WEBVTT

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All right, we're back on the record in case number

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26 -90103. So what I would suggest is that rather

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than have Mr. Harris cross examine the witness

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at this point, why don't we Go on to some of

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the other motions and so that you'll have time,

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Mr. DiPompeo, to address the questions, the arguments

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that were made in the motion. And that way I

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think we'll have a better presentation because

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otherwise I think we would do the cross -examination

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and then take additional time. And I read it.

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Quickly, so I really didn't have a chance to

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to really study it So I'd like to come back to

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that after we do You know we take another break

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and we go through some of the motions. I think

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that probably makes the most sense I'm glad that's

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the case, but I'd just like to finish to be able

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to read the objection a little bit more carefully

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than just, you know, a quick perusely through.

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So why don't we go through the other ones? We'll

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take it up right after the next break. Okay.

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Thank you, Your Honor. Your Honor, this is Chris

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Harris. We just confirmed that the witness is

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on the stand, and so no one will be speaking

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to him in the interim on these topics. I don't

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think he's been sworn yet. He hasn't been sworn

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yet, Mr. Harris. Okay. All right. So why don't

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we move on to some of the other items on the

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agenda and then, you know, we'll take a break.

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Mr. Hawkins, did you want to say something? Did

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you hit five star, Mr. Hawkins? Yes. There we

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are. Thank you so much. Two things I hope to

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raise as an objection, but maybe could be helpful.

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Both of the clients that I just mentioned have

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consignment arrangements with the SACS companies.

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And it was not clear to us that consignment,

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both goods and proceeds, were clearly set forth

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as being some of the permitted prior liens, which

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I believe the DIP facility in this case, I think

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would be ABL, was not intending to touch. That

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was an objection or a request for a clarification.

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Then with regards to Dolce & Gabbana, they have,

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from HOSCO 2, an obligation for their indebtedness.

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It's unsecured. HOSCO 2 appears to not have much

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debt and to please solve them going into these

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cases. And so we would join with the concerns

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that were expressed by them and brought about

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putting a lot of debt on that entity when right

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now we understand it can pay everything it owes.

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That's all, Your Honor. Thank you. Thank you.

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All right. Anyone else wish to be heard? Your

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Honor. Yes. Jonathan. John, again, for Gorski

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Group. Gorski Group is also a consignment vendor,

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and we just got to agreement with the debtors

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and, I believe, the lenders as to language that

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they were going to put on the record on a consignment

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point. So I think it's going to wait until the

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consignment stuff came up, if that makes sense.

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I'll let the debtor speak to that. Is this not

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a good time for it? That's fine. That probably

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makes sense, because that's probably somebody.

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I did not, Mr. Hawkins, I did not read the order

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to do anything with the consignments, but if

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there's clarifying language on the record, that

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would probably makes more sense. I don't know.

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Your Honor, can you hear me? Yes. This is Seth

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Lieberman from Prior Cashman. May I be heard

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briefly? Yes, sir. Thank you, sir. Your Honor,

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as you may recall, we alongside our co -counsel,

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Andrew Meyers, represent a number of vendors

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in these bankruptcy cases. LVMH, Caring, Richemont,

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among their affiliated brands, along with David

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Yearman, SMCP, and Goyard. And we filed a reservation

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of rights today, which I believe is at docket

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number 130. And I'm only raising that right now,

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Your Honor, because this seems to dovetail well.

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into Mr. Covery and Mr. Hawkins' remarks. And

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if I may be heard, I just wanted to raise two

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points for the record. The first is my clients

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have no issues with the debtors' financing. It

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appears there's a need for financing for the

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debtors to operate in Chapter 11 to pay claims

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of certain third -party vendors, such as my clients.

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And to that end, we're supportive of our continued

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and long -standing relationship among Sachs and

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my clients. and trust that that will continue

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both during and after the Chapter 11 cases. However,

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the second point I want to raise for the Court,

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Your Honor, and while we're on the topic, I just

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want to be crystal clear on this, is that while

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the dip papers and related proposed orders certainly

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allude to these issues, both my clients have

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various consignment and concession arrangements.

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And to be very clear on this, Your Honor, the

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debtor should be explicitly carved out from any

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type of collateral pledge. vis -a -vis concession

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or consignment. We believe that that's certainly

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the intention. That seems to be the language.

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But just to state the obvious for the court,

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Your Honor, the company can't pledge what's not

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there. If there are goods or proceeds which don't

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belong to the debtors, or my clients have superior

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rights with respect to those goods or proceeds,

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then those concessions and consigned goods should

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be carved out from any collateral that's pledged.

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Like the other parties here, we've only had a

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few hours to really dive into this. And so we're

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still looking at it. But I just rise to not only

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reserve my client rights vis -a -vis concession

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and consignment, but also to make the point abundantly

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clear on the record and request that the DIP

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order reflects that none of those good, again,

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concession, consignment, or the proceeds thereof

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will be pledged as part of the DIP. And my team

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is happy to work with the Wilkie team on proposed

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language. to be inserted on the dip order to

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that effect. And with that reservation, Your

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Honor, I'm going to let everyone get to their

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seats. Actually, that reservation of rights is

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a test of the confinement vendor's property interest

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and deserves rights on behalf of Stepa Lellie

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in exactly the same way Mr. Lieberman did, and

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we also would be willing to work with that as

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counsel to correct the language for the dip order

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around that issue. Thank you. Your Honor, if

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I may be heard briefly. Yes, and would people

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please mute their lines, because we're still,

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although there's a lot less people than are on

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the line, there's still a lot of background noise.

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So if you're not speaking, mute your own line,

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please. Right, go ahead, sir. Thank you, Your

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Honor. I'm Christian Jensen, Sullivan and Cromwell,

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appearing on behalf of Xenia Group by the appending

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Prohok. if i think they've uh... people to speak

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now you saw this briefly going the comments made

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by mister lieberman with respect to reservation

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of rights my client and their you know it's affiliated

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subsidiaries are party to similar concession

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agreement before we agree that the death cannot

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grant lian fund on the inventory that the debtor

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does not own uh... but that you know for avoidance

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of doubt any concession inventory should be fully

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carved out of any uh... any debt lian Additionally,

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my clients are creditors at HoldCode2, and we

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join the comments made by Mr. Hawkins and others

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with respect to the financing at that entity.

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All right. Thank you. Your Honor, may I be heard?

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Yes. Brendan Scott placed at Winters, Drillers,

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Sutherland, Stevens on behalf of BH Multicom,

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BH Multicolor, Richline Designs, and East Designs,

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also a group of consignment vendors. Rather than

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duplicating the argument, I'd just like to say

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that we do echo the sentiment of Mr. Lieberman

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and we join his reservation with respect to consignment,

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reservation with respect to consignment, because

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we have sent over some proposed language to the

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debtors earlier today and hadn't received a response.

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We're happy to hear what the debtors are proposing

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on the record now. Thank you. Right. Anyone else

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wish to be heard? Yes, sir. Go ahead, Mr. Billenberg.

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Thank you, Your Honor. Again, for the record,

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Justin Birnbrock, Shepard Mullinwick, and Hampton

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Council, to Chanel, Akras, and Ralph Lauren.

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We'll have notices of appearance and PROHACs

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filed soon. Your Honor, I join Mr. Lieberman's

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comments with respect to concession and consignment.

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As the others have mentioned, Chanel in particular

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has a significant concession relationship with

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these debtors. a relationship that has been strained,

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as is evident by the top 30 list of unsecured

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creditors. But nevertheless, Chanel is very encouraged

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by the commitment by Mr. Britton's clients. Nice

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to see Mr. Britton. And Chanel stands by these

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debtors, Your Honor, and is prepared to support

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them through these Chapter 11 cases to the greatest

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extent that they can. With respect to ACRIS,

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ACRIS also has a hold code to guarantee. ACRIS

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does not join the comments made by Council to

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adulterate. And indeed ACRIS and Ralph Lauren

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and Chanel would like to see this approved today.

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Thank you, Your Honor. Anyone else wish to be

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heard? Your Honor, can you hear me? It's Greg

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Gallardi. Yes, it's Greg Gallardi. Go ahead.

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Your honor just very briefly Representing centric

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and Vince. I just wanted to again express our

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concerns about the disk. We are creditors given

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credit support by the hold code to entity and

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we're reserving rights to Potentially cross mr.

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Weinstein if we think it necessary. Thank you.

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Thank you Right if any if anyone else wishes

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to speak hit five star one time Yes, I can hear

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you, Ms. Heilman. like to raise that objection

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on the record. And I would imagine that it would

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be more after Mr. Weinstein's testimony. But

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we do have one open issue. And since parties

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have been stating on the record their concerns

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with respect to the dip, I just wanted to make

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sure that at the appropriate time we could do

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that. All right. And what issue is that? The

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issue is with respect to the debtors, the dip

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lenders are seeking a waiver of the 506C, 552,

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and marshaling waivers on the first day of the

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case, Your Honor. All right. Anyone else wish

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to be heard? Your Honor, if I may? Yes. Good

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afternoon or good evening, Your Honor. Dan Fiorello

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from Ottawa, DC, with me, Dave Castleman. We're

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co -counseled to Bank of America, the administrative

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agent for the ABL bank group that provides the

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ABL revolving line of credit and proposed Zip

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lender. Your Honor, I'll defer to the Debtors'

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Council to read on the record language that we've

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agreed prior to the hearing with regard to the

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reservation of rights on the consignment and

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concession goods. And we support the reservation

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of rights. Your Honor, today we're not trying

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to adjudicate the priorities of the consignment

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vendors or the concession vendors. We're merely

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looking to reserve rights for today's hearing.

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As evidenced by the appearances by multiple counsel

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on the first day, we anticipate that between

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now and the final hearing, we'll have a lot of

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conversations and engage with the company and

00:14:23.399 --> 00:14:25.659
the consignment and concession vendor counsel.

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to reach acceptable language that will get folks

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comfortable. But, Your Honor, we are, in fact,

00:14:33.960 --> 00:14:37.580
a bank of over 10 banks providing significant

00:14:37.580 --> 00:14:40.259
liquidity and proposed liquidity in the Chapter

00:14:40.259 --> 00:14:43.399
11, and we're merely looking to continue the

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same ABL revolving line of credit that the company

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has access to. for years prior to the bankruptcy

00:14:49.679 --> 00:14:53.320
filing, and we're just trying to preserve the

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status quo for now, Your Honor, and to the extent

00:14:56.440 --> 00:15:00.419
that parties cannot reach a resolution on consensual

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language that would be reflected in the order

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submitted for final approval, then we would obviously,

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everyone's rights are reserved with respect to

00:15:09.340 --> 00:15:12.220
the final hearing on the matters concerning consignment

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and the concession priorities and interests.

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Why don't we hear from the debtor and then let's

00:15:21.820 --> 00:15:26.120
let's try to move on to some of the other Matters

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and then we'll come back to the dip in in short

00:15:28.659 --> 00:15:33.940
order Good evening, your honor of Robin Steagall.

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We'll keep our in Gallagher. You can hear me.

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Okay, I can hear you fine. Yes Great. Thank you

00:15:41.360 --> 00:15:44.700
The vendors whether their wholesale consignment

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or confession are obviously very important to

00:15:46.779 --> 00:15:49.799
the debtors business Ms. Sinclair went through

00:15:49.799 --> 00:15:53.100
that in her opening remarks. In anticipation

00:15:53.100 --> 00:15:56.320
of potential objections, at least on the interim

00:15:56.320 --> 00:15:59.440
order, we have included paragraph 27 and 28 of

00:15:59.440 --> 00:16:04.399
the DIP order. In paragraph 27, it talks to the

00:16:04.399 --> 00:16:07.000
consignment inventory and specifically reserves

00:16:07.000 --> 00:16:13.059
rights of consignors. We did agree during, just

00:16:13.059 --> 00:16:17.759
before I got up, with one of the consignors that

00:16:17.759 --> 00:16:21.299
we would read on the record, that the party's

00:16:21.299 --> 00:16:24.259
rights as to the priority of their liens, including

00:16:24.259 --> 00:16:26.340
purchase money, interest, security interest,

00:16:26.539 --> 00:16:29.480
and consigned goods as against its collateral

00:16:29.480 --> 00:16:33.120
are preserved. So that, combined with 27, is

00:16:33.120 --> 00:16:37.100
intended to preserve the rights of consignment

00:16:37.100 --> 00:16:41.460
vendors. And as Mr. Fiorello said, we will work

00:16:41.480 --> 00:16:44.659
in the interim with all of the consignment vendors

00:16:44.659 --> 00:16:47.080
that reach out to us to try to come up with some

00:16:47.080 --> 00:16:50.860
consensual language to include in the final dip

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order. With respect to the concessionaires, we

00:16:55.559 --> 00:16:58.100
did include language in paragraph 28, which we

00:16:58.100 --> 00:17:02.240
think should address their concerns. We've heard

00:17:02.240 --> 00:17:03.620
them on the record. They'll have a chance to

00:17:03.620 --> 00:17:05.839
look at it. But if there are issues, we will

00:17:05.839 --> 00:17:09.380
work consensually with them going forward. All

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right. Thank you. Thank you. Good evening, Your

00:17:28.589 --> 00:17:30.549
Honor. Jessica Graper, for the record, will keep

00:17:30.549 --> 00:17:33.250
on Gallagher as co -counsel for the global debtor.

