:58:12.599 giving you the hearing on the 23rd this is not 00:58:12.599 --> 00:58:16.900 my approach okay you asked for it i'm giving 00:58:16.900 --> 00:58:20.840 it to you whether i will impose sanctions today 00:58:20.840 --> 00:58:23.260 i'm going to think about i've heard the request 00:58:23.530 --> 00:58:25.889 And I'm going to think about it, and I will either 00:58:25.889 --> 00:58:28.369 issue an order or I won't. But I will give it 00:58:28.369 --> 00:58:29.949 some thought. Thank you, Your Honor. That's all 00:58:29.949 --> 00:58:32.489 I had. I appreciate the time. Let's move on to 00:58:32.489 --> 00:58:39.949 the next matter. Your Honor, if I may, I think 00:58:39.949 --> 00:58:41.989 that there's nothing else that requires me to 00:58:41.989 --> 00:58:43.730 be here. I'd just like to ask to be excused, 00:58:43.750 --> 00:58:46.610 if that's OK? Yes, certainly. Thank you, Your 00:58:46.610 --> 00:58:59.309 Honor. I think we're going to pivot now to the 00:58:59.309 --> 00:59:01.929 dip motion, which is agenda item number three. 00:59:03.409 --> 00:59:05.250 Now I'll keep my comments brief. We're now on 00:59:05.250 --> 00:59:08.829 the fourth iteration of our interim order. As 00:59:08.829 --> 00:59:10.829 has been previewed previously with the court 00:59:10.829 --> 00:59:14.170 and obviously today, given ongoing litigation 00:59:14.170 --> 00:59:16.909 efforts and the enforcement compliance efforts 00:59:16.909 --> 00:59:20.150 in this case, the debtors are in need of additional 00:59:20.150 --> 00:59:23.170 liquidity and funding. to prosecute the Chapter 00:59:23.170 --> 00:59:26.389 11 cases and to operate their businesses. As 00:59:26.389 --> 00:59:29.449 you heard today, the debtors have obtained access 00:59:29.449 --> 00:59:33.690 to their Mexican records and bank accounts and 00:59:33.690 --> 00:59:36.110 they are obtaining access to the revenues that 00:59:36.110 --> 00:59:39.110 are coming in as far as we know. So hopefully 00:59:39.110 --> 00:59:42.329 that will be easing some of the burden going 00:59:42.329 --> 00:59:45.170 forward. The River On team is working closely 00:59:45.170 --> 00:59:47.829 with their Mexican counterparts to determine 00:59:48.699 --> 00:59:50.440 cash flow needs and that kind of thing and are 00:59:50.440 --> 00:59:53.780 working on a prospective budget for later on. 00:59:53.900 --> 00:59:56.139 And we'll be updating the budget as additional 00:59:56.139 --> 01:00:03.420 information becomes available. The donors have 01:00:03.420 --> 01:00:05.460 requested and the lenders have agreed to fund 01:00:05.460 --> 01:00:07.760 an additional $10 million in new money dip loans. 01:00:10.000 --> 01:00:12.139 The debtors have submitted a budget in support 01:00:12.139 --> 01:00:15.079 of that additional commitment along with a declaration 01:00:15.079 --> 01:00:18.539 from Mr. Wagstaff detailing the funding need, 01:00:18.739 --> 01:00:21.719 the debtors' liquidity constraints, the challenges 01:00:21.719 --> 01:00:24.559 that the debtors have faced in these cases, and 01:00:24.559 --> 01:00:27.000 the debtors' limited ability to source financing 01:00:27.000 --> 01:00:30.820 from alternative sources. Mr. Wagstaff has been 01:00:30.820 --> 01:00:33.780 in Mexico dealing with operational issues for 01:00:33.780 --> 01:00:36.719 the past week or so. He is currently en route 01:00:36.719 --> 01:00:41.829 from Mexico. We did ask the court for accommodations 01:00:41.829 --> 01:00:44.929 that he could attend by Zoom today. He is