WEBVTT

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I'm Sean Greacher from Young Conaway on behalf

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of the debtors. Your Honor, we generally start

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these cases with a status update. Let's give

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you a quick one. On the first day hearing, you'll

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recall Mr. Braden described the three phases

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we anticipated in this case. Phase one being

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stabilizing proper management and oversight of

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the business, ensuring animal safety and necessary

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operational controls in connection with the Chapter

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11. getting our arms around the financial operations

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of the business, digging into the company books

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and records, complying with reporting requirements

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called for by the rules, and determining the

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best path forward through this process from an

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operational standpoint. Your Honor, we feel like

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we are getting close to closing out most of phase

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one. Sadly, it took much longer and was much

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more costly than anyone hoped. I think that that

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was caused largely by Mr. Albor's willful stable

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violations, and we still do have some gaps. We'll

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talk about those later today. Unfortunately,

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we've uncovered a number of operational challenges

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resulting from some of prior management decisions

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which the Rebron team has been tackling. Phase

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two of the case was state value maximization.

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That process is now underway, and we expect this

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to kick into full steam as the phase one process

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starts to taper off. The advisors, Greenhill

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and Keene Summit, have kicked off the marketing

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process. We hope that the procedural orders related

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to future sales will help us move forward quickly.

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to preserve and generate as much value as possible.

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We've received substantial interest from various

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parties as to a number of assets and we're optimistic

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that the process will be successful. And then

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we talked about phase three. We now do have most

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of the books and records preserved. We're learning

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more and more each day about how these companies

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were run and we will be poised for a full investigation

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and accounting of the historical issues related

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to these debtors. So I think... In some, we are

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moving forward. This has been a challenging case

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so far. We are hopeful that we are getting to

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a place where this becomes run more like a normal

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Chapter 11 case in short order. So with that,

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unless Your Honor has any questions, I propose

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we just kick into the agenda. Let Mr. Kashanash

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step up. Thank you. I do not have any questions.

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Jared Toshinosh from Young Conway, Starr and

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Taylor on behalf of the debtors. I'll be handling

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the miscellaneous asset sale procedures and the

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bidding procedures motions. But first, a little

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housekeeping matter. We did submit a declaration

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from our investment banker, Mr. Jakub Malechko,

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at docket number 364. Mr. Malechko is appearing

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virtually today and we thank your honor for allowing

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that. So with that, we would... Respectfully

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move in to evidence the declaration of Mr. Molechko.

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Is there any objection? I hear none, it's admitted.

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Does anyone wish to cross examine or is going

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to wish to cross examine Mr. Molechko? I hear

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no one. Thank you, Your Honor. Mr. Molechko has

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actually an immovable conflict towards the end

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of the act. So unless your honor has any questions

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for him, we would respectfully request that he

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be permitted to leave the virtual hearing when

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appropriate. I don't think I have questions for

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him. I have some questions. We'll get to them.

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Okay, your honor. Sounds good. Thank you very

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much. So starting with the miscellaneous asset

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sale procedures motion. I think before we get

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into it, it's important to sort of take a step

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back and set some context for when we were preparing

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these motions about a month ago. First, the debtors'

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assets, as you know, comprise a very diverse

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set of assets, both in terms of your geography

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and the types of assets. They range from parks,

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equipment, and obviously to animals. Moreover

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some some properties are going to be sold as

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going concern sales while others may just be

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sold for the real estate And obviously in addition

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to those levels of complexity You have all the

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issues that mr. Greacher was just referencing

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a moment ago where we have been struggling obtained

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control of the books and records. So when we

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started out, this was sort of a black box. And

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as we've progressed through these cases, it has

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become less and less of a black box. But we did

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need to file the motions, and we needed to do

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so in order to be ready to basically hit the

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ground running when the time came. And that time

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is now. those levels of complexity to address

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those. We created a framework that we thought

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provided flexibility while also building in what

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we believe to be appropriate notice to parties

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in interest. But now that we have studied the

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ship, we are hopeful that this will, as Mr. Reacher

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also alluded to, become more of a normal standard

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sale process where we can hopefully group as

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many assets together and we are not running multiple.

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parallel sale process at the same time. I think

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that would, we are trying our best to be efficient

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as possible while also progressing in a way that

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maximizes the value of the debtors complex asset

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structure. So with that sort of high level background,

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I guess I've moved into the miscellaneous asset

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sale procedure motion, which is agenda item number

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eight and docket number 298. I don't think I

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need to add much to what I've already said and

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what's set forth in the motion. These miscellaneous

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asset sales are, again, designed to provide efficiency

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and flexibility to the debtors in monetizing

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their various assets. And with respect to this

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particular motion, we have three categories of

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assets, the real property, the personal property,

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and the animals, all with their varying thresholds

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and notice periods. But with that, I guess I

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would open it up to your honor to address any

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questions that you have. Well, the big questions

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I do have, I guess, on this cell motion is with

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respect to the animals, which are included, and

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who is getting notice. with respect to the sale

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of a particular animal or group of animals. Because

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I did not see in this motion any notice to any

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regulatory body that's responsible for animal

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welfare. Understood and I think I think we would

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give them notice but I think we can make that

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more explicit in the order in by adding into

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the notice parties all applicable regulators,

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if that would solve your honor's concern. I think

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it's a must. It's not discretionary. And they

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need to get notice of any sale of any animal.

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And I would like in here who that is. I would

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like the applicable regulatory entities specified.

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The debtors should know who those entities are,

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the regulators or whoever they are, and they

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need to be notified on every sale of any animal.

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Or if something's, I can't imagine, you're abandoning

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any animal or whatever the situation might be.

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But I thought that was a notable... hole in these

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procedures. I think the miscellaneous asset sale

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notice to the extent that it deals with an animal

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needs to also include how that animal is being

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transported. how it's being protected, et cetera.

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There needs to be more. This is a unique, in

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this aspect, and maybe only this aspect, this

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debtor is unique and, you know, the multiple

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sales or we're selling it in piece parts or they're

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not going concerned, none of that is atypical.

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I think the only atypical part of this the sale

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motion is that we're dealing with animals. And

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so that's going to be my question on every sale

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or other disposition of any animals is how are

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they being cared for? How are they being transported?

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Who's overseeing it? Do the regulators have the

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appropriate notice? That's what I'm gonna be

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looking for. So that needs to be specifically

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put in here By no means were the debtors Attempting

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to flout any of their responsibilities to regulators.

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We are very keen and acutely aware of all the

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regulations and we Understood if any there is

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any disposition of animals We certainly were

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intending to follow and provide notice to all

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the regulators, but I agree that we can include

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this more explicitly in the order and notice.

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And I should note, you mentioned abandoning.

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We do not, this is not like the other de minimis

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asset sales. I did a control F for abandoned

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before I got here and there is no mention of

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abandonment. So this procedure will not be dealing

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with abandonment. But we appreciate your honors

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comments and we will incorporate those. The only

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issue that I had with the de minimis sale motion.

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So if you revise that form of order submitted

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under certification after it's been circulated,

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I anticipate signing it. Understood, Your Honor.

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And for the notice, I guess we will put in a

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bracket to be updated as applicable if and when

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an animal is sold. Say that again? Just for purposes

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of submitting the order under COC. In the notice,

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we will put a bracket in for basically who will

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be in charge of the transportation to be updated

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at the applicable time when an animal is sold.

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To make it clear when the order goes out that

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if and when we sell an animal, that bracket will

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be updated with all the necessary information.

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Thank you. Thank you, your honor. So moving on

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to the bidding procedures motion. We did receive

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several comments from several parties. And first,

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I'd like to thank the Office of the United States

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Trustee, Ms. Leamy is here, who is filling in

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for Ms. McCollum, who is filling in for Mr. Hackman.

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We thank all of them for participating and their

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responses. I believe they were very additive

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in this regard. But after we, and we did submit

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a COC, resolving the various comments from the

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parties, but when we heard from Your Honor's

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chambers that there was questions, alarm bells

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went off at the offices of Young Conway, and

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we did a more thorough scrub of the order. We

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didn't want to market too much further after

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we submitted a COC, but we did catch some more

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issues that... may be helpful to your honor.

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And we did circulate an incremental red line

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to various parties, including the United States

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trustee, the official committee of on -secret

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creditors, and all the other respondents who

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did provide comments to the form of order. I

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do have an incremental red line. It is just seven

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pages, mostly clarifying changes. controversial

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and as I said I believe all the parties who received

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this I circulated a few hours ago they most if

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not all responded with saying they do not object

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but just to quickly walk through the incremental

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red line this first one on page 8 follow this

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just clarifies that the objection will be filed

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following the filing of a stocking horse notice

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rather than just simply thereafter which was

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a little unclear On paragraph 15, when the debtors

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are serving the bidding procedures, we have added

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to the extent not already served. I believe that

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came about because the bidding procedures were

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originally attached to the motion. And so now

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we have included the bidding procedures as a

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exhibit to the order. So I think paragraph 15

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would have been a little duplicative in terms

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of serving. So that is the reason you see that

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to the extent not already served. The next one

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on paragraph 21, Electronical is, I don't think

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a word, although Spellcheck did not catch that.

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This I would say is the more substantive change,

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but again, it is not prejudicial because this

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is with respect to the service of a cure notice.

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We had originally put in service on bid procedure

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notice parties, which actually as a defined term

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included the creditor matrix. And we don't, I

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don't think we ever serve cure notices on the

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entire creditor matrix. So here we've changed

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that to the non -debtor contract counterparties

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and all those entitled to notice. The next one,

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again, is a clarifying change, just making clear

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that the objection we are speaking about with

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respect to the designated contract is with respect

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to the assumption and assignment of the designated

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contract. Paragraph 26, again, electronical,

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and then in the first sentence, rather than,

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say, listed above. we were more specific and

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put in paragraph 25, which sets out the actual

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specific items that we are referencing there.

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Paragraph 17, this discusses objections to the

00:16:19.799 --> 00:16:23.759
proposed form of adequate assurance. This was,

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I think, a holdover that was not updated when

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we received comments from the landlord. It basically

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says that the original order had said that the

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objection will be heard at the sale hearing or

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supplemental designated contract hearing. But

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we have since changed that in connection with

00:16:43.159 --> 00:16:45.639
some comments that we received. So we just simply

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put in accordance with this bidding procedures

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order. And then again, the last one is paragraph

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32. And that is just, again, a clarifying change

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that. an objection must be filed no later than

00:16:59.590 --> 00:17:01.769
three business days, but it can be filed earlier

00:17:01.769 --> 00:17:05.950
than three business days. So that's the incremental

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changes from what was filed as a COC at docket

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number 369. And again, I won't say, I don't think

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I need to say much more than my introductory

00:17:17.750 --> 00:17:20.170
remarks with respect to the bidding procedures.

00:17:20.990 --> 00:17:24.069
We designed them in a way that we hoped balanced

00:17:24.069 --> 00:17:26.900
the need for flexibility in these cases while

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also providing adequate notice to all parties

00:17:30.819 --> 00:17:34.279
in interest. So with that, again, I will open

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it up to your honor for your questions. I do

00:17:44.420 --> 00:17:47.200
have questions regarding the contract assumption

00:17:47.200 --> 00:17:51.200
and assignment procedures. And I'm not sure quite

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frankly if the motion differs from the order.

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But I flagged some things in the in the motion

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and particularly on page 31. This is 31 of the

00:18:18.339 --> 00:18:21.380
motion. I just want to make sure I understand

00:18:21.380 --> 00:18:30.380
what's happening. Because of the way that these

00:18:30.380 --> 00:18:33.079
notices are going out, are people going to be,

00:18:33.200 --> 00:18:35.420
counter -contract parties, going to be receiving

00:18:35.420 --> 00:18:39.019
more than one notice with respect to their contracts?

00:18:39.700 --> 00:18:43.420
Are they gonna have to keep looking for something

00:18:43.420 --> 00:18:46.259
else in the mail that says you may be impacting

00:18:46.259 --> 00:18:49.700
their contract? Because that's how it struck

00:18:49.700 --> 00:18:52.259
me as I was reading this, and I could be wrong.

00:19:12.880 --> 00:19:14.380
Well, first it starts, you know, we're going

00:19:14.380 --> 00:19:17.640
to post on the website. That's not noticed to

00:19:17.640 --> 00:19:20.880
anybody, posting on a website. Okay? So do I

00:19:20.880 --> 00:19:22.740
have to look on the website? Is it going to be

00:19:22.740 --> 00:19:24.920
changing? How many notices am I going to get?