00:17:33.369 --> 00:17:35.250
Can you hear me okay? I can hear you fine, yes.

00:17:36.529 --> 00:17:38.789
Thank you, Your Honor. I will be starting with

00:17:38.789 --> 00:17:40.869
agenda item number six, which is document number

00:17:40.869 --> 00:17:43.450
13. This is the global debtor's motion for authorities

00:17:43.450 --> 00:17:46.250
to continue using their existing cash management

00:17:46.250 --> 00:17:48.569
system, including bank accounts and business

00:17:48.569 --> 00:17:50.950
forms, to honor certain related pre -petition

00:17:50.950 --> 00:17:53.609
obligations and to continue intercom money transactions

00:17:53.609 --> 00:17:55.609
in accordance with their pre -petition practices.

00:17:56.160 --> 00:17:59.400
As noted by my colleague, the global debtors

00:17:59.400 --> 00:18:02.200
refers to all of the debtors except for debtors

00:18:02.200 --> 00:18:04.720
that comprise the SAC Office digital debtors.

00:18:05.279 --> 00:18:07.440
As Your Honor has heard, the SAC Office digital

00:18:07.440 --> 00:18:09.619
debtors who maintain their own cash management

00:18:09.619 --> 00:18:12.440
system will be seeking relief pursuant to their

00:18:12.440 --> 00:18:15.799
own separate cash management motion. As described

00:18:15.799 --> 00:18:17.920
in the motion, the global debtors utilize and

00:18:17.920 --> 00:18:20.299
maintain a global cash management system that

00:18:20.299 --> 00:18:22.759
is comparable to centralized cash management

00:18:22.759 --> 00:18:25.059
systems used by other large retail companies.

00:18:25.480 --> 00:18:28.039
The global system is actually comprised of two

00:18:28.039 --> 00:18:30.819
largely separate systems that interact in a centralized

00:18:30.819 --> 00:18:34.160
matter. First is the SACS legacy cash management

00:18:34.160 --> 00:18:37.059
system, and the second is the Neiman Marcus cash

00:18:37.059 --> 00:18:39.839
management system. Although the entire system

00:18:39.839 --> 00:18:43.380
is comprised of almost 227 bank accounts across

00:18:43.380 --> 00:18:46.160
11 banks, the movement of cash throughout the

00:18:46.160 --> 00:18:49.799
global system is not overly complex. The global

00:18:49.799 --> 00:18:52.279
cash management system generally involves the

00:18:52.279 --> 00:18:55.359
flow of funds through various and Neiman Marcus

00:18:55.359 --> 00:18:58.220
receipts, and deposit accounts. There are also

00:18:58.220 --> 00:18:59.920
accounts that serve other specific purposes,

00:19:00.099 --> 00:19:01.900
such as investment accounts, accounts that make

00:19:01.900 --> 00:19:03.960
disbursements specifically related to real estate

00:19:03.960 --> 00:19:06.839
obligations, master funding accounts that receive

00:19:06.839 --> 00:19:09.859
and transfer funding distribution that debtors

00:19:09.859 --> 00:19:12.119
receive under their legacy revolving credit facility

00:19:12.119 --> 00:19:15.740
as well. Finally, the vast majority of the global

00:19:15.740 --> 00:19:29.970
debtors with each other, and also with certain

00:19:29.970 --> 00:19:33.009
of their non -global debtor affiliates. The nature

00:19:33.009 --> 00:19:35.170
of these intercompany transactions are described

00:19:35.170 --> 00:19:37.509
in more detail in the motion, but they relate

00:19:37.509 --> 00:19:40.009
to payments of rent obligations to the SACS flagship

00:19:40.009 --> 00:19:42.670
location, a sharing arrangement between the global

00:19:42.670 --> 00:19:44.630
debtors and the SACS self -conditional debtors,

00:19:44.930 --> 00:19:46.890
and the payment of certain rent obligations.

00:19:48.150 --> 00:19:50.490
As described in the motion, if these ordinary

00:19:50.490 --> 00:19:53.109
court intercompany transactions were discontinued,

00:19:57.000 --> 00:20:00.180
would be severely disrupted to the detriment

00:20:00.180 --> 00:20:02.779
of the global debtors, their states, and their

00:20:02.779 --> 00:20:05.259
creditors. Accordingly, the debtors are seeking

00:20:05.259 --> 00:20:07.740
authority to continue engaging in the intercompany

00:20:07.740 --> 00:20:10.140
transactions consistent with their pre -petition

00:20:10.140 --> 00:20:13.380
practices. And as set forth in the motion and

00:20:13.380 --> 00:20:15.720
as required under the proposed order, the global

00:20:15.720 --> 00:20:18.059
debtors will maintain detailed and accurate records

00:20:18.059 --> 00:20:20.359
with respect to all intercompany transactions

00:20:20.359 --> 00:20:23.940
and transfers. A final point on the cash management

00:20:23.940 --> 00:20:28.019
motion. The global debtors are requesting 45A

00:20:28.019 --> 00:20:31.200
extension of the requirements under Section 345B

00:20:31.200 --> 00:20:33.779
and the trustee guidelines with respect to their

00:20:33.779 --> 00:20:35.200
bank accounts so that they can work with the

00:20:35.200 --> 00:20:37.920
U .S. trustee to confirm compliance of the global

00:20:37.920 --> 00:20:40.440
debtors' bank accounts. We do have a handful

00:20:40.440 --> 00:20:42.319
of revisions that we plan to make to the cash

00:20:42.319 --> 00:20:44.579
management order and related Exhibit 2 that was

00:20:44.579 --> 00:20:47.400
filed with the motion. It appears that certain

00:20:47.400 --> 00:20:49.460
language pertaining to the global debtors and

00:20:49.460 --> 00:20:51.519
the SACS -LF -IT digital debtors' payment arrangement

00:20:51.519 --> 00:20:54.240
was stripped from the Ag Files order. As a result,

00:20:54.539 --> 00:20:58.450
we plan to... to this effect, which I'm happy

00:20:58.450 --> 00:21:03.029
to read for your honor. Well, just make sure

00:21:03.029 --> 00:21:05.269
to file a red line, and I'll review the red line

00:21:05.269 --> 00:21:09.609
as well. Thank you, will do. Additionally, there

00:21:09.609 --> 00:21:11.650
were a few bank account numbers that were inadvertently

00:21:11.650 --> 00:21:13.650
excluded from the list of bank accounts set forth

00:21:13.650 --> 00:21:16.869
in Exhibit 2, which we will fix as well. Prior

00:21:16.869 --> 00:21:18.890
to filing the motion, the debtors previewed the

00:21:18.890 --> 00:21:21.049
requested relief with the U .S. Trustee's office,

00:21:21.410 --> 00:21:23.529
answered certain questions, and I understand

00:21:23.529 --> 00:21:25.490
that we are resolved on the questions they posed

00:21:25.490 --> 00:21:27.490
and the U .S. the fee does not object to the

00:21:27.490 --> 00:21:30.190
order. Unless Your Honor has any questions, we

00:21:30.190 --> 00:21:32.029
respectfully request that the court approve the

00:21:32.029 --> 00:21:34.849
cash management motion and enter the order. All

00:21:34.849 --> 00:21:36.869
right. Does anyone wish to be heard with respect

00:21:36.869 --> 00:21:40.210
to the cash management order? Yes, go ahead.

00:21:40.529 --> 00:21:43.630
Your Honor, Amane Bordy from Exonic. Absolutely

00:21:43.630 --> 00:21:46.009
no objection to cash management, other than we

00:21:46.009 --> 00:21:48.329
would like to reserve rights, which you'll hear

00:21:48.329 --> 00:21:51.690
in connection with our DIC presentation about...

00:21:51.630 --> 00:21:54.069
debtor separateness. So, as long as all of the

00:21:54.069 --> 00:21:56.349
first days are going to be without prejudice

00:21:56.349 --> 00:22:00.089
to our rights and arguments in that regard, I

00:22:00.089 --> 00:22:02.150
won't raise my hand again until we get to the

00:22:02.150 --> 00:22:07.910
dip. All right. Ms. Reckler. Thank you, Your

00:22:07.910 --> 00:22:09.789
Honor. Caroline Reckler on behalf of Amazon.

00:22:10.049 --> 00:22:12.150
Your Honor, before the hearing, we had asked

00:22:12.150 --> 00:22:15.190
the debtor to include some language in the order

00:22:15.190 --> 00:22:17.609
that said that the debtor shall maintain a report

00:22:17.609 --> 00:22:19.710
setting forth all the inter -company transactions.

00:22:19.640 --> 00:22:23.279
involving SACS, the Babineau Hold Co. 2 LLC,

00:22:23.619 --> 00:22:27.140
SACS flagship real property LLC, and or 12 East

00:22:27.140 --> 00:22:29.980
49th Street LLC and to provide us with a copy

00:22:29.980 --> 00:22:32.460
of that report on a weekly basis in addition

00:22:32.460 --> 00:22:35.539
to providing it to our creditors committee. And

00:22:35.539 --> 00:22:39.140
we just ask that the debtor include that language

00:22:39.140 --> 00:22:43.059
in the revised proposed form of order. All right.

00:22:43.339 --> 00:22:46.440
And we would join in that request. All right,

00:22:46.519 --> 00:22:51.430
any objection? The debtors do not believe that

00:22:51.430 --> 00:22:55.509
there is any basis for Amazon and Axonic to be

00:22:55.509 --> 00:22:58.309
receiving those type of reporting. So we do object

00:22:58.309 --> 00:23:03.670
to that inclusion. All right. So I think subject

00:23:03.670 --> 00:23:07.490
to a appropriate confidentiality agreement that

00:23:07.490 --> 00:23:09.730
it can only be used for purposes of monitoring

00:23:09.730 --> 00:23:14.089
the cash management, I think that so long as

00:23:14.089 --> 00:23:16.869
there is an appropriate confidentiality agreement

00:23:16.869 --> 00:23:19.250
that they can't use it other than for purposes

00:23:19.250 --> 00:23:23.650
of monitoring it and they can't disclose it except

00:23:23.650 --> 00:23:27.349
subject to further court order. I don't think

00:23:27.349 --> 00:23:34.289
that's a bridge too far. But I'm going to draw

00:23:34.289 --> 00:23:36.869
the line at that. To the extent everyone else

00:23:36.869 --> 00:23:40.069
asked for it, then we're going to go back and

00:23:40.069 --> 00:23:42.130
just give it to the creditors committee and they

00:23:42.130 --> 00:23:45.680
can inform creditors appropriately. Go ahead,

00:23:45.759 --> 00:23:50.619
Mr. Rod. Yes. I'm sorry. Again, Dan Cerelo from

00:23:50.619 --> 00:23:53.200
Otterberg PC, Council for Bank of America, the

00:23:53.200 --> 00:23:55.599
agent for the ABL lenders. Your Honor, some of

00:23:55.599 --> 00:23:58.339
the banks in the ABL bank group also provide

00:23:58.339 --> 00:24:01.740
cash management services. I just raised a concern

00:24:01.740 --> 00:24:04.000
regarding disclosing information relative to

00:24:04.000 --> 00:24:06.839
the cash management systems that some of these

00:24:06.839 --> 00:24:09.799
banks have with the debtors insofar as there

00:24:09.799 --> 00:24:11.940
may be confidential or proprietary information

00:24:11.940 --> 00:24:16.109
that may not be in handy. but may be in violation

00:24:16.109 --> 00:24:17.710
of the bank's arrangements with the company.

00:24:18.069 --> 00:24:19.569
And so I don't want to have an agreement on the

00:24:19.569 --> 00:24:21.630
record that might put the company in jeopardy

00:24:21.630 --> 00:24:23.509
in violation of their arrangements with the bank.

