WEBVTT 00:00:00.430 --> 00:00:06.769 All right, good afternoon. It is 4 o 'clock on 00:00:06.769 --> 00:00:11.429 Wednesday, January 14, 2026. We're here for the 00:00:11.429 --> 00:00:16.510 first day hearings and case number 26 -90103, 00:00:16.789 --> 00:00:25.550 Sachs Global Enterprises, LLC. So if we get appearances 00:00:25.550 --> 00:00:29.929 of counsel first and then to the extent anyone 00:00:30.079 --> 00:00:34.240 wants to talk, please hit five star one time. 00:00:38.619 --> 00:00:41.039 Good afternoon, Your Honor. Jennifer Hardy of 00:00:41.039 --> 00:00:43.579 Wilkie Farr and Gallagher proposed co -counsel 00:00:43.579 --> 00:00:46.460 to the SAC's global gutters. The rest of the 00:00:46.460 --> 00:00:48.820 Wilkie team, including my partner Debra Sinclair, 00:00:49.079 --> 00:00:51.380 are in a conference room and have all made appearances 00:00:51.380 --> 00:00:55.159 electronically. All right. Thank you. Yes. I'm 00:00:55.159 --> 00:00:57.960 glad you reminded me. Please make sure to make 00:00:57.960 --> 00:01:00.880 your appearances electronically. That's how we 00:01:00.880 --> 00:01:07.780 keep track of, uh, of appearances. Good afternoon, 00:01:07.780 --> 00:01:09.840 Your Honor. Jared Martin, Broadway, and both 00:01:09.840 --> 00:01:13.959 Cummings for the SO5 Digital Betters. Also joining 00:01:13.959 --> 00:01:18.780 me are Michael Reardon and James Bailey. Um, 00:01:18.780 --> 00:01:20.459 Andrew Heade, Chief Restructuring Officer, is 00:01:20.459 --> 00:01:24.590 also on the line. Okay. Thank you. So we have 00:01:24.590 --> 00:01:29.890 maxed out on the go to meeting at 251 but you 00:01:29.890 --> 00:01:34.849 can still get on the on the phone line and if 00:01:34.849 --> 00:01:37.730 you're not on the go to meeting because you joined 00:01:37.730 --> 00:01:41.049 a little bit after we maxed out just make sure 00:01:41.049 --> 00:01:46.890 to make your appearance on on the audio version 00:01:53.460 --> 00:02:00.060 Let's take further appearances, please. Good 00:02:00.060 --> 00:02:04.519 afternoon, Your Honor. Proposed co -counsel for 00:02:04.519 --> 00:02:07.299 the tax global debtors. I'm joined in our virtual 00:02:07.299 --> 00:02:09.300 courtroom by several of my colleagues, including 00:02:09.300 --> 00:02:11.060 Mr. David Troush, who will be speaking later 00:02:11.060 --> 00:02:15.979 in the hearing. All right. Thank you. Good afternoon, 00:02:16.080 --> 00:02:20.479 Your Honor. Sorry, Your Honor. Debra Sinclair, 00:02:20.620 --> 00:02:23.039 Wilkie Bar and Gallagher also present. Global 00:02:23.039 --> 00:02:25.340 Enterprises, LLC, and its debtor affiliates. 00:02:25.639 --> 00:02:27.780 I'll make appearances on behalf of my colleagues 00:02:27.780 --> 00:02:30.620 in the room if that's okay because I expect that 00:02:30.620 --> 00:02:33.080 some or all of them will be appearing before 00:02:33.080 --> 00:02:35.840 you at one point or another today. With me in 00:02:35.840 --> 00:02:37.979 the conference room here are my colleagues Robin 00:02:37.979 --> 00:02:41.419 Spiegel, Todd Gorin, Allison Smith, Christopher 00:02:41.419 --> 00:02:44.879 DiPompeo, Stuart Lombardi, Jessica Graver, and 00:02:44.879 --> 00:02:47.699 Zachary Charlton. I'd also like to introduce 00:02:47.699 --> 00:02:50.360 Mark Weinstein, Chief Restructuring Officer of 00:02:50.360 --> 00:02:52.599 the Debtors from Berkeley Research Group. as 00:02:52.599 --> 00:02:55.099 well as Steve Zellent and Jamie Baird of PJT 00:02:55.099 --> 00:02:57.719 Partners. Well, Mr. Weinsen and Mr. Baird are 00:02:57.719 --> 00:03:03.159 also in the room with me here. All right. Good 00:03:03.159 --> 00:03:06.219 afternoon, Your Honor. Toby Gerber on behalf 00:03:06.219 --> 00:03:10.620 of Bank of America, the AVL agent with me on 00:03:10.620 --> 00:03:15.379 the phone, our co -counsel Daniel Fiorello and 00:03:15.379 --> 00:03:19.659 David Castleman from Otterburg, and also hearing 00:03:19.659 --> 00:03:23.580 Gregory Ginther. Marjorie Crider and Matthew 00:03:23.580 --> 00:03:28.000 Furlong from Morgan Lewis and Bacchus. I believe 00:03:28.000 --> 00:03:32.400 Mr. Fiorello and Castleman may be speaking later 00:03:32.400 --> 00:03:36.180 on. All right. Thank you, sir. Thank you. Good 00:03:36.180 --> 00:03:38.340 afternoon, your honor. Nathan Elmer with City 00:03:38.340 --> 00:03:42.379 Austin LLP on behalf of Exotic Co -Invest 2 LP 00:03:42.379 --> 00:03:46.699 in Sierra Leone. I'm joined in the virtual courtroom 00:03:46.699 --> 00:03:50.080 by Ms. Amine Bori and Jean Ducatier from our 00:03:50.080 --> 00:03:53.099 firm. Each of them have pro -hoc motions pending 00:03:53.099 --> 00:03:55.560 before your honor. They were filed very shortly 00:03:55.560 --> 00:03:58.620 before this day. And I'd also just like to note 00:03:58.620 --> 00:04:01.039 that we filed an objection to this motion as 00:04:01.039 --> 00:04:03.819 document number 120, also shortly before this 00:04:03.819 --> 00:04:07.719 hearing, in mid -40, the point person for today's 00:04:07.719 --> 00:04:10.560 hearing. I can't find that objection. Thank you. 00:04:10.800 --> 00:04:14.099 All right. Thank you. Yes, we had many pro -hocs. 00:04:14.159 --> 00:04:16.600 We tried to get them all entered before, but 00:04:16.600 --> 00:04:18.220 to the extent they haven't been entered, you're 00:04:18.220 --> 00:04:23.269 authorized to speak. Thank you. Good afternoon, 00:04:23.350 --> 00:04:26.649 Your Honor. Can you hear me? Yes. Good afternoon, 00:04:26.769 --> 00:04:28.689 Your Honor. John Higgins, Shane Johnson from 00:04:28.689 --> 00:04:30.910 Porter and Hedges. I'm appearing today on behalf 00:04:30.910 --> 00:04:33.170 of the ad hoc group of secured note holders. 00:04:33.790 --> 00:04:36.050 Also appearing with us today are the Paul Weiss 00:04:36.050 --> 00:04:39.149 team, and I can see Bob Britton on camera. I 00:04:39.149 --> 00:04:44.990 see Mr. Britton as well. Good afternoon, Your 00:04:44.990 --> 00:04:48.209 Honor. Caroline Reckler. Caroline Reckler on 00:04:48.209 --> 00:04:50.529 behalf of Amazon. I'm here in the virtual courtroom 00:04:50.529 --> 00:04:53.110 with my partner, Chris Harris. As Your Honor 00:04:53.110 --> 00:04:57.189 has seen, we filed a motion to adjourn the dip 00:04:57.189 --> 00:05:00.730 and cash management motions very briefly. I saw 00:05:00.730 --> 00:05:02.470 that. Yes. Mr. Britton, go ahead and make your 00:05:02.470 --> 00:05:10.470 appearance. Have I unmuted you? Mr. Britton, 00:05:10.509 --> 00:05:13.649 did I? There we go. You have now, Your Honor. 