00:19:24.960 --> 00:19:29.619
It just seemed to be a little unclear to me of

00:19:29.619 --> 00:19:32.319
all the places that a contract party is going

00:19:32.319 --> 00:19:34.660
to be expected to look to protect their rights.

00:19:35.299 --> 00:19:40.119
Sir, I believe the case website and the various

00:19:40.119 --> 00:19:43.269
provisions related thereto were... were included

00:19:43.269 --> 00:19:48.170
as just a backup means to in case other in case

00:19:48.170 --> 00:19:52.490
parties wanted to look or More of a belt and

00:19:52.490 --> 00:19:56.430
suspenders sort of approach with respect to whether

00:19:56.430 --> 00:20:00.529
They will be receiving multiple notices. I I

00:20:00.529 --> 00:20:03.009
don't I don't believe that would be the case

00:20:03.009 --> 00:20:08.710
but If if it is unclear that it's something that

00:20:08.710 --> 00:20:12.710
we can revise to make clear that I think the

00:20:12.710 --> 00:20:15.089
way it was structured or supposed to be structured

00:20:15.089 --> 00:20:17.910
was the contract counterparties will be getting

00:20:17.910 --> 00:20:21.509
a notice as they typically do with respect to

00:20:21.509 --> 00:20:26.190
the cures. And if there's any amendments to that,

00:20:26.609 --> 00:20:28.869
we would file a supplemental contract notice.

00:20:29.650 --> 00:20:34.630
But I believe, I understand your honor's concern

00:20:34.630 --> 00:20:37.029
with respect to how this is structured or at

00:20:37.029 --> 00:20:41.109
least phrased. We can. Clean this up a bit to

00:20:41.109 --> 00:20:43.130
make it clear that they will only be receiving

00:20:43.130 --> 00:20:47.230
one notice. I think this was. More like I said,

00:20:47.250 --> 00:20:50.250
a belt and suspenders not not meant to confuse

00:20:50.250 --> 00:20:52.750
anyone, but I understand your honors concern.

00:20:54.849 --> 00:20:58.849
OK. Footnote on this page. For the avoidance

00:20:58.849 --> 00:21:01.329
of doubt, the failure by the debtors to list

00:21:01.329 --> 00:21:05.170
a contract. On the designated contract list shall

00:21:05.170 --> 00:21:08.089
not be deemed an admission that it's not executory.

00:21:08.410 --> 00:21:10.869
and not subject to assumption and assignment,

00:21:11.789 --> 00:21:14.630
and the proposed cure cost for any such contract

00:21:14.630 --> 00:21:18.490
shall be deemed zero. I don't get that. If you

00:21:18.490 --> 00:21:20.769
didn't put it on the designated contract list,

00:21:20.849 --> 00:21:23.769
there's nothing to deem zero. You gotta send

00:21:23.769 --> 00:21:25.829
a notice to somebody and you gotta send them

00:21:25.829 --> 00:21:28.769
a cure amount. I'm not gonna deem somebody zero

00:21:28.769 --> 00:21:31.730
by the absence of the contract on the designated

00:21:31.730 --> 00:21:35.210
contract list. And I don't know that I found

00:21:35.210 --> 00:21:37.470
that in the order, but since it's in the motion,

00:21:38.620 --> 00:21:41.559
I'm raising it. If it's in the order, or if it's

00:21:41.559 --> 00:21:43.700
in any of these notices, it needs to come out.

00:21:43.900 --> 00:21:47.480
I don't believe it is, but we will scrub the

00:21:47.480 --> 00:21:51.319
order of notices to make sure it comes out. Paragraph

00:21:51.319 --> 00:21:58.599
40. A counterparty to a designated contract listed

00:21:58.599 --> 00:22:00.500
on the notice of assumption and assignment may

00:22:00.500 --> 00:22:04.539
file an objection only if such objection is to

00:22:04.539 --> 00:22:07.509
the proposed assumption and assignment. of the

00:22:07.509 --> 00:22:09.950
applicable designated contract or the proposed

00:22:09.950 --> 00:22:11.990
cure costs. What does that mean? They can't file

00:22:11.990 --> 00:22:15.829
an objection on some other basis? Am I limiting

00:22:15.829 --> 00:22:18.970
objections that people can file? Again, I'm not

00:22:18.970 --> 00:22:20.750
sure I saw this in the order, but it's here in

00:22:20.750 --> 00:22:24.170
the motion. And it's to me an unusual provision.

00:22:27.150 --> 00:22:30.470
I do I think that was referencing specifically

00:22:30.470 --> 00:22:33.630
with respect to their if they receive and I don't

00:22:33.630 --> 00:22:35.609
think it's precluding them from raising an objection

00:22:35.609 --> 00:22:38.109
with respect to the sale or otherwise but if

00:22:38.109 --> 00:22:44.730
you are listed on the notice as a contract counterparty

00:22:44.730 --> 00:22:50.029
if you are objecting to these to the the notice

00:22:50.029 --> 00:22:54.130
itself that would be limited to the assumption

00:22:54.130 --> 00:22:56.210
of assignment of such contract, but I don't think

00:22:56.210 --> 00:22:58.569
that is precluding. I'm not going to make someone

00:22:58.569 --> 00:23:00.849
file three different objections. They can file

00:23:00.849 --> 00:23:03.869
one objection to anything they have. If they

00:23:03.869 --> 00:23:06.089
want to file more than one objection and separate

00:23:06.089 --> 00:23:09.890
out their notice and cure amount from their cell

00:23:09.890 --> 00:23:12.670
objection, they can, but I'm not precluding people

00:23:12.670 --> 00:23:16.470
from filing one objection to whatever it is they

00:23:16.470 --> 00:23:22.349
think they have a right to object to. So if that's

00:23:22.349 --> 00:23:24.750
in the order and I missed it, that's got to come

00:23:24.750 --> 00:23:29.170
out. Okay. Understood. I don't think it is. I

00:23:29.170 --> 00:23:31.289
will double check. I'm not sure if it is. I don't

00:23:31.289 --> 00:23:33.049
think it is, but we will double check to make

00:23:33.049 --> 00:23:37.890
sure. Yeah. Paragraph 41 suggests the same thing.

00:23:37.970 --> 00:23:42.269
So it's a counterparty to a designated contract.

00:23:43.750 --> 00:23:46.509
If they file a designated contract objection

00:23:46.509 --> 00:23:49.150
that is consistent with the requirements set

00:23:49.150 --> 00:23:52.589
forth above, then something happens. I'm not

00:23:52.589 --> 00:23:55.970
getting that granular, okay? They file an objection,

00:23:56.130 --> 00:23:58.390
they file an objection. We deal with it. It doesn't

00:23:58.390 --> 00:24:01.569
have to be consistent with some preconceived

00:24:01.569 --> 00:24:04.990
notion that the debtor has about how that objection

00:24:04.990 --> 00:24:07.450
should look. Again, I think these are unusual

00:24:07.450 --> 00:25:14.119
provisions and unnecessary. I'm looking at the

00:25:14.119 --> 00:25:18.839
order now. The red line with the CO5. The red

00:25:18.839 --> 00:25:30.180
line. Okay. I'm not sure I fully appreciate the

00:25:30.180 --> 00:25:33.640
sliding scale you have here on all the different

00:25:33.640 --> 00:25:41.259
days. Somewhere I thought the sale objection

00:25:41.259 --> 00:25:45.700
deadline was 30 days after service and here it's

00:25:45.700 --> 00:25:49.039
15 to 60 days. So how does the when does the

00:25:49.039 --> 00:25:53.500
15 days kick in versus the 30 days? I believe

00:25:53.500 --> 00:26:06.339
you are referencing paragraph. 32 says. Objection

00:26:06.339 --> 00:26:09.829
to any sale transaction. must be filed no later

00:26:09.829 --> 00:26:13.049
than the date that is 30 days from the bid procedures

00:26:13.049 --> 00:26:16.910
trigger date. Yes. And then in your timeline

00:26:16.910 --> 00:26:21.670
back in paragraph two, the bid procedures trigger

00:26:21.670 --> 00:26:26.769
date is day zero. And sale objection deadline

00:26:26.769 --> 00:26:29.950
is 15 to 60 days. So how does that comport with

00:26:29.950 --> 00:26:33.849
paragraph 32? Yes, this was something that we

00:26:33.849 --> 00:26:37.890
also saw and thought that we would discuss. I

00:26:37.890 --> 00:26:42.609
think with paragraph 32, this is a no later than

00:26:42.609 --> 00:26:46.490
date. I think nothing in this chart that you're

00:26:46.490 --> 00:26:49.849
referencing was meant to deviate from any local

00:26:49.849 --> 00:26:53.349
rules or notice requirements. So I think the

00:26:53.349 --> 00:26:57.470
day 15 sale objection deadline is we would go

00:26:57.470 --> 00:27:00.809
out with, in some circumstances, the regular

00:27:00.809 --> 00:27:04.869
21 days notice with an objection deadline of

00:27:04.869 --> 00:27:12.769
15 days out. We're in no way attempting to deviate

00:27:12.769 --> 00:27:17.569
from any of the rules, and we can set the objection

00:27:17.569 --> 00:27:21.569
deadline for date 30 in the chart to make it

00:27:21.569 --> 00:27:25.569
clear and comport with paragraph 32. And with

00:27:25.569 --> 00:27:30.670
respect to the outside date of day 60, that I

00:27:30.670 --> 00:27:33.369
think just reflects the potential for the debtors

00:27:33.369 --> 00:27:39.099
to set a later date. necessary which would be

00:27:39.099 --> 00:27:41.279
beneficial to creditors and provide more notice

00:27:41.279 --> 00:27:45.619
but if there are anything that we could clarify

00:27:45.619 --> 00:27:53.680
with respect to this chart. I appreciate the

00:27:53.680 --> 00:27:57.599
attempt to try to build in flexibility but I

00:27:57.599 --> 00:27:59.859
think you've actually confused many things in

00:27:59.859 --> 00:28:02.619
doing that and I'm not sure it was necessary.

00:28:04.329 --> 00:28:06.509
I can tell you right now that if anybody misses

00:28:06.509 --> 00:28:11.049
a date, there's going to be a lot of leeway given

00:28:11.049 --> 00:28:12.990
to people because I think this is confusing.

00:28:13.450 --> 00:28:16.529
If 30 days is an outside date and you make something

00:28:16.529 --> 00:28:18.869
15 and somebody thought they had 30 days because

00:28:18.869 --> 00:28:20.630
they read this, they're going to get 30 days.

00:28:21.210 --> 00:28:32.559
So I think it's confusing. And I don't know how

00:28:32.559 --> 00:28:34.759
sitting up here on the bench to make your order

00:28:34.759 --> 00:28:39.339
not confusing, okay, with respect to these sliding

00:28:39.339 --> 00:28:45.839
scale days. But I'm gonna give people leeway

00:28:45.839 --> 00:28:48.539
that miss a deadline because of these sliding

00:28:48.539 --> 00:28:51.799
scales and the inconsistencies. So that's all

00:28:51.799 --> 00:29:07.059
I'm saying. If these notices go out, we will

00:29:07.059 --> 00:29:10.359
be clear on the specific days. I think the point

00:29:10.359 --> 00:29:14.440
of this order was to provide a sense of the potential

00:29:14.440 --> 00:29:17.619
timeline in connection with these sales, but

00:29:17.619 --> 00:29:22.000
when we do file a trigger notice, it will say

00:29:22.000 --> 00:29:28.880
your objection deadline is day X. Okay, and what

00:29:28.880 --> 00:29:31.680
deadline am I approving with respect to that

00:29:31.680 --> 00:29:35.480
if it's not in here and it's not clear? I think

00:29:35.480 --> 00:29:39.160
you would be approving, if your honor agrees,

00:29:39.400 --> 00:29:43.279
with paragraph 32, the objection deadline set

00:29:43.279 --> 00:29:47.299
forth, it shall be no later than 30 days, unless...

00:29:47.299 --> 00:29:50.319
Well, I'm more concerned with it's no earlier

00:29:50.319 --> 00:29:54.160
than. No later than doesn't, doesn't, doesn't

00:29:54.160 --> 00:29:57.339
bother me at all. It's the no earlier than. If

00:29:57.339 --> 00:29:59.859
you said something for seven days, that's no

00:29:59.859 --> 00:30:02.119
later than 30, but I might have a problem with

00:30:02.119 --> 00:30:05.220
seven days. So it's really the no earlier than

00:30:05.220 --> 00:30:10.160
that I care about, and that matters for purposes

00:30:10.160 --> 00:30:13.339
of appropriate notice, not that outside date.