00:24:23.950 --> 00:24:27.390
And I think all we're talking about is not so

00:24:27.390 --> 00:24:31.849
much the inner companies, but the transfers between

00:24:31.849 --> 00:24:37.670
debtors. And it doesn't have to show what bank

00:24:37.670 --> 00:24:39.950
or anything. It's just... you know debtor one

00:24:39.950 --> 00:24:42.609
to debtor two debtor two to debtor three and

00:24:42.609 --> 00:24:46.190
and it's all with respect to eight you know the

00:24:46.190 --> 00:24:49.609
the debtors that that uh miss recler has a concern

00:24:49.609 --> 00:24:51.549
about i mean that that's all we're talking about

00:24:51.549 --> 00:24:55.309
it's just a a limited universe of those of those

00:24:55.309 --> 00:24:58.269
transactions i don't believe obviously to the

00:24:58.269 --> 00:25:00.450
extent that there's an issue with that i mean

00:25:00.450 --> 00:25:04.750
this is not a an issue with respect to the form

00:25:04.750 --> 00:25:07.380
of order It's just something that can be worked

00:25:07.380 --> 00:25:10.579
out in the ordinary course. So, you know, there's

00:25:10.579 --> 00:25:12.700
going to have to be a confidentiality that we

00:25:12.700 --> 00:25:14.960
entered into and everything. Thank you, Your

00:25:14.960 --> 00:25:20.319
Honor. All right. Anyone else wish to be heard

00:25:20.319 --> 00:25:23.099
on cash management? Mr. Nguyen, are you? Your

00:25:23.099 --> 00:25:25.380
Honor, briefly, William. Can you hear me, Your

00:25:25.380 --> 00:25:29.759
Honor? Yes. Yes, sir. William Hawkins again,

00:25:29.920 --> 00:25:33.180
briefly. We just wanted to make sure that nothing

00:25:33.180 --> 00:25:37.440
that is brought forth in the cash -managing order

00:25:37.440 --> 00:25:41.920
compromises the ability to keep cash proceeds

00:25:41.920 --> 00:25:45.299
traceable and identifiable from the various consigned

00:25:45.299 --> 00:25:50.180
goods. Either money they may have now, especially

00:25:50.180 --> 00:25:52.680
because after the holiday season there will be

00:25:52.680 --> 00:25:57.319
a lot of sales, but well as going forward. That's

00:25:57.319 --> 00:26:01.630
a great substance of that. Yes, so with respect

00:26:01.630 --> 00:26:04.589
to the cash management I view that is strictly

00:26:04.589 --> 00:26:09.150
as a Procedural order that continues to allow

00:26:09.150 --> 00:26:10.970
them to implement. You know the bankruptcy court

00:26:10.970 --> 00:26:15.569
requires that You close all bank accounts and

00:26:15.569 --> 00:26:17.990
open up new bank accounts and this allows the

00:26:17.990 --> 00:26:20.490
debtor You know the cash flows of the debtor

00:26:20.490 --> 00:26:23.170
to continue uninterrupted. I don't view this

00:26:23.170 --> 00:26:27.470
as a substance consolidation or anything other

00:26:27.470 --> 00:26:31.680
than you know, allowing the debtor to continue

00:26:31.680 --> 00:26:35.720
to operate in the ordinary course, and now that

00:26:35.720 --> 00:26:37.480
they're in bankruptcy, and I'm sure they did

00:26:37.480 --> 00:26:41.980
before, is account for all of the receipts and

00:26:41.980 --> 00:26:44.880
all of the intercompany amounts. So I don't view

00:26:44.880 --> 00:26:50.059
this as in any way impacting the concerns that

00:26:50.059 --> 00:26:53.039
you have. But I'll let the debtor address that,

00:26:53.059 --> 00:26:59.269
but that's the way I read the order. All right,

00:26:59.329 --> 00:27:02.390
so let's, should we talk about the final hearing?

00:27:06.369 --> 00:27:10.670
Sure, Your Honor. My understanding is, February

00:27:10.670 --> 00:27:15.990
13th? Yes, I'm sorry. February 13th. I think

00:27:15.990 --> 00:27:20.549
that's what was discussed with Mr. Laws. Yes,

00:27:20.549 --> 00:27:22.650
I believe that's correct, Your Honor. So February

00:27:22.650 --> 00:27:26.130
13th at 9 a .m. Central Time. And that hearing

00:27:26.130 --> 00:27:31.190
will be a virtual hearing as well? Thank you,

00:27:31.190 --> 00:27:34.529
Your Honor. All right. And so the objection deadline

00:27:34.529 --> 00:27:42.329
would be the Friday before, the February 6th.

00:27:43.250 --> 00:27:45.549
If you could just work that into the proposed

00:27:45.549 --> 00:27:49.329
form of order that you upload. Will do, thank

00:27:49.329 --> 00:27:53.910
you, Your Honor. All right. So based on the testimony,

00:27:54.629 --> 00:27:57.650
provided in Mr. Weinstein's declaration regarding

00:27:57.650 --> 00:28:02.009
the cash management system. I'm going to go ahead

00:28:02.009 --> 00:28:08.670
and approve the order, you know, subject to the

00:28:08.670 --> 00:28:11.950
comment I made with respect to the accounting

00:28:11.950 --> 00:28:16.849
for the inner company and the amounts. And with

00:28:16.849 --> 00:28:19.910
that, once the order is uploaded, I'll enter

00:28:19.910 --> 00:28:26.380
it and go. Go forward. All right. So that order

00:28:26.380 --> 00:28:31.859
is granted subject to the presentation of the

00:28:31.859 --> 00:28:33.960
new form of order. All right. Where do we go

00:28:33.960 --> 00:28:37.400
next? Thank you, Your Honor. Next up is agenda

00:28:37.400 --> 00:28:39.380
item number seven, which is the wages motion.

00:28:39.420 --> 00:28:42.099
This appears at docket number 10. Through the

00:28:42.099 --> 00:28:44.059
wages motion, the debtors are seeking authority

00:28:44.059 --> 00:28:46.240
to continue certain employee benefits in the

00:28:46.240 --> 00:28:48.519
ordinary court and pay certain pre -petition

00:28:48.519 --> 00:28:50.960
claims owed to their workforce, both subject

00:28:50.960 --> 00:28:53.740
to the terms of the proposed order. The debtors

00:28:53.740 --> 00:28:56.759
currently employ almost 17 ,000 employees across

00:28:56.759 --> 00:28:59.160
the United States and abroad, all of whom are

00:28:59.160 --> 00:29:02.039
vital to the debtor's continued operations. The

00:29:02.039 --> 00:29:04.920
motion describes the debtor's employee obligations

00:29:04.920 --> 00:29:07.839
and programs in detail. This information is set

00:29:07.839 --> 00:29:11.279
forth and summarized in paragraph 18. A large

00:29:11.279 --> 00:29:15.900
portion of the cap accounts for health and welfare

00:29:15.900 --> 00:29:18.299
benefits, including medical and other benefit

00:29:18.299 --> 00:29:21.160
plans offered to employees. pay time off and

00:29:21.160 --> 00:29:23.660
outstanding leave obligations as well as retirement

00:29:23.660 --> 00:29:27.160
benefits. A significant yet smaller portion of

00:29:27.160 --> 00:29:29.339
the amounts requested relate to pre -petition

00:29:29.339 --> 00:29:32.440
compensation obligations owed to the debtor's

00:29:32.440 --> 00:29:35.059
workforce including temporary employees and commissioned

00:29:35.059 --> 00:29:37.839
employees. And the remaining portion of the amounts

00:29:37.839 --> 00:29:40.839
requested relate to withholding obligations including

00:29:40.839 --> 00:29:44.700
union deductions. Approximately 6 ,000 of the

00:29:44.700 --> 00:29:46.700
debtor's hourly -based employees are eligible

00:29:46.700 --> 00:29:49.160
to earn a commission, which makes up a large

00:29:49.160 --> 00:29:52.099
majority of those individuals' wages. The commission

00:29:52.099 --> 00:29:54.700
program is primarily available for certain employees

00:29:54.700 --> 00:29:57.819
in sales and sales support roles, and the amounts

00:29:57.819 --> 00:30:00.500
earned are paid as part of the employee's regular

00:30:00.500 --> 00:30:04.160
payroll disbursement. As part of the relief requested,

00:30:04.339 --> 00:30:06.640
the debtors are seeking authority to make pre

00:30:06.640 --> 00:30:09.279
-petition payments on account of their non -insider

00:30:09.279 --> 00:30:12.759
severance program. that constitute priority treatment

00:30:12.759 --> 00:30:15.980
under Section 507A of the Bankruptcy Code as

00:30:15.980 --> 00:30:18.380
well as to honor post -petition non -insider

00:30:18.380 --> 00:30:21.299
severance obligations in the ordinary court solely

00:30:21.299 --> 00:30:24.180
as required by applicable law. As indicated,

00:30:24.359 --> 00:30:26.099
the debtors are not seeking authorization to

00:30:26.099 --> 00:30:28.259
pay severance to any court -of -law insider as

00:30:28.259 --> 00:30:31.980
such term is defined under Section 10131 of the

00:30:31.980 --> 00:30:35.160
Bankruptcy Code. In connection with those payments,

00:30:35.359 --> 00:30:37.660
the proposed order now includes reporting requirements,

00:30:37.759 --> 00:30:40.420
and this information will be provided on a monthly

00:30:40.420 --> 00:30:43.799
basis to the U .S. Trustee, any secured creditors

00:30:43.799 --> 00:30:46.059
committee appointed in these cases, as well as

00:30:46.059 --> 00:30:48.680
the DIP lenders. Prior to filing the motion,

00:30:48.819 --> 00:30:50.680
the debtors previewed the request of relief with

00:30:50.680 --> 00:30:52.740
the U .S. Trustee's office and answered certain

00:30:52.740 --> 00:30:55.099
questions. And I also understand that we are

00:30:55.099 --> 00:30:56.960
resolved on the questions they posed and that

00:30:56.960 --> 00:30:58.839
the U .S. Trustee does not object to the order.

00:30:59.440 --> 00:31:01.819
Unless your honor has any questions, we respectfully

00:31:01.819 --> 00:31:03.960
request that the court approve the wages motion

00:31:03.960 --> 00:31:07.559
and enter the order. All right. Does anyone wish

00:31:07.559 --> 00:31:10.039
to be heard with respect to the wages motion?

00:31:11.880 --> 00:31:13.440
Your honor, this is how it went through the U

00:31:13.440 --> 00:31:16.799
.S. Justice Office. Yes. Council is correct.

00:31:17.119 --> 00:31:19.720
We are resolved. But I just want to make this

00:31:19.720 --> 00:31:22.859
reservation on the record. I don't want to put

00:31:22.859 --> 00:31:26.859
a stop to people's retirement plan. at this time,

00:31:27.240 --> 00:31:29.519
but there are certain supplemental executive

00:31:29.519 --> 00:31:32.880
retirement plans within the wages motion. We

00:31:32.880 --> 00:31:35.000
just want to reserve rights. Once we get more

00:31:35.000 --> 00:31:37.579
information, it is in violation of what we see.

00:31:38.279 --> 00:31:40.700
We want to take a look at it and preserve those

00:31:40.700 --> 00:31:43.539
rights. But in terms of the income orders, we

00:31:43.539 --> 00:31:47.079
don't oppose entry of the order today. All right.

00:31:47.119 --> 00:31:50.880
Thank you. All right. Anything further? All right.

00:31:50.980 --> 00:31:55.339
I've reviewed the I've reviewed the motion and

00:31:55.339 --> 00:31:58.799
obviously there's a lot of employees and the

00:31:58.799 --> 00:32:02.319
numbers are big, but obviously keeping the employees

00:32:02.319 --> 00:32:07.140
is a key part of preserving value in this company.