00:05:13.649 --> 00:05:16.629 Thank you very much. All right. On the record, 00:05:16.829 --> 00:05:19.410 Bob Britton, Paul Weiss. On behalf of the ad 00:05:19.410 --> 00:05:22.089 hoc group of tip lenders and note holders, I'm 00:05:22.089 --> 00:05:24.470 joined in the room by my partners, Andy Rosenberg 00:05:24.470 --> 00:05:27.129 and Chris Hopkins. And it's a pleasure to appear 00:05:27.129 --> 00:05:30.910 up here before you again today. Thank you. All 00:05:30.910 --> 00:05:33.050 right. Good afternoon, Your Honor. Howlin for 00:05:33.050 --> 00:05:35.449 the United States trustee. Good afternoon, Mr. 00:05:36.149 --> 00:05:39.350 Wynne. Good afternoon, Your Honor. Kurt Lieberman 00:05:39.350 --> 00:05:43.170 of Prior Cashman. Here on behalf of David Yermann 00:05:43.170 --> 00:05:47.540 Enterprises. Goyard, Caron Americas, and certain 00:05:47.540 --> 00:05:53.300 affiliated brands, Richemont, and LVMH, and certain 00:05:53.300 --> 00:05:59.100 of their affiliated Mazons. Good afternoon. Good 00:05:59.100 --> 00:06:01.459 afternoon, Your Honor. Jonathan Covary, Olsen 00:06:01.459 --> 00:06:05.300 Promolowski for Gorsky Group Limited and Kate 00:06:05.300 --> 00:06:09.939 LLC. Good afternoon. Good afternoon, Your Honor. 00:06:10.079 --> 00:06:13.920 John Spiricino from McCool Smith. Here in Houston, 00:06:13.939 --> 00:06:16.439 I believe I'm joined virtually by my colleague 00:06:16.439 --> 00:06:20.660 Margie Venus appearing on behalf of Wexford Capital 00:06:20.660 --> 00:06:30.319 Good afternoon Right anyone else wish to make 00:06:30.319 --> 00:06:48.089 an appearance Good afternoon, Your Honor. Leslie 00:06:48.089 --> 00:06:51.250 Hyelman -Ballard -Spar on behalf of Street Retail 00:06:51.250 --> 00:06:54.730 LLC, the Macerich Company, Centennial Real Estate 00:06:54.730 --> 00:06:57.689 Company, and the Ford's Company on behalf of 00:06:57.689 --> 00:07:04.470 a number of leases with the debtor. Good afternoon, 00:07:04.589 --> 00:07:09.370 Your Honor. Lisa Norman from Andrews Meyers here 00:07:09.370 --> 00:07:11.350 in Houston. We're here on behalf of the state. 00:07:12.019 --> 00:07:14.920 Appliance that Seth Lieberman, as our cashman, 00:07:15.100 --> 00:07:18.839 announced a moment ago. All right. Thank you. 00:07:20.459 --> 00:07:22.160 Good afternoon, Your Honor. Justin Birnbrock. 00:07:22.279 --> 00:07:26.939 I'm Shepard Mullen. On behalf of Chanel Akpris 00:07:26.939 --> 00:07:33.680 and Ralph Lauren. Good afternoon. Good afternoon, 00:07:33.680 --> 00:07:36.980 Your Honor. Jason Teele of Sears, Cummins, and 00:07:36.980 --> 00:07:39.480 Gross on behalf of Anthony Scapparelli, Yesenia. 00:07:41.709 --> 00:07:51.829 Good afternoon. Good afternoon, your honor. Brunson's 00:07:51.829 --> 00:07:53.870 got a place that winners for other Southern Stevens 00:07:53.870 --> 00:07:57.329 on behalf of BH Multicom Corp, BH Multicolor 00:07:57.329 --> 00:07:59.610 Corp, Rich Line Design Bank, and Unique Design 00:07:59.610 --> 00:08:05.610 Bank. All right. Anyone else wish to make it? 00:08:05.610 --> 00:08:08.350 Good afternoon, your honor. Go ahead. Yes, sorry. 00:08:08.560 --> 00:08:11.680 Good afternoon, Your Honor. This is Allison Janoy, 00:08:11.879 --> 00:08:17.199 appearing on behalf of Keesley USA. All right. 00:08:18.720 --> 00:08:21.339 Good afternoon, Your Honor. Greg Hess on behalf 00:08:21.339 --> 00:08:30.360 of Capitol One National Association. All right. 00:08:31.199 --> 00:08:37.779 Anyone else? Mr. Ghilardi, have you hit five 00:08:37.779 --> 00:08:49.070 star? Good afternoon, Your Honor. I'm Greg Gallardy 00:08:49.070 --> 00:08:52.990 on behalf of VINC and CENTRIC. All right, Mr. 00:08:53.230 --> 00:08:57.269 Lehane. Good afternoon, Your Honor. Robert Lehane, 00:08:57.549 --> 00:09:00.169 Kelly Dry and Warren on behalf of a number of 00:09:00.169 --> 00:09:02.490 landlords. Brookfield Properties Retail Inc. 00:09:02.649 --> 00:09:08.610 at 18 locations. WFP Tower B Company LP and WFP 00:09:08.610 --> 00:09:11.409 Tower D Company LP, the headquarters landlords, 00:09:12.009 --> 00:09:14.870 Regency Centers, Turnberry Associates, and Brixmore 00:09:14.870 --> 00:09:21.970 Property Group. Oh, and just Mr. Hey, I'm glad 00:09:21.970 --> 00:09:24.889 I'm glad you brought that up. I saw that Brookfield 00:09:24.889 --> 00:09:29.309 also has a preferred equity interest in the debtor 00:09:29.309 --> 00:09:32.090 that's represented by while, obviously, to the 00:09:32.090 --> 00:09:34.129 extent that they become a material participant 00:09:34.129 --> 00:09:37.190 in the case with respect to any particular matter. 00:09:37.509 --> 00:09:41.789 You know, I'll have to evaluate the need to recuse 00:09:41.789 --> 00:09:44.549 myself on that matter. But my understanding is 00:09:44.549 --> 00:09:49.980 that just indicating what you said that Brookfield 00:09:49.980 --> 00:09:52.740 is represented as a landlord by your firm as 00:09:52.740 --> 00:09:57.559 opposed to by WOW. Anyone else wish to make an 00:09:57.559 --> 00:10:03.639 appearance? Hold on. Good afternoon, Your Honor. 00:10:03.720 --> 00:10:06.340 Daniel Rosenberg, General Counsel for Chanel, 00:10:06.539 --> 00:10:09.399 represented on the phone by Justin Birnbaum from 00:10:09.399 --> 00:10:17.659 Shepherd. Good afternoon. All right, anyone else 00:10:17.659 --> 00:10:21.539 wish to be heard? Just hit five star one time. 00:10:22.960 --> 00:10:25.659 Good afternoon, Your Honor. David Banker. I'm 00:10:25.659 --> 00:10:28.159 law officer David M. Banker, Esquire. I'm the 00:10:28.159 --> 00:10:31.779 F .L .C .L. U .S. Distribution Corporation, Christian 00:10:31.779 --> 00:10:38.120 Louboutin. Good afternoon. Thank you, Your Honor. 00:10:40.139 --> 00:10:45.980 All right, anyone else? Good afternoon, Your 00:10:45.980 --> 00:10:48.100 Honor. Trey Wood, can you hear me? Yes, sir. 00:10:49.259 --> 00:10:51.840 Good afternoon, Your Honor. Trey Wood with Bracewell. 