00:30:13.460 --> 00:30:16.839
30 days is fine for notice of a sale, I think,

00:30:16.839 --> 00:30:19.940
under our rules, but seven days would not be.

00:30:21.240 --> 00:30:26.299
So I find this order confusing on the dates.

00:30:27.640 --> 00:30:31.640
Understood. I think in paragraph 32, Would it

00:30:31.640 --> 00:30:35.119
be acceptable to change it from no later than

00:30:35.119 --> 00:30:38.019
to no earlier than? I think it should be no earlier

00:30:38.019 --> 00:30:41.099
than. I think that no later than doesn't matter.

00:30:43.000 --> 00:30:45.279
Understood, so we will change paragraph 32 to

00:30:45.279 --> 00:30:48.039
no earlier than. No earlier than whatever the

00:30:48.039 --> 00:30:51.440
rules provide. Correct. Whatever date that is,

00:30:51.440 --> 00:30:55.180
which I don't know off the top. And then we will

00:30:55.180 --> 00:31:00.819
change the chart from day 15 to day 30. However.

00:31:01.099 --> 00:31:04.960
your chart works, I will confess to finding the

00:31:04.960 --> 00:31:10.799
chart confusing. Understood and like I said,

00:31:10.859 --> 00:31:13.880
this was unique circumstances and I don't think

00:31:13.880 --> 00:31:16.299
you'll ever see this chart again, God willing.

00:31:19.539 --> 00:31:24.319
You should put that in the order somewhere. But

00:31:24.319 --> 00:31:27.420
yes, like I said, this chart was meant to set

00:31:27.420 --> 00:31:31.200
up basically parameters for how the sale process

00:31:31.200 --> 00:31:33.859
is going to play out to give parties at least

00:31:33.859 --> 00:31:36.440
some sort of idea as to when they would expect

00:31:36.440 --> 00:31:41.500
the various time, how the process would play

00:31:41.500 --> 00:31:45.059
out and the various dates. But when we file the

00:31:45.059 --> 00:31:49.460
applicable notices, we will do so in a way that

00:31:49.460 --> 00:31:51.819
comports with the date ranges set forth in this

00:31:51.819 --> 00:31:55.420
chart, but they will be exact dates to make clear.

00:31:56.380 --> 00:32:00.119
It will not be we are we are having an auction

00:32:00.119 --> 00:32:03.880
sometime in the future between days 35 30 and

00:32:03.880 --> 00:32:06.460
35 and 80 it will be we are having an auction

00:32:06.460 --> 00:32:10.859
on day Whatever day 40 is that will be the day

00:32:10.859 --> 00:32:19.059
that is in the in the in the notice I think the

00:32:19.059 --> 00:32:22.019
attempt was for your honor to approve as long

00:32:22.019 --> 00:32:25.970
as the dates that we set forth in whatever notice

00:32:25.970 --> 00:32:29.490
that we file. As long as the dates fall into

00:32:29.490 --> 00:32:32.329
these date ranges, that is what we are asking

00:32:32.329 --> 00:33:15.819
Your Honor to approve. Yes. We're back to posting

00:33:15.819 --> 00:33:18.380
again on this site, but everybody's going to

00:33:18.380 --> 00:33:21.279
get their individual notice. Correct. And if

00:33:21.279 --> 00:33:25.019
it's no cure costs, you're going to put a zero

00:33:25.019 --> 00:33:30.829
in there. What are the DCL instructions that

00:33:30.829 --> 00:33:34.950
are referenced in this paragraph? Those are the

00:33:34.950 --> 00:33:37.369
instructions I believe to access the case website.

00:34:05.259 --> 00:34:10.639
on paragraph 39, page 31, instructions regarding

00:34:10.639 --> 00:34:47.420
how to view the list on the case website. Last

00:34:47.420 --> 00:34:50.380
sentence says if there is no objection, this

00:34:50.380 --> 00:34:53.900
is to a supplemental designated contract. Then

00:34:53.900 --> 00:34:56.880
the debtors shall obtain an order of the court.

00:34:57.579 --> 00:35:00.719
Including by filing a certification of no objection

00:35:00.719 --> 00:35:18.980
shall should be May. Paragraph 29, I view this

00:35:18.980 --> 00:35:22.199
as substantive and we're in a procedural order.

00:35:22.519 --> 00:35:27.900
So why should this paragraph be included in a

00:35:27.900 --> 00:35:53.090
procedural order? the designated contract list

00:35:53.090 --> 00:35:56.849
and I think the debtors would need some certainty

00:35:56.849 --> 00:35:59.690
with respect to if they don't receive any objections

00:35:59.690 --> 00:36:04.429
or otherwise notified by the contract counterparty

00:36:04.429 --> 00:36:07.469
that they don't agree with whatever is being

00:36:07.469 --> 00:36:09.949
set forth and the information being provided.

00:36:11.110 --> 00:36:14.610
The debtors should know at that time and should

00:36:14.610 --> 00:36:18.369
be given certainty with respect to what the cure

00:36:18.369 --> 00:36:31.699
cost is going to be. I'll deal with what happens

00:36:31.699 --> 00:36:35.179
if somebody doesn't file an appropriate objection

00:36:35.179 --> 00:36:38.780
when they don't file the objection. But this

00:36:38.780 --> 00:36:41.940
is prejudging what's going to happen, and it

00:36:41.940 --> 00:36:44.260
even envisions a subsequent order of the court.

00:36:44.780 --> 00:36:48.199
So I think that happens in the future. So I'm

00:36:48.199 --> 00:36:50.760
not going to approve this. This is not procedural.

00:36:51.539 --> 00:36:59.300
Understood. We will strike paragraph 29. Paragraph.

00:36:59.389 --> 00:37:04.269
31 has what I think is an unusual provision in

00:37:04.269 --> 00:37:07.690
it, in the middle. It says unless the court orders

00:37:07.690 --> 00:37:12.050
otherwise, the sale hearing shall be an evidentiary

00:37:12.050 --> 00:37:15.789
hearing on matters relating to the sale transactions

00:37:15.789 --> 00:37:18.409
and there will be no further bidding at the sale

00:37:18.409 --> 00:37:23.190
hearing. I don't expect there will be, but why

00:37:23.190 --> 00:37:26.969
is that in this order? Again, I think I'd go

00:37:26.969 --> 00:37:29.210
back to the finality and certainty that we were

00:37:29.210 --> 00:37:32.210
at. Yeah, I'll deal with that when we get to

00:37:32.210 --> 00:37:39.409
the order. That suggests that an auction could

00:37:39.409 --> 00:37:42.469
never be reopened. It suggests all kinds of things.

00:37:42.789 --> 00:38:02.230
And I'm just not, that's substantive. Throughout

00:38:02.230 --> 00:38:05.829
the procedures, the lenders have consultation

00:38:05.829 --> 00:38:09.150
rights unless they become a bidder and exercise

00:38:09.150 --> 00:38:11.429
their credit bid rights. When do they have to

00:38:11.429 --> 00:38:13.849
make that decision? When do other parties get

00:38:13.849 --> 00:38:16.670
to know whether or not the lenders are going

00:38:16.670 --> 00:38:27.150
to credit bid on particular assets? I believe

00:38:27.150 --> 00:38:36.039
it would be the bid deadline. Well, for each

00:38:36.039 --> 00:38:42.860
sale, the lenders will have to indicate by the

00:38:42.860 --> 00:38:44.840
bid deadline whether or not they're going to

00:38:44.840 --> 00:38:48.300
credit bid. And once they do, then for purposes

00:38:48.300 --> 00:38:50.639
of that sale, they are no longer a consultation

00:38:50.639 --> 00:39:28.039
party. Those are my comments and questions. The

00:39:28.039 --> 00:39:31.000
extent that I've got bid procedures here that

00:39:31.000 --> 00:39:33.079
reflect anything that needs to be changed and

00:39:33.079 --> 00:39:37.679
needs to be changed in the bid procedures. I

00:39:37.679 --> 00:39:40.659
see paragraph 38 of the sale order which says

00:39:40.659 --> 00:39:43.460
to the extent this bidding procedures order is

00:39:43.460 --> 00:39:46.539
inconsistent with any prior order or pleading

00:39:46.539 --> 00:39:51.659
with respect to the motion this governs I think

00:39:51.659 --> 00:39:55.219
that's fine. I believe that's cabin to this motion

00:39:55.219 --> 00:39:59.960
and nothing else that I'm doing or have done.

00:40:02.079 --> 00:40:07.179
So with those clarifications and with revisions

00:40:07.179 --> 00:40:10.679
made consistent with this discussion, I will

00:40:10.679 --> 00:40:14.219
approve the sale procedures. Does anyone wish

00:40:14.219 --> 00:40:24.300
to be heard? Good to see you, Your Honor. Ivan

00:40:24.300 --> 00:40:28.639
Gold of Allen Mackins for Keys Hotel Operator

00:40:28.639 --> 00:40:31.320
Inc., which is the Hawks Cave Resort. First,

00:40:31.400 --> 00:40:33.139
I want to thank the debtor for working with us

00:40:33.139 --> 00:40:36.079
on a number of informal comments. And I only

00:40:36.079 --> 00:40:38.900
rise because your colloquy with counsel for the

00:40:38.900 --> 00:40:43.139
debtors kind of raised an issue that I think

00:40:43.139 --> 00:40:46.460
deserves a little clarification. And that relates

00:40:46.460 --> 00:40:49.599
to your concern you expressed regarding how many

00:40:49.599 --> 00:40:53.090
notices. And are we looking at multiple objections?

00:40:53.449 --> 00:40:55.610
And I appreciate the need for flexibility here.

00:40:55.690 --> 00:40:58.190
The debtor is not only selling unique assets.

00:40:59.289 --> 00:41:01.349
You know, we're not selling two forklifts on

00:41:01.349 --> 00:41:06.710
an F -150. And the likelihood of a global going

00:41:06.710 --> 00:41:08.889
concern sale in here, global meaning global,

00:41:09.750 --> 00:41:12.590
is it's not impossible, but it is the less likely

00:41:12.590 --> 00:41:15.250
outcome. We're more looking at geographical pods,

00:41:16.030 --> 00:41:21.090
single locations, et cetera. I think the intent

00:41:21.090 --> 00:41:23.769
of the charge, which confused the heck out of

00:41:23.769 --> 00:41:27.170
me too, is to create flexibility that we may

00:41:27.170 --> 00:41:30.090
have several tracks here. And I get all of that.

00:41:30.130 --> 00:41:32.050
And what we were looking in our comments was

00:41:32.050 --> 00:41:35.710
for minimums to assure some level of due process

00:41:35.710 --> 00:41:40.369
in this process. But your concerns you raised

00:41:40.369 --> 00:41:43.730
regarding the motion, paragraphs 40 and 41, and

00:41:43.730 --> 00:41:46.269
then the order, paragraph 32, highlighted this

00:41:46.269 --> 00:41:49.570
question for me. And to the extent I may have...

00:41:49.400 --> 00:41:51.420
Missed this in my discussions with the debtor.

00:41:51.539 --> 00:41:53.480
I apologize, but I think it goes right to your

00:41:53.480 --> 00:41:56.619
honor's question. Is paragraph 32 contemplates

00:41:56.619 --> 00:42:00.719
an objection to put a sale transaction? That's

00:42:00.719 --> 00:42:05.280
different from the procedures. That of a notice

00:42:05.280 --> 00:42:10.460
of intended assumption and assignment. Am I so

00:42:10.460 --> 00:42:12.980
for example, and this shouldn't be surprised

00:42:12.980 --> 00:42:15.659
anybody because we've raised it in prior pleadings

00:42:15.659 --> 00:42:20.730
is we have concerns that. the agreement by which

00:42:20.730 --> 00:42:23.630
the debtor operates at my client's property may

00:42:23.630 --> 00:42:27.010
not, as a matter of state law, even be assignable.