00:32:07.539 --> 00:32:09.619
So I think this is proper exercise of debtor's

00:32:09.619 --> 00:32:11.240
business judgment. I'm going to go ahead and

00:32:11.240 --> 00:32:13.940
approve the wages motion. So if you give me a

00:32:13.940 --> 00:32:35.400
minute. All right, that has been signed and sent

00:32:35.400 --> 00:32:45.900
to docketing. Thank you, Your Honor. Next is

00:32:45.900 --> 00:32:48.640
agenda item number eight, which is the customer

00:32:48.640 --> 00:32:51.519
program motion. This appears at docket number

00:32:51.519 --> 00:32:54.839
15. Like many large retailers, the debtors have

00:32:54.839 --> 00:32:56.960
historically implemented certain customer programs

00:32:56.960 --> 00:32:59.859
to promote customer satisfaction, create goodwill

00:32:59.859 --> 00:33:01.880
for their businesses, and enhance the value of

00:33:01.880 --> 00:33:04.640
their brand. The debtor's specific customer programs

00:33:04.640 --> 00:33:07.400
are described in detail in the motion and include

00:33:07.400 --> 00:33:10.140
refund and exchange programs, gift card programs,

00:33:10.440 --> 00:33:13.079
credit cards, and loyalty and rewards programs

00:33:13.079 --> 00:33:15.759
among others. The debtors are seeking authority

00:33:15.759 --> 00:33:18.039
to honor pre -petition obligations related to

00:33:18.039 --> 00:33:20.319
their customer programs subject to the amounts

00:33:20.319 --> 00:33:22.680
set forth in the motion and to continue their

00:33:22.680 --> 00:33:25.480
customer programs in the ordinary course. Honoring

00:33:25.480 --> 00:33:27.759
these customer program obligations and continuing

00:33:27.759 --> 00:33:30.390
the program, in the ordinary course is critical

00:33:30.390 --> 00:33:32.609
to preserving the ongoing value of the debtor's

00:33:32.609 --> 00:33:35.589
operations during these cases. Prior to filing

00:33:35.589 --> 00:33:37.470
the motion, the debtors previewed the requested

00:33:37.470 --> 00:33:40.329
release with the U .S. Trustee's office. We incorporated

00:33:40.329 --> 00:33:43.349
requested language into the proposed form of

00:33:43.349 --> 00:33:46.150
order, which appears in paragraph four of the

00:33:46.150 --> 00:33:48.829
order, noting that in the event that the debtors

00:33:48.829 --> 00:33:51.130
choose to terminate any gift cards, they will

00:33:51.130 --> 00:33:53.029
provide sufficient notice to parties in interest,

00:33:53.170 --> 00:33:55.950
including by posting a notice on their website

00:33:55.950 --> 00:33:58.720
and at the store's location. For the avoidance

00:33:58.720 --> 00:34:00.319
of doubt, the debtors seek to continue their

00:34:00.319 --> 00:34:02.480
gift card program pursuant to the relief requested

00:34:02.480 --> 00:34:05.200
in the motion. With this inclusion, we understand

00:34:05.200 --> 00:34:07.319
that the U .S. trustee does not object to the

00:34:07.319 --> 00:34:10.719
order. Unless your honor has any questions, we

00:34:10.719 --> 00:34:13.539
respectfully request that the court approve the

00:34:13.539 --> 00:34:15.960
customer program's motion and enter the order.

00:34:16.800 --> 00:34:19.179
All right. Mr. Hess, I think you filed the reservation

00:34:19.179 --> 00:34:29.110
of rights. On behalf of Capital One, Capital

00:34:29.110 --> 00:34:33.989
One is a party to Neiman and Bergdorf Goodman

00:34:33.989 --> 00:34:37.030
with regard to the private label credit agreement.

00:34:37.750 --> 00:34:40.010
As a general matter, Capital One does not object

00:34:40.010 --> 00:34:43.030
to the continuation of the program. There is

00:34:43.030 --> 00:34:45.190
kind of a nuance that they have objections to

00:34:45.190 --> 00:34:48.809
if that relates to what's described in our objection

00:34:48.809 --> 00:34:54.889
as the big force credit obligation. that the

00:34:54.889 --> 00:34:59.469
program that provides their customers that purchase

00:34:59.469 --> 00:35:03.550
goods in excess of their credit lines, that Neyman's

00:35:03.550 --> 00:35:07.489
has the obligation to backstop those guarantees

00:35:07.489 --> 00:35:11.989
and agree to repurchase them. Will that be suspended

00:35:11.989 --> 00:35:17.510
for the time being so that there's no further

00:35:17.510 --> 00:35:21.449
increase in the recourse obligations of Neyman's?

00:35:21.550 --> 00:35:27.570
and that we can wind down the existing outstating

00:35:27.570 --> 00:35:31.349
obligations. We have submitted to the debt of

00:35:31.349 --> 00:35:34.710
proposed language before the hearing, but there's

00:35:34.710 --> 00:35:36.510
a lot going on that we have not heard back from

00:35:36.510 --> 00:35:40.690
them, and so we're hoping that that be inserted

00:35:40.690 --> 00:35:43.929
into the order. So subject to that limited objection,

00:35:44.989 --> 00:35:52.159
we stand by that objection. Your Honor, we did

00:35:52.159 --> 00:35:54.039
miss it, but we will review after the hearing

00:35:54.039 --> 00:35:57.380
and get back to Mr. Hess. All right. All right.

00:35:57.920 --> 00:36:07.460
So again, anyone else wish to be heard? All right.

00:36:07.619 --> 00:36:10.760
So I've reviewed the customer program motion.

00:36:10.960 --> 00:36:14.780
Obviously, the employees and customers are key

00:36:14.780 --> 00:36:20.530
participants in making this case a success. So

00:36:20.530 --> 00:36:24.130
I've reviewed the motion and form of order, and

00:36:24.130 --> 00:36:29.429
I'm going to go ahead and approve the form, the

00:36:29.429 --> 00:36:32.690
motion to the customer programs motion at docket

00:36:32.690 --> 00:36:36.809
number 15. So I'll wait for the revised form

00:36:36.809 --> 00:36:39.670
of order. Just make sure to contact Mr. Laws

00:36:39.670 --> 00:36:43.889
once that gets filed. Thank you, Your Honor.

00:36:43.929 --> 00:36:48.510
That is granted. Thank you, Your Honor. The next

00:36:48.510 --> 00:36:50.989
item on the agenda is item number nine, which

00:36:50.989 --> 00:36:53.329
is the taxes motion, and this appears at docket

00:36:53.329 --> 00:36:55.750
number eight. By this motion, the debtors are

00:36:55.750 --> 00:36:57.690
requesting authority to pay taxes and fees that

00:36:57.690 --> 00:36:59.949
they owe to relevant state, local, or federal

00:36:59.949 --> 00:37:02.550
taxing authorities. And set forth in further

00:37:02.550 --> 00:37:04.769
detail in the motion, given the sheer size of

00:37:04.769 --> 00:37:07.269
the debtors' operations, the debtors are responsible

00:37:07.269 --> 00:37:09.809
for a variety of taxes and fees, including sales

00:37:09.809 --> 00:37:13.150
and use, income and franchise, license and regulatory,

00:37:13.550 --> 00:37:16.730
property, and customs duties, among others. As

00:37:16.730 --> 00:37:18.530
of the petition date, the debtors estimate that

00:37:18.530 --> 00:37:21.050
they owe approximately $134 million in taxes

00:37:21.050 --> 00:37:23.389
and fees, which includes amounts incurred on

00:37:23.389 --> 00:37:25.889
behalf of audits. None of the taxes that the

00:37:25.889 --> 00:37:27.710
debtors are seeking authority to pay represent

00:37:27.710 --> 00:37:30.929
old, unpaid taxes. Prior to filing the motion,

00:37:31.050 --> 00:37:32.889
the debtors previewed the requested relief with

00:37:32.889 --> 00:37:35.429
the U .S. Trustee's office and incorporated requested

00:37:35.429 --> 00:37:37.989
language into the proposed form of order. This

00:37:37.989 --> 00:37:40.789
language appears in paragraph 13 and notes that

00:37:40.789 --> 00:37:43.449
the debtors will provide reporting to the U .S.

00:37:43.550 --> 00:37:45.690
trustee's office and on a professionalized only

00:37:45.690 --> 00:37:48.690
basis counsel to the DIP lenders and any committee

00:37:48.690 --> 00:37:51.409
appointed in these chapter 11 cases. With this

00:37:51.409 --> 00:37:53.369
inclusion we understand that the U .S. trustee

00:37:53.369 --> 00:37:55.809
does not object to the order and unless your

00:37:55.809 --> 00:37:57.929
honor has any questions we respectfully request

00:37:57.929 --> 00:38:00.269
that the court approve the taxes motion and answer

00:38:00.269 --> 00:38:05.210
the order. All right does anybody else wish to

00:38:05.210 --> 00:38:13.699
be heard on the taxes motion? I'm going to go

00:38:13.699 --> 00:38:18.000
ahead and approve the taxes motion. I think that

00:38:18.000 --> 00:38:21.780
obviously most of the taxes are priority claims

00:38:21.780 --> 00:38:26.860
and in effort to avoid penalties and potential

00:38:26.860 --> 00:38:34.320
implications for responsible persons, it's a

00:38:34.320 --> 00:38:37.659
debtor's business judgment to go ahead and pay

00:38:37.659 --> 00:39:05.309
the taxes. So give me a minute here. has been

00:39:05.309 --> 00:39:11.070
signed and sent to docking. Thank you your honor.

00:39:12.349 --> 00:39:15.110
Next up is agenda item number 10 which is the

00:39:15.110 --> 00:39:17.309
insurance motion and this appears at docking

00:39:17.309 --> 00:39:20.570
number 9. Through this motion the global debtors

00:39:20.570 --> 00:39:22.650
are seeking authority to maintain their insurance

00:39:22.650 --> 00:39:25.650
policies in the ordinary court, pay any pre -petition

00:39:25.650 --> 00:39:27.750
amounts they're under, and honor the current

00:39:27.750 --> 00:39:30.719
surety bonds and letters of credit. As set forth

00:39:30.719 --> 00:39:33.659
in the motion, the debtors maintain 154 insurance

00:39:33.659 --> 00:39:36.679
policies administered by various carriers, which

00:39:36.679 --> 00:39:39.000
includes coverage for property damage, general

00:39:39.000 --> 00:39:42.159
liability, D &O liability, cybersecurity, and

00:39:42.159 --> 00:39:44.960
among other coverage. The debtors are also party

00:39:44.960 --> 00:39:47.380
to four premium financing agreements. All but

00:39:47.380 --> 00:39:49.480
one of these policies has been paid in full as

00:39:49.480 --> 00:39:51.719
of the petition date. The debtor's next payment

00:39:51.719 --> 00:39:54.539
under the cyber policy premium financing agreement

00:39:54.539 --> 00:39:57.570
is due at the end of this month. The debtors

00:39:57.570 --> 00:39:59.989
maintain 40 surety bonds in the approximate amount

00:39:59.989 --> 00:40:03.510
of 11 .6 million, and these relate to utilities,

00:40:03.889 --> 00:40:07.469
customs, taxes, different securities deposits,

00:40:07.690 --> 00:40:10.769
and liquor licenses. The global debtors also

00:40:10.769 --> 00:40:13.030
maintain various letters of credit for the benefit

00:40:13.030 --> 00:40:15.469
of third parties to support their obligations

00:40:15.469 --> 00:40:18.650
related to, among other things, workers' compensation,

00:40:19.329 --> 00:40:22.110
property leases, inventory, and transportation

00:40:22.110 --> 00:40:25.869
logistics. that the maintenance of insurance

00:40:25.869 --> 00:40:28.269
coverage is not only essential to continued operation

00:40:28.269 --> 00:40:30.289
of the debtor's businesses and preservation of

00:40:30.289 --> 00:40:33.050
the debtor's estate, but also required under

00:40:33.050 --> 00:40:36.130
the trustee's operating guidelines. Prior to

00:40:36.130 --> 00:40:37.989
filing the motion, the debtors previewed the

00:40:37.989 --> 00:40:39.869
requested release of the U .S. trustee's office,

00:40:39.929 --> 00:40:42.449
and we incorporated language into paragraph seven

00:40:42.449 --> 00:40:45.030
of the proposed order. This language notes that

00:40:45.030 --> 00:40:46.829
the debtors will notify the U .S. trustee if

00:40:46.829 --> 00:40:49.610
they seek to renew, supplement, or modify their

00:40:49.610 --> 00:40:52.289
insurance policies, maturity bonds, or letters

00:40:52.289 --> 00:40:54.800
of and seek to obtain replacement covers during

00:40:54.800 --> 00:40:57.079
the cases. I understand that we are resolved

00:40:57.079 --> 00:40:59.099
and that the U .S. trustee does not object to

00:40:59.099 --> 00:41:01.360
the order. Unless your honor has any questions,

00:41:01.460 --> 00:41:03.219
we respectfully request that the court approve

00:41:03.219 --> 00:41:06.360
the insurance motion and enter the order. All

00:41:06.360 --> 00:41:08.480
right. Does anyone wish to be heard on the insurance

00:41:08.480 --> 00:41:15.340
motion? All right. Again, the insurance motion

00:41:15.340 --> 00:41:17.380
obviously is required. Insurance is required

00:41:17.380 --> 00:41:19.760
by the U .S. trustee guidelines. In addition,

00:41:19.800 --> 00:41:21.800
it's a proper exercise of the debtor's business

00:41:21.800 --> 00:41:28.159
judgment. So, I'll go ahead and approve the order

00:41:28.159 --> 00:41:31.340
allowing you to proceed with the insurance program.

00:41:31.579 --> 00:41:40.599
So, give me a minute. That order has been signed

00:41:40.599 --> 00:41:43.559
and sent to docketing. Thank you, Your Honor.

00:41:43.639 --> 00:41:45.300
I will now feed the podium to my colleagues.