00:10:52.580 --> 00:10:55.139 Appearing today on behalf of Caledine Commercial 00:10:55.139 --> 00:10:58.360 Finance. With me in the virtual courtroom is 00:10:58.360 --> 00:11:01.700 Chris Carter of the Morgan Lewis Law Firm. All 00:11:01.700 --> 00:11:04.759 right. Thank you. Thank you, Your Honor. All 00:11:04.759 --> 00:11:07.460 right. Anyone else? Good afternoon, Your Honor. 00:11:07.539 --> 00:11:10.220 This is Chess Wong of Cohen Legend Simon here 00:11:10.220 --> 00:11:23.990 on behalf of Local 1102. Thank you. Anyone else? 00:11:28.629 --> 00:11:29.990 All right, Miss Hardy, who's going to take the 00:11:29.990 --> 00:11:34.799 lead? Thank you, Your Honor. First, on behalf 00:11:34.799 --> 00:11:36.659 of the SACS Global Debtors, I just wanted to 00:11:36.659 --> 00:11:38.980 thank the court for accommodating us today. We 00:11:38.980 --> 00:11:41.100 know that it's an enormous effort to get up to 00:11:41.100 --> 00:11:43.840 speed on a complex case in just a handful of 00:11:43.840 --> 00:11:47.299 hours. So we really appreciate that. With that, 00:11:47.419 --> 00:11:50.519 Your Honor, I'd like to turn the podium over 00:11:50.519 --> 00:11:53.899 to my partner, Deborah Sinclair. All right, Ms. 00:11:53.980 --> 00:11:57.279 Sinclair. Good afternoon, Your Honor. Are you 00:11:57.279 --> 00:12:01.340 able to hear me? I am. For the record, Deborah 00:12:01.340 --> 00:12:03.149 Sinclair Claire from the law firm Wilkie Bar 00:12:03.149 --> 00:12:06.070 and Gallagher LLP for SACS Global Enterprises 00:12:06.070 --> 00:12:09.409 LLC and its debtor affiliates. Your Honor, my 00:12:09.409 --> 00:12:11.629 colleague, Lucas Emmer, will be running a PowerPoint 00:12:11.629 --> 00:12:13.730 on the screen to accompany our presentation. 00:12:14.190 --> 00:12:15.929 So I understand you've coordinated with your 00:12:15.929 --> 00:12:18.029 chambers on that and I'll ask him to screen share 00:12:18.029 --> 00:12:20.889 in just a few minutes. But first I'd like to 00:12:20.889 --> 00:12:23.269 echo Ms. Hardy's comments. We'd like to thank 00:12:23.269 --> 00:12:26.870 the court, Your Honor staff, U .S. trustee, and 00:12:26.870 --> 00:12:29.409 all of the professionals and principals who helped 00:12:29.409 --> 00:12:32.320 us get at this point today. It truly was a tremendous 00:12:32.320 --> 00:12:35.279 effort, so we're very grateful. Your Honor, we're 00:12:35.279 --> 00:12:37.440 here today to present the first date reading 00:12:37.440 --> 00:12:40.620 in connection with the Chapter 11 filing of SACS 00:12:40.620 --> 00:12:44.200 mobile. Today's hearing marks a new beginning 00:12:44.200 --> 00:12:47.659 for three historic American brands. Of course, 00:12:47.759 --> 00:12:50.340 the first one is SACS Fifth Avenue, which traces 00:12:50.340 --> 00:12:53.440 its roots all the way back to the year 1867. 00:12:54.139 --> 00:12:56.820 For over 100 years, SACS has been continuously 00:12:56.820 --> 00:12:59.259 operating its flagship store here in midtown 00:12:59.259 --> 00:13:01.960 Manhattan. And over those decades, as your honor 00:13:01.960 --> 00:13:04.320 and everyone on the phone knows, the store has 00:13:04.320 --> 00:13:07.639 become world famous. It is synonymous with luxury 00:13:07.639 --> 00:13:10.700 fashion and a classic New York City shopping 00:13:10.700 --> 00:13:14.100 experience. In that time, Saks has also developed 00:13:14.100 --> 00:13:16.899 a coast -to -coast presence and currently operates 00:13:16.899 --> 00:13:20.720 33 locations across the U .S. There's Neiman 00:13:20.720 --> 00:13:23.139 Marcus, which has been an innovator since it 00:13:23.139 --> 00:13:26.600 opened in Dallas in 1907. Neiman was actually 00:13:26.600 --> 00:13:33.690 one of the first stores made clothing. And today, 00:13:33.830 --> 00:13:36.629 Neiman offers a curated assortment of that exact 00:13:36.629 --> 00:13:39.370 type of luxury fashion across its 36 stores. 00:13:40.169 --> 00:13:42.450 And finally, Bergdorf Goodman, for its part, 00:13:42.889 --> 00:13:46.889 traces its history back to 1899. For over 100 00:13:46.889 --> 00:13:50.250 years, Bergdorf has been an international destination 00:13:50.250 --> 00:13:53.490 for customers that are seeking ultra luxury fashion. 00:13:54.190 --> 00:13:56.769 Bergdorf is another quintessential New York shopping 00:14:04.720 --> 00:14:08.059 the umbrella of Saks Global, which is the largest 00:14:08.059 --> 00:14:11.779 multi -brand luxury retailer in the world. These 00:14:11.779 --> 00:14:15.340 brands are enduring, they are iconic, and most 00:14:15.340 --> 00:14:18.000 importantly, Your Honor, they are open for business. 00:14:18.639 --> 00:14:20.700 I want to make it clear at the outset of this 00:14:20.700 --> 00:14:23.200 case that the company's troubles are not related 00:14:23.200 --> 00:14:27.000 to a decrease in demand for luxury goods or a 00:14:27.000 --> 00:14:29.200 lack of interest in department store shopping. 00:14:29.559 --> 00:14:36.590 It's actually quite the opposite. goods available 00:14:36.590 --> 00:14:40.090 in our stores, we are able to sell them. The 00:14:40.090 --> 00:14:42.250 problem, as you'll hear a lot about today and 00:14:42.250 --> 00:14:44.330 over the course of this case, has been that we 00:14:44.330 --> 00:14:47.049 have not been able to buy enough inventory to 00:14:47.049 --> 00:14:49.509 meet our demand, and that is because the company 00:14:49.509 --> 00:14:51.769 has been facing increasingly tight liquidity 00:14:51.769 --> 00:15:07.909 constraints over the last year. Mr. Emmer? Yes, 00:15:08.029 --> 00:15:12.789 Your Honor, Lucas Emmer. Okay, here you go. Thank 00:15:12.789 --> 00:15:15.389 you, Your Honor. All right. So before I jump 00:15:15.389 --> 00:15:18.250 more into the history and our presentation, I 00:15:18.250 --> 00:15:20.009 just want to say what our core goals are going 00:15:20.009 --> 00:15:22.789 to be in this Chapter 11 case. On the one hand, 00:15:22.870 --> 00:15:25.250 Your Honor, we want to maintain all of those 00:15:25.250 --> 00:15:27.809 healthy parts of these businesses that people 00:15:27.809 --> 00:15:31.289 know and love, while on the other hand, we stabilize 00:15:31.289 --> 00:15:47.210 our continue to provide customers with the upscale 00:15:47.210 --> 00:15:49.750 shopping experience that they've come to expect 00:15:49.750 --> 00:15:52.990 from SAC Global Brands. Your Honor, I'd like 00:15:52.990 --> 00:15:55.190 to ask Mr. Emmer to share our presentation on 00:15:55.190 --> 00:15:57.289 the screen now. We can talk a little bit more 00:15:57.289 --> 00:15:59.529 about the history of the company and the goals 00:15:59.529 --> 00:16:07.409 for the Chapter 11 case. If you could just make 00:16:07.409 --> 00:16:39.919 me a presenter. I think I just did. Do you have 00:16:39.919 --> 00:16:43.879 your camera turned on? I do, I'm right here. 00:16:48.100 --> 00:17:25.700 Hold on a second. Look at it now. Still not able 00:17:25.700 --> 00:17:29.420 to share. Your Honor, if we're having technical 00:17:29.420 --> 00:17:31.960 difficulties, I can suggest that we share our 00:17:31.960 --> 00:17:34.119 presentation on the docket following the hearing. 