00:42:27.929 --> 00:42:30.210
And our discussions with the debtors, we reserve

00:42:30.210 --> 00:42:34.130
that issue. And so that's an open understanding

00:42:34.130 --> 00:42:37.030
that we have. But as I read these procedures

00:42:37.030 --> 00:42:40.289
and I listen to your question, the question is,

00:42:40.449 --> 00:42:44.090
do I need to file a separate objection that this

00:42:44.090 --> 00:42:47.309
isn't assignable, separate and apart from whatever

00:42:47.309 --> 00:42:51.849
cure? adequate assurance objections I have and

00:42:51.849 --> 00:42:53.730
you know given the nature of the debtor's operations

00:42:53.730 --> 00:42:57.050
I may not be the only party with that concern

00:42:57.050 --> 00:43:01.389
but again are we am I looking at multiple objections

00:43:01.389 --> 00:43:03.610
I don't have a problem with the second notice

00:43:03.610 --> 00:43:06.949
or do I save that for when we have a buyer for

00:43:06.949 --> 00:43:12.289
my property as opposed to this earlier you know

00:43:12.289 --> 00:43:15.610
more metaphysical objection to selling it in

00:43:15.610 --> 00:43:18.869
the first place If I were you, I'd raise it the

00:43:18.869 --> 00:43:21.530
first opportunity I had. Well, I already have,

00:43:21.730 --> 00:43:24.809
but yes, it could be early and often could be

00:43:24.809 --> 00:43:27.989
the answer to that. But, you know, the question

00:43:27.989 --> 00:43:30.409
is, is the way these procedures are drafted,

00:43:31.409 --> 00:43:34.070
it would appear that we are required to file

00:43:34.070 --> 00:43:36.670
two separate objections. Now, the first one doesn't

00:43:36.670 --> 00:43:38.309
necessarily have to be elaborate because we've

00:43:38.309 --> 00:43:40.849
already raised it. But it does, you know, you

00:43:40.849 --> 00:43:44.090
would ask that question. And so I just wanted

00:43:44.090 --> 00:43:47.679
to... approach with a real life example so that

00:43:47.679 --> 00:43:50.639
you could kind of get clarity before we delve

00:43:50.639 --> 00:43:53.340
any further into these procedures. Well, my thought

00:43:53.340 --> 00:43:56.420
was that people shouldn't be constrained in the

00:43:56.420 --> 00:43:59.980
objections that they are filing to, you can only

00:43:59.980 --> 00:44:04.860
file a cure objection, an assumption, an adequate

00:44:04.860 --> 00:44:10.960
assurance objection. You can file whatever objection

00:44:10.960 --> 00:44:15.829
you want. And again, this is where I'm going

00:44:15.829 --> 00:44:17.929
to give some people some leeway because I think

00:44:17.929 --> 00:44:26.190
these procedures are confusing. Let me hear if

00:44:26.190 --> 00:44:30.809
the debtors have a response to Mr. Gold's example

00:44:30.809 --> 00:44:38.269
of how counter contract parties are supposed

00:44:38.269 --> 00:44:41.210
to respond to the various notices they're getting.

00:44:54.300 --> 00:44:57.659
The point of the cure notice was to notify parties

00:44:57.659 --> 00:45:00.519
that they have to object to that cure at that

00:45:00.519 --> 00:45:05.219
time. They can raise sale objections at a later

00:45:05.219 --> 00:45:12.460
date pursuant to the order. But it was not meant

00:45:12.460 --> 00:45:15.219
to preclude people from raising multiple objections

00:45:15.219 --> 00:45:19.940
or how they choose to do so, only providing a

00:45:19.940 --> 00:45:22.960
deadline with respect to cure costs and the assumption

00:45:22.960 --> 00:45:26.059
and assignment notice. which I believe is fairly

00:45:26.059 --> 00:45:32.940
typical. And to the extent the motion is inconsistent

00:45:32.940 --> 00:45:35.139
with that, I would not want to be the lawyer

00:45:35.139 --> 00:45:37.539
arguing to you that the motion controls over

00:45:37.539 --> 00:46:02.280
the order. It says any and all objections to

00:46:02.280 --> 00:46:05.719
any sale transaction must be filed no later than

00:46:05.719 --> 00:46:08.280
a date that is 30 days from the bid procedure's

00:46:08.280 --> 00:46:11.340
trigger date. Well, how does that intersect with

00:46:11.340 --> 00:46:13.500
all this other stuff they're doing? I mean, that's

00:46:13.500 --> 00:46:16.659
not my cure notice. No, it isn't. So this is

00:46:16.659 --> 00:46:19.059
something else. This is something else. And how

00:46:19.059 --> 00:46:21.619
do we reconcile this something else with the

00:46:21.619 --> 00:46:27.179
cure notice is my fundamental question. Well,

00:46:27.219 --> 00:46:33.000
I don't think it's unusual to have the cure notices

00:46:33.000 --> 00:46:35.840
go out in the beginning of a sale process so

00:46:35.840 --> 00:46:38.800
that the debtor can understand and the prospective

00:46:38.800 --> 00:46:41.780
purchasers can understand what the cure obligations

00:46:41.780 --> 00:46:44.760
are with respect to any particular contract.

00:46:45.900 --> 00:46:48.699
But my point is now I'm up to three. I got a

00:46:48.699 --> 00:46:51.699
cure notice and a cure response. We all agree

00:46:51.699 --> 00:46:54.820
at the back end once we identify a notice of

00:46:54.820 --> 00:46:59.889
successful bidder. Now we've got one in the middle

00:46:59.889 --> 00:47:05.090
that you can't sell my property. So now we've

00:47:05.090 --> 00:47:07.409
got three. I've got three notices. I've got three

00:47:07.409 --> 00:47:11.630
objections. Is that different than normal? Three's

00:47:11.630 --> 00:47:17.230
a lot. Two is not unusual to your point, but

00:47:17.230 --> 00:47:19.070
I just want to clarify. I just want to make sure

00:47:19.070 --> 00:47:20.289
I understand when I walk out of here. Which one

00:47:20.289 --> 00:47:22.269
should I eliminate? I mean, that's the question.

00:47:22.329 --> 00:47:25.670
Which one gets eliminated? There are three different

00:47:25.670 --> 00:47:31.889
separate things. Because of the way this is developed

00:47:31.889 --> 00:47:34.010
where you have to file an objection before the

00:47:34.010 --> 00:47:37.809
auction has taken place, which we can all discuss

00:47:37.809 --> 00:47:40.230
the merits offline at some conference, but that's

00:47:40.230 --> 00:47:43.909
how it's developed, right? So so that does put

00:47:43.909 --> 00:47:48.269
in. Well, I understand your honor, and it's traditional

00:47:48.269 --> 00:47:50.809
to have a cure notice prior to the auction, so

00:47:50.809 --> 00:47:52.550
everybody knows what they're bidding. They have

00:47:52.550 --> 00:47:57.150
to stipulate it. I understand the. filing of

00:47:57.150 --> 00:48:00.570
an adequate assurance objection once buyers have

00:48:00.570 --> 00:48:03.489
digested the cure notice and the other due diligence

00:48:03.489 --> 00:48:06.250
information. They've decided to bid, the debtor

00:48:06.250 --> 00:48:09.530
selects them, they tell us, and then we have

00:48:09.530 --> 00:48:13.030
the right to object or consent to the proposed

00:48:13.030 --> 00:48:16.170
assignment. So those two pillars are normal.

00:48:17.929 --> 00:48:20.730
It's the third one is what, you know, do I, you

00:48:20.730 --> 00:48:22.949
know, I just want to walk out of here understanding

00:48:22.949 --> 00:48:26.309
and. Know that I'm on the same page with you

00:48:26.309 --> 00:48:28.530
that these procedures contemplate. I've got a

00:48:28.530 --> 00:48:30.570
third pleading to file somewhere in the middle

00:48:30.570 --> 00:48:35.110
That would raise the sale ability of the asset

00:48:35.110 --> 00:48:36.949
that that's not something I can do after the

00:48:36.949 --> 00:48:40.869
auction. I can't wait Under these procedures

00:48:40.869 --> 00:48:45.809
or do I have to do it on this paragraph 32 timeline

00:48:45.809 --> 00:48:49.269
and Where that 30 days and how that fits in the

00:48:49.269 --> 00:48:51.630
chart, you know, I don't even know that this

00:48:51.630 --> 00:48:53.949
will be the second one Could end up with the

00:48:53.949 --> 00:48:56.389
30 days, it could be the third one. I don't know.

00:48:57.090 --> 00:49:01.030
That's where I'm confused having heard your colloquy.

00:49:07.610 --> 00:49:13.949
Do you have any response? I agree with your Honor's

00:49:13.949 --> 00:49:15.710
initial inclination. I don't think that this

00:49:15.710 --> 00:49:18.449
is part, this aspect of things are particularly

00:49:18.449 --> 00:49:20.489
different. You have an assumption and assignment

00:49:20.489 --> 00:49:23.199
deadline. and you file an objection to the assumption

00:49:23.199 --> 00:49:25.840
and assignment. If you don't agree that the property

00:49:25.840 --> 00:49:28.579
that is being sold, which Mr. Gold will know

00:49:28.579 --> 00:49:33.280
what property is being sold, I mean, he only

00:49:33.280 --> 00:49:37.219
has, his landlord has one lease that it is responsible

00:49:37.219 --> 00:49:40.300
for. It will be involved. It will know who is

00:49:40.300 --> 00:49:43.900
bidding. It will know what asset, which is the

00:49:43.900 --> 00:49:49.250
lease, is being sold. I don't know about other

00:49:49.250 --> 00:49:52.409
parties, but Mr. Gold can file an objection to

00:49:52.409 --> 00:49:56.550
this. He basically has. But I don't think this

00:49:56.550 --> 00:49:59.289
is particularly different than how normal sale

00:49:59.289 --> 00:50:02.989
processes run. Setting aside the chart, which

00:50:02.989 --> 00:50:07.469
I understand is not the model of clarity, but

00:50:07.469 --> 00:50:10.469
this particular aspect of things is not different.

00:50:10.909 --> 00:50:12.829
You have an assumption assignment deadline. You

00:50:12.829 --> 00:50:15.619
have a sale deadline. And then if you don't agree

00:50:15.619 --> 00:50:18.059
with the successful bidder or the backup bidder,

00:50:18.119 --> 00:50:20.099
then you can object to the identity of the bidder.

00:50:20.199 --> 00:50:26.860
That is not strange or unique in any way. It

00:50:26.860 --> 00:50:29.519
isn't. I think it's the sliding scale nature

00:50:29.519 --> 00:50:32.719
of things that makes things more difficult here.

00:50:36.940 --> 00:50:40.420
I think your notices need to be very clear as

00:50:40.420 --> 00:50:42.800
to what they're noticing when people go out.

00:50:42.829 --> 00:50:46.349
when they go out, so that people understand their

00:50:46.349 --> 00:50:52.190
deadlines for objecting. And I will say now,

00:50:52.550 --> 00:50:56.789
without giving anybody any legal advice, I am

00:50:56.789 --> 00:51:02.530
not restricting any objection that is filed to

00:51:02.530 --> 00:51:09.070
only, for example, the cure costs. If you've

00:51:09.070 --> 00:51:11.820
got... any objection with respect to a contract

00:51:11.820 --> 00:51:14.880
just put it all in that first objection and you'll

00:51:14.880 --> 00:51:17.960
be okay in terms of notice as far as timeliness

00:51:17.960 --> 00:51:22.880
as far as I'm concerned so I would I would not

00:51:22.880 --> 00:51:25.639
wait and try to figure out wait I can wait on

00:51:25.639 --> 00:51:28.679
this objection until this later day I wouldn't

00:51:28.679 --> 00:51:32.820
do that understood and to be again perfectly

00:51:32.820 --> 00:51:35.300
clear we're not that chart will not be in the

00:51:35.300 --> 00:51:37.940
notices that when they go out That chart will

00:51:37.940 --> 00:51:40.679
be filled in with exact dates that comport with

00:51:40.679 --> 00:51:43.760
the time ranges set forth in the chart. That

00:51:43.760 --> 00:51:46.400
was the entire purpose of the chart, to set forth

00:51:46.400 --> 00:51:49.059
date ranges for everyone in your honor to see.