00:41:45.780 --> 00:41:48.579
Just to make sure I want to... So, with respect

00:41:48.579 --> 00:41:57.820
to the... So the cash management order you had,

00:41:58.300 --> 00:42:00.679
you're gonna upload a new order, is that right?

00:42:01.840 --> 00:42:16.579
Yeah, that's correct. Okay. I think that's the

00:42:16.579 --> 00:42:20.039
only one, right? Yeah, that's right. Oh, and

00:42:20.039 --> 00:42:28.380
the customer program. Okay, got it. All right,

00:42:28.460 --> 00:42:35.579
thank you. Thank you, Your Honor. Hi, good evening,

00:42:35.579 --> 00:42:37.639
Your Honor. For the record, Allison Smith, Wilkie

00:42:37.639 --> 00:42:40.340
Barton Gallagher, proposed counsel to what we've

00:42:40.340 --> 00:42:42.739
been referring to as the global debtors. I'll

00:42:42.739 --> 00:42:45.039
pick up right where Ms. Graver left off with

00:42:45.039 --> 00:42:48.480
agenda item number 11. It's the global debtors'

00:42:48.599 --> 00:42:50.659
critical vendors' motion. It was filed at socket

00:42:50.659 --> 00:42:54.400
number 14. The global debtors are seeking authority

00:42:54.400 --> 00:42:57.639
to make payments to trade and 5039 claimants.

00:42:57.789 --> 00:43:00.909
in an aggregate amount up to $126 million on

00:43:00.909 --> 00:43:05.150
an interim basis and approximately $337 .4 million

00:43:05.150 --> 00:43:07.889
on a final basis. I do recognize, Your Honor,

00:43:08.210 --> 00:43:10.869
that on its face, these numbers do air on the

00:43:10.869 --> 00:43:13.489
higher end of the scale. But as I'm sure you

00:43:13.489 --> 00:43:15.449
can appreciate both from our documents and the

00:43:15.449 --> 00:43:16.789
statements that have been made on the record

00:43:16.789 --> 00:43:20.369
already today, these relationships and these

00:43:20.369 --> 00:43:22.750
creditors are very, very important to the debtor's

00:43:22.750 --> 00:43:24.730
business. And it's a business who's... success

00:43:24.730 --> 00:43:27.849
is directly influenced by their ability to stop

00:43:27.849 --> 00:43:31.190
to carry inventory. It is critical to this process

00:43:31.190 --> 00:43:33.329
and to go forward operations more generally that

00:43:33.329 --> 00:43:36.110
the global debtors be able to restart those vendor

00:43:36.110 --> 00:43:38.389
payments and shipments to ensure that they can

00:43:38.389 --> 00:43:41.630
continue providing the diverse and uniquely curated

00:43:41.630 --> 00:43:44.289
inventory assortment to which their customers

00:43:44.289 --> 00:43:47.469
have become accustomed. We did engage with the

00:43:47.469 --> 00:43:50.650
U .S. Trustee's office prior to filing. I understand

00:43:50.650 --> 00:43:52.860
that we have addressed and resolve their concerns

00:43:52.860 --> 00:43:56.019
largely by the inclusion of the standard reporting

00:43:56.019 --> 00:43:59.380
matrices obligation. I'm happy to address any

00:43:59.380 --> 00:44:01.179
point in particular but unless the court has

00:44:01.179 --> 00:44:03.860
any questions would submit that the specific

00:44:03.860 --> 00:44:06.239
facts and circumstances of these cases do justify

00:44:06.239 --> 00:44:08.280
and support the release being sought and the

00:44:08.280 --> 00:44:12.900
motion be approved on an interim basis. All right

00:44:12.900 --> 00:44:26.199
anyone else wish to be heard? The you know, the

00:44:26.199 --> 00:44:28.659
vendors are just as important in this case as

00:44:28.659 --> 00:44:33.099
the customers and the and the employees And so

00:44:33.099 --> 00:44:34.940
I think this is a proper exercise of debtors

00:44:34.940 --> 00:44:37.360
business judgment. I'm gonna go ahead and approve

00:44:37.360 --> 00:46:05.610
the order Let me just give me a moment That order

00:46:05.610 --> 00:46:08.929
has been signed and sent to docketing. Thank

00:46:08.929 --> 00:46:11.989
you, Your Honor. Moving to the next item on the

00:46:11.989 --> 00:46:14.429
agenda, the lien claimants motion at agenda item

00:46:14.429 --> 00:46:16.809
number 12. This motion was brought to docket

00:46:16.809 --> 00:46:19.969
number 16. Similar to the critical vendors, the

00:46:19.969 --> 00:46:22.130
parties contemplated by this motion are those

00:46:22.130 --> 00:46:25.090
parties that are necessary to maintain an uninterrupted

00:46:25.090 --> 00:46:27.210
flow of inventory of other goods to the debtors'

00:46:27.650 --> 00:46:30.349
networks and to their stores and customers, in

00:46:30.349 --> 00:46:32.250
addition to ceasing services, which would cause

00:46:32.250 --> 00:46:34.409
disruption and delay to the debtors' operations.

00:46:34.699 --> 00:46:36.800
These parties may be entitled to assert liens

00:46:36.800 --> 00:46:39.519
on the debtor's property as a result of non -payment.

00:46:40.119 --> 00:46:42.280
Accordingly, the debtors are seeking authority

00:46:42.280 --> 00:46:46.340
to pay up to approximately $114 million. Again,

00:46:46.400 --> 00:46:48.500
these payments are crucial to turning the spigot

00:46:48.500 --> 00:46:51.519
back on, so to speak, so the debtors can redo,

00:46:51.519 --> 00:46:54.539
excuse me, ordinary course operations and inventory

00:46:54.539 --> 00:46:56.500
sourcing as they transition into these proceedings.

00:46:57.139 --> 00:46:58.860
Unless your honor has any questions for me, I

00:46:58.860 --> 00:47:04.699
would ask that the court enter this order. uh,

00:47:04.980 --> 00:47:09.820
lien claimants, uh, order. Your Honor, this is

00:47:09.820 --> 00:47:12.179
how it went to the U .S. Trustee's office. Can

00:47:12.179 --> 00:47:15.920
I be heard? Yes, sir. My only concern with this

00:47:15.920 --> 00:47:18.840
motion, I think I agree with the debtors, is

00:47:18.840 --> 00:47:22.079
that you're granting on a final basis of approximately

00:47:22.079 --> 00:47:26.500
114 million on day one. I'm very concerned about

00:47:26.500 --> 00:47:29.440
that. It's a big case and I understand it's a

00:47:29.440 --> 00:47:33.429
big number, but in terms of having not having

00:47:33.429 --> 00:47:36.989
a committee, not having more eyes on the amount.

00:47:38.269 --> 00:47:40.369
The critical vendor motion is also a big number,

00:47:40.449 --> 00:47:42.590
but then you get trade agreements, you get a

00:47:42.590 --> 00:47:45.789
final, and there's procedures to actually look

00:47:45.789 --> 00:47:48.769
into the numbers. But once the order is entered,

00:47:49.010 --> 00:47:52.230
$114 million of the state assets will be leaving,

00:47:52.289 --> 00:47:54.670
and I don't doubt that there are needs for it,

00:47:55.050 --> 00:47:57.469
but my only concern is I don't have a committee

00:47:57.469 --> 00:47:59.750
in place that can take a look at these numbers.

00:48:00.500 --> 00:48:04.739
My suggestion was to bifurcate the process in

00:48:04.739 --> 00:48:06.800
a way that's what they need in the next, I don't

00:48:06.800 --> 00:48:08.840
know, three weeks until we get into a second

00:48:08.840 --> 00:48:12.739
day hearing, as opposed to having final approval

00:48:12.739 --> 00:48:16.659
of $114 million today, less than 24 hours of

00:48:16.659 --> 00:48:21.179
notice. The only thing I'll say to that, Your

00:48:21.179 --> 00:48:23.139
Honor, is that a number of these claims subject

00:48:23.139 --> 00:48:25.239
to this motion do give rise to security claims

00:48:25.239 --> 00:48:27.000
that would be paid out later in the case, as

00:48:27.000 --> 00:48:29.429
regardless. And we have incorporated the same

00:48:29.429 --> 00:48:31.809
matrix in scheduling reporting obligations. And

00:48:31.809 --> 00:48:34.110
of course, we're happy to provide that to any

00:48:34.110 --> 00:48:39.869
committee that is appointed in these cases. All

00:48:39.869 --> 00:48:43.849
right. So I'm going to go ahead and grant the

00:48:43.849 --> 00:48:48.210
motion on a final basis. But obviously, the debtor

00:48:48.210 --> 00:48:49.829
is going to pay these. They're not going to pay

00:48:49.829 --> 00:48:52.530
these all at once. And to the extent that the

00:48:52.530 --> 00:48:55.789
committee wants to raise a question with respect

00:48:55.789 --> 00:49:00.190
to the timing of the payment or the necessity

00:49:00.190 --> 00:49:04.309
of the payment, I'll allow them to raise that

00:49:04.309 --> 00:49:07.230
at the second day hearings. But I think these

00:49:07.230 --> 00:49:09.469
are different than critical vendors. Critical

00:49:09.469 --> 00:49:12.050
vendors, you have to negotiate a trade agreement,

00:49:12.110 --> 00:49:14.050
you have to do those kinds of things. To the

00:49:14.050 --> 00:49:16.090
extent these are lien claimants that can actually

00:49:16.090 --> 00:49:23.070
hold your, disrupt your supply chain. I think

00:49:23.070 --> 00:49:28.010
that I'm inclined to grant the relief. I don't

00:49:28.010 --> 00:49:30.409
think, in fact, that the debtor doesn't have

00:49:30.409 --> 00:49:32.849
sufficient cash in order to be able to pay these

00:49:32.849 --> 00:49:35.429
all on day one. They're authorized to do it,

00:49:35.969 --> 00:49:38.170
but they're authorized but not directed. So I

00:49:38.170 --> 00:49:40.889
think they will be paid in the ordinary course.

00:49:40.989 --> 00:49:44.190
I'm sure the debtors will act prudently in terms

00:49:44.190 --> 00:49:47.369
of how they're going to handle this. So on that

00:49:47.369 --> 00:49:49.550
basis, I'm going to approve it. But again, to

00:49:49.550 --> 00:49:54.530
the extent the committee sees this differently

00:49:54.530 --> 00:49:57.230
than the debtor, obviously they're going to have

00:49:57.230 --> 00:50:02.250
the opportunity to raise that issue. So on that

00:50:02.250 --> 00:50:03.789
base, I'm going to go ahead and grant the order

00:50:03.789 --> 00:50:07.869
as drafted. Thank you, Your Honor. I'll allow

00:50:07.869 --> 00:50:09.369
my colleague to take you to the remainder of

00:50:09.369 --> 00:50:19.769
the motion. All right. Good afternoon, Your Honor.

00:50:19.869 --> 00:50:24.159
Zachary Charlton. For the record, Floyd Farn

00:50:24.159 --> 00:50:26.960
Gallagher proposed council to the global debtors.

00:50:27.760 --> 00:50:32.340
Can you hear me okay? I can. Perfect. I'm going

00:50:32.340 --> 00:50:37.019
to be addressing agenda number 13, which is docket

00:50:37.019 --> 00:50:41.079
number 12, the automatic stay motion. The debtors

00:50:41.079 --> 00:50:43.400
operate as a global enterprise and importantly

00:50:43.400 --> 00:50:45.340
as reference in connection with the critical

00:50:45.340 --> 00:50:47.960
vendors here. The debtors have regular dealings

00:50:47.960 --> 00:50:50.800
with foreign customers, contract counterparties,

00:50:54.960 --> 00:50:57.719
be severely disrupted. It's likely that these

00:50:57.719 --> 00:51:00.019
foreign vendors are unfamiliar with the automatic

00:51:00.019 --> 00:51:02.880
stay and its application, and as such, various

00:51:02.880 --> 00:51:05.300
interested parties may attempt to seize assets

00:51:05.300 --> 00:51:07.940
located outside of the United States to the detriment

00:51:07.940 --> 00:51:10.559
of the debtors, their states, and creditors,

00:51:10.619 --> 00:51:12.840
or otherwise attempt to contravene the provisions

00:51:12.840 --> 00:51:15.760
of the Code. This order seeks to notify parties

00:51:15.760 --> 00:51:18.679
of the stay. We believe the motion and the proposed

00:51:18.679 --> 00:51:22.000
order simply restates and does not expand the

00:51:22.000 --> 00:51:31.809
protections under Section 362 of No comment to

00:51:31.809 --> 00:51:34.510
the form of order. Unless the court has any questions,

00:51:34.710 --> 00:51:36.690
we respectfully request entry of the automatic

00:51:36.690 --> 00:51:40.010
stay order filed at Docket Number 12. All right.