00:17:34.579 --> 00:17:37.420 I'm happy to just go along verbally, if that's 00:17:37.420 --> 00:17:39.960 easiest for everyone. Yes, why don't we do that? 00:17:39.980 --> 00:17:51.569 Let me just try one last time. Yeah, for some 00:17:51.569 --> 00:17:54.569 reason, it's not wanting to make you the presenter. 00:17:57.950 --> 00:18:00.730 All right, go ahead. OK, Your Honor, we'll plan 00:18:00.730 --> 00:18:03.190 to share it on the docket after the hearing. 00:18:03.950 --> 00:18:06.490 So look, as Your Honor may be aware, the current 00:18:06.490 --> 00:18:09.589 enterprise that we call SACS Global was created 00:18:09.589 --> 00:18:12.950 at the end of 2024. And it was the result of 00:18:12.950 --> 00:18:15.490 SACS's acquisition of the Neiman Marcus Group, 00:18:15.789 --> 00:18:17.490 which was a deal done for a total enterprise 00:18:17.490 --> 00:18:29.019 value of $2 .7 billion. to recognize $600 million 00:18:29.019 --> 00:18:31.720 of total synergies from the deal over the course 00:18:31.720 --> 00:18:34.380 of the five years post -acquisition, but the 00:18:34.380 --> 00:18:36.700 immediate term liquidity made it hard for the 00:18:36.700 --> 00:18:39.819 company to chart a path towards actually recognizing 00:18:39.819 --> 00:18:42.279 those synergies. And the liquidity constraints 00:18:42.279 --> 00:18:45.519 made it difficult to pay vendors on time. That 00:18:45.519 --> 00:18:48.099 made it harder to buy more go -forward inventory. 00:18:57.050 --> 00:19:00.250 And so last year, the company was ultimately 00:19:00.250 --> 00:19:02.970 not able to build an adequate amount of seasonal 00:19:02.970 --> 00:19:06.250 inventory leading into the spring season of 2025. 00:19:07.730 --> 00:19:09.710 At that point, the company began considering 00:19:09.710 --> 00:19:12.210 strategies to address this, including looking 00:19:12.210 --> 00:19:48.480 for a new money financing. for new notes and 00:19:48.480 --> 00:19:51.079 the company was able to raise $600 million of 00:19:51.079 --> 00:19:54.579 new money and capture approximately $115 million. 00:20:26.339 --> 00:20:28.460 merchandising systems that were used by SACS 00:20:28.460 --> 00:20:32.319 on one hand and Neiman on the other. So all of 00:20:32.319 --> 00:20:35.539 these issues led to, in late 2025, the company 00:20:35.539 --> 00:20:39.140 starting to work with Wilkie, PJC, BRG, and its 00:20:39.140 --> 00:20:42.380 other professionals to pursue what I would characterize 00:20:42.380 --> 00:20:45.960 as a number of liquidity and restructuring solutions. 00:20:46.339 --> 00:20:49.000 We spoke to parties throughout our capital structure. 00:20:49.240 --> 00:20:52.180 We also spoke to third parties. And you'll hear 00:20:52.180 --> 00:20:54.380 that, other than the disk facilities that we'll 00:20:54.380 --> 00:21:04.319 be presenting to you a little bit Chapter 11. 00:21:05.440 --> 00:21:07.259 Your Honor, we have a task now that we're in 00:21:07.259 --> 00:21:09.940 Baker Street to obtain much needed liquidity 00:21:09.940 --> 00:21:13.180 through our DIP facilities. The proposed facilities 00:21:13.180 --> 00:21:17.099 together represent $1 .75 billion in new money 00:21:17.099 --> 00:21:20.279 commitment. One of those DIP facilities is being 00:21:20.279 --> 00:21:22.859 provided by an ad hoc group of the company's 00:21:22.859 --> 00:21:25.599 existing bondholders. They have committed $1 00:21:25.599 --> 00:21:34.279 .5 billion of new money to the who are providing 00:21:34.279 --> 00:21:38.500 approximately $240 million in incremental availability 00:21:38.500 --> 00:21:41.380 under the ADL compared to what was available 00:21:41.380 --> 00:21:44.920 pre -petition under that revolver. The DIP facilities 00:21:44.920 --> 00:21:47.599 will infuse new capital into the business, and 00:21:47.599 --> 00:21:49.819 if approved, they'll position the company for 00:21:49.819 --> 00:22:06.539 a strong and stable future. will orient you to 00:22:06.539 --> 00:22:10.359 what is obviously a very complex situation. And 00:22:10.359 --> 00:22:12.339 again, we will send our slides because I think 00:22:12.339 --> 00:22:14.480 it is helpful for you to have that visual as 00:22:14.480 --> 00:22:17.599 you think about this later on. But I will summarize 00:22:17.599 --> 00:22:19.619 it for you so that we can at least get a lay 00:22:19.619 --> 00:22:21.599 of the land for you and everybody else on the 00:22:21.599 --> 00:22:25.279 phone here. Briefly to summarize the company's 00:22:25.279 --> 00:23:07.519 pre -petition capital structure. to what I've 00:23:07.519 --> 00:23:11.220 already described to you. But for now, note that 00:23:11.220 --> 00:23:14.039 the notes issued last summer totaled approximately 00:23:14.039 --> 00:23:18.259 $762 .5 million in aggregate principal amount. 00:23:18.359 --> 00:23:24.779 All right. Just hold on a second. For some reason, 00:23:25.279 --> 00:23:27.920 it thinks that I'm not the organizer, and we're 00:23:27.920 --> 00:23:30.420 going to get bumped off of here. Just hold on 00:23:30.420 --> 00:23:40.799 a second. If we do get bumped off, I think that 00:23:40.799 --> 00:23:45.460 we're at capacity both in terms of video and 00:23:45.460 --> 00:23:49.559 audio. So at the first break, I'm going to see 00:23:49.559 --> 00:23:54.019 if I can open up either Judge Lopez or Judge 00:23:54.019 --> 00:23:56.839 Isger's line to see if we can add more people. 