00:51:49.360 --> 00:51:52.599
As long as the dates within the process fall

00:51:52.599 --> 00:51:55.360
within those date ranges, that is what we were

00:51:55.360 --> 00:51:57.500
seeking approval of. When we go out with the

00:51:57.500 --> 00:52:02.840
notices, they will be exact dates. And I understand

00:52:02.840 --> 00:52:05.809
that... Leaveway will be given. I wouldn't expect

00:52:05.809 --> 00:52:08.510
anything else. I mean, I understand the unique

00:52:08.510 --> 00:52:11.829
circumstances of these cases, but we are going

00:52:11.829 --> 00:52:15.010
to go out with clear notice. And when we deal

00:52:15.010 --> 00:52:18.030
with whatever objections may be, we will deal

00:52:18.030 --> 00:52:21.090
with them then. But in terms of assumption of

00:52:21.090 --> 00:52:23.929
assignment and identity of bidders, like I said

00:52:23.929 --> 00:52:26.449
before, I think that is the normal part for the

00:52:26.449 --> 00:52:58.809
course forbidding procedure. Bill Hazeltine on

00:52:58.809 --> 00:53:02.889
behalf of Tradewinds LPD. Tradewinds filed an

00:53:02.889 --> 00:53:05.869
objection to credit bidding because we assert

00:53:05.869 --> 00:53:08.210
a first priority lien on the assets in Florida.

00:53:09.530 --> 00:53:12.730
And we have worked it out with language in the

00:53:12.730 --> 00:53:16.369
bidding procedures that says that any party can

00:53:16.369 --> 00:53:18.550
object to credit bidding at the time of the sale

00:53:18.550 --> 00:53:21.190
objection. Yes. And that satisfies our concern.

00:53:21.309 --> 00:53:29.099
Thank you. Thank you, Your Honor. I'll look for

00:53:29.099 --> 00:53:33.000
that revised form of order. Thank you, Your Honor.

00:53:39.519 --> 00:53:41.980
Your Honor, Sean Greacher again. Okay, I'm sorry,

00:53:42.079 --> 00:53:46.340
one second. With respect to this order as well,

00:53:46.760 --> 00:53:51.500
I did notice here on notice was going to regulators,

00:53:52.340 --> 00:53:56.599
who I assumed were regulators over animal welfare.

00:53:56.760 --> 00:53:59.280
But I think that should be specified in this

00:53:59.280 --> 00:54:03.139
order as well, as to who the regulators are that

00:54:03.139 --> 00:54:05.800
are going to receive notice. Understood. Thank

00:54:05.800 --> 00:55:04.349
you, Your Honor. Thank you. Your honor the debtors

00:55:04.349 --> 00:55:07.110
first seek to admit the declaration of mr. Wagstaff,

00:55:07.289 --> 00:55:10.170
which was followed at docket number three three

00:55:10.170 --> 00:55:17.039
three As well as exhibits to it a through J Is

00:55:17.039 --> 00:55:20.699
that in the exhibit binder or is that? You'll

00:55:20.699 --> 00:55:24.019
see in your binder right behind tab one is the

00:55:24.019 --> 00:55:26.559
declaration and then behind that are tabs A through

00:55:26.559 --> 00:55:29.739
J. Yes, which which aligned with how they were

00:55:29.739 --> 00:55:32.699
identified in the declaration. OK, thank you.

00:55:32.960 --> 00:55:37.980
Let me ask is there any objection to. Mr. Wax

00:55:37.980 --> 00:55:45.280
staffs declaration coming into evidence. I hear

00:55:45.280 --> 00:55:48.719
none. Let me ask this. I do not see Mr. Albor

00:55:48.719 --> 00:55:56.039
in the courtroom and I know Mr. Moon and Mr.

00:55:56.280 --> 00:55:59.139
Hughes and Cowles have withdrawn. I permitted

00:55:59.139 --> 00:56:02.500
their withdrawal. Is Mr. Albor going to appear

00:56:02.500 --> 00:56:06.820
today or is he represented by anyone in the courtroom?

00:56:14.219 --> 00:56:15.900
Thank you, Your Honor. I'll just note for the

00:56:15.900 --> 00:56:19.119
record that exhibits DNF to the declaration were

00:56:19.119 --> 00:56:21.360
filed under seal and which was approved by an

00:56:21.360 --> 00:56:23.800
order of the court. There are banking records

00:56:23.800 --> 00:56:25.900
involving third -party non -debtors, which is

00:56:25.900 --> 00:56:28.820
why we put them under seal, Your Honor. D and

00:56:28.820 --> 00:56:36.500
E? DNF. Okay, thank you. And then, Your Honor,

00:56:36.599 --> 00:56:39.679
before we turn the podium back over to Mr. Greacher,

00:56:39.840 --> 00:56:42.619
the debtors would offer a brief proffer from

00:56:42.699 --> 00:56:46.079
Mister backstaff that is intended to cover events

00:56:46.079 --> 00:56:49.219
that have occurred since his declaration was

00:56:49.219 --> 00:56:54.619
filed on July 9 as well as. If you recall, Your

00:56:54.619 --> 00:56:57.179
Honor, the debtors also filed what I'll call

00:56:57.179 --> 00:57:00.519
a sanctions notice was debtors notice of submission

00:57:00.519 --> 00:57:02.780
of costs in connection with orders enforcing

00:57:02.780 --> 00:57:06.139
the automatic stay and imposing sanctions sanctions

00:57:06.139 --> 00:57:13.769
at docket number 355. So I'll proceed with. Thank

00:57:13.769 --> 00:57:16.670
you, your honor. With respect to the stay enforcement

00:57:16.670 --> 00:57:19.429
motion, if called to testify, Mr. Wagstaff would

00:57:19.429 --> 00:57:22.269
testify about Mr. Albers and Ms. Esteban's actions

00:57:22.269 --> 00:57:25.269
that have occurred or continue to occur since

00:57:25.269 --> 00:57:28.989
the filing of his declaration on July 9, 2025.

00:57:30.469 --> 00:57:33.070
Mr. Wagstaff would testify that Mr. Albers and

00:57:33.070 --> 00:57:35.610
Ms. Esteban have continued to be uncooperative

00:57:35.610 --> 00:57:37.550
and have failed to turn over the records to the

00:57:37.550 --> 00:57:40.590
debtors and have continued their refusal to provide

00:57:40.590 --> 00:57:43.329
access to the records. He would testify that

00:57:43.329 --> 00:57:45.829
Ms. Esteban has expressly conditioned the turnover

00:57:45.829 --> 00:57:48.510
records on a legal release and a payment of estate

00:57:48.510 --> 00:57:52.909
funds for alleged severance due to her. He would

00:57:52.909 --> 00:57:55.489
say Mr. Albert has refused or otherwise failed

00:57:55.489 --> 00:57:58.030
to return the keys to the debtor's legal department

00:57:58.030 --> 00:58:00.869
offices at the headquarters. Mr. Ragsdale would

00:58:00.869 --> 00:58:03.389
testify that Mr. Albert has refused to return

00:58:03.389 --> 00:58:06.389
the funds transferred to PES in connection with

00:58:06.389 --> 00:58:08.329
the operation of the debtor's Mexican parks.

00:58:09.070 --> 00:58:11.170
and has not returned the funds transferred by

00:58:11.170 --> 00:58:14.329
PES to his personal attorneys at the CDAA firm.

00:58:15.489 --> 00:58:17.570
Mr. Ragsiff would testify that Mr. Albert has

00:58:17.570 --> 00:58:19.670
not provided the debtors with bank records of

00:58:19.670 --> 00:58:22.789
PES or Elysium, which would allow the debtors

00:58:22.789 --> 00:58:24.989
to trace the flow of estate funds through PES

00:58:24.989 --> 00:58:29.809
and Elysium. He would also testify that Mr. Albert

00:58:29.809 --> 00:58:32.230
and Ms. Esteban have not returned the funds transferred

00:58:32.230 --> 00:58:41.639
to Elysium. Have to Mr. Wags that would testify

00:58:41.639 --> 00:58:44.880
that state violations that he has identified

00:58:44.880 --> 00:58:48.599
since his declaration was filed include Mr. Albert's

00:58:48.599 --> 00:58:53.579
email response dated July 14 2025 and that's

00:58:53.579 --> 00:58:59.320
a tab to your honor and your honor. USC and also

00:58:59.320 --> 00:59:02.559
as we did with some of the emails that were attached

00:59:02.559 --> 00:59:05.699
to his declaration, we included at the back end.

00:59:05.980 --> 00:59:09.900
For your honor's benefit, a machine -generated

00:59:09.900 --> 00:59:12.900
English translation, which Mr. Wagstaff, if you

00:59:12.900 --> 00:59:15.960
recall, is fluent in Spanish. He would testify

00:59:15.960 --> 00:59:20.199
that this is an accurate translation, at least

00:59:20.199 --> 00:59:22.380
as machine -generated. Importantly, your honor,

00:59:22.480 --> 00:59:26.400
I think with reference to tab two, Mr. Wagstaff

00:59:26.400 --> 00:59:29.480
would say the important parts of Mr. Albert's

00:59:29.480 --> 00:59:34.260
email would that... Mr. Albar alleges that payments

00:59:34.260 --> 00:59:37.440
made by PES directly to CDA were made on his

00:59:37.440 --> 00:59:40.500
behalf, by his order, and that the legal services

00:59:40.500 --> 00:59:43.300
that he received were personally provided to

00:59:43.300 --> 00:59:46.920
him by CDA. Mr. Baxdaf would note that the funds

00:59:46.920 --> 00:59:49.780
paid to the CDA firm by PES do not constitute

00:59:49.780 --> 00:59:51.780
property of the debtors and were from the cash

00:59:51.780 --> 00:59:54.500
flows of PES itself. That's what Mr. Albar says.

00:59:55.480 --> 00:59:58.340
And that Mr. Albar says the deposits from Controlador

00:59:58.340 --> 01:00:01.340
Dolphin to the PES account were recurrent. and

01:00:01.340 --> 01:00:03.079
began months prior to the petition date. Again,

01:00:03.099 --> 01:00:05.260
that's all what Mr. Alvarez says in his email.

01:00:06.199 --> 01:00:08.739
What Mr. Wagstaff would testify is based upon

01:00:08.739 --> 01:00:11.519
these statements in this June, I'm sorry, July

01:00:11.519 --> 01:00:15.440
14 email, Mr. Wagstaff and his team at Riveron

01:00:15.440 --> 01:00:18.539
investigated the flow of funds through the PES

01:00:18.539 --> 01:00:22.059
bank account. Based upon that investigation,

01:00:22.539 --> 01:00:26.039
Riveron determined that the average monthly deposits

01:00:26.039 --> 01:00:30.500
to this PES account between September 2024 in

01:00:30.500 --> 01:00:34.480
March 2025 was approximately $600 ,000 a month.

01:00:35.539 --> 01:00:38.119
And that the monthly credits from the account

01:00:38.119 --> 01:00:41.639
or debits, yeah, debits, sorry, from the account

01:00:41.639 --> 01:00:43.860
during that same period of time was also roughly

01:00:43.860 --> 01:00:48.320
$600 ,000. However, the rerun determined that

01:00:48.320 --> 01:00:53.119
in the months of April 2025 and May 2025, after

01:00:53.119 --> 01:00:55.960
the debtors had commenced their proceedings and

01:00:55.960 --> 01:00:58.559
began trying to take control of the Dolphin Company,

01:00:59.019 --> 01:01:04.280
PS noted that monthly deposits into the PS account

01:01:04.280 --> 01:01:09.960
were approximately $3 .7 million in April 2025

01:01:09.960 --> 01:01:15.159
and approximately $4 million in May 2025. And

01:01:15.159 --> 01:01:20.679
during those same two months, funds flowing out

01:01:20.679 --> 01:01:24.780
of that account in April 2025 were $3 .2 million

01:01:24.780 --> 01:01:27.760
approximately and approximately $4 .3 million.

01:01:29.079 --> 01:01:32.940
May 2025 so a dramatic increase in both funds

01:01:32.940 --> 01:01:35.159
going to that account and out of that account

01:01:35.159 --> 01:01:40.880
post -petition and your honor just to help Maybe

01:01:40.880 --> 01:01:43.400
just pictures worth a thousand words tab four

01:01:43.400 --> 01:01:47.059
is a demonstrative in your binder that reflects

01:01:47.059 --> 01:01:51.639
The credits and debits to that PS account during

01:01:51.639 --> 01:01:56.820
those months. I just talked about Your honor

01:01:56.820 --> 01:02:01.639
lastly with respect to the sanctions notice that

01:02:01.639 --> 01:02:05.800
and if you the sanctions notice your honor is

01:02:05.800 --> 01:02:09.800
Tab 3 debtors will seek to admit that into evidence

01:02:09.800 --> 01:02:16.800
And your honor tab 3 itself also has tabs a through

01:02:16.800 --> 01:02:21.280
f which has reflected on the notice are the the

01:02:21.280 --> 01:02:23.679
breakdowns of the various professionals that

01:02:23.679 --> 01:02:27.960
have worked perform work on behalf of the debtors

01:02:27.960 --> 01:02:31.380
of states in terms of enforcing the court's orders,

01:02:31.579 --> 01:02:34.900
as well as the automatic state violations actions

01:02:34.900 --> 01:02:40.360
taken to combat Mr. Albert's actions. Okay, top

01:02:40.360 --> 01:02:43.119
three. Is there any objection to the admission?