00:51:40.070 --> 00:51:42.809
Does anyone object to the entry of the comfort

00:51:42.809 --> 00:51:49.889
order? All right. I've reviewed the proposed

00:51:49.889 --> 00:51:55.250
form of order. I think it does restate what the

00:51:55.250 --> 00:51:57.289
automatic stay indicates. And to the extent that

00:51:57.289 --> 00:52:00.210
you have a global enterprise, I think it's important

00:52:00.210 --> 00:52:03.630
to make sure that all of the assets of the estate

00:52:03.630 --> 00:52:05.730
are protected, so I'm going to go ahead and enter

00:52:05.730 --> 00:52:15.090
the comfort order. Thank you, Your Honor. All

00:52:15.090 --> 00:52:17.309
right, that's been signed and sent to docketing.

00:52:18.469 --> 00:52:20.849
Thank you, Your Honor. Next up, we have agenda

00:52:20.849 --> 00:52:24.190
item number 14 at docket number 6, which is the

00:52:24.190 --> 00:52:30.449
utilities motion. By the utilities motion, adequate

00:52:30.449 --> 00:52:33.389
assurance of future utilities, prohibiting utility

00:52:33.389 --> 00:52:36.030
companies from discontinuing, altering, or abusing

00:52:36.030 --> 00:52:38.730
service, and approving the proposed adequate

00:52:38.730 --> 00:52:41.710
assurance procedures. Utility companies provide

00:52:41.710 --> 00:52:44.010
services vital to the operation and management

00:52:44.010 --> 00:52:46.150
of the debtor's brick and mortar locations and

00:52:46.150 --> 00:52:48.909
distribution and fulfillment centers. Further,

00:52:49.030 --> 00:52:50.849
the debtor's contract with various third -party

00:52:50.849 --> 00:52:53.130
administrators to process the debtor's utility

00:52:53.130 --> 00:52:56.489
invoices and payments. Any interruption of the

00:52:56.489 --> 00:52:58.530
utility services would significantly disrupt

00:52:58.530 --> 00:53:01.130
this case and impact the debtor's ability to

00:53:01.130 --> 00:53:04.789
sell merchandise and operate as a growing concern

00:53:04.789 --> 00:53:08.769
during these Chapter 11 cases. Adequate assurance

00:53:08.769 --> 00:53:11.050
has been provided in the form of the debtor's

00:53:11.050 --> 00:53:13.710
newly established utility deposit account, which

00:53:13.710 --> 00:53:17.389
holds $2 .9 million, representing 50 percent

00:53:17.389 --> 00:53:20.090
of the debtor's estimated monthly cost of free

00:53:20.090 --> 00:53:23.090
petition services. Your Honor, we believe the

00:53:23.090 --> 00:53:25.849
relief requested is proper under Section 366

00:53:25.849 --> 00:53:28.170
of the Code and is standard in cases of similar

00:53:28.170 --> 00:53:31.489
size. We do have a few revisions we plan to make

00:53:31.489 --> 00:54:09.809
to the proposed utilities order. Anyone else

00:54:09.809 --> 00:54:15.050
wish to be heard on the utilities motion? All

00:54:15.050 --> 00:54:19.550
right. I have reviewed the motion and the proposed

00:54:19.550 --> 00:54:24.110
form of order. I will approve the motion. I think

00:54:24.110 --> 00:54:29.389
under 366, the way I read 366, you have to have

00:54:29.389 --> 00:54:32.909
somebody request additional adequate assurance

00:54:32.909 --> 00:54:35.550
within the first 30 days. You have to have a

00:54:35.550 --> 00:54:38.539
hearing. So what I'm going to do is, and this

00:54:38.539 --> 00:54:42.960
is not, I'm going to say since the first case

00:54:42.960 --> 00:54:51.280
was filed on the 13th, 30 days would be January

00:54:51.280 --> 00:55:02.099
12th. I mean, I'm sorry, February 12th, 30. Yeah.

00:55:02.679 --> 00:55:08.230
So I have a. A hearing hearing starting that

00:55:08.230 --> 00:55:13.969
day at nine. So I'm just going to schedule a

00:55:13.969 --> 00:55:17.730
30 minute at 830 to the extent just limited to

00:55:17.730 --> 00:55:21.329
to the extent anyone requests additional adequate

00:55:21.329 --> 00:55:24.949
assurance during between now and that date so

00:55:24.949 --> 00:55:27.889
that we could come in. I anticipate that it won't

00:55:27.889 --> 00:55:31.530
happen. But I think 366 says we have to do it

00:55:31.530 --> 00:55:36.969
within 30 days. and so I'm gonna go ahead and

00:55:36.969 --> 00:55:41.309
and just pencil that in to have it but otherwise

00:55:41.309 --> 00:55:45.590
I'll go ahead and grant the proposed form of

00:55:45.590 --> 00:55:50.170
order. The proposed form of motion and then I'll

00:55:50.170 --> 00:55:54.329
wait I'll wait for your order. Thank you your

00:55:54.329 --> 00:55:59.550
honor. Next on the agenda we have item number

00:55:59.550 --> 00:56:02.869
15. the Schedules and Sofas Extension Motion,

00:56:03.050 --> 00:56:07.090
which was filed at Docket Number 4. By this motion,

00:56:07.269 --> 00:56:09.050
the debtors seek entry of an order extending

00:56:09.050 --> 00:56:11.030
the debtor's deadline to file their schedules

00:56:11.030 --> 00:56:15.150
and statements and 2015 .3 reports by 45 days

00:56:15.150 --> 00:56:18.449
to March 13, that being 59 days after the petition

00:56:18.449 --> 00:56:22.389
date. The global debtors submit that cause exists

00:56:22.389 --> 00:56:24.309
to extend the schedule and statements deadline

00:56:24.309 --> 00:56:28.170
and the 2015 .3 reports deadline, given the voluminous

00:56:28.170 --> 00:56:30.679
number of books, records, and documents. that

00:56:30.679 --> 00:56:33.519
the debtor's complex accounting systems across

00:56:33.519 --> 00:56:36.380
various legal entities located in numerous jurisdictions.

00:56:37.739 --> 00:56:39.739
Finally, the global debtors submit that good

00:56:39.739 --> 00:56:42.320
and sufficient cons exist to modify the requirements

00:56:42.320 --> 00:56:46.480
of Local Rule 2015 -3 to permit the global debtors

00:56:46.480 --> 00:56:49.679
to file their 2015 .3 reports every six months

00:56:49.679 --> 00:56:52.219
rather than monthly as required under the Local

00:56:52.219 --> 00:56:55.380
Rule. A monthly compilation of these materials

00:56:55.380 --> 00:57:04.539
for all non -subsidiary operations Notably, the

00:57:04.539 --> 00:57:06.900
global debtors do not seek a full waiver of their

00:57:06.900 --> 00:57:10.960
obligations to file the 2015 reports. Rather,

00:57:11.079 --> 00:57:13.179
the global debtors seek permission to file the

00:57:13.179 --> 00:57:16.639
2015 .3 reports every six months instead of every

00:57:16.639 --> 00:57:19.300
month. Accordingly, there will be no harm to

00:57:19.300 --> 00:57:21.800
any parties in interest here, as they will still

00:57:21.800 --> 00:57:24.960
receive the necessary information. We would know,

00:57:25.059 --> 00:57:27.860
Your Honor, that the release requested herein

00:57:27.860 --> 00:57:29.920
is consistent with the release typically granted

00:57:29.920 --> 00:57:39.949
by courts in this district in complex That's

00:57:39.949 --> 00:57:46.250
been entered. You requested release. Mr. Nguyen?

00:57:49.289 --> 00:57:52.090
No objection, Your Honor. I would not require

00:57:52.090 --> 00:57:54.389
them to file their scheduled rooms within 14

00:57:54.389 --> 00:57:57.389
days. I think the extension makes sense for these

00:57:57.389 --> 00:58:02.989
centers. All right. All right. So again, I've

00:58:02.989 --> 00:58:04.969
reviewed the proposed form of order. I think

00:58:04.969 --> 00:58:08.539
in the case of this size, I think the The requests

00:58:08.539 --> 00:58:27.239
are appropriate. So let me Mr. Wynn would normally

00:58:27.239 --> 00:58:31.159
require you to do that within 14 days, but he's

00:58:31.159 --> 00:58:39.690
being nice today. Thank you, Mr. Wynn. All right,

00:58:39.730 --> 00:58:45.070
that order has been signed and sent about. Thank

00:58:45.070 --> 00:58:47.750
you, Your Honor. With that, I will feed the podium

00:58:47.750 --> 00:58:50.869
to our colleagues at Haynes and Boone to continue

00:58:50.869 --> 00:58:56.570
with the agenda. All right. Thank you. Good evening,

00:58:56.570 --> 00:58:58.949
Your Honor. David Crouch, Haynes and Boone, proposed

00:58:58.949 --> 00:59:02.630
co -counsel for the global debtors. The next

00:59:02.630 --> 00:59:05.960
item on the agenda is item 16. The creditor matrix

00:59:05.960 --> 00:59:08.340
or redaction motion files a docket number seven.

00:59:09.260 --> 00:59:11.739
In this procedural motion, the debtors seek approval

00:59:11.739 --> 00:59:15.380
of three things. Using a single top 30 list and

00:59:15.380 --> 00:59:18.380
consolidated creditor list, the form and manner

00:59:18.380 --> 00:59:20.960
of notice of commencement of these cases, and

00:59:20.960 --> 00:59:23.360
the redaction of personally identifiable information.

00:59:24.079 --> 00:59:27.860
For the first, using a single top 30 list and

00:59:27.860 --> 00:59:29.739
consolidated creditor list is consistent with

00:59:29.739 --> 00:59:32.400
the complex procedures and customary practice

00:59:32.400 --> 00:59:34.400
in this district for large cases like these.

00:59:34.780 --> 00:59:37.079
For the second, the debtors submit that the form

00:59:37.079 --> 00:59:39.840
of notice attached to the proposed order is Exhibit

00:59:39.840 --> 00:59:44.139
1. It complies with complex case procedures and

00:59:44.139 --> 00:59:47.019
is also customary for cases like these in this

00:59:47.019 --> 00:59:50.699
district. And then lastly, we seek authorization

00:59:50.699 --> 00:59:53.159
to redact personally identifiable information.

00:59:53.719 --> 00:59:56.480
As the court knows, privacy concerns a paramount

00:59:56.480 --> 00:59:59.500
in today's world. And the request of relief is

00:59:59.500 --> 01:00:02.079
narrowly tailored to balance the competing interests

01:00:02.079 --> 01:00:05.670
between transparency in these cases. and privacy

01:00:05.670 --> 01:00:09.389
concerns of individuals that are brought to these

01:00:09.389 --> 01:00:13.610
cases involuntarily. We incorporate comments

01:00:13.610 --> 01:00:15.869
received from the U .S. Trustee in the proposed

01:00:15.869 --> 01:00:17.849
order, and I believe they're signed off on the

01:00:17.849 --> 01:00:19.909
proposed order, so unless the Court has any questions,

01:00:20.550 --> 01:00:22.670
we request entry of the proposed order filed

01:00:22.670 --> 01:00:25.929
at docket number 7 -1. All right, does anyone

01:00:25.929 --> 01:00:29.789
wish to be heard with respect to the redaction

01:00:29.789 --> 01:00:39.110
motion? I've reviewed the motion and the proposed

01:00:39.110 --> 01:00:42.590
form of order. And again, I believe this is a

01:00:42.590 --> 01:00:44.409
proper exercise of the debtor's business judgment.

01:00:44.590 --> 01:00:47.110
I think the concerns raised by Mr. Truss are

01:00:47.110 --> 01:00:50.690
genuine concerns, especially with respect to

01:00:50.690 --> 01:00:54.530
the privacy issues and the administrative convenience.