00:23:57.579 --> 00:24:01.279 But to the extent we get bumped off, just everyone 00:24:01.279 --> 00:24:40.710 come back in again. All right, go ahead. We have 00:24:40.710 --> 00:24:43.509 over a hundred debtors in a file today and that 00:24:43.509 --> 00:25:17.490 doesn't cover every One of those assets is the 00:25:17.490 --> 00:25:48.799 company's intellectual property holdings. $428 00:25:48.799 --> 00:25:52.039 million. And finally, the flagship building, 00:25:52.059 --> 00:25:54.680 Your Honor, that's the Saks Fifth Avenue in Midtown. 00:25:54.819 --> 00:25:57.619 That sits in an entity called Saks Flagship Real 00:25:57.619 --> 00:26:01.220 Property, LLC. That entity is not in these Chapter 00:26:01.220 --> 00:26:05.720 11 cases. It has a $1 .25 billion CMBS loan that 00:26:05.720 --> 00:26:08.619 is secured by the building. And our intent, Your 00:26:08.619 --> 00:27:19.730 Honor, is to work me to talk to a little... moving 00:27:19.730 --> 00:27:22.930 towards optimizing the portfolio for the debtors. 00:27:23.589 --> 00:27:25.410 All in, the company does, as I said, operates 00:27:25.410 --> 00:27:28.490 nationwide and operates approximately 70 full 00:27:28.490 --> 00:27:56.309 -line luxury locations and many more. and luxury 00:27:56.309 --> 00:27:59.170 retail, including his leadership during the infrastructure. 00:28:00.430 --> 00:28:03.289 Brandy Richardson will continue to serve as the 00:28:03.289 --> 00:28:06.390 company's Chief Financial Officer. Ms. Richardson 00:28:06.390 --> 00:28:09.569 joined SAC School in August and has been an absolutely 00:28:09.569 --> 00:28:12.089 critical part of the process to get us into Chapter 00:28:12.089 --> 00:28:15.529 11 today. She is also highly experienced in the 00:28:15.529 --> 00:28:18.170 retail space. She served for many years as the 00:28:18.170 --> 00:28:36.700 Chief Financial Officer of Taylor & Grant. Receiving 00:28:36.700 --> 00:28:38.900 the bankruptcy process is a special committee 00:28:38.900 --> 00:28:41.539 of the board. It's currently comprised of two 00:28:41.539 --> 00:28:43.900 independent directors, Paul Aronson and Bill 00:28:43.900 --> 00:28:46.299 Tracy, both of whom have their own experience 00:28:46.299 --> 00:28:48.700 in restructuring. We're in the process of adding 00:28:48.700 --> 00:28:51.859 a third independent director, Scott Vogel, to 00:28:51.859 --> 00:29:58.160 the board. This call counts. Thank you. Good 00:29:58.160 --> 00:30:00.180 afternoon, Your Honor, and thank you again for 00:30:00.180 --> 00:30:03.000 spending time on an emergency basis. Broadly 00:30:03.000 --> 00:30:06.380 represents what we colloquially call the SO5 00:30:06.380 --> 00:30:08.960 digital debtors. The SO5 digital debtors have 00:30:08.960 --> 00:30:10.859 a separate capital structure, separate ownership 00:30:10.859 --> 00:30:13.619 structure, separate unsecured creditor body. 00:30:14.339 --> 00:30:17.279 But they are intimately intertwined with the 00:30:17.279 --> 00:30:21.319 operations of SACS Global. And for reasons that 00:30:21.319 --> 00:30:25.079 we'll get into later, it was necessary for We 00:30:25.079 --> 00:30:27.240 also provide digital debtors to retain separate 00:30:27.240 --> 00:30:29.880 counsel and a separate chief restructuring officer 00:30:29.880 --> 00:30:33.079 and a separate financial advisor. Those debtors 00:30:33.079 --> 00:30:37.400 are SACS Active Holdings LLC, SACS Office LLC, 00:30:37.640 --> 00:30:40.880 which is YACO, SACS Office Midco partner, Inc., 00:30:40.880 --> 00:30:45.599 and Ledgerd Outlets USA LLC. These debtors are 00:30:45.599 --> 00:30:50.039 not a party to the DIP facility and the assets 00:30:50.039 --> 00:30:52.859 that it owns are not subject to the DIP liens. 00:30:53.099 --> 00:30:56.299 Although there will be discussions between global 00:30:56.299 --> 00:30:59.980 and the FFI digital letters regarding certain 00:30:59.980 --> 00:31:01.660 cost -sharing arrangements, because as you'll 00:31:01.660 --> 00:31:06.220 learn again later, back in 2021, the operations 00:31:06.220 --> 00:31:09.740 at various SACS entities were consolidated and 00:31:09.740 --> 00:31:14.880 pursuant to a cost -sharing arrangement. Over 00:31:14.880 --> 00:31:17.420 the next few weeks and pursuant to certain milestones 00:31:17.420 --> 00:31:20.160 within our cash collateral order, we anticipate 00:31:21.139 --> 00:31:24.359 conducting diligence regarding certain restructuring 00:31:24.359 --> 00:31:28.440 paths that anticipate absent sufficient financing 00:31:28.440 --> 00:31:32.380 that we will pursue certain implementation opportunities. 00:31:33.200 --> 00:31:36.460 And that has been in consultation with our term 00:31:36.460 --> 00:31:39.579 under Caroline Financial. And I'm happy to answer 00:31:39.579 --> 00:31:41.119 any questions whether or not we'll see the podium 00:31:41.119 --> 00:31:43.460 back to Wilkie. And you have one independent 00:31:43.460 --> 00:31:46.299 director, correct? We do, Your Honor. Thank you. 00:31:46.940 --> 00:31:49.160 Yes. Barry Begman is our independent director 00:31:49.160 --> 00:31:54.329 and We have one other existing director to resign 00:31:54.329 --> 00:31:57.309 shortly before the final. All right, thank you. 00:31:57.309 --> 00:32:00.029 All right, thank you, Mr. Martin. All right, 00:32:00.029 --> 00:32:02.109 before we get started to the plea, does anyone 00:32:02.109 --> 00:32:07.990 wish to make an opening statement? Your Honor, 00:32:08.069 --> 00:32:10.069 Bob Britton, Paul Weiss on behalf of the Ad Hoc 00:32:10.069 --> 00:32:12.250 Group of Diplomats and Pondholders. Yes, sir. 00:32:13.869 --> 00:32:16.930 Your Honor, back in December, my clients learned 00:32:16.930 --> 00:32:18.890 that the company was in a very difficult liquidity 00:32:18.890 --> 00:32:21.960 situation. driven by former management missteps 00:32:21.960 --> 00:32:24.000 in inventory and vendor management, business 00:32:24.000 --> 00:32:27.200 integration, and other issues. In the wake of 00:32:27.200 --> 00:32:29.740 that news, Your Honor, my clients, alongside 00:32:29.740 --> 00:32:33.059 the ABL lenders, engaged in good faith, arm's 00:32:33.059 --> 00:32:36.460 length, frankly difficult negotiations with the 00:32:36.460 --> 00:32:39.779 company in order to ultimately reach terms on 00:32:39.779 --> 00:32:41.859 the dip financing and the other first day relief 00:32:41.859 --> 00:32:44.920 just before you for approval today. Your Honor, 00:32:45.500 --> 00:32:47.519 that dip financing, which is backstopped by the 00:32:47.519 --> 00:32:49.980 ad hoc group, and will be offered to other first 00:32:49.980 --> 00:32:52.900 -out holders of the company's pre -petition notes 00:32:52.900 --> 00:32:56.059 on the terms set forth in the syndication documents. 