present 01:00:44.929 --> 01:00:47.309 on Zoom and available for cross -examination 01:00:47.309 --> 01:00:50.289 if necessary. Although we understand today, which 01:00:50.289 --> 01:00:52.590 I'll get to in a moment, that there are no objections 01:00:52.590 --> 01:00:55.210 to the relief requested. So I don't anticipate 01:00:55.210 --> 01:00:57.309 that anybody will need to cross -examine him. 01:00:58.030 --> 01:00:59.510 So if there are no questions from the court, 01:00:59.750 --> 01:01:02.110 we'd like to move Mr. Wagstaff's declaration 01:01:02.110 --> 01:01:07.750 into evidence at this time. Any objections? I 01:01:07.750 --> 01:01:11.900 hear none. It's admitted. The debtors submit 01:01:11.900 --> 01:01:14.619 that the facts of these cases, additional financing 01:01:14.619 --> 01:01:17.679 at this point, is imperative to pay payroll, 01:01:17.900 --> 01:01:22.039 to satisfy operational expenses, etc. It's also 01:01:22.039 --> 01:01:23.860 important in this case, Your Honor, to fund a 01:01:23.860 --> 01:01:26.900 sale process. The debtors believe at this point 01:01:26.900 --> 01:01:30.239 that we are at a pivot in the Chapter 11 cases 01:01:30.239 --> 01:01:33.179 and that we can start to focus on more traditional 01:01:33.179 --> 01:01:38.480 Chapter 11 efforts. Referenced earlier the debtors 01:01:38.480 --> 01:01:41.079 did file retention applications for King Summit 01:01:41.079 --> 01:01:44.179 as a real estate advisor and Green Hill as an 01:01:44.179 --> 01:01:46.639 investment banker and those professionals have 01:01:46.639 --> 01:01:48.880 been consulting with the debtors on a go -forward 01:01:48.880 --> 01:01:52.360 sale process. We anticipate filing a sell motion 01:01:52.360 --> 01:01:57.880 in the next few weeks. As part of the additional 01:01:57.880 --> 01:02:01.860 agreement to provide additional funding in the 01:02:01.860 --> 01:02:05.239 Chapter 11 cases The lenders have demanded certain 01:02:05.239 --> 01:02:08.199 case milestones be implemented in the cases. 01:02:08.500 --> 01:02:11.579 These are standard milestones and are intended 01:02:11.579 --> 01:02:14.420 to put some structure and guardrails on the cases 01:02:14.420 --> 01:02:17.639 to ensure an efficient process. Those have been 01:02:17.639 --> 01:02:19.780 included in the supplement that we filed last 01:02:19.780 --> 01:02:26.400 week. Governor, we did file, in addition to the 01:02:26.400 --> 01:02:29.739 milestones, a proposed form of order with the 01:02:29.739 --> 01:02:32.610 supplement. That was circulated to the Office 01:02:32.610 --> 01:02:34.909 of the United States Trustee Council for the 01:02:34.909 --> 01:02:37.829 committee and the two parties that formally objected 01:02:37.829 --> 01:02:40.969 to the dip on a final basis. The order and the 01:02:40.969 --> 01:02:44.710 budget attached to that supplement both reflect 01:02:44.710 --> 01:02:46.610 the comments from those parties. And again, I 01:02:46.610 --> 01:02:48.449 don't believe there's any objection from those 01:02:48.449 --> 01:02:52.150 parties to the relief requested. We also received 01:02:52.150 --> 01:02:55.289 informal comments from Miami -Dade County yesterday. 01:02:58.480 --> 01:03:00.900 We have been discussing those with the lenders 01:03:00.900 --> 01:03:03.579 and Miami -Dade, and this morning we did file 01:03:03.579 --> 01:03:06.860 a further revised order to incorporate those 01:03:06.860 --> 01:03:09.019 informal comments, and I believe that Miami -Dade 01:03:09.019 --> 01:03:11.340 County's comments at this point have been resolved. 