01:00:54.670 --> 01:00:58.670
I think that's being done with no similar. There's

01:00:58.670 --> 01:01:01.730
no harm to any of the creditors as a result of

01:01:01.730 --> 01:01:12.019
this. All right, I've signed that order and sent

01:01:12.019 --> 01:01:16.679
it to docketing. Thank you, Your Honor. The next

01:01:16.679 --> 01:01:19.719
item on the agenda is item number 17, the debtor's

01:01:19.719 --> 01:01:22.820
joint NOL and record date motion, which was filed

01:01:22.820 --> 01:01:26.199
to docket number 11. This is also a procedural

01:01:26.199 --> 01:01:28.860
motion, Your Honor, which the debtors seek approval

01:01:28.860 --> 01:01:32.679
of two things. Procedures governing certain transfers

01:01:32.679 --> 01:01:35.380
of equity interest in the debtors and declarations

01:01:35.380 --> 01:01:38.210
of worthlessness for tax purposes. with respect

01:01:38.210 --> 01:01:41.050
to equity in debtor's tax global holdings LLC,

01:01:41.809 --> 01:01:44.389
and then also a record date for potential sell

01:01:44.389 --> 01:01:48.010
-down procedures applicable to transfers of debt

01:01:48.010 --> 01:01:51.110
claims against the debtors. The purposes of these

01:01:51.110 --> 01:01:53.110
procedures and the record date is to ensure that

01:01:53.110 --> 01:01:55.329
the debtors can adequately protect against the

01:01:55.329 --> 01:01:58.690
loss of their substantial tax attributes, which

01:01:58.690 --> 01:02:01.510
are property of the debtors of states. Trading

01:02:01.510 --> 01:02:03.409
of equity interests in the debtors during these

01:02:03.409 --> 01:02:06.320
cases could cause an ownership change. to occur

01:02:06.320 --> 01:02:08.599
that would adversely affect the debtor's ability

01:02:08.599 --> 01:02:12.219
to use their tax attributes. The procedures detailed

01:02:12.219 --> 01:02:15.179
in the motion set forth restrictions on the transfers

01:02:15.179 --> 01:02:17.960
of stock in the debtors and the declarations

01:02:17.960 --> 01:02:20.500
of worthlessness with respect to equity in Debtors

01:02:20.500 --> 01:02:24.079
Tax Global Holdings LLC to avoid a transaction

01:02:24.079 --> 01:02:27.199
that would be irreversible for tax purposes and

01:02:27.199 --> 01:02:29.960
destroy the debtor's valuable tax attributes.

01:02:30.699 --> 01:02:34.019
The motion also seeks approval of a record date

01:02:34.019 --> 01:02:37.300
to put parties on notice that the debtors may

01:02:37.300 --> 01:02:40.019
need to seek a sell -down order for any debt

01:02:40.019 --> 01:02:42.480
claims acquired after the record date. We're

01:02:42.480 --> 01:02:44.800
not seeking a sell -down order today, Judge.

01:02:45.000 --> 01:02:47.800
We're only seeking to establish the record date

01:02:47.800 --> 01:02:51.500
so that if the debtors have to seek a sell -down

01:02:51.500 --> 01:02:55.360
order, the debt claimholders are already aware

01:02:55.360 --> 01:02:58.179
of the record date for purposes of the sell -down

01:02:58.179 --> 01:03:03.420
order. Because certain changes to the debtor's

01:03:03.420 --> 01:03:06.400
equity structure and post -record date debt claims

01:03:06.400 --> 01:03:08.139
trading could threaten the debtor's valuable

01:03:08.139 --> 01:03:10.179
tax attributes, the debtors believe that this

01:03:10.179 --> 01:03:12.159
relief is in the best interest of their estates

01:03:12.159 --> 01:03:15.900
and all parties' interests. The proposed procedures

01:03:15.900 --> 01:03:18.599
are customary practice in large Chapter 11 cases

01:03:18.599 --> 01:03:21.159
that balance notice and latitude for trading

01:03:21.159 --> 01:03:23.619
stock and the debt claims while at the same time

01:03:23.619 --> 01:03:27.360
protecting valuable estate assets. We previewed

01:03:27.360 --> 01:03:29.300
the motion and proposed order with the U .S.

01:03:29.480 --> 01:03:32.760
trustee and did not receive any comments. So

01:03:32.760 --> 01:03:34.860
unless the court has any questions, we respectfully

01:03:34.860 --> 01:03:37.900
request entry of the proposed order. File the

01:03:37.900 --> 01:03:40.980
docket number 11 -1. All right. Does anyone wish

01:03:40.980 --> 01:03:46.920
to be heard on the NOL motion? All right. So

01:03:46.920 --> 01:03:50.940
again, I reviewed the proposed form of order

01:03:50.940 --> 01:03:53.800
and the motion. The debtor has billions of dollars

01:03:53.800 --> 01:03:58.730
of tax attributes. And I think this is only prudent

01:03:58.730 --> 01:04:01.170
for the debtor in the exercise of its business

01:04:01.170 --> 01:04:03.650
judgment to protect those assets, which are in

01:04:03.650 --> 01:04:05.730
fact property of the estate. So I'm going to

01:04:05.730 --> 01:04:13.869
go ahead and approve the motion. Thank you, Your

01:04:13.869 --> 01:04:16.090
Honor. That concludes my portion and I'll pass

01:04:16.090 --> 01:04:19.070
the virtual podium to the Bradley team. All right.

01:04:19.090 --> 01:04:20.929
So that order has been signed and sent to documenting.

01:04:21.650 --> 01:04:24.449
All right, Mr. Martin. Tell them not to put you

01:04:24.449 --> 01:04:30.300
last. I'd say the best flash you are. Before

01:04:30.300 --> 01:04:33.199
I begin, a few housekeeping items. First, we'll

01:04:33.199 --> 01:04:35.559
have to move to exhibit two exhibits. First is

01:04:35.559 --> 01:04:39.280
exhibit 12, which is the declaration of Andrew

01:04:39.280 --> 01:04:42.679
D .J. Heade in support of SO5 digital letters,

01:04:42.900 --> 01:04:44.880
chapter 11 petitions, and first state pleadings.

01:04:45.920 --> 01:04:48.679
All right. Anyone object to the declaration of

01:04:48.679 --> 01:04:52.840
Mr. Heade? And that is at docket number 12. No,

01:04:52.840 --> 01:04:57.480
I'm sorry. It's not. It's docket number. It's

01:04:57.480 --> 01:05:01.460
docket number 37. Docket number 37 in connection

01:05:01.460 --> 01:05:07.760
with the two matters for the, what I call the

01:05:07.760 --> 01:05:12.639
digital debtors. All right, hearing none, I'll

01:05:12.639 --> 01:05:17.320
admit that it is direct testimony. In the second

01:05:17.320 --> 01:05:19.179
exhibit you honor be the admission of exhibit

01:05:19.179 --> 01:05:22.260
14, which is our initial cash collateral budget.

01:05:25.840 --> 01:05:29.260
Does anyone object to the admission of the initial

01:05:29.260 --> 01:05:31.360
cash collateral budget? It's a two, it's a three

01:05:31.360 --> 01:05:34.960
week budget, right? Yes, your honor, but we'll

01:05:34.960 --> 01:05:38.219
be asking to come back in two weeks. Okay. All

01:05:38.219 --> 01:05:41.460
right. So it's a three week budget. Does anyone

01:05:41.460 --> 01:05:46.099
object to the admission of the budget for the,

01:05:46.099 --> 01:05:50.199
what I would call the digital debtors? So that,

01:05:52.849 --> 01:05:55.730
Exhibit which is attached to exhibit number 14

01:05:55.730 --> 01:06:02.849
is admitted. I just wanted to note for the record

01:06:02.849 --> 01:06:05.829
that as the Wilkie team went through their first

01:06:05.829 --> 01:06:08.630
-day motions, much of the relief that was requested

01:06:08.630 --> 01:06:10.969
in those motions is joint relief. As it relates

01:06:10.969 --> 01:06:12.730
to the SFI digital bettors, it would be very

01:06:12.730 --> 01:06:14.429
unusual for a case of this size to only have

01:06:14.429 --> 01:06:17.210
two first -day motions. That's because we, for

01:06:17.210 --> 01:06:19.170
efficiency purposes, joined in much of the relief

01:06:19.170 --> 01:06:25.019
that was being requested by SACS Global. The

01:06:25.019 --> 01:06:28.059
first motion I'd like to go through is the cash

01:06:28.059 --> 01:06:32.659
collateral motion. The SO5 digital debtors need

01:06:32.659 --> 01:06:35.380
to be used of cash collateral to avoid irreparable

01:06:35.380 --> 01:06:38.159
harm. After the use of cash collateral, they

01:06:38.159 --> 01:06:42.199
would not be able to continue on in their business

01:06:42.199 --> 01:06:47.469
in the ordinary course. The debtors secured Creditors

01:06:47.469 --> 01:06:50.190
are represented by Kaledine Commercial Finance

01:06:50.190 --> 01:06:53.510
LLC as pre -petition agents and Morgan Willis

01:06:53.510 --> 01:06:56.550
as their counsel. I'd like to go through some

01:06:56.550 --> 01:06:58.969
of the provisions of the order and if the court

01:06:58.969 --> 01:07:00.710
has any questions as I go through it, I'd be

01:07:00.710 --> 01:07:22.789
happy to answer them. All right, why don't you

01:07:22.789 --> 01:07:26.070
go ahead I had I just want to make sure I understand

01:07:26.070 --> 01:07:35.510
paragraph number nine In paragraph number 17

01:07:35.510 --> 01:07:40.230
You know that the amount for the challenge is

01:07:40.230 --> 01:07:44.030
50 ,000 I don't know whether that's an appropriate

01:07:44.030 --> 01:07:48.940
amount obviously that's going to be in And it's

01:07:48.940 --> 01:07:52.099
also 50 ,000 in the dip motion, which is probably

01:07:52.099 --> 01:07:56.440
not an appropriate amount. But I don't know whether

01:07:56.440 --> 01:07:58.639
this is it. Obviously, that's without prejudice

01:07:58.639 --> 01:08:05.980
to the committee coming in and asking. And then

01:08:05.980 --> 01:08:11.599
I don't I really the only question I had was

01:08:11.599 --> 01:08:14.119
really, I want to understand, make sure I understand

01:08:14.119 --> 01:08:15.820
paragraph nine. But other than that, I really

01:08:15.820 --> 01:08:18.680
didn't have it. Any questions? All my other tabbies

01:08:18.680 --> 01:08:24.220
I answered myself. Understood, Your Honor. I

01:08:24.220 --> 01:08:26.699
think just for the benefit of everyone, because

01:08:26.699 --> 01:08:29.760
some of these terms were negotiated, I would

01:08:29.760 --> 01:08:32.140
like to get that on the record if the Court is

01:08:32.140 --> 01:08:34.539
okay with that. Absolutely. The primary item

01:08:34.539 --> 01:08:38.260
I wanted to note for everyone relates to the

01:08:38.260 --> 01:08:40.180
cash flow of the budget during interim period.

01:08:41.079 --> 01:08:44.600
The budget contemplates establishing an escrow

01:08:44.829 --> 01:08:49.810
of $350 ,000 relating to amounts that may be

01:08:49.810 --> 01:08:53.409
paid to the SACS global debtors as it relates

01:08:53.409 --> 01:08:58.149
to fees and expenses that they may be covering

01:08:58.149 --> 01:09:02.029
that are for the benefit of the SO5 digital debtors.

01:09:02.470 --> 01:09:05.369
As the court is aware, through the first day

01:09:05.369 --> 01:09:08.590
declarations of Mr. Weinstein and Mr. Headey,

01:09:09.550 --> 01:09:13.109
the SO5 digital debtors consolidated their operations

01:09:13.109 --> 01:09:17.500
with the global debtors back in 2021 and since

01:09:17.500 --> 01:09:21.060
that time have been operating under a sharing

01:09:21.060 --> 01:09:24.439
agreement. That sharing agreement contemplated

01:09:24.439 --> 01:09:29.739
the certain expenses to be reimbursed to the

01:09:29.739 --> 01:09:33.220
SACS global debtors and now that we're in bankruptcy

01:09:33.220 --> 01:09:37.399
the analysis now needs to change to whether those

01:09:37.399 --> 01:09:40.199
expenses are leaving or unnecessary under 503b

01:09:40.199 --> 01:09:42.979
and so what this does is it creates a framework

01:09:43.210 --> 01:09:46.369
or funds to be set aside so that if there is

01:09:46.369 --> 01:09:49.250
an administrative expense claim between the estates

01:09:49.250 --> 01:09:52.850
that there's a mechanism to um to tee that off

01:09:52.850 --> 01:09:55.970
and this is i think the the first agreement relating

01:09:55.970 --> 01:09:58.050
to that and i'm sure we'll be revisiting that

01:09:58.050 --> 01:10:00.529
again in the next interim order and in a final

01:10:00.529 --> 01:10:02.470
order so i just wanted to preview that for the

01:10:02.470 --> 01:10:08.449
court where is that in the budget it's uh it's

01:10:08.449 --> 01:10:12.649
uh the tsa payment at 175 000 dollars per week

01:10:16.939 --> 01:10:18.920
All right. Was there an updated budget? Because

01:10:18.920 --> 01:10:23.579
the budget I have, I know you filed a revised

01:10:23.579 --> 01:10:27.560
form of order. Is it attached to that? If it's

01:10:27.560 --> 01:10:29.500
not, I'll make sure it is. I don't have it up

01:10:29.500 --> 01:10:33.199
in front of me right now. OK. Because the SACS

01:10:33.199 --> 01:10:37.119
Global TSA payment is zero. There's no amount

01:10:37.119 --> 01:10:40.699
in the budget that I have. Then that must not

01:10:40.699 --> 01:10:42.260
have been updated. So we'll make sure that the

01:10:42.260 --> 01:10:44.920
updated budget gets attached to the final proposed

01:10:44.920 --> 01:10:48.199
order. That's been filed with the court. All

01:10:48.199 --> 01:10:51.880
right. Thank you. All right. Does anyone else

01:10:51.880 --> 01:10:59.779
wish to be heard with respect to the SO5 digital

01:10:59.779 --> 01:11:08.979
debtors? All right. So again, obviously these

01:11:08.979 --> 01:11:11.060
debtors need to have cash collateral, access

01:11:11.060 --> 01:11:14.039
to cash collateral. I think the form of order

01:11:14.039 --> 01:11:17.359
is is perfectly appropriate. I think it has the

01:11:17.359 --> 01:11:21.600
with respect to both the events of default and

01:11:21.600 --> 01:11:24.340
the challenge period. I think it has the standard

01:11:24.340 --> 01:11:26.979
language with respect to those. So I'm going

01:11:26.979 --> 01:11:31.439
to go ahead and approve the cash collateral for

01:11:31.439 --> 01:11:35.600
the 50 digital debtors. I did get a revised form

01:11:35.600 --> 01:11:42.840
of order at docket number 77. And let me just

01:11:42.840 --> 01:11:50.800
see. And then you and I believe there's another

01:11:50.800 --> 01:11:56.180
revised from the boarder at socket 141. Well,

01:11:56.319 --> 01:11:58.260
that must have started. That must have been.