01:02:44.719 --> 01:02:50.599
I hear none. It's admitted. Right, Your Honor.

01:02:50.739 --> 01:02:53.800
Lastly, Mr. Baxeff would testify that he and

01:02:53.800 --> 01:02:59.780
along invoices and or summaries of fees incurred

01:02:59.780 --> 01:03:02.659
and that based upon his involvement and understanding

01:03:02.659 --> 01:03:04.719
of the work performed on behalf of the debtors

01:03:04.719 --> 01:03:08.280
that the amounts the work reflected in the invoices

01:03:08.280 --> 01:03:11.820
was appropriate in scope and necessary to combat

01:03:11.820 --> 01:03:15.420
Mr. Alvarez actions. I think your honor with

01:03:15.420 --> 01:03:17.500
that unless you have any questions for me from

01:03:17.500 --> 01:03:19.300
an evidentiary perspective I'll turn it back

01:03:19.300 --> 01:03:26.789
over to Mr. Reacher. Exhibit or tab four is a

01:03:26.789 --> 01:03:31.670
demonstration. And tab two is the email. That's

01:03:31.670 --> 01:03:34.030
the email we seek to admit as an admission by

01:03:34.030 --> 01:03:38.989
Mr. Albor. Is there any objection? I hear none.

01:03:39.150 --> 01:04:00.869
It's admitted. Thank you, Your Honor. Once again,

01:04:01.030 --> 01:04:02.809
we're here before your honor seeking enforcement

01:04:02.809 --> 01:04:04.510
of fundamental protections of the bankruptcy

01:04:04.510 --> 01:04:07.130
code, specifically the automatic stay and to

01:04:07.130 --> 01:04:09.289
compel compliance with the court's prior orders,

01:04:09.630 --> 01:04:11.289
the turnover and the stay enforcement order as

01:04:11.289 --> 01:04:15.010
a result of the ongoing non -compliance by Mr.

01:04:15.230 --> 01:04:18.150
Albor and Ms. Ed Simon. We're also here seeking

01:04:18.150 --> 01:04:20.269
a determination of liability for the direct cost

01:04:20.269 --> 01:04:23.690
borne by the state as a result of the willful

01:04:23.690 --> 01:04:25.489
violations that the court found in connection

01:04:25.489 --> 01:04:29.150
with the prior orders. Your honor. As you heard

01:04:29.150 --> 01:04:31.869
from the testimony and you saw on the pleadings,

01:04:32.030 --> 01:04:34.090
Mr. Albor continues to obstruct the debtor's

01:04:34.090 --> 01:04:35.989
access to critical business records and assets,

01:04:36.170 --> 01:04:38.750
has engaged in conduct that directly undermine

01:04:38.750 --> 01:04:41.829
the administration of these estates. Mr. Albor

01:04:41.829 --> 01:04:44.230
has not complied with Your Honor's orders. In

01:04:44.230 --> 01:04:46.849
fact or in spirit, in fact the declaration that

01:04:46.849 --> 01:04:48.869
Mr. Wagstaff filed provides a laundry list of

01:04:48.869 --> 01:04:51.710
ongoing violations and efforts to undermine Mr.

01:04:51.889 --> 01:04:53.650
Strong's and Mr. Wagstaff's proper operation

01:04:53.650 --> 01:04:56.429
of the business. This introduces unnecessary

01:04:56.429 --> 01:04:58.650
cost and risk to the operations. It puts into

01:04:58.650 --> 01:05:01.690
jeopardy the debtor's ongoing ability to run

01:05:01.690 --> 01:05:04.809
the business and care for the animals. Your Honor,

01:05:05.210 --> 01:05:06.610
we notified the Court of many of these issues

01:05:06.610 --> 01:05:10.090
back on June 26th. Since then, Mr. Albor has

01:05:10.090 --> 01:05:12.030
done little or nothing to bring himself into

01:05:12.030 --> 01:05:13.730
further compliance with the stay of your order.

01:05:14.429 --> 01:05:17.750
So I'll point out a few of those issues. Again,

01:05:18.110 --> 01:05:20.170
interference with assets and financial information.

01:05:20.750 --> 01:05:23.690
As we noted last month, Mr. Albor attempted to

01:05:23.690 --> 01:05:25.449
assign assets and rights of the debtors away

01:05:25.449 --> 01:05:28.030
from the debtors, funnel them through a company

01:05:28.030 --> 01:05:31.769
called Proyectos Ejecutivos Sostentibles, PES

01:05:31.769 --> 01:05:34.710
for short. Mr. Albor apparently directed the

01:05:34.710 --> 01:05:36.889
company's legal counsel, Ms. Esteban, to create

01:05:36.889 --> 01:05:39.250
a backdated agreement between Controladora Dolphin

01:05:39.250 --> 01:05:42.090
and PES, whereby Controladora would essentially

01:05:42.090 --> 01:05:45.010
hand over operations of the Mexican parks and

01:05:45.010 --> 01:05:48.719
all Mexican park revenues. to PES, and PES would,

01:05:48.760 --> 01:05:51.599
in addition, receive some additional consideration

01:05:51.599 --> 01:05:54.340
from Controlador Adolphin at correspondence in

01:05:54.340 --> 01:05:56.619
that backdated agreements attached to Mr. Wagstaff's

01:05:56.619 --> 01:06:00.440
declaration in Exhibit A. Similarly, Mr. Albor

01:06:00.440 --> 01:06:02.639
directed Dolphin Management to circumvent the

01:06:02.639 --> 01:06:04.699
debtors' bank accounts with respect to Caribbean

01:06:04.699 --> 01:06:07.019
affiliate funds and deposit them into an account

01:06:07.019 --> 01:06:09.519
held by Elysium Properties and Investment, which

01:06:09.519 --> 01:06:12.480
we learned through deposition testimony that

01:06:12.480 --> 01:06:14.760
is a company Mr. Albor incorporated in Delaware

01:06:14.760 --> 01:06:17.650
about 10 years ago. to be a family -owned entity

01:06:17.650 --> 01:06:20.630
of which he is the only member. The records show

01:06:20.630 --> 01:06:24.550
over $263 ,000 transferred from just two of the

01:06:24.550 --> 01:06:26.530
company's Caribbean affiliates to Elysium in

01:06:26.530 --> 01:06:29.369
the month of May. Further, the records we've

01:06:29.369 --> 01:06:31.190
been able to retrieve also show that these Caribbean

01:06:31.190 --> 01:06:33.469
bank accounts where Dolphin Company funds were

01:06:33.469 --> 01:06:36.010
diverted were used to pay Mr. Albor's personal

01:06:36.010 --> 01:06:41.429
legal counsel in Mexico. So what we know is that

01:06:41.429 --> 01:06:44.989
Mr. Albor has orchestrated these schemes to divert

01:06:45.199 --> 01:06:47.639
estate revenues into the non -debtor entities,

01:06:48.000 --> 01:06:50.719
PES and Elysium, after originally claiming that

01:06:50.719 --> 01:06:53.059
no estate funds were dissipated on account of

01:06:53.059 --> 01:06:54.820
non -debtor obligations. I want to be clear about

01:06:54.820 --> 01:06:57.239
this. Mr. Albor did not tell you the truth under

01:06:57.239 --> 01:06:59.059
oath when he was asked about estate revenues.

01:06:59.539 --> 01:07:02.539
If you look at pages 149 to 150 of the transcript

01:07:02.539 --> 01:07:04.900
of that May 21st hearing where he was on the

01:07:04.900 --> 01:07:07.380
stand, Mr. Albor's counsel asked him point blank

01:07:07.380 --> 01:07:10.000
why the estate's balances, bank balances were

01:07:10.000 --> 01:07:12.420
so low in the reports that his counsel produced

01:07:12.420 --> 01:07:16.670
to the debtors. The truthful answer... I have

01:07:16.670 --> 01:07:19.110
been diverting estate revenues to non -debtor

01:07:19.110 --> 01:07:22.130
accounts that I control at PES and Elysium. Mr.

01:07:22.269 --> 01:07:24.590
Elboer did not come clean. He provided the debtors

01:07:24.590 --> 01:07:27.230
with partial misleading information prior to

01:07:27.230 --> 01:07:29.349
that hearing and fabricated a story that just

01:07:29.349 --> 01:07:32.010
the day before the company had lots of cash,

01:07:32.550 --> 01:07:34.610
but they had to pay all of that money on account

01:07:34.610 --> 01:07:36.989
of various estate obligations and that the debtors'

01:07:37.150 --> 01:07:39.130
bank accounts were on the verge of being replenished

01:07:39.130 --> 01:07:43.519
by revenues that were due to come in. His representations

01:07:43.519 --> 01:07:47.440
in his, quote, certification of compliance, particularly

01:07:47.440 --> 01:07:50.179
based on Mr. Wagstaff's testimony, should be

01:07:50.179 --> 01:07:53.679
viewed in that light. They're just simply not

01:07:53.679 --> 01:07:57.400
credible. And Mr. Albor, as you noted, chose

01:07:57.400 --> 01:07:59.780
not to come here today to sit under penalty of

01:07:59.780 --> 01:08:04.139
perjury to try to justify those statements. Mr.

01:08:04.239 --> 01:08:06.260
Wagstaff's declaration also includes two documents

01:08:06.260 --> 01:08:08.940
that evidence some of Mr. Albor's misconduct.

01:08:10.349 --> 01:08:12.710
Again, to justify the story that PES had some

01:08:12.710 --> 01:08:15.250
rightful claim to those revenues, there was this

01:08:15.250 --> 01:08:18.829
contract that was fabricated. And further, and

01:08:18.829 --> 01:08:21.390
second, despite the testimony that no estate

01:08:21.390 --> 01:08:23.409
funds were used to pay personal obligations,

01:08:24.210 --> 01:08:27.930
Exhibit C of Mr. Wagstaff's declaration shows

01:08:27.930 --> 01:08:31.970
the bank records indicating that payments that

01:08:31.970 --> 01:08:33.710
should have gone to the estate were used to pay

01:08:33.710 --> 01:08:37.850
personal counsel. They were paid to PES, they

01:08:37.850 --> 01:08:40.399
were paid to CDA, They were paid to Mr. Kasten,

01:08:40.899 --> 01:08:43.739
and they were paid to a company called Inversiones

01:08:43.739 --> 01:08:46.920
Garifon, G -A -R -R -A -F -O -N, which we just

01:08:46.920 --> 01:08:49.939
learned days ago is another entity managed by

01:08:49.939 --> 01:08:53.279
Mr. Albor. Mr. Wagstaff has demanded all the

01:08:53.279 --> 01:08:55.260
records and information related to these transfers.