00:32:56.819 --> 00:32:59.160 We'll provide an immediate cash infusion of $400 00:32:59.160 --> 00:33:02.759 million, which is in addition to TIP -ABL availability. 00:33:03.519 --> 00:33:05.059 And that's how those dollars, Your Honor, will 00:33:05.059 --> 00:33:08.000 be used to stabilize and begin to grow this retail 00:33:08.000 --> 00:33:11.920 business. I can't emphasize, Your Honor, I can't 00:33:11.920 --> 00:33:14.160 emphasize enough just how critical it is to the 00:33:14.160 --> 00:33:16.599 preservation of SACs and the success of these 00:33:16.599 --> 00:33:19.279 Chapter 11 cases. but that financing be approved 00:33:19.279 --> 00:33:23.160 today and funds tomorrow. Your Honor, while the 00:33:23.160 --> 00:33:26.119 situation that got us here was difficult, I think 00:33:26.119 --> 00:33:28.759 it's important to note that this enterprise and 00:33:28.759 --> 00:33:31.220 its new management team have the full support 00:33:31.220 --> 00:33:33.400 of its lenders, and we look forward to working 00:33:33.400 --> 00:33:36.039 together with them, with the court, and with 00:33:36.039 --> 00:33:38.640 other critical stakeholders to ensure an efficient 00:33:38.640 --> 00:33:40.640 value -maximizing path through these chapter 00:33:40.640 --> 00:33:43.759 -olding cases and to a reorganization. Thank 00:33:43.759 --> 00:33:54.400 you, Your Honor. Thank you. Somebody raise their 00:33:54.400 --> 00:33:59.640 hand. Yes. Good afternoon, Your Honor. Ameneh 00:33:59.640 --> 00:34:01.740 Bordy from Sidley Austin on behalf of Exonic. 00:34:01.779 --> 00:34:04.700 Can you hear me? Yes, I can. Thank you, Your 00:34:04.700 --> 00:34:06.960 Honor. I won't make an opening statement, but 00:34:06.960 --> 00:34:09.460 I would just like to note that we will be having, 00:34:09.599 --> 00:34:11.739 we did file an objection to the dip and we would 00:34:11.739 --> 00:34:15.360 like to be heard on that basis. And, you know, 00:34:15.360 --> 00:34:17.719 we hope that our objection will be heard then. 00:34:22.989 --> 00:34:26.789 All right, go ahead, Ms. Sinclair. Yes, Your 00:34:26.789 --> 00:34:28.630 Honor. For the record, Denver Sinclair will keep 00:34:28.630 --> 00:34:31.630 our in Gallagher. So before we move into the 00:34:31.630 --> 00:34:33.949 agenda, I'd like to move the exhibit and witness 00:34:33.949 --> 00:34:38.210 list that's filed as docket number 137 into evidence. 00:34:38.570 --> 00:34:41.210 The exhibits that are on that list, as well as 00:34:41.210 --> 00:34:44.110 the declaration of Mark Weinstein in support 00:34:44.110 --> 00:34:46.309 of the first state pleadings, which is filed 00:34:46.309 --> 00:34:49.590 as docket number 17. As you know, Mr. Weinstein 00:34:49.590 --> 00:34:51.619 is providing the evidence we need to for the 00:34:51.619 --> 00:34:53.719 first day relief, and he is in the virtual courtroom 00:34:53.719 --> 00:34:56.179 with us today, physically here with me in New 00:34:56.179 --> 00:35:01.119 York. All right. I think it's docket number 139. 00:35:01.559 --> 00:35:04.300 139. Apologies, Your Honor. I cannot read my 00:35:04.300 --> 00:35:06.519 own handwriting. You're right. Docket number 00:35:06.519 --> 00:35:09.559 139. All right. Does anyone object to the admission 00:35:09.559 --> 00:35:13.579 of the declaration of Mr. Weinstein as his direct 00:35:13.579 --> 00:35:15.820 testimony in connection with the first day hearings? 00:35:18.989 --> 00:35:21.489 Your honor, this is Chris Harris of Latham and 00:35:21.489 --> 00:35:24.429 Watkins for Amazon. Yes. We don't object to it 00:35:24.429 --> 00:35:26.530 solely for that purpose, but would reserve our 00:35:26.530 --> 00:35:29.889 rights on cross -examination to identify portions 00:35:29.889 --> 00:35:33.789 that might need to be struck based on how the 00:35:33.789 --> 00:35:36.829 cross -examination goes. All right. Okay. So 00:35:36.829 --> 00:35:42.530 I will admit the declaration of Mr. Weinstein 00:35:42.530 --> 00:35:46.309 found that docket number 139 -1 is his direct 00:35:46.309 --> 00:35:52.659 testimony. subject to cross -examination. Thank 00:35:52.659 --> 00:35:57.039 you, Your Honor. One closing remark. I understand 00:35:57.039 --> 00:35:59.219 the Court has entered the Joint Administration 00:35:59.219 --> 00:36:02.179 Order. Thank you for doing that. Related to that, 00:36:02.320 --> 00:36:04.599 though, we have agreed at the request of one 00:36:04.599 --> 00:36:06.820 of the parties in interest that we would make 00:36:06.820 --> 00:36:09.420 a statement on the record that notwithstanding 00:36:09.420 --> 00:36:12.039 entry of the Joint Administration Order, all 00:36:12.039 --> 00:36:15.159 parties' rights to object to substantive consolidation 00:36:15.159 --> 00:36:18.360 are reserved. We are okay to make that representation 00:36:18.360 --> 00:36:20.400 right now, Your Honor, as the Joint Administration 00:36:20.400 --> 00:36:23.360 Order is, of course, entered for procedural purposes 00:36:23.360 --> 00:36:26.480 only. With that, I would propose that we turn 00:36:26.480 --> 00:36:31.059 to the DIP Ocean. With respect to the other exhibits, 00:36:31.199 --> 00:36:33.019 are you going to move in the other exhibits as 00:36:33.019 --> 00:36:37.699 well? Your Honor, I think the only other exhibits 00:36:37.699 --> 00:36:41.659 that would be necessary for today are the declaration 00:36:41.659 --> 00:36:44.610 of Mark Weinstein in support of the DIP. as well 00:36:44.610 --> 00:36:47.409 as the declaration of Mr. Jamie Baird in support 00:36:47.409 --> 00:36:53.489 of the dip. All right so that is 139 -10 is the 00:36:53.489 --> 00:36:55.889 other it's the declaration of Mr. Weinstein in 00:36:55.889 --> 00:36:59.909 support of the dip. Does anyone object to that 00:36:59.909 --> 00:37:03.929 subject across admission as his direct testimony 00:37:03.929 --> 00:37:10.110 subject across examination? Your honor, Jared 00:37:10.110 --> 00:37:12.389 Martin for the SO5 digital letters. Is there 00:37:12.389 --> 00:37:14.269 a preference between admitting our exhibits now 00:37:14.269 --> 00:37:20.929 or after the FACTS global presentation? Let's 00:37:20.929 --> 00:37:24.309 just admit the exhibits on this. I'll turn to 00:37:24.309 --> 00:37:28.289 you at the appropriate time. Understood. Thank 00:37:28.289 --> 00:37:31.610 you. Your honor, Chris Harris related. And just 00:37:31.610 --> 00:37:33.949 to your question about the declaration, with 00:37:33.949 --> 00:37:36.250 the same understanding, no objection, your honor. 