01:03:12.119 --> 01:03:15.559 That comment was very limited. I can point you 01:03:15.559 --> 01:03:19.139 to the section in the black line if necessary, 01:03:19.159 --> 01:03:21.400 Your Honor, but the comment I don't think is 01:03:21.400 --> 01:03:23.800 controversial, which is to say that the dip lean 01:03:24.420 --> 01:03:30.480 to the extent appropriate under applicable law, 01:03:30.699 --> 01:03:33.039 and then otherwise to the proceeds of those leases 01:03:33.039 --> 01:03:37.500 and leasehold interests. In addition, we did 01:03:37.500 --> 01:03:41.880 make one tweak to the milestones to fix a typo, 01:03:42.039 --> 01:03:44.219 but that was the extent of the changes to the 01:03:44.219 --> 01:03:48.030 further interim dip order. your honor the last 01:03:48.030 --> 01:03:49.670 thing that i'll note is that there is a little 01:03:49.670 --> 01:03:52.590 bit of a sense timing sensitivity here the debtors 01:03:52.590 --> 01:03:54.789 are in need of the funding as soon as possible 01:03:54.789 --> 01:03:57.969 and so we'd request your honor that if you have 01:03:57.969 --> 01:03:59.889 no further questions and that there are no objections 01:03:59.889 --> 01:04:02.889 to the relief requested that the order be entered 01:04:02.889 --> 01:04:06.250 as soon as possible okay thank you let me hear 01:04:06.250 --> 01:04:12.969 from others briefly if i may be heard your honor 01:04:16.679 --> 01:04:18.760 I'm going to hear from Mr. Hazeltine first. He's 01:04:18.760 --> 01:04:21.659 in the courtroom. Then I'll hear from you. Happy 01:04:21.659 --> 01:04:23.699 to defer to those that are live, Your Honor. 01:04:24.039 --> 01:04:26.079 Good afternoon, Your Honor. Bill Hazeltine of 01:04:26.079 --> 01:04:29.460 Sullivan Hazeltine Allentown on behalf of Tradewinds. 01:04:29.840 --> 01:04:31.679 And I first want to say it's good to see you 01:04:31.679 --> 01:04:36.460 again. It's been quite a while. So just a brief 01:04:36.460 --> 01:04:38.940 explanation. I don't want to go into detail because 01:04:38.940 --> 01:04:43.139 it's very it's a little complicated. My client 01:04:43.139 --> 01:04:45.400 situation is a little complicated. I don't want 01:04:45.400 --> 01:04:52.820 to prompt any unnecessary responses. But my client 01:04:52.820 --> 01:04:58.860 has a judgment lien that was recorded in Florida. 01:05:01.360 --> 01:05:06.360 And it asserts a first priority lien ahead of 01:05:06.360 --> 01:05:09.860 the first lien lenders on those assets. First 01:05:09.860 --> 01:05:12.260 lien lenders, the debtors, and the second lien 01:05:12.260 --> 01:05:16.539 lenders obviously don't agree with that. We followed 01:05:16.539 --> 01:05:24.400 an objection seeking adequate protection in the 01:05:24.400 --> 01:05:29.159 event that it's determined that my client is 01:05:29.159 --> 01:05:35.599 not senior. As I read the order, if we were senior 01:05:35.599 --> 01:05:38.699 to the first priority lanes, we'll also be senior 01:05:38.699 --> 01:05:45.340 to the dip. Putting aside we did file an objection 01:05:45.340 --> 01:05:47.760 to the what was supposed to be the final dip 01:05:47.760 --> 01:05:50.219 that it what turned out to be I think the second 01:05:50.219 --> 01:05:54.179 And I have reviewed the order that was attached 01:05:54.179 --> 01:05:58.179 to the supplement last week We obviously were 01:05:58.179 --> 01:06:01.099 concerned about the increase of 20 million new 01:06:01.099 --> 01:06:07.980 money