01:08:55.800 --> 01:08:58.359
Our team continues to uncover further details

01:08:58.359 --> 01:09:00.739
each day, and it appears that these schemes go

01:09:00.739 --> 01:09:04.119
even deeper than just the activities that we

01:09:04.119 --> 01:09:07.710
indicated in the... declaration may have begun

01:09:07.710 --> 01:09:11.529
even pre -petition. It's critical, Your Honor,

01:09:11.689 --> 01:09:13.829
that the debtors be provided with access to the

01:09:13.829 --> 01:09:16.189
full and accurate records and documents, both

01:09:16.189 --> 01:09:18.329
the physical records, contracts and corporate

01:09:18.329 --> 01:09:20.449
documents, and the records related to the diversion

01:09:20.449 --> 01:09:23.229
of assets, particularly the diversion of these

01:09:23.229 --> 01:09:26.569
funds into the PES and Elysian accounts that

01:09:26.569 --> 01:09:29.590
were done in an effort to circumvent the impact

01:09:29.590 --> 01:09:37.119
of Mr. Albor has simply failed to provide us

01:09:37.119 --> 01:09:42.760
with access. Going to the issue of the company

01:09:42.760 --> 01:09:45.039
books and records, Mr. Albor and Ms. Esteban

01:09:45.039 --> 01:09:47.500
have repeatedly refused to turn over those books

01:09:47.500 --> 01:09:50.020
and records despite the multiple orders requiring

01:09:50.020 --> 01:09:53.619
them to do so. Rather than cooperating with the

01:09:53.619 --> 01:09:56.239
transition of these documents, Mr. Albor actively

01:09:56.239 --> 01:09:58.739
has interfered. We provided correspondence from

01:09:58.739 --> 01:10:01.039
Mr. Albor indicating that he would direct debtor

01:10:01.039 --> 01:10:03.460
employees with access to information. regarding

01:10:03.460 --> 01:10:06.420
these schemes to provide it. He conditioned that,

01:10:06.420 --> 01:10:09.439
though, on those parties being released from

01:10:09.439 --> 01:10:12.680
any liability. After promising to personally

01:10:12.680 --> 01:10:14.659
accompany the debtors' advisors to the headquarters

01:10:14.659 --> 01:10:17.300
to complete the process of documenting and retrieving

01:10:17.300 --> 01:10:21.100
the records, and as well as promising to appear

01:10:21.100 --> 01:10:24.760
and discuss with Mr. Wagstaff and his team all

01:10:24.760 --> 01:10:28.619
the information regarding these PES and Elysium

01:10:28.619 --> 01:10:31.260
transactions, he decided the day before the plan

01:10:31.260 --> 01:10:35.840
meeting he would not appear. employees who were

01:10:35.840 --> 01:10:38.039
appointed at the directors of PES, appointing

01:10:38.039 --> 01:10:41.560
himself alone as the director of PES, thereby

01:10:41.560 --> 01:10:44.800
further obscuring and making it more difficult

01:10:44.800 --> 01:10:47.579
to understand the information and understand

01:10:47.579 --> 01:10:49.300
the nature of the assets that were related to

01:10:49.300 --> 01:10:53.460
this scheme. Further, he sent his driver to change

01:10:53.460 --> 01:10:55.779
locks at the building, and he was unsuccessful

01:10:55.779 --> 01:10:58.079
in accomplishing that, and when the company began

01:10:58.079 --> 01:11:03.119
the process of accessing documents while Mr.

01:11:03.260 --> 01:11:05.439
Albor personally disrupted the process of collecting

01:11:05.439 --> 01:11:07.560
those legal documents, threatened the debtor's

01:11:07.560 --> 01:11:09.239
staff, and demanded that they turn over their

01:11:09.239 --> 01:11:11.680
keys to the building under threat of criminal

01:11:11.680 --> 01:11:15.699
prosecution. And now recall, Mr. Albor testified,

01:11:15.840 --> 01:11:17.859
again untruthfully, that there weren't any paper

01:11:17.859 --> 01:11:19.579
records in the Cancun headquarters in the first

01:11:19.579 --> 01:11:22.100
place. Again, the May 21st hearing transcript,

01:11:22.380 --> 01:11:25.680
page 162, he says all the paper records were

01:11:25.680 --> 01:11:29.600
in the parks. It's not true, Your Honor. Mr.

01:11:29.640 --> 01:11:32.029
Albor has concocted a new story. that instead

01:11:32.029 --> 01:11:33.869
of the debtor's records being readily available

01:11:33.869 --> 01:11:36.050
and not commingled with any other non -debtor

01:11:36.050 --> 01:11:38.010
property, which is what he testified to prior

01:11:38.010 --> 01:11:41.029
to the hearing on the stay enforcement, the records

01:11:41.029 --> 01:11:42.890
were now apparently held in a portion of the

01:11:42.890 --> 01:11:44.810
building that he no longer had any control over.

01:11:45.310 --> 01:11:47.590
He instead advised that he has leased that portion

01:11:47.590 --> 01:11:49.409
of the building to his personal attorney, Ms.

01:11:49.510 --> 01:11:51.829
Esteban, who is also acting as general counsel

01:11:51.829 --> 01:11:54.529
to the company, and therefore Mr. Albor suggests

01:11:54.529 --> 01:11:56.390
that he can't do anything more to comply with

01:11:56.390 --> 01:11:59.390
the court's order. That's Exhibit H to Mr. Wagstaff's

01:11:59.390 --> 01:12:01.460
declaration. Of course, this is inconsistent

01:12:01.460 --> 01:12:04.560
with his verified response on April 28th. It's

01:12:04.560 --> 01:12:06.859
inconsistent with his deposition testimony when

01:12:06.859 --> 01:12:08.859
he asked who was in physical control of the data

01:12:08.859 --> 01:12:11.600
records located in headquarters. It's inconsistent

01:12:11.600 --> 01:12:15.239
with his testimony in this courtroom. In fact,

01:12:15.319 --> 01:12:18.000
if you look at docket number 155, his supplemental

01:12:18.000 --> 01:12:21.659
response, the statement is, Mr. Albor remains

01:12:21.659 --> 01:12:24.560
willing to grant Mr. Wagstaff and his team supervised

01:12:24.560 --> 01:12:26.880
access to any physical records located in his

01:12:26.880 --> 01:12:28.619
office that cannot be shared electronically.

01:12:31.020 --> 01:12:33.079
When he testified here, he insisted only that

01:12:33.079 --> 01:12:35.039
the debtors need to simply agree to a respectful

01:12:35.039 --> 01:12:38.880
protocol with him. Him alone, not in his Estevan,

01:12:39.100 --> 01:12:40.720
to access all the debtor records in the headquarters

01:12:40.720 --> 01:12:44.000
buildings. And after the court codified that

01:12:44.000 --> 01:12:46.579
protocol in the order, Mr. Albor took every single

01:12:46.579 --> 01:12:49.199
possible step he could to disrupt and interfere

01:12:49.199 --> 01:12:58.229
with the debtor's operation and management. Your

01:12:58.229 --> 01:13:00.430
honor, whether Mr. Albor has put Ms. Esteban

01:13:00.430 --> 01:13:02.890
up to conspiring with him to continue to stonewall

01:13:02.890 --> 01:13:04.789
the debtors from accessing these records, or

01:13:04.789 --> 01:13:07.109
if she's acting on her own record, Ms. Esteban

01:13:07.109 --> 01:13:09.310
has similarly not complied with the debtor's

01:13:09.310 --> 01:13:11.989
demand for cooperation and access. What notice

01:13:11.989 --> 01:13:16.149
has Ms. Esteban got of anything? Well, so we

01:13:16.149 --> 01:13:19.850
thought, she is an employee. What notice has

01:13:19.850 --> 01:13:23.770
she got? She's received electronic mail, and

01:13:23.770 --> 01:13:28.279
I believe we sent her a physical mail. Has she

01:13:28.279 --> 01:13:54.050
been served with a notice of motion? You can

01:13:54.050 --> 01:13:57.569
continue. I really have some basic procedural

01:13:57.569 --> 01:14:00.189
questions about what's in front of me and what

01:14:00.189 --> 01:14:06.609
I can do. At the previous hearing, I said we

01:14:06.609 --> 01:14:09.649
would go forward with the damages hearing today.

01:14:15.470 --> 01:14:21.170
As I understand it, that's now exhibit F, the

01:14:21.170 --> 01:14:27.500
notice of submission of Costs is what the debtors

01:14:27.500 --> 01:14:30.220
filed in response to that. I didn't get any legal

01:14:30.220 --> 01:14:36.039
authority for what it is that I can order under

01:14:36.039 --> 01:14:39.680
362k, which I take it, or maybe I should ask

01:14:39.680 --> 01:14:42.739
you. What provision of the code do you think

01:14:42.739 --> 01:14:49.359
I'm ordering sanctions under or damages? So you're

01:14:49.359 --> 01:14:53.180
all right. We think it is... It is under 362K

01:14:53.180 --> 01:14:55.079
and we think it's under your prior sanctions

01:14:55.079 --> 01:14:57.420
order. I think your prior sanctions order indicated

01:14:57.420 --> 01:15:01.640
that sanctions would be imposed. Sanctions are

01:15:01.640 --> 01:15:05.260
different than damages. So talk to me, I have

01:15:05.260 --> 01:15:09.100
no authority in front of me on 362K or quite

01:15:09.100 --> 01:15:14.359
frankly on sanctions. But, and I've requested

01:15:14.359 --> 01:15:19.170
it before, okay, is what do you want? And what

01:15:19.170 --> 01:15:22.869
authority is there for me to grant what you want?

01:15:23.930 --> 01:15:26.529
And so I don't have anything in front of me that

01:15:26.529 --> 01:15:31.729
tells me how I apply 362K and what the standards

01:15:31.729 --> 01:15:38.670
are and how I should view the evidence. So Your

01:15:38.670 --> 01:15:43.430
Honor, I would suggest that I'll go back to our

01:15:43.430 --> 01:15:45.569
briefing and our argument in connection with

01:15:45.569 --> 01:15:47.789
the prior hearing. I believe that we submitted

01:15:48.109 --> 01:15:53.350
You know a handful of cases and I believe Make

01:15:53.350 --> 01:15:59.489
sure that I have that right I But I think we

01:15:59.489 --> 01:16:02.310
spoke about these cases in in connection with

01:16:02.310 --> 01:16:06.810
the follow -up hearing The follow -up hearing

01:16:06.810 --> 01:16:11.329
was for sanctions and I entered a sanctions order

01:16:11.329 --> 01:16:17.369
and I did a $10 ,000 a day Order on sanctions

01:16:18.229 --> 01:16:23.270
Now you want damages Yes, those are different

01:16:23.270 --> 01:16:27.189
at least I think they're different maybe I'm

01:16:27.189 --> 01:16:29.930
wrong, but I don't have the briefing in front

01:16:29.930 --> 01:16:37.090
of me on 362 K if that is the provision that

01:16:37.090 --> 01:16:40.949
you're relying on And you are I think we did

01:16:40.949 --> 01:16:43.670
we did raise this in connection with the hearing

01:16:45.070 --> 01:16:50.010
It was the hearing where your honor asked us

01:16:50.010 --> 01:16:53.409
to come back and argue with respect to the evidence.

01:16:54.109 --> 01:16:58.310
It was the hearing after the evidentiary hearing.

01:16:58.350 --> 01:17:00.829
We came back and your honor asked us to provide

01:17:00.829 --> 01:17:04.810
you with a discussion of what the appropriate

01:17:04.810 --> 01:17:07.869
remedies were. What we had indicated was that

01:17:07.869 --> 01:17:10.710
there were sort of two paths. One is section

01:17:10.710 --> 01:17:17.529
362K indicates that. that the sanctions are appropriate

01:17:17.529 --> 01:17:20.970
to a corporate debtor. We also cited Judge Dorsey's

01:17:20.970 --> 01:17:24.890
opinion in the NNN 400 case where he said that

01:17:24.890 --> 01:17:32.850
under section 105, any type of order, whether

01:17:32.850 --> 01:17:36.909
it's injunctive, compensative, or punitive, as

01:17:36.909 --> 01:17:38.890
long as it's necessary or appropriate to carry

01:17:38.890 --> 01:17:42.149
out the provisions of the code, are authorized.

01:17:42.409 --> 01:17:45.109
So you're coming to me under 105, and that's

01:17:45.109 --> 01:17:49.569
it? No, I think that 362K gives you the right.

01:17:49.609 --> 01:17:51.289
And I think if you look at the Atlantic Business

01:17:51.289 --> 01:17:54.130
case, the Atlantic Business case indicated, and

01:17:54.130 --> 01:17:55.949
Judge Goldblatt acknowledged this in the Health

01:17:55.949 --> 01:17:59.210
Care Real Estate Partners case, that 362K is

01:17:59.210 --> 01:18:02.029
applicable to corporate debtors. What I'm saying

01:18:02.029 --> 01:18:05.510
is that even if 362K weren't applicable, Judge

01:18:05.510 --> 01:18:09.010
Dorsey, under the NNN 400 case, has imposed sanctions.

01:18:10.090 --> 01:18:12.710
I'm talking about sanctions. There's two things

01:18:12.710 --> 01:18:15.210
going on in this hearing today. One is you filed

01:18:15.210 --> 01:18:19.630
another motion to enforce, okay? That's one thing.

01:18:20.050 --> 01:18:22.890
Then we're supposed to have a hearing on damages,

01:18:23.609 --> 01:18:26.949
okay? Damages to me, at least I think that's

01:18:26.949 --> 01:18:29.529
what my order said. Let me just double check.

01:18:34.149 --> 01:18:36.649
Yeah, an evidentiary hearing is scheduled for

01:18:36.649 --> 01:18:40.090
July 23rd at 10 for determination of the damages,

01:18:40.369 --> 01:18:44.880
if any. Mr. Albor is liable for based on cost

01:18:44.880 --> 01:18:48.319
to the estate of responding to Mr. Albor's actions.