00:37:36.460 --> 00:37:38.920 All right, so the declaration of Mr. Weinstein 00:37:38.920 --> 00:37:52.400 found at 139 -10 is admitted for purposes of 00:37:52.400 --> 00:37:55.099 this hearing subject to cross -examination. And 00:37:55.099 --> 00:37:57.780 then the other one is the declaration of Mr. 00:37:58.320 --> 00:38:06.250 Baird, which is exhibit 139 -11. I'll admit it's 00:38:06.250 --> 00:38:08.489 subject to cross -examination as well, as is 00:38:08.489 --> 00:38:12.210 direct testimony. All right, so those three declarations 00:38:12.210 --> 00:38:17.989 are admitted. Thank you, Your Honor. So with 00:38:17.989 --> 00:38:20.070 that, unless Your Honor has any questions for 00:38:20.070 --> 00:38:22.829 me, I propose that we turn to the dip motion. 00:38:23.909 --> 00:38:27.849 All right, go ahead. I'll feed the podium to 00:38:27.849 --> 00:38:29.909 my colleague, Mr. Warren, to present the dip 00:38:29.909 --> 00:38:34.690 motion. Your Honor, this is Caroline Reckler 00:38:34.690 --> 00:38:37.170 on behalf of Amazon. I just ask that we take 00:38:37.170 --> 00:38:40.070 the motion to adjourn first. All right, let's 00:38:40.070 --> 00:38:44.949 do that. Go ahead. Your Honor, we filed a motion 00:38:44.949 --> 00:38:48.170 to adjourn the hearing on the DIP and the cash 00:38:48.170 --> 00:38:50.389 management motion. That motion was filed at docket 00:38:50.389 --> 00:38:54.090 number 66. And thank you for hearing us. Without 00:38:54.090 --> 00:38:56.650 getting into the merits of the DIP motion, suffice 00:38:56.650 --> 00:38:58.730 it to say the debtors are trying to do a lot 00:38:58.730 --> 00:39:01.190 on the first day of the case with respect to 00:39:01.190 --> 00:39:03.949 the DIP. It's not a simple dip. There are three 00:39:03.949 --> 00:39:06.429 dips with three roll -ups, and on top of that, 00:39:06.530 --> 00:39:08.849 two refinancings of other pre -positioned debt, 00:39:09.550 --> 00:39:11.570 all of which, Your Honor, is being asked to approve 00:39:11.570 --> 00:39:14.969 today. The interim release being requested will 00:39:14.969 --> 00:39:17.730 have a significant impact on the debtor's capital 00:39:17.730 --> 00:39:20.230 structure, particularly at the entity that we're 00:39:20.230 --> 00:39:24.190 focused on, the flagship hold code two box, an 00:39:24.190 --> 00:39:28.039 entity with very little secured debt. and unencumbered 00:39:28.039 --> 00:39:31.119 assets, at least as of today, before a DIP is 00:39:31.119 --> 00:39:34.699 approved. There are complex issues of cross -debtor, 00:39:34.900 --> 00:39:37.239 cross -collateralization about which we want 00:39:37.239 --> 00:39:40.760 an opportunity to argue. We want to cross -examine 00:39:40.760 --> 00:39:44.079 the debtor's witnesses. And we've had all of 00:39:44.079 --> 00:39:47.079 only five or so hours with the papers that were 00:39:47.079 --> 00:39:49.679 filed, which only included the motion, order, 00:39:49.699 --> 00:39:52.599 and two declarations. And about 20 minutes before 00:39:52.599 --> 00:39:55.699 the hearing, the DIP credit agreements were attached. 00:39:56.039 --> 00:39:59.079 We requested those credit agreements promptly 00:39:59.079 --> 00:40:02.900 after the motion was filed, and we were not provided 00:40:02.900 --> 00:40:05.780 with them at that time. The credit agreements 00:40:05.780 --> 00:40:08.639 will have meaningful information. For example, 00:40:08.760 --> 00:40:10.820 we don't know what the conditionality may or 00:40:10.820 --> 00:40:14.460 may not exist on future draws after the court 00:40:14.460 --> 00:40:16.800 grants potentially case altering release today. 00:40:18.079 --> 00:40:20.039 We don't know if there are any conditions subsequent. 00:40:20.480 --> 00:40:24.039 We don't know what the covenants are. Dip motion 00:40:24.039 --> 00:40:26.719 deserves a full and fair hearing after parties 00:40:26.719 --> 00:40:28.920 and interests have time to fully appreciate what's 00:40:28.920 --> 00:40:32.519 going on here and what bodies, if any, are buried 00:40:32.519 --> 00:40:35.460 in the 93 page proposed order that the debtors 00:40:35.460 --> 00:40:39.400 just filed today. We're not asking for a lot, 00:40:39.519 --> 00:40:42.159 Your Honor. I'm asking that you simply adjourn 00:40:42.159 --> 00:40:46.690 the dip motion until tomorrow morning. I'm sure 00:40:46.690 --> 00:40:48.610 that Your Honor is going to hear about the debtor's 00:40:48.610 --> 00:40:50.610 exigent need to draw on the DIP facility right 00:40:50.610 --> 00:40:53.309 now and the harms that will befall the debtors 00:40:53.309 --> 00:40:56.809 if the company can't do so. Maybe that's true, 00:40:56.809 --> 00:40:58.969 at least for a certain of the debtors. We don't 00:40:58.969 --> 00:41:01.329 believe it is true, particularly for the flagship 00:41:01.329 --> 00:41:05.210 hold code. But in any event, Your Honor, it's 00:41:05.210 --> 00:41:09.309 after, what is it? It's after 5 .45 today on 00:41:09.309 --> 00:41:11.750 the East Coast. The debtors are not going to 00:41:11.750 --> 00:41:16.320 be able to fund the DIP today. It's just not 00:41:16.320 --> 00:41:19.320 possible. We're already into tomorrow with respect 00:41:19.320 --> 00:41:22.239 to funding the DIP. Rushing to get a DIP order 00:41:22.239 --> 00:41:25.719 entered tonight before all of the documents have 00:41:25.719 --> 00:41:29.760 been reviewed by the applicable parties only 00:41:29.760 --> 00:41:32.579 serves to curtail the ability of parties of interest 00:41:32.579 --> 00:41:36.260 to prosecute objections to the relief that based 00:41:36.260 --> 00:41:38.380 on the little that we do know could have serious 00:41:38.380 --> 00:41:41.639 consequences for the rest of the cases with respect 00:41:41.639 --> 00:41:44.289 to the recovery for unsecured