01:12:03.859 --> 01:12:08.260
And then I see that the approved budget wasn't

01:12:08.260 --> 01:12:10.720
attached. So we will re -apply that order with

01:12:10.720 --> 01:12:12.420
the approved budget. All right. So I'm going

01:12:12.420 --> 01:12:44.949
to go ahead and grant them. Yes. Yes. Yes. We

01:12:44.949 --> 01:12:48.170
have no objection to that. And the intent is

01:12:48.170 --> 01:12:50.670
to preserve our right to consignment parties.

01:12:51.949 --> 01:12:54.789
Thanks. To the extent, I think that resolves

01:12:54.789 --> 01:12:57.149
any objection you would have with respect to

01:12:57.149 --> 01:12:59.810
pre -petition consignment goods, because delivered

01:12:59.810 --> 01:13:02.510
pre -petition. But we also proposed some language

01:13:02.510 --> 01:13:05.649
related to post -petition delivery of consignment

01:13:05.649 --> 01:13:09.010
goods that was designed really to try to prevent

01:13:09.010 --> 01:13:11.149
the interruption in the debtor supply chain.

01:13:12.990 --> 01:13:16.970
We have proposed language that would give consignment

01:13:16.970 --> 01:13:20.789
vendors comfort that goods delivered post petition

01:13:20.789 --> 01:13:22.630
are not going to be challenged and there's going

01:13:22.630 --> 01:13:25.609
to be some certainty that those goods are not

01:13:25.609 --> 01:13:27.329
going to be viewed as property to the state and

01:13:27.329 --> 01:13:30.449
that otherwise consignment vendors would have

01:13:30.449 --> 01:13:32.310
perfected consignment rights on those goods.

01:13:32.869 --> 01:13:34.630
We don't want to be in a situation where we're

01:13:34.630 --> 01:13:37.149
delivering goods and then we get to a final hearing

01:13:37.149 --> 01:13:39.829
on how to find that somebody wants to challenge.

01:13:39.949 --> 01:13:42.270
our rights with respect to goods that were delivered

01:13:42.270 --> 01:13:44.350
post -petition. Pre -petition, I think, is a

01:13:44.350 --> 01:13:46.090
different story. Whatever rights we have are

01:13:46.090 --> 01:13:51.069
the rights we have. My clients are happy to and

01:13:51.069 --> 01:13:53.729
hoping to support these debtors in the post -petition

01:13:53.729 --> 01:13:55.090
period. But I think they're also looking for

01:13:55.090 --> 01:13:57.369
some comfort that to the extent they do deliver

01:13:57.369 --> 01:13:59.909
goods, they're going to have protection. And

01:13:59.909 --> 01:14:01.449
they're not going to have someone coming in and

01:14:01.449 --> 01:14:03.729
challenging their rights. So we have presented

01:14:03.729 --> 01:14:07.149
some language to the debtor that would provide

01:14:07.420 --> 01:14:10.560
uh, for essentially automatic perfection of consignment

01:14:10.560 --> 01:14:12.359
rights to the extent people were delivering goods

01:14:12.359 --> 01:14:14.220
on consignment, and it was clear that they were

01:14:14.220 --> 01:14:16.279
delivering goods on consignment. Um, we hadn't

01:14:16.279 --> 01:14:18.380
received a response from the debtors. I know

01:14:18.380 --> 01:14:21.220
that we've gathered a lot of falls, but, um,

01:14:21.220 --> 01:14:24.380
I don't know how to deal with that, um, at the

01:14:24.380 --> 01:14:25.960
moment. You know, typically in the old days you

01:14:25.960 --> 01:14:28.020
might step outside and try to talk through something

01:14:28.020 --> 01:14:30.180
in the hallway, but, um, is it possible, Ryan,

01:14:30.300 --> 01:14:31.899
we could just put this on hold for a few minutes

01:14:31.899 --> 01:14:34.479
and we could resend that language to debtor council?

01:14:39.940 --> 01:14:42.319
So I'm happy to review any proposed language.

01:14:42.439 --> 01:14:47.079
Yeah, this is an interim order. I think your

01:14:47.079 --> 01:14:50.680
request is a reasonable request. So they're going

01:14:50.680 --> 01:14:52.800
to have to upload another order anyway. So I'm

01:14:52.800 --> 01:14:55.039
going to go ahead and approve it. And then to

01:14:55.039 --> 01:14:57.359
the extent there's an issue with respect to the

01:14:57.359 --> 01:15:01.079
language, I'll take that up. And it would be

01:15:01.079 --> 01:15:05.239
as of when we go to the final hearing. And then

01:15:05.239 --> 01:15:07.479
when did you want a final hearing on this? You

01:15:07.479 --> 01:15:10.569
said two weeks. Yes, you are. Do you have anything

01:15:10.569 --> 01:15:40.529
available on or around January 27th, 28th? about

01:15:40.529 --> 01:16:14.819
a second, let me see. I'm just communicating

01:16:14.819 --> 01:16:20.600
with Mr. Laws. Just give me a minute. Thank you.

01:16:25.479 --> 01:16:28.680
Could you go out to the 23rd? Or is that too

01:16:28.680 --> 01:16:37.420
long? I defer to Mr. Carter as to whether the

01:16:37.420 --> 01:16:43.579
budget can be extended to the 23rd. Are you talking

01:16:43.579 --> 01:16:49.939
about February 23 or January 23? I'm talking

01:16:49.939 --> 01:16:54.579
about January 23rd. Okay. That's within our two

01:16:54.579 --> 01:16:59.399
-week period, and that works for the days. All

01:16:59.399 --> 01:17:07.859
right, so we're going to do January 23rd. And

01:17:07.859 --> 01:17:16.689
that will be a virtual setting. Thank you, Mark.

01:17:18.550 --> 01:17:20.770
Before we go off the topic of cash collateral,

01:17:20.869 --> 01:17:22.409
I wanted to make sure I answered any questions

01:17:22.409 --> 01:17:24.489
that the court had regarding paragraph 9, which

01:17:24.489 --> 01:17:26.510
is the application of proceeds of post -petition

01:17:26.510 --> 01:17:32.750
collateral. No, no, I think I understood kind

01:17:32.750 --> 01:17:37.149
of what's going on now. OK, thank you. All right.

01:17:37.390 --> 01:17:41.630
All right, so I'll go ahead and grant the motion,

01:17:41.710 --> 01:17:44.510
subject to the language that we're going to get.

01:17:45.430 --> 01:17:48.069
with respect to making clear that with respect

01:17:48.069 --> 01:17:52.090
to consignment those assets post on a post petition

01:17:52.090 --> 01:17:57.050
basis are are not becoming part of the collateral

01:17:57.050 --> 01:18:00.770
base and and that it on the pre petition everybody's

01:18:00.770 --> 01:18:05.550
reserving their rights thank you honor and with

01:18:05.550 --> 01:18:09.090
that I'll turn the podium over to Jay Billy relating

01:18:09.090 --> 01:18:12.810
to the SO5 digital debtors cash management motion

01:18:12.810 --> 01:18:15.359
which tracks generally with the cash management

01:18:15.359 --> 01:18:16.899
motion that the court already approved for the

01:18:16.899 --> 01:18:19.920
global debtors. All right. Go ahead, Mr. Bailey.

01:18:21.539 --> 01:18:23.260
Thank you. Good evening, Your Honor. James Bailey

01:18:23.260 --> 01:18:26.079
with Bradley Rambo Cummings, proposed counsel

01:18:26.079 --> 01:18:28.939
for the SO5 digital debtors. Your Honor, much

01:18:28.939 --> 01:18:31.220
like the global debtors, the digital debtors

01:18:31.220 --> 01:18:33.500
just need this straightforward relief to ensure

01:18:33.500 --> 01:18:36.600
continuity of operations, maintain control and

01:18:36.600 --> 01:18:39.199
transparency over cash, and avoid disruption

01:18:39.199 --> 01:18:42.979
on the first day of these Chapter 11 cases. Your

01:18:42.979 --> 01:18:46.279
Honor, prior to the petition date, the SF5 digital

01:18:46.279 --> 01:18:49.319
debtors operated a cash management system using

01:18:49.319 --> 01:18:51.779
established bank accounts and ordinary course

01:18:51.779 --> 01:18:54.319
collection and disbursement procedures. That

01:18:54.319 --> 01:18:56.039
system has been in place for a significant period

01:18:56.039 --> 01:18:58.659
of time. It's well understood by management and

01:18:58.659 --> 01:19:01.000
includes internal controls designed to safeguard

01:19:01.000 --> 01:19:05.500
state funds. Your Honor, there is a request to

01:19:05.500 --> 01:19:07.439
continue to intercompete transactions in the

01:19:07.439 --> 01:19:11.100
cash management order. That would be in... the

01:19:11.100 --> 01:19:13.779
discretion of the SO5 digital debtors, of course,

01:19:14.100 --> 01:19:16.140
with any payments being consistent with the cash

01:19:16.140 --> 01:19:18.420
flow out of order and budget. Your Honor, we

01:19:18.420 --> 01:19:20.939
also requested certain waivers of the U .S. trustee

01:19:20.939 --> 01:19:24.899
operating guidelines and the timeline to comply

01:19:24.899 --> 01:19:28.899
with section 345. Your Honor, these are customary

01:19:28.899 --> 01:19:31.500
reasonable and necessary relief to ensure a smooth

01:19:31.500 --> 01:19:34.539
transition in these cases. We have previewed

01:19:34.539 --> 01:19:37.699
the order, motion and order, with the U .S. trustee,

01:19:37.699 --> 01:19:41.140
who I understand has no objections. Your Honor,

01:19:41.220 --> 01:19:44.760
I think this would go out to the February 13

01:19:44.760 --> 01:19:48.180
second hearing date with the same objection deadline

01:19:48.180 --> 01:19:52.159
tracking the global debtors motion. I'm glad

01:19:52.159 --> 01:19:53.699
to answer any questions, Your Honor. All right.

01:19:53.779 --> 01:20:00.760
Does anyone wish to be heard on the S05 debtors

01:20:00.760 --> 01:20:08.260
cash management motion? All right. I reviewed

01:20:08.260 --> 01:20:10.539
the motion of proposed form of order and again

01:20:10.539 --> 01:20:13.260
I think this is a proper exercise of the debtor's

01:20:13.260 --> 01:20:17.359
business judgment in allowing them to have the

01:20:17.359 --> 01:20:22.180
uninterrupted use of their cash as opposed to

01:20:22.180 --> 01:20:24.420
shutting everything down and starting all over

01:20:24.420 --> 01:20:28.279
again. So I'm going to go ahead and grant the

01:20:28.279 --> 01:20:58.770
motion. So give me a minute. All right, I've

01:20:58.770 --> 01:21:12.890
signed that and send it to docketing. All right,

01:21:13.010 --> 01:21:14.989
why don't we come back and just take a 10 minute

01:21:14.989 --> 01:21:20.010
break. Why don't we come back at 6 .50 and we'll

01:21:20.010 --> 01:21:21.369
proceed with the dip at that time.