we 10 million dollars in new money But 01:06:07.980 --> 01:06:10.840 I think this hearing has enlightened me quite 01:06:10.840 --> 01:06:15.440 a bit on why that is the case. So we don't oppose 01:06:15.440 --> 01:06:18.059 the entry of the order that was attached to the 01:06:18.059 --> 01:06:20.559 supplement that was followed last week. Thank 01:06:20.559 --> 01:06:27.960 you. Thank you. Mr. Gold. Thank you and good 01:06:27.960 --> 01:06:30.260 afternoon, Your Honor. Ivan Gold of Allen Mackins 01:06:30.260 --> 01:06:34.059 for Keyes Hotel Operator, Inc., which is doing 01:06:34.059 --> 01:06:37.329 business as the Hawks K Resort. one of the debtor's 01:06:37.329 --> 01:06:39.210 facilities, the one in the Keys, that has been 01:06:39.210 --> 01:06:43.030 referred to. We have an objection at 146 on the 01:06:43.030 --> 01:06:45.269 docket that has been pending for quite some time. 01:06:45.989 --> 01:06:49.429 We do not dispute the debtor's need given the 01:06:49.429 --> 01:06:51.510 circumstances that have brought us here today 01:06:51.510 --> 01:06:55.969 for increased liquidity to continue to have the 01:06:55.969 --> 01:06:59.750 estate's function in light of the continuing 01:06:59.750 --> 01:07:03.409 disputes with Mr. Albor and Mexico. However, 01:07:03.449 --> 01:07:05.409 we have a number of issues we've raised in our 01:07:05.409 --> 01:07:10.909 objection. The ability of the lenders to seek 01:07:10.909 --> 01:07:13.809 to impose a lien on a license agreement, which 01:07:13.809 --> 01:07:17.909 we contend is not valid under Florida law, as 01:07:17.909 --> 01:07:22.090 well as the bankruptcy code. The adequacy of 01:07:22.090 --> 01:07:25.010 the budget, which is, to say the least, a moving 01:07:25.010 --> 01:07:27.869 target under the circumstances of these cases. 01:07:29.739 --> 01:07:32.920 whether and at what point a 506c waiver may be 01:07:32.920 --> 01:07:35.500 appropriate. We've asked for adequate protection. 01:07:36.619 --> 01:07:39.280 Obviously in the context of an interim order 01:07:39.280 --> 01:07:43.519 that will take us to July 23rd, we do not have 01:07:43.519 --> 01:07:45.559 objection to continue proceeding on an interim 01:07:45.559 --> 01:07:48.219 basis. I just wanna remind the court, these are 01:07:48.219 --> 01:07:50.820 some substantial issues and it sounds like we're 01:07:50.820 --> 01:07:52.840 gonna have a lot of stuff to do on July 23rd 01:07:52.840 --> 01:07:55.869 and I hope they do not get lost. in the process. 01:07:56.030 --> 01:07:58.929 They also do relate to the sale process that 01:07:58.929 --> 01:08:03.449 the debtor seeks to engage in. Obviously, our 01:08:03.449 --> 01:08:06.090 concern is in the context of a license agreement 01:08:06.090 --> 01:08:08.750 under Florida law, whether this is even a transferable 01:08:08.750 --> 01:08:12.110 interest under the terms of the document. But 01:08:12.110 --> 01:08:15.090 these are all issues for another day, but I just 01:08:15.090 --> 01:08:18.210 wanted to make it clear that the entry of the 01:08:18.210 --> 01:08:20.109 interim order does not prejudice any of that 01:08:20.109 --> 01:08:25.460 stuff. We have continuing dialogue with the debtors, 01:08:25.560 --> 01:08:28.260 and that will, of course, continue in advance 01:08:28.260 --> 01:08:31.439 of the hearing. But just want to make sure that 01:08:31.439 --> 01:08:35.859 we do not get elbowed out by the main event, 01:08:36.840 --> 01:08:40.680 which has predominated in this case. But I said 01:08:40.680 --> 01:08:44.420 at a prior hearing, and Ms. Melkey said it very 01:08:44.420 --> 01:08:47.859 well in her comments on this motion, we still 01:08:47.859 --> 01:08:51.260 have traditional Chapter 11 processes. to pursue 01:08:51.260 --> 01:08:55.960 and we welcome the opportunity to present these 01:08:55.960 --> 01:08:58.600 issues in that context. Thank you for listening, 01:08:58.819 --> 01:09:28.210 Your Honor. Why is the dip so large in such a 01:09:28.210 --> 01:09:31.489 short period of time? And the answer is simple. 01:09:32.130 --> 01:09:34.510 The answer is that the parks outside of Mexico 01:09:34.510 --> 01:09:36.750 are the ones we can control, the debtors can 01:09:36.750 --> 01:09:39.170 control, and those are the parks that I would 01:09:39.170 --> 01:09:42.649 describe as cash flow neutral. The park that 01:09:42.649 --> 01:09:46.470 has 1 .7 million visitors a year and generates 01:09:46.470 --> 01:09:49.369 a majority of the company's revenue are the parks 01:09:49.369 --> 01:09:51.470 that are located, the dozen or so parks that 01:09:51.470 --> 01:09:55.529 are located in Mexico. over which the CRO is 01:09:55.529 --> 01:09:59.390 trying to still wrestle control. Your Honor, 01:09:59.510 --> 01:10:01.670 I would like to point out that there is an event 01:10:01.670 --> 01:10:07.210 of default in the DIP whereby if the debtors 01:10:07.210 --> 01:10:10.909 lack control over their assets, that can be declared 01:10:10.909 --> 01:10:13.670 as an event of default. We are not declaring 01:10:13.670 --> 01:10:15.810 that event of default now, although we probably 01:10:15.810 --> 01:10:18.310 could, and we certainly don't have any intentions 01:10:18.310 --> 01:10:20.949 to do so in the near future. However, I just 01:10:20.949 --> 01:10:22.630 wanted to make it clear at this hearing that 01:10:22.630 --> 01:10:35.909 we're or a strategy here is to try and wear the 01:10:35.909 --> 01:10:38.649 matters down. And, you know, for that reason, 01:10:38.810 --> 01:10:44.170 I would, you know, just be, you know, I don't 01:10:44.170 --> 01:10:47.550 want to ask the court upfront, but it is entirely 01:10:47.550 --> 01:11:10.899 possible. I'm going to approve the dip with the 01:11:10.899 --> 01:11:14.180 revised form of order. This is another interim 01:11:14.180 --> 01:11:20.439 dip. The need has been shown by the declaration 01:11:20.439 --> 01:11:23.600 in support, as well as the representations of 01:11:23.600 --> 01:11:28.539 council. There's no objection on an interim basis 01:11:28.539 --> 01:11:35.680 to this. Everyone's, the two objectors, objections 01:11:35.680 --> 01:11:39.159 are preserved. for a final hearing or a future 01:11:39.159 --> 01:11:45.800 hearing on another DIP. And I did review the 01:11:45.800 --> 01:11:48.939 limited changes to the previous form of order. 01:11:50.039 --> 01:11:59.460 They do seem pro forma and resolve an informal 01:11:59.460 --> 01:12:10.060 objection. So I will approve the DIP again. The 01:12:10.060 --> 01:12:13.119 only administrative comment I'll make is that 01:12:13.119 --> 01:12:14.819 I believe my office is uploading an order as 01:12:14.819 --> 01:12:16.500 we speak, so it'll be ready for you whenever 01:12:16.500 --> 01:12:18.359 you're ready. That's fine. I'll take a look at 01:12:18.359 --> 01:12:20.680 it. We'll get it entered this afternoon. Thank 01:12:20.680 --> 01:12:23.220 you very much. Thank you. And I believe that's 01:12:23.220 --> 01:12:25.600 all we have for today, so we're adjourned.