creditors. such 00:41:44.289 --> 00:41:49.230 as Amazon and the brand. Your Honor, as I said, 00:41:49.250 --> 00:41:51.809 we're not asking for much. We're asking for the 00:41:51.809 --> 00:42:15.539 morning. Thank you, Your Honor. Ideally, we would 00:42:15.539 --> 00:42:19.619 be in a position to fund tomorrow's disbursements 00:42:19.619 --> 00:42:22.920 tomorrow morning. And Ms. Breckler's point that 00:42:22.920 --> 00:42:25.179 it's past 5 p .m. in New York is frankly a little 00:42:25.179 --> 00:42:27.860 bit beside the point. This is a highly publicized 00:42:27.860 --> 00:42:30.579 bankruptcy. We need to be able to give our vendors 00:42:30.579 --> 00:42:33.900 and our employees confidence that we are stabilizing 00:42:33.900 --> 00:42:37.699 this business ASAP. And if we leave court today 00:42:37.699 --> 00:42:40.239 without our interim order, we're not going to 00:42:40.239 --> 00:42:42.440 be able to demonstrate that to our creditors. 00:42:42.800 --> 00:42:45.059 The other point I want to make, Your Honor, is 00:42:45.059 --> 00:42:47.760 the idea that this dip was a surprise to Amazon 00:42:47.760 --> 00:42:51.099 is just not accurate. We've been in close contact 00:42:51.099 --> 00:42:53.260 with Amazon throughout our preparation for these 00:42:53.260 --> 00:42:55.900 cases. We actually received a letter from them 00:42:55.900 --> 00:42:59.219 on January 9th, almost a full week ago, in which 00:42:59.219 --> 00:43:02.320 they told us that they had become aware of several 00:43:02.320 --> 00:43:04.500 materials from the dip and that they would be 00:43:04.500 --> 00:43:07.260 ejecting if we pursued it. So coming in here 00:43:07.260 --> 00:43:09.219 now to say that they don't have sufficient notice 00:43:09.219 --> 00:43:11.480 and they don't really know what's going on is 00:43:11.480 --> 00:43:14.179 just disingenuous. The only purpose of this motion 00:43:14.179 --> 00:43:17.099 is to create chaos at a time that we are in, 00:43:17.099 --> 00:43:19.719 frankly, desperate need of stability. So on those 00:43:19.719 --> 00:43:22.039 grounds, we would request that you deny the motion. 00:43:23.900 --> 00:43:27.480 Your Honor, may I be heard? Yes. This is Omnate 00:43:27.480 --> 00:43:29.659 Borde on behalf of Exonic again. I just wanted 00:43:29.659 --> 00:43:33.199 to join in Amazon's motion for a brief adjoinment. 00:43:33.659 --> 00:43:37.280 if not on whole, at least in part with respect 00:43:37.280 --> 00:43:38.960 to the entity that we're concerned with, which 00:43:38.960 --> 00:43:42.960 is also SFH2, the same entity, and one of its 00:43:42.960 --> 00:43:46.420 subsidiaries. Thank you, Your Honor. All right. 00:43:46.860 --> 00:43:50.239 I'm going to carry the motion. I want to listen 00:43:50.239 --> 00:43:53.219 to the evidence as to the need for the money 00:43:53.219 --> 00:43:57.400 to create liquidity and stability, and I'll consider 00:43:57.400 --> 00:44:01.000 it along with the motion. So I think before we 00:44:01.000 --> 00:44:03.679 get to the evidence, We're going to try to open 00:44:03.679 --> 00:44:07.119 up and, you know, we're maxed out both in the 00:44:07.119 --> 00:44:12.900 cameras and in the people who can call in. So 00:44:12.900 --> 00:44:16.139 if we have a five -minute break, we're going 00:44:16.139 --> 00:44:21.539 to open up another line, Judge Isger's line, 00:44:21.900 --> 00:44:28.860 to allow others to be able to join. It's open 00:44:28.860 --> 00:44:34.679 now. Okay, so if anybody wants to Let me just 00:44:34.679 --> 00:44:37.579 put it on the on the line, but I have to call 00:44:37.579 --> 00:44:42.380 in Okay, all right, so if anyone wants to join 00:44:42.380 --> 00:45:21.619 judge Isger's line All right. So I've just put 00:45:21.619 --> 00:45:28.360 on here the Judge Isger's passcode. So if anyone, 00:45:29.699 --> 00:45:35.780 if for some reason you get pushed off, then the, 00:45:37.099 --> 00:45:39.679 you can call Judge Isger and that will open up 00:45:39.679 --> 00:45:44.719 another 500 lines. And right now we're pretty 00:45:44.719 --> 00:45:50.059 much at capacity on here. They're listen -only 00:45:50.059 --> 00:45:53.440 lines, I'm sorry, they're listen -only. Okay, 00:45:53.699 --> 00:46:00.739 thank you. Your Honor, if I may, Your Honor. 00:46:01.699 --> 00:46:04.659 Your Honor, we've been working through the start 00:46:04.659 --> 00:46:07.699 of this hearing on an objection. We will go ahead 00:46:07.699 --> 00:46:09.900 and file it and I would just ask that if Your 00:46:09.900 --> 00:46:11.840 Honor does go forward with the hearing that we 00:46:11.840 --> 00:46:14.219 do at some point, the appropriate point, take 00:46:14.219 --> 00:46:18.099 a pause so that you can read our pleading. All 00:46:18.099 --> 00:46:25.099 right, OK, we'll do that. All right, go ahead, 00:46:25.179 --> 00:46:28.139 Ms. Sinclair. Thank you, Your Honor. I'll see 00:46:28.139 --> 00:46:30.480 the podium to Mr. Ford to present the dip. All 00:46:30.480 --> 00:47:19.840 right, thank you. before we get into any argument 00:47:19.840 --> 00:47:25.099 here would probably be helpful. The overall capital 00:47:25.099 --> 00:47:26.920 structure of the business itself, of course, 00:47:27.019 --> 00:47:30.820 is quite complex and sizable. And putting aside 00:47:30.820 --> 00:47:32.880 the debt with the flagship and the other non 00:47:32.880 --> 00:47:35.719 -debtor assets, there's over $3 billion of secured 00:47:35.719 --> 00:47:40.280 debt, mainly in the form of passive -based revolving 00:47:40.280 --> 00:51:44.559 credit facility and... package the ABL with to 00:51:44.559 --> 01:00:14.760 be rolled out. Your Honor, this is Charis of 01:00:14.760 --> 01:00:17.139 Latham for Amazon. I think it may make sense 01:00:17.139 --> 01:00:19.480 to take the brief break Your Honor offered and 01:00:19.480 --> 01:00:21.940 you could look at our objection that we just 01:00:21.940 --> 01:00:23.980 filed briefly and then we could resume with the 01:00:23.980 --> 01:00:25.820 cross -examination, which might make more sense. 01:00:26.099 --> 01:00:28.860 All right. Well, I will do that. Why don't we, 01:00:29.119 --> 01:00:34.639 it's 5 .02 Central. Why don't we come back at 01:00:34.639 --> 01:00:39.119 5 .15? Thank you, Your Honor. Thank you, Your 01:00:39.119 --> 01:00:39.340 Honor.