01:18:48.319 --> 01:18:54.079
Yes, okay, so That's what was requested I said

01:18:54.079 --> 01:19:02.960
that's what I ordered 362 K It's not apparent

01:19:02.960 --> 01:19:06.359
to me exactly how one applies that in every situation

01:19:06.359 --> 01:19:12.689
It just says it just says that You recover actual

01:19:12.689 --> 01:19:15.569
damages, including costs and attorney's fees,

01:19:16.289 --> 01:19:18.649
and in appropriate circumstances may recover

01:19:18.649 --> 01:19:22.550
punitive damages. And Your Honor, all we are

01:19:22.550 --> 01:19:24.489
asking for today and all the notice asked for

01:19:24.489 --> 01:19:27.569
today is the costs and attorney's fees. That

01:19:27.569 --> 01:19:30.149
was the notice that was filed. And so Your Honor,

01:19:30.289 --> 01:19:33.189
that's all we're asking for today. We believe

01:19:33.189 --> 01:19:36.529
that there are other types of damages that could

01:19:36.529 --> 01:19:39.350
be sought. But today, All we're asking for are

01:19:39.350 --> 01:19:41.250
the costs and attorney's fees, which are reflected

01:19:41.250 --> 01:19:46.229
in the notice. So you're not asking anything

01:19:46.229 --> 01:19:49.609
with respect to the notice of motion and the

01:19:49.609 --> 01:19:55.689
motion that was filed at docket 332? Not with

01:19:55.689 --> 01:19:58.310
respect to further costs and attorney's fees.

01:19:58.569 --> 01:20:00.829
What are you requesting on that? On that one,

01:20:00.890 --> 01:20:08.060
we do have a form of order. It's attached. The

01:20:08.060 --> 01:20:11.640
requests are, again, for the parties to provide

01:20:11.640 --> 01:20:16.720
us with the records, the records related to the

01:20:16.720 --> 01:20:19.020
debtors and the debtors' estates, the documents

01:20:19.020 --> 01:20:23.819
related to PES and Elysium, and the return of

01:20:23.819 --> 01:20:26.979
the funds that were diverted. So if you look

01:20:26.979 --> 01:20:31.020
at paragraph 5, 6, and 7 of that form of order,

01:20:31.100 --> 01:20:33.819
those are the requests from the additional motion.

01:20:41.229 --> 01:20:47.470
like a written submission discussing the authority

01:20:47.470 --> 01:20:52.310
under which I can assess the costs and damages

01:20:52.310 --> 01:20:56.949
and what can be assessed because I don't have

01:20:56.949 --> 01:20:59.869
it in written form even if you may have thrown

01:20:59.869 --> 01:21:03.550
some cases at me during argument in a previous

01:21:03.550 --> 01:21:09.550
hearing and and I want to ensure and I got I

01:21:09.550 --> 01:21:19.300
think respect to how these costs were put together

01:21:19.300 --> 01:21:24.420
but for example I see in the young Conaway submission

01:21:24.420 --> 01:21:27.460
prepare for and participate in meeting with young

01:21:27.460 --> 01:21:30.760
Conaway ray first day hearing issues well I don't

01:21:30.760 --> 01:21:32.739
know that first day hearing issues get charged

01:21:32.739 --> 01:21:40.079
to mr. Albor okay I saw some and maybe they do

01:21:40.079 --> 01:21:50.989
but I need I need some a written submission with

01:21:50.989 --> 01:22:01.390
authority. It looked like some of the submissions

01:22:01.390 --> 01:22:05.430
were broad. I think Riveron had some as well

01:22:05.430 --> 01:22:07.890
that seemed very broad to me where I couldn't

01:22:07.890 --> 01:22:10.630
discern just from looking at the document that

01:22:10.630 --> 01:22:13.050
that was in fact something done and received.

01:22:14.000 --> 01:22:17.600
to Mr. Albor. And then I think I need authority

01:22:17.600 --> 01:22:23.760
for why Baker and McKinsey's fees can be assessed

01:22:23.760 --> 01:22:27.840
as damages. Maybe they can, I don't know. But

01:22:27.840 --> 01:22:30.739
I have no authority that tells me that I can

01:22:30.739 --> 01:22:35.579
assess the lender's fees, attorney's fees and

01:22:35.579 --> 01:22:43.479
costs to Mr. Albor. Okay, so your honor, we're

01:22:43.479 --> 01:22:45.659
happy to put together a written submission, you

01:22:45.659 --> 01:22:50.640
know, and just for the avoidance of doubt. It

01:22:50.640 --> 01:22:54.239
sounds like the question is not that, you know,

01:22:54.420 --> 01:23:00.619
whether or not the costs are, whether or not

01:23:00.619 --> 01:23:05.979
costs are Give me authority. Just give me authority

01:23:05.979 --> 01:23:09.159
on everything you want. Don't make an assumption

01:23:09.159 --> 01:23:12.960
that I know how to apply 362K because I think

01:23:12.960 --> 01:23:16.699
maybe I've done it once. Okay? And it doesn't,

01:23:16.699 --> 01:23:18.859
it's not just that apparent to me. The first

01:23:18.859 --> 01:23:22.039
question you already talked about was can you

01:23:22.039 --> 01:23:24.180
even do it in a corporate case? Well, yes, there's

01:23:24.180 --> 01:23:26.619
authority for that. I understand that. Okay?

01:23:26.859 --> 01:23:29.319
I haven't looked at it, but I understand that.

01:23:29.380 --> 01:23:33.329
That's an issue. The other issues are, how do

01:23:33.329 --> 01:23:37.710
I interpret and apply this section? And for example,

01:23:37.989 --> 01:23:41.909
can the lender's fees and expenses be charged

01:23:41.909 --> 01:23:45.810
to Mr. Albor or assessed as damages and costs?

01:23:46.529 --> 01:23:50.750
Maybe they can, I don't know. I just want the

01:23:50.750 --> 01:23:55.430
authority on how I apply this section. Okay,

01:23:55.909 --> 01:23:59.890
I understand, John. So I think that that relates

01:23:59.890 --> 01:24:04.060
to... The fees and costs point and we will. We'll

01:24:04.060 --> 01:24:07.560
endeavor to provide additional. Briefing in connection

01:24:07.560 --> 01:24:12.939
with that. Unless you have your honor has any

01:24:12.939 --> 01:24:17.579
other questions on that. I didn't want to make

01:24:17.579 --> 01:24:19.960
a couple more statements in connection with.

01:24:21.140 --> 01:24:23.640
And I also want in that submission, then the

01:24:23.640 --> 01:24:30.380
service that was done. On both Mr Albor and Miss.

01:24:30.390 --> 01:24:34.250
Miss Esteban, but in particular, Mr. Miss Esteban,

01:24:34.350 --> 01:24:41.250
who's not here before me. That's I guess different.

01:24:41.590 --> 01:24:45.289
That's on the that's on the motion. On the costs,

01:24:45.329 --> 01:24:47.630
I guess you're not asking to chart to charge

01:24:47.630 --> 01:24:52.189
these costs against her, are you? No, OK, I so

01:24:52.189 --> 01:24:54.909
that's fine. I'm I'm now confusing the two things

01:24:54.909 --> 01:24:58.430
on the motion. I want I want evidence of the

01:24:58.430 --> 01:25:06.800
service. Very well, Your Honor. I guess just

01:25:06.800 --> 01:25:11.399
a couple of other points, if I could. Certainly.

01:25:13.739 --> 01:25:16.260
And I guess my question is whether Your Honor

01:25:16.260 --> 01:25:18.880
is prepared to enter an order with respect to

01:25:18.880 --> 01:25:23.180
the further violations of Mr. Albor. I'll review

01:25:23.180 --> 01:25:25.380
the evidence, and I will enter an order that

01:25:25.380 --> 01:25:28.659
I think that is appropriate. And again, apologies,

01:25:28.819 --> 01:25:31.489
Your Honor, if I'm missing something. I thought

01:25:31.489 --> 01:25:33.630
the evidence you were looking for was with respect

01:25:33.630 --> 01:25:37.550
to the assessment of the costs. I will review

01:25:37.550 --> 01:25:39.989
the evidence that was just presented to me. Mr.

01:25:40.189 --> 01:25:42.850
Watt staff's declaration and the submissions,

01:25:42.890 --> 01:25:47.229
for example, I heard in your argument, though

01:25:47.229 --> 01:25:49.170
I don't know that it's in the evidence, I heard

01:25:49.170 --> 01:25:51.850
argument about pre -petition actions. I don't

01:25:51.850 --> 01:25:53.949
think those could be a violation of the state.

01:25:54.319 --> 01:25:57.520
So I need to, I am going to consider the evidence

01:25:57.520 --> 01:26:01.159
that was presented and I will issue an appropriate

01:26:01.159 --> 01:26:03.239
order. I don't know if it will be exactly the

01:26:03.239 --> 01:26:07.920
order that has been submitted, but I will consider

01:26:07.920 --> 01:26:10.399
the evidence submitted on the motion and the

01:26:10.399 --> 01:26:12.579
proposed form of order and make a decision on

01:26:12.579 --> 01:26:16.600
that. Okay. Okay. I understand your honor. If

01:26:16.600 --> 01:26:20.840
I, if I could though, a couple of other remarks

01:26:20.840 --> 01:26:24.800
with respect to some of the additional. And one

01:26:24.800 --> 01:26:28.619
would be the declaration that was filed by Mr.

01:26:28.880 --> 01:26:33.100
Duenas. So, and again, I'll note first of all,

01:26:33.159 --> 01:26:37.140
Mr. Duenas is not here. Well, is that part of

01:26:37.140 --> 01:26:44.239
the evidence? Was that submitted? Is that attached

01:26:44.239 --> 01:26:49.579
to the declaration? So, Mr. Duenas' declaration

01:26:49.579 --> 01:26:53.060
was filed. It's at docket number 305, and it's

01:26:53.060 --> 01:27:00.979
tab D to the agenda item. Well, that's not evidence.

01:27:02.140 --> 01:27:05.699
I have an evidentiary record. Correct. I'd like

01:27:05.699 --> 01:27:09.399
to make it. This was filed by Mr. Albor's attorney.

01:27:09.840 --> 01:27:12.140
OK, but it's not part of the evidence, is it?

01:27:12.899 --> 01:27:15.600
I have an evidentiary record. People file stuff

01:27:15.600 --> 01:27:19.520
all the time. I have an evidentiary record, and

01:27:19.520 --> 01:27:22.630
I don't. know that that declaration was submitted

01:27:22.630 --> 01:27:24.989
in the evidence. That's what I'm asking. Did

01:27:24.989 --> 01:27:28.369
Mr. Nyberg today submit that declaration into

01:27:28.369 --> 01:27:30.930
evidence? I don't think he did. I could be wrong

01:27:30.930 --> 01:27:33.409
if it could be attachment to Mr. Wackstaff's

01:27:33.409 --> 01:27:37.750
declaration. No, no. No, it's not. This is Mr.

01:27:37.970 --> 01:27:40.829
Albor's attorney in Mexico. Yes. So why are I

01:27:40.829 --> 01:27:44.069
considering that? I have an evidentiary record.

01:27:44.489 --> 01:27:47.630
OK. If Your Honor is disregarding that declaration

01:27:47.630 --> 01:27:51.649
in its entirety, then. I don't have any problem,

01:27:51.729 --> 01:27:54.649
but I just wanted to make it clear that we. It's

01:27:54.649 --> 01:28:00.050
not part of the evidentiary record. Okay. Okay.

01:28:01.649 --> 01:28:06.649
All right. Very good, Your Honor. All right.

01:28:06.710 --> 01:28:08.430
Well, so I think that we have our marching orders.

01:28:08.449 --> 01:28:11.850
We'll prepare a further submission with respect

01:28:11.850 --> 01:28:16.470
to the damages. Your Honor will review that.

01:28:16.609 --> 01:28:19.560
We'll review the. record this before you today

01:28:19.560 --> 01:28:24.520
in our further motion, and we will await further

01:28:24.520 --> 01:28:26.899
word from Your Honor on that. Very good. All

01:28:26.899 --> 01:28:29.720
right. Thank you, Your Honor. I don't believe

01:28:29.720 --> 01:28:32.500
we have anything else for the Court today. Thank

01:28:32.500 --> 01:28:34.140
